HINDSIGHT IS 2020 - MARKET REPORT
The New Year is the perfect time to reflect, so I wanted to take a look back at 2020 in Real Estate. Below are the top trends that dominated the Halifax Real Estate Market last year:
1. Record Prices
I started my first market update of 2020 with a series of news headlines:
In 2020, we saw the average house price in Halifax rise by 14.6% (compared to the norm of 4-6% annually) leaving first-time buyers with fears of being priced out of the market.
What didn’t happen: Back in the spring, CMHC CEO Evan Siddall forecasted a 9-18% drop in average house prices over the next 12 months. This prediction was based on the belief that we would see a high number of foreclosures once homeowners were no longer able to defer mortgage payments.
With prices on the rise and increasing homeowner equity, it is unlikely we will see a high number of foreclosures as sellers in financial trouble will opt to sell rather than foreclose. Several Canadian economists have spoken out and said the CMHC Housing Market Forecast is no longer relevant.
2. Record Low Inventory Levels
We started 2020 with record low inventory levels in Halifax, entrenching the sellers’ market that had been building in our city since 2018.
Add in a pandemic and we saw the number of new listings drop between 65-70% each week as sellers held off on listing their properties amid uncertainty in the market and fear of community spread.
What’s causing these record low inventory levels? Millennials.
The Demographic cohort following Generation X and preceding Generation Z, are now 27-40 years of age and have entered their peak home-buying years. Millennials make up 31% of the population in North America and represent 45% of new mortgage applications. What we are experiencing is termed the Millennial Draw Down.
As such a significant portion of the population enters the housing market for the first time, we are seeing Millennials buy up home inventory at a faster rate than the inventory comes to market.
What slim pickings mean for buyers: Low inventory means you need to be on your toes when you go house hunting—the best homes will likely be snatched up fast. Check out my post on buying a home in a seller’s market for more tips.
3. Spring Market?
The timing of the first wave of COVID-19 in our province disrupted our Spring market which is usually considered the hottest season for real estate. We often see the highest number of new listings and highest number of sales in the spring, but this year people pushed pause on their real estate goals—unable to take advantage of the buying or selling process as it once was.
The lack of a traditional spring market didn’t hurt our overall annual sales numbers. A surge in home sales toward the end of 2020 actually made up for the spring market losses.
13,923 properties sold in Nova Scotia over the course of 2020. This was an increase of 13% from the same period in 2019 and marked the highest level of any year in history, beating the previous record set in 2019 by more than 1,500 sales.
4. Home Became More Important Than Ever
With Canadians spending more time at home, 2020 was the year that 'home' became more important than ever.
It became the office, the school, the gym, the restaurant, the movie theatre and even the bakery—as it seemed that record numbers of Canadians learned to bake sourdough during 2020.
What this meant for the Real Estate Industry is that we saw an increase of potential buyers shopping for homes online as they became keenly aware of the issues with their current home; visits to Realtor.ca were up 35% in 2020.
The type of home searched for shifted. We saw an increase in demand for bigger homes, further from the urban core, that provided the space for the multiple uses we began demanding of our home in 2020.
Commute time mattered less as offices transitioned to work from home – some permanently. And outdoor space became extremely valuable in the wake of public green spaces being shut.
Looking back on this year, 2020 will be seen as the year home became more important than ever.
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Real Estate Advisor based in Halifax, Nova Scotia. I help people buy and sell homes with Engel & Völkers.