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60% of Home Prices Have Been Reduced, Will Prices Drop More?, 2023 Canadian Real Estate Market
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- čas přidán 13. 02. 2023
- The market is showing mixed signals, so I analyzed the propaganda to make some sense of it all. The data shows some very interesting stories about current inventory and what's selling and what's not. Enjoy this weeks statistics!
Really like your video, Jon. As much as I like it here in Canada, now I’m leaving here and going back to my home country. I bought a house in 2016 as a foreigner, sold it last year at peak, very lucky. otherwise with current salary, I’m going to be forced to sell this year.
Wish the best to all kind Canadian people, hope you all vote a government that really care about you. So long.
Thanks for sharing, I hope Canadians are wise enough to vote in a fiscally responsible government soon so we can somewhat fix this broken and unfair financial system.
Very well said. Too bad Canada is loosing good people. All the very bets to you ...!!!
Now foreigners get so screwed by the government of canada that the best decision is for them to boycott the country and go somewhere else where you are treated best. I hope the rest of the world will retaliate to canadians so they will also be banned from buying outside of Canada but many countries are not as mean as Canada is.....
It’s time to change
Considering interest rates, home prices are more expensive then ever. Prices will come down till at least end of 2023. If your an investor the numbers don't work.
well said
Men lie, women lie; but numbers don’t. Your ability to gather such relevant data and deliver it in an eloquent manner always amazes me. Thanks for your hard work John. You’re a legend!
Thanks, much appreciated
44% canceled or expired and the data in gen is a big tell where this is going... as the most important investment of the average joe's world your posts provide invaluable and honest info that is free and free from pump... excellent brother...
Thanks for watching, do you have a Shiba?
@@jonflynn Nope but I have a couple hundred million shiba inu tokens and a hockey sock full of other crypto....
Most of those job gains were in low paying service and retail sectors. Not really the incomes needed to support an inflated housing market.
Where can I see this data?
This was also my argument: what are these 150k jobs?
Immigration numbers generally posted around include 4 separate members of same family as different individuals. Incremental family units is the number that should be focussed on. Numbers of 430k are approx 100-120k incremental people moving from 2018-2020 levels before any adjustment for family units is done.
The incremental family unit immigration demand is overstated by basing it on absolute numbers.
Very true, great point.
That is very good point so the immigration effect is around 4 times lower. I was an immigrant in 2004 and it took me several years before I can afford to buy a property
Thankyou for this insight. Many immigrants are also willing to do 'whatever it takes' to save ... multiple couples or families per household. Frugal spending.
Also, keep in mind that they are being brought in to replace our DECLINING population. Peak Boomer cohorts are in their mid-70s now, and still hanging onto a lot of inventory which will be released just in time for these new waves of people to enter the market.
There is also a lot of new build inventory coming online. This whole idea that developers will pause for years is ridiculous. Some of them might have delayed projects a bit, but once they capitulate to higher interest rates, all but the most over-leveraged will resume. No one is going to shutter their multi-million dollar business because interest rates have reverted back to a normal level. They will adapt, like they always have, as long as there’s demand.
Very nicely summarized as always. The red ones outweigh the green ones heavily.
I gave it an honest try, thanks
all projections and forecasts by the BoC are as useful as weather forecast for next month. First they said rates would stay lower for longer, then inflation would be transitory, then rates would stay up for longer, and recently the governor said there are signs of slowdown so a pause in rate hikes would be appropriate. US will continue raising rates, so I doubt BoC will stop as the loonie will weaken way too much and this will cause additional increase on imported goods.
IF there are lot of sellers waiting it out for interest rates to drop(which isn't happening), there could be a glut of inventory that goes on the market this spring/summer. Could cause prices to fall near the end of summer after they sit all spring summer long.
Biggest housing bubble in history in Canada 🇨🇦 😫
by far
Good news...lol finally
I’ve seen no change in House prices. People are still advertising crazy prices. Like nothing has happened.
Interested rates need to go to 10 to 12%. This is where they always where prior to 2008.
