With the first quarter of the year in the books, the dynamics of the Winnipeg real estate market have not really changed from 2021, which blew the doors off all previous records for sales volumes and values.
While there were 27 per cent fewer sales this March compared to last year’s all time high for the month, and off 26 per cent for the full quarter, there were also fewer listings at exactly the same proportion, about 26 to 27 per cent.
Meanwhile, according to the Winnipeg Regional Real Estate Board’s March market release, prices have continued to soar as the imbalanced seller’s market continues to hold sway.
The average price for a single-family detached home in Winnipeg was up 15.7 per cent through the first three months of the year and up 14.2 per cent in the month of March.
The slightly lower growth in prices in March compared to the hike over the full quarter probably shouldn’t fool people into thinking prices are about to start moderating.
“I don’t know it’s a surprise that prices are going up as much as they are,” said Akash Bedi, president of the WRREB and a broker at RE/MAX Executives Realty.
“We are facing a supply shortage, just like the rest of the country,” he said. “The number of buyers are still the same, if not increasing from last year at this time. Because of supply being so low we’re still seeing multiple offers coming in.”
Last year, the WRREB was recording record low listings and they continue to lag this year.
Bedi said there is a one month supply of listings when in a typical balanced market dynamic there would be a four-month supply.
“It’s creating a very stringent market, very heavily weighted on the sellers side,” he said.
Another difference in 2021 is the increase in mortgage rates, which the WRREB believes may be a contributing factor with fixed-term mortgage holders deciding to hold onto the favourable terms they have in place with respect to financing their existing home.
What that means is that sellers don’t have to worry if their house will sell.
In March, about 78 per cent of all MLS listings sold with single-family listing sales conversions at 82 per cent. The out-of-balance market conditions has opened up the condo market in Winnipeg like never before. Condo listings converting to sales were at 73 per cent in March. Those are all almost identical rates to last year.
Prior to 2021, conversions were significantly lower for this time of year.
Bedi said that the average broker will write between five and 10 offers with the average buyer. Five years ago it may have been one-to-three.
“The house hunting experience was different then,” he said. “Now patience is a virtue.”
That means buyers have to be prepared with a committed game plan, according to Bedi.
“You need to be coming in with a strong offer that is going to be attractive for a vendor to consider over others,” he said. “Terms and conditions like possession date and other inclusions really can be a factor.”
For instance, he said someone may offer a possession date that is more convenient for the seller but it is $5,000 less and the seller may consider that offer.
At the WRREB’s annual market insight’s conference in February, Peter Squire, the Winnipeg Regional Real Estate Board’s (WRREB) head of market intelligence, said that while activity is expected to slow in 2022, rising prices are not.
“Simply put we need more listing inventory to ameliorate the supply/demand imbalance,” said Squire. “This, in and of itself, is reducing our possibility of reaching and surpassing last year’s total.”
So far, 2022 is playing out just as predicted.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.
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