The Inventory Chasm
The jump in the average price from December to January is nothing short of astonishing. Sales are down by almost 40% from last year, but that's not due to a lack of buyers. Rather, there is simply nothing to buy. Let me paint a picture for you. Currently, there are only ten condos for sale on the entire Halifax Peninsula. Two of those are listed below $400,000, the next cheapest is $1,014,500. That is a gap better described as a chasm. In January, the average price of a home in the Halifax Regional Municipality was $581,180. Sellers were on average obtaining 111% of their asking price.
Next, let's talk about a certain Spryfield semi-detached. A nice home built in 2010, well-maintained and with a few recent upgrades. We listed this property in late January and held showings over a five-day period. In the middle of that, we had a whopping snowstorm which would have kept even the hardiest groundhog inside for several additional weeks. But, real estate agents and their buyers braved the howling wind and swirling snow. At the end of it, the seller received 24 offers. Listed for $409,900. Sold for $576,000.
Had the $576, 000 offer been an outlier in comparison to the other bids, I would have described it as an anomaly. A buyer who didn't understand the market, with more money than sense. However, half a dozen of the offers were for amounts $550,000 or higher. When we listed the property, we thought we'd be lucky to get $500,000. That is the significance of the change and the result of the desperation many buyers are feeling.
As we move into Spring, there will be more inventory which will hopefully help slow the sharp price trajectory. Until then, buyers are going to have to weather the storm to overcome the blizzard of competition.