After the 2008/2009 downturn. They where artificially kept low.
To get rid of inflation they need to go higher.
Let’s graph out interest rates from 1970 to now.
national price went from 816K to 612K
Hi Jon ,thank you.
I totally agree with you , but let me share my thought
In terms of which market are we in right now , data shows we are in a balance market now, if we agree upon it , price have fallen a lot. and we are going to the Byers market very soon and it seems the steep decline will be imminent afterwards. You are awesome , thanks again and keep up the good and honest work .
Thanks for the comment, you're actually right, we we're heading towards a buyers market and could even say on the edge but I think the new year and spring market will keep us in balanced territory until summer. I think I just refer to anything that wasn't the extreme sellers market we came from early last year as a buyers market. Thanks for watching.
The market here on Vancouver island hasn’t moved an inch. Half duplexes in pulp mill towns still going for 750k.
Thanks for the info
People who bought in 21 will be in denial for a long time
yep
The sales numbers are still very low, that's really suspicious. Rates are up and affordability is down so that implies prices will fall from here, but what do I know?
January had lowest sales in 14 years nationally.
It’s a simple case of price reset & everyone needs to accept this reality. Eventually it’s the demand & supply that would drive the market.
very true, thanks for the comment
I feel like statements from CREA, Royal LePage, etc. stating that new home buyers are waiting on the sideline is misleading. Sure I think there are a lot of people waiting to get into the market/ would like to get into the market but I also feel like the majority of these people are also priced out of the market. Personally I find it hard to see a swarm of new home buyers without a significant drop in interest rates or continued drops in the housing market.
Great point
Think of it like this - there’s tons of people who would rather own an expensive sports car as opposed to a 10 year old beater, however “wanting” to own that sports car and being feasibly able to are two different stories. This is how certain associations mislead people with this claim. There will always be buyers on the sidelines as long as the homeownership rate is not 100%
Still no price drops in the Ottawa area. Lots of new listings but still priced in the stratosphere. Nothing selling......
Thanks for the info, I still have to analyze Ottawa and report on it, lots of requests.
Is it a buyer market? I don't think Ottawa-Gatineau are in a buyer market, although it is not as crazy as it was in the last years. Price are still up to 50% higher than in 2019.
Thanks for the info
I monitor this market on HouseSigma from time to time. Yes, the prices are much higher than in 2019. But A lot of homes are sold for 100 under the first asking price which was the market price just a few months ago. As I noticed on HouseSigma, some neighborhoods are still in balanced marked, but some are already in byers market.
Another excellent job giving an unbiased perspective based on the facts and data
Thanks
There could also be many sellers waiting on the sidelines. I bet all those who bought within the past two years with intent to renovate and a variable rate are itching to off load.
yep, robbing Peter to pay Paul right now.
Been targetting a particular one bought in 2019. Was for sale late 2022 and pulled
The owner-agent is staying put with his price with a menial reduction. Ive been waving a decent offer that nets him 250-300k and still says no
Not sure how much more pain they can handle but my patience is being tested.
I would say the inflated rents and food costs in the CPI will be the core reason why the BOC will keep the rates higher for a lot longer than anybody thinks. Again, they learned that lesson back in the 70s and 80s. In fact, this last week the bond rates have been surging higher adjusting to the reality that central banks are stuck fighting these inflationary influences throughout 2023 and well into 2024. The 2 year bond rate is close to hitting a multi year high. I think the BOC after this pause will move the rate higher by 0.5% to crush these expectations.
great info, thanks for sharing
Bond yields not bond rates
@@nickyfurlano8531 yes bond yields. Sometimes I use rate because most people don’t understand yield as it impacts their int rates on their mortgages.
The only thing you need to know here is the debt loads. The amount of debt loads that people have at rates they could barely afford pre rate increases is astonishing.
Every day you wake up that these rates hold is a day the guy that lives next door to you is one payment closer to not being able to make those payments. We are at interest rate levels where your best friend your cousin your minister might be in trouble. Every day that people put their mortgage payment on their line of credit “you know who you are” is one day closer to the end.
