I am back again for the monthly recap of the Squamish real estate market, and surprise, surprise the hot topic is the shifting market and rising interest rates. Not that this is a bad thing. It’s an incredibly important trend to keep track of that provides insight into the current market.
The Bank of Canada’s prime rate saw yet another increase of 75 basis points bringing the overnight prime rate to 5.45% on September 8th. The reason for such drastic increases to the overnight rate is due to escalating inflation rates. July saw a minor dip in inflation to 7.6% and August dipped further to 7%, however, its still far cry from the target goal of 2-3%.
If this trend of a dipping inflation rate continues, we will start to see the BOC relaxing on the continuous interest rate hikes and eventually will start to see the rate lower again.
Now the big question, what does this mean for our local real estate market? In short, I predict that we will continue to push further into a buyers market for the next 3-6 months (maybe even more) before a recovery begins. Will we go into a recession? I certainly hope not, but time will tell. The Canadian unemployment rate rose from 4.9% in July 2022 to 5.4% in August 2022. This is .4% higher than forecasted. This is a key figure to watch when looking at the Canadian economy.
Moving along to what we experienced in the real estate market in Squamish throughout August:
As always, I will start with Squamish as a whole and then move along to individual property types.
SQUAMISH – ALL PROPERTY TYPES
MLS HPI Benchmark Price: $1,148,000 | +15% year over year
Average Sold Price: $931,582 | +2.2% year over year
Average Days on Market: 35 days | +34% year over year
New Listings: 56 new listings | +51% year over year
Sales: 22 sales | -52% year over year
Percentage of sold price to list price: 93% of list price | -5% year over year
Absorption Rate: 11% | -75% year over year *officially dipped into a buyers market*
DETACHED
MLS HPI Benchmark Price: $1,763,100 | +16% year over year
Average Sold Price: $1,145,625 | +1% year over year
Average Days on Market: 49 days | -34% year over year
New Listings: 28 new listings | +100% year over year
Sales: 8 sales | -58% year over year
Percentage of sold price to list price: 90% of list price | -7% year over year
Absorption Rate: 7% | -75% year over year *buyers market*
TOWNHOUSE
MLS HPI Benchmark Price: $1,032,400 | +12% year over year
Average Sold Price: $941,333 | +5% year over year
Average Days on Market: 34 days | +47% year over year
New Listings: 10 new listings | +66% year over year
Sales: 6 sales | – 45% year over year
Percentage of sold price to list price: 93% of list price | -4% year over year
Absorption Rate: 16% | -72% year over year *currently in a balanced market*
CONDOMINIUM
MLS HPI Benchmark Price: $621,200 | +19% year over year
Average Sold Price: $624,633 | +24% year over year
Average Days on Market: 18 days | +38% year over year
New Listings: 16 new listings | +14% year over year
Sales: 6 sales | -40% year over year
Percentage of sold price to list price: 98% of list price | -2% year over year
Absorption Rate: 12% | -84% year over year *on the cusp of a buyers market*
