A Bumpy Road to Recovery

Residential home sales declined in February, but a decline in new listings helped keep prices steady this month.

Sales totalled 1.094 units in February, 18 percent below last year's activity. Easing sales occurred across all property types this month, which outpaced the sales growth that occurred in January. After the first two months of the year, sales activity remains well below longer-term averages.

"Housing market conditions are still adjusting to rising lending rates and changes in lending requirements. This process is expected to be bumpy, with demand adjustments leading the changes," said CREB® chief economist Ann-Marie Lurie.

"However, it is important to remember that it is early in the process and the impact on prices will ultimately be dependent on the supply response."

A decline in new listings was not enough to prevent further gains in inventory levels, but it offset some of the impact of slower sales activity. In the detached sector, one of the largest declines in sales occurred in the $600,000 - $999,999 range, while this price range also recorded gains in new listings.  

"This is a market where the fundamentals of a sound pricing strategy need to be understood by sellers. At the same time, savvy buyers typically have a clear understanding of how much of a mortgage they can get," said CREB® president Tom Westcott.

"With all the recent changes, potential purchasers should be obtaining pre-approvals so they understand exactly what they can afford prior to making an offer on a home. It also provides them flexibility in this market."

Citywide benchmark prices totalled $434,300 in February, which is just above levels recovered last month, but comparable to levels recorded last year. While year-over-year price growth remained relatively stable in both the detached and attached markets, apartment prices remained three percent below last year's levels.