We won’t know when this thing blows but these rates are way more than enough to tip all this over. How long it takes is anyone’s guess. I am guessing this time next year there will be some very important people having some very important meetings deciding the fates of thousands and thousands of peoples financial futures. You don’t want to be one of these people.
I had a business that had a line of credit... when I applied they responded with double what i asked... it was ruinous in the end... you say it true... those with re-ups coming, even investors like the guy across the street from me who at early retirement bought and rehabbed like 10 homes in durham... he will be re-up now going forward couple years and rents will fall and values plummet as mortgage payments double... he could lose his shirt in the end and his retirement... it is the family that will suffer as kids see the stress rip through the house... jan inflation was uuup... euro war is not baked in but will be huge in consequence as rates will not only not go down but could inch up further and stay for min 24 months... this again will depend on this widening war...
Nice to see prices stabilizing
@@Sir-Robalon you get it. Most don’t.
More speculators will need to die of tailpipe carbon monoxide poisoning before prices "stabilize" and become reasonably affordable for would be homeowners and renters. 2016 prices would be about right seeing as terminal rate may very well sit at over 5% for the next year as the S&P takes a dive towards 3200. Oh, and if you 're employed in the auto sector, you'll be losing your cushy union job in the next couple of years as the big three lose their shirts. More foreclosures ahead. A perfect hurricane..
all great points, thanks for sharing
Enjoying the videos, Jon. Commenting to help the algorithm for your channel.
awesome I appreciate that
bond yields will continue to rise, mortgage rates will rise, the Fed has no choice but to continue raising rates.........I'm looking forward to the slow train wreck in the real estate market. I go to alot of open houses for empty spec homes that unfortunately continue to be listed for " make believe" prices. Realtors are putting on a brave face trying to convince me that these spec homes are a "great value" at current prices. No thanks, I'll wait.
Thanks for the info, yeah realtors will continue to believe these prices are good because some people still buy them, but they're a lot harder to sell. The downward trend continues.
Hey John say there a house listed for $675k in your area would you still show that house to someone with a budget of say $550k what I’m really trying to ask is how much lower would a seller take if they had to sell the house
it's hard to say since it's a case by case scenario, if the house is over priced and and should have been listed lower and sellers wants out then there's a possibility. The most important thing is knowing the market and follow up with the sellers and their agents to see where they stand. I've seen many homes lately come down 2 hundred thousand from where they started. Usually price reduction first then negotiation. $50-100K below asking is not out of the question though.
Love your videos Jon. Always a fair and well-researched take on the current conditions. Please keep it up. Especially any information on the Hamilton market.
Very interesting the way you presented the data and the conclusions you can get from
Greetings from calgary
Jon, you are an honest humble personality. Your content sported by genuine data helps to clear the clutter. Make a video on effectiveness of foreign buyer ban in Canada in housing sector. I think instead, government should ban multiple house ownerships to control the prices. What's your take on this.
Foreign buyer ban is a joke, it has more holes in it than Swiss cheese.
Buyers are thinking the higher the asking price means the greater the risk of losing money near term.
thanks for the comment.
We don’t need predictions,everywhere prices r nosediving , Inventory is up, way up
yep
Do we have lots of buyers waiting by sideline with 200k+ household income?
I doubt it, majority can probably afford a $500K home max
LOL OF COURSE NOT ! THEY WOULD HAVVE BOUGHT ALREADY.... BUT FUNNY. THE ONES WAITING ARE THE AVERAGE ONES AND POOR ONES WHICH MEANS THEY WON'T QUALIFY SO THE SUPPLY OF CONDOS AND HOUSES WILL KEEP ON INCREASING WITH NO TAKERS FORCING THE PRICES TO DROP FURTHER. JUST WATCH !
