CREB®'s Q1 2022 Housing Market Report
The first quarter of 2022 saw record high sales activity, thanks to an increase in new listings. This provided some choice for buyers in comparison to the previous quarter, where sales exceeded the number of new listings.
Although there was an improvement in new listings, it was not enough to add significant supply to the market. Inventory levels declined over the last quarter of 2021 and were 30 per cent lower than long-term trends, reflecting the lowest quarterly inventory level seen since 2014.
“Record sales combined with low inventory levels caused the months of supply to average just over one month in the first quarter,” said CREB® Chief Economist Ann-Marie Lurie.
“Conditions have not been this tight since 2006, which was also the last time that we saw price gains push above 15 per cent.”
The persistent sellers’ market conditions weighed on prices in the first quarter of 2022. Driven by strong gains in the detached sector of the market, the total residential benchmark price averaged $496,767. This is a quarterly gain of nearly eight per cent and a year-over-year gain of over 15 per cent.
While sales were expected to be strong in the first quarter, demand continued to exceed expectations. “Expectations on rising rates and further price gains is likely pushing consumers to enter the market as soon as possible,” said Lurie. “However, lack of choice over the past several quarters has created a build up of demand that can only be filled as supply levels improve.”
While economic improvements will continue to support housing demand, this pace of sales is still expected to cool later this year. This will eventually help the market shift to more balanced conditions and slow the upward pressure on prices.