We are expecting 2023 to follow more of the regular seasonalities that real estate goes through every year. These seasonalities help us determine things like the best months to put your home on the market based on looking at historical data which typically repeats itself every year except of course the last 2 years.
Having said that, it is extremely safe to assume we will have a flow of inventory come into the market this spring. This is going to be due to a couple of different factors. First, as I mentioned seasonalities. Historically we get our highest inventory levels during spring. Second, there are some sellers out there that are currently in a position where they have to sell due to many different factors and we will most likely start seeing those sellers going on market as we get further into the year.
When it comes to demand, we typically see many more buyers come on the market during the spring time as well, and even though we are going to see much more activity during spring then what we are seeing now due to extremely low inventory levels, due to interest rates and recession talks we will probably see supply outpace demand.
Keep in mind that so much rides on what happens with interest rates and how long the Bank of Canada holds them about 4% however we will most likely see 1 or 2 more interest rate hikes and I would not expect them to start lowering them until the 3rd or 4th quarter of 2023 and if they do it would be extremely hard to lower them down by much by the end of this year.
Overall, I would say if you are a seller, you would benefit from capitalizing on the low inventory levels in the first quarter of the year as that won’t be the case for long, we will see inventory rise especially during this spring, buyer affordability will most likely decrease which will affect the higher pricing brackets first and we should not expect to see interest rates come down until the second half of the year however the probability is that we will continue seeing interest rates over 4% well into this year and most likely early 2024 as well.
We expect prices to fall slightly as we head further into 2023 by roughly 5% to 8% on the higher end.