There are some market segments that just have not had enough quality inventory, which caused a massive increase in prices for anything decent. Just about start making fair offers on some stale listings that were drastically overpriced, warm them up for what will likely be a dry summer. Maybe by then they will be willing to play ball. We’re cash buyers in the luxury market, looking only at high-quality custom homes, which is usually a buyers’ game in our area (not GTA or GVA). We’ve needed to be incredibly patient to not do anything stupid, like overpaying by 6 or 7 figures for properties that have sat on the market for YEARS. These homes are difficult to sell in normal times, especially since many need renovations.
Excellent video with sound data points bring some clarity to what is going on. Its certainly a "Transitory" period in R/E right now. A significant amount of sellers need a reality check, which I'm convinced will happen with time as interest rates remain or increase. Thanks for all your hard work on this one!
Thanks for watching and I agree, interest rates take time to run their course, still a long road ahead.
Excellent analysis of what is happening in your market. Thank you.
Thanks
I think a lot of sellers will be jumping into the market
I think employment will get tighter as companies are reshoring leading to wage gains
I think buyers are pricing in inflation
I followed a few properties. They were listed at $1.3 M for more than 80 days. Re-listed at $1 M ( a 25% price reduction. Sold in a week, maybe with a price war
Ban Air B n B. Make vacant homes illegal. Housing problem solved.
it's an option
Excellent job really, these videos are gold. Thanks 👌👍
You're very welcome!
The most important reason missing from your table is: INFLATION. Most houses in the country are in strong hands. Where does the money go if they sell?
The BOC is in the business to add liquidity to the banking system, not taking it away. There's a limit to the tightening.
The banks will be forced to sell at a loss when uninsured people can't pay their mortgages and can't sell themselves.
@@jonflynn The BOC will cut rates if they see a systemic banking crisis.
What is the sweet spot in Oakville (upper s.e). Thank you
Always great information!! Any insight on the North Bay market?? Some inventory still going over asking!! Thanks
I would say everyone that is not financially well off can’t afford to actually live in the greater Toronto area and they’re moving outside makor cities in bringing that unaffordability to a neighbourhood near you. Just a matter of time. It’s happening to every city/town outof Toronto.
Jon, you should add growing Mortgage Fraud on your list
Im bullish because we should pívot soon due to the inability to hike further
Thanks for the comment
Let's say it in a simple way, if the prices do not come down, comprable to the USA, people will simply go down south! The current house market is a bobble, is not sustainable, and is there not incentive to by a house, Canada ramp to a none sense house pricing promoted by low interest rates, and buyers ignorance! On the other site, was a great loophole to profitability but, this times are over, in simple math, doesn’t work! Canada doesn’t look very good right now!
Personal debt load would be one other factor swaying toward values decreasing further. (A major factor). Every Canadian I know is in debt up to their eyeballs.. Will be interesting 9 months - a year from now where all these people are standing with it all.
good point, should have been on the list
Lots of innovative stuff there. Thanks for the hard work.
Thanks for watching!
Just wondering since this video was posted did prices drop?
They will, don't you worry
@@jonflynn that didn't answer the question. You answer questions as well as Justin Trudeau.
haha, first of all I DON"T have to answer any questions, I'm not an elected official and you don't pay me, JT wouldn't even allow you in the comments to ask the questions so please use better comparisons. If you give me credit for the times I was correct then maybe I'll play your game. The more you chastise me the more energy it gives me to make these videos.
@@jonflynn for someone who always talks about how honest and professional they are you sure aren't acting very honest or professional. Just answer the question, just the number please.
If you were actually correct I'd give you credit for that. I am still waiting for you to be correct.
If the house price drops to the 2019 level, should we start looking for buying opportunities? or drops to the 2012,2013 levels?
I wouldn't be doing anything until this inflation situation is fully under control and interest rates come down or normalize
@@jonflynn Wouldnt this trigger another buying spree? Mom and Pop investors would probably fold but there has to be a market where 4%-ers can sustain it
What are your thoughts on Welland in the Niagara Region? Bought in Q2 of 2020 for what I feel was a good deal. Currently locked into a 5yr fixed (renewing q3 2025)
My neighbor house in the market since 5-6 months and nobody is buying
They need to drop the price more
Another great video, Jon. Thanks very much for keeping us educated.
