The headlines on the real estate market last year were dominated by the sales surge. However, while sales in larger urban centers are generally believed to continue to rise over time and as population increases, the real story that has caught national attention is the fact that smaller, suburban and rural communities have been changing since then Summer 2020. For most of the last decade, Atlantic Canada has been known to experience some economic hardship, especially when it came to the real estate industry. However, it appears that the COVID-19 pandemic has had a positive impact on the eastern provinces real estate market. The Moncton housing market is one of those recent success stories.
Ryan Davison, the president-elect of Greater Moncton Realtors, attributes the pandemic to people either migrating east, where they can work from home, or retire early, in a cheaper market than Ontario. “They can sell there and come here and pick up a house that they like and that is great and they can either park some money or even look at a house or something like that.” In fact, both factors have driven demand in local markets across New Brunswick, however This unprecedented activity is causing inventory depletion, which is contributing to soaring property prices.
Record demand takes its toll on the Moncton housing market
With the growing demand for home ownership in the greater Moncton area, the real estate industry is thriving. However, in order to maintain this demand and achieve balanced conditions, there must be sufficient housing stock in the market to meet the demand.
At the end of 2020, Greater Moncton hit a record high in homes sold. The trend continued strongly in the first quarter of 2021. Parise Cormier, President of Greater Moncton REALTORS® du Grand Moncton, says while the increase in homes sold is great, there are more new listings to be released.Home sales in the greater Moncton area continued to break new records over the past month. We also saw a modest increase in new additions in February. Unfortunately, they still lagged behind the number of sales over the month, which further reduced total inventory to levels not seen since the early 1990s. Since the active offers are at such a low level and demand will not decrease in the foreseeable future, we expect this to be the case The upward movement will continue for the foreseeable future. “
Put simply, high demand and low inventory drive prices up – and Greater Moncton is no exception to that rule. At the end of the fourth quarter of 2020, the number of single-family homes decreased by around 64.8% compared to the fourth quarter of 2019. The number of semi-detached houses also fell by 29% in the fourth quarter of 2020. compared to the same point in time in 2019. This trend from the end of 2020 continued into the first months of 2021, when the storage months at the end of February 2021 increased by about 60.8% and compared to February 2020. the long-term average for February fell by an unbelievable 82.9%.
In late February 2021, homes were snapped up much faster than they hit the market. While the number of new entries in February 2021 was 1.8% higher than in 2020, the total number of apartments remaining on the market at the end of the month was significantly lower than in the previous year – an astonishing 50.2% fewer apartments were listed for sale. This sharp drop in listings has set a record for the lowest number of listings on the market in the greater Moncton area in the past 25 years.
This consistently low supply led to a sharp rise in home prices in the greater Moncton area; a ripple effect that lasted until early 2021. The MLS Home Price Index (HPI) for February 2021 totaled $ 247,200; which indicates an inflation of 28% compared to February 2020. The sharp rise in prices resulted in record home sales in February totaling $ 77.6 million – an increase of 69.2% compared to the same point in time in 2020.
Do you want to shop in Moncton? Get on while you can.
It is expected that these current trends of high demand, depleted inventories and rising prices in this region will continue in the coming months. That means now is the time to buy a home in the greater Moncton area, but make sure you navigate this competitive market under the guidance of an experienced REALTOR® professional. It could make all the difference when you struggle through multiple bidding wars.
Throughout the remainder of 2021, activity in the national housing market is expected to remain strong, with the land firmly positioned as a best seller from coast to coast. Should this forecast prevail in real time, it will result in a record year for real estate in Moncton and in the urban and rural housing markets across Canada.