Thank You Jon for always giving is the correct information
Thanks for sharing real and unbiased information!
Some will go up and others will go down.
yep, but overall they're trending down. 25% national average price decline now.
Slow and steady wins the race- atleast we are moving up from dec 2022
Mark was the only central banker that constantly warned Canadians to keep their debt level under control, every other banker after mark was oblivious to that. They should really adjust the cpi to put a heavier weighting on house price appreciation, had they done that interest rates would have risen a long long time ago and we wouldn’t be in this poop show (perhaps a different type of poop show)
That’s because poloz and macklem both subscribed to the Liberal paradigm of fiscal irresponsibility. Their leadership in tandem with liberal policy has lead Canadians to be some of the most highly indebted people on Earth. It’s criminal.
My friend has 500k to invest in real estate. What should he do?
Go outside Canada and you will get more for your money and especially a better quality of life ! People are no longer interested in becoming homeowners in canada with such a bad, discriminatory, socialist, controlling government
Buy US Treasuries instead. Risk free, high rates, no broken toilets to unclog.
@@Julie-rg3mb They were thinking about buying townhouses in Calgary, 1 to live and 2 to rent. You think it would be better to buy US treasuries? How much do they return?
Great content and analysis, Jon.
Good information thank you
Glad it was helpful!
Are there more buyers or sellers on the sideline? Will sellers jump in big time this spring/summer?
The data suggests there's more sellers
I think the table was good 👍 I'm in Hamilton!
how does Canadian housing market compare to US or EU
worse, Canada is the worst, then EU, then US
Hydro bills hv doubled, heat bill are more 3-4 times, property tax hv increased, now mortgage is 3 times so, rent will skyrocket and new immigrants will be affected
good points, it's pretty close to a crisis or already happening and we just don't know yet.
40 plus offers in Mississuaga and Brampton…. Double garage sold for 1.4 mill yesterday… prices slowly rising…
how much under market value did they list it? February and March will catch a lot of people in the new year trap, watch out. I talk about this in my next video.
@@jonflynn 200 k less…
a lot of GTA realtors have gone back to this strategy of listing low and getting multiple offers to get things sold. It will work for a bit until that pool of buyers dries up.
How can I create that data for NOTL?
If you're a realtor run the stats on matrix using sales and new listings as secondary stat and group by price point. The rest you have to go through listing my listing
The immigrant influx is a big realtor talking point. I very sure if you're affluent enough to afford a home in a major city like Vancouver or Toronto within a couple years of moving here - you're already here. Rich have never had issues with immigration. We'll most likely see a large portion of low income earners or refugees seeking safety. They won't enter market at all time high prices and a new high interest rate.
Good point, most immigrants take years to get stable enough to buy.
Biggest factors might be low unemployment and less investment in real estate, in other words, less fear but also less greed. The other factors seem to be hinging on those. People with jobs will be the strongest defence against the housing market crumbling, but houses are not a desirable investment right now, and considering how many of those houses are just an investment, investors leaving the market could make quite an impact.
There’s no way that housing is going to crash. There’s way too much demand. way too much. Immigration. rents are about as high as ownership. It just doesn’t make sense. This country is fucked.
good point but look at it this way, there's so much demand and little supply and prices are still falling. 25% nationally now.
@@jonflynn which direction did prices go after you made this bang up comment? How much did prices fall? Just the number please.
buyers waiting on sidelines because of affordability problems, housing prices go up doesn't solve that
Very good video. Lots of helpful ideas. Thanks.
Glad it was helpful!
When Brampton real estate is more expensive than Hawaii or Florida then you know it is a bubble
haha, yep
I think domino effect is going on. First the increase in interest rate would have forced people to spend more of their earning towards the mortgage. This means the places they used to spend money for leisure would lose business. This would force those places to layoff their staff or reduce their hours. Then those employees would have to cut down on their leisure activities as well, then so on. I bet lots of people right now are forced to work extra jobs which they weren't doing before the rate hikes. During covid and for awhile after no one wanted to work for low wage jobs. I wouldn't be surprised if those jobs are now being filled. If this continues there has to be a breaking point. I deal with many companies at work from various fields and they are all saying that their business has slowed down drastically. Many people misinterpreted BOC thinking that they said they won't raise rates but they only said they are pausing for now. So not surprised right now that housing are selling alot recently and bidding war is going again. Let see what happens if/when BoC decides to raise rates later in the year.
Great points. Even if the BoC just held at current rates it will crush the market, it takes time for the full effects to be felt.
Another point for "prices may go up", - rents are too high now.
If people can somehow manage it, it makes more sense to get a mortgage instead of renting if price is similar.
If you don't plan to stay in the property long term you may be exposed to a greater risk that way if prices go further down, especially if they hit pre pandemic levels.
in my area its still way cheaper to rent than buy
Lol ok
If you can't afford rent in a condo, chances are you definitely can't afford a mortgage, maintenance fees, property taxes and insurance.
Mortgages are by far more expensive currently than rent for equivalent properties.
Carnie can stay in the U.K
I agree.
People predicted a decline in 2023 back at end of 2022.... and it went up like 10-15% in 2023... lolzzzz
Most immigrants don't live in Niagara Falls & that is one reason why they have limited price appreciation. no jobs. Older folks move there to retire, not to start a family.
For prices going down add in job losses
Immigrants well home many will be paid to live here with home, welfare, 45 grand federal, dental ……free free free courtesy of the ready for Canadians.
Wow Hamilton is very over priced still.....but before the pandemic my buddy sold his 5 bed 2 bath home in Stipley downtown for 599. Which he bought in 2000 for 120. Lol oh the good old days when we could afford a house on minimum wage with roommates obviously lol 😆
US 2007/2008 housing crash bottomed in 2012. Bottom will probably be 2026/27.
great forecast
But interest rates weren’t this high in 2008 or aftermath. I think a bottom is sooner but it depends on the economy.
@@ScientistsRus We are on a five year fixed. My brother in law is locked in at 1.83 percent till 2026. It takes five years for people to wakeup to the new reality.
He also paid $100,000 over asking. Time to pay the piper.
For that reason, we sold our principal residence 3 months later. Couldn’t believe how crazy the market was. Convince my wife to sell and move into our Triplex rental. Got $80,000 over asking. Paid off our mortgages. Looking back and where we were, it was the best decision. My family thought I was crazy. Lol. Currently in Mexico enjoying the show. Might buy in 2026/27.
Was there a crash in 2007 or 2008 ? What are you talking about ?
@@Carolinapetroska did you not see the US 2007/2008? You must be vaccinated. My condolences.
Canada 🇨🇦 mortgage fraud capital of the world ! 🤣🤣🤣👍👍👍
looks like it
If a guy that was in charge of bank becomes P.M after this monster god help us we will become another Cuba.
Pre 2nd Great Depression is coming sooner than we all think collapse of US dollar imminent 🙏
back to gold or on to digital?
@@jonflynn GOLD …. The tectonic plates are shifting from Anglo American western hemisphere to the East keep one eye on China Russia India & the formation of BRIC once they stop trading in petro dollar its game over & Canada is joint @ the hip with US of A ☠️
First
nice, thanks
Fork
Thanks for watching
Second
silver medal for you
still talking!! blah blah blah ! you all say the same thing...if people had stopped talking years ago and stayed put, there would not be all the problems
Thanks for the comment, don't know if it's a compliment or insult
Third 😂
on the podium
Wow - so you just spent 20mins to “brainstorm” before sharing any data?
Thank you for your time - I stopped watching your this video right at this time.
Jon that bit of data on optimum sale price "ranges" is a first time for me - makes a lot of sense! Thank you. You have definitely put in a lot of your time. Is there any reason why the 2 million and above homes are removed from the market? does it mean they can afford to wait it out?
Thanks for the feedback, in the area's I showed there's not too many 2 million plus homes.