Seller’s to Buyer’s: A Market Shift in Peterborough and Kawartha Lakes Real Estate
The real estate market in Peterborough and Kawartha Lakes has undergone significant changes over the past few months, transitioning from a competitive seller's market earlier this year to what could now be considered a buyer's market. Let’s trace this back, beginning with the bustling activity in March/April 2024, through the pivotal July rate reduction by the Bank of Canada, to where we stand today.
A Look Back: March/April 2024 Market Overview
In March 2024, Peterborough's real estate market was seen by a surge in sales and rising property prices. According to Century 21 United Realty, the number of sales jumped to 97, a substantial 29.3% increase from the previous year. The average property price also climbed to $646,837, marking a solid 3.7% year-over-year increase. This period saw a highly competitive environment, with limited inventory—only 91 active listings—and homes selling quickly, often within 22 days of hitting the market.
This seller's market meant that buyers faced steep competition and rising prices, making it crucial to act swiftly when a desirable property became available. Sellers, on the other hand, enjoyed favorable conditions, with the ability to command higher prices and sell quickly.
The Turning Point: Bank of Canada’s July Rate Cut
Fast forward to July 2024, and the landscape began to shift as the Bank of Canada announced a reduction in borrowing rates by 25 basis points. This decision was driven by the need to address excess supply in the economy, which had been suppressing inflationary pressures. Although inflation was moderating, particularly in areas like shelter and services, the Bank sought to stimulate economic growth, particularly in the housing market.
This rate cut was a game-changer, particularly for the real estate market. After all, lower borrowing costs make mortgages more affordable, encouraging more buyers to enter the market. However, with household spending and housing investment still weak, the influx of buyers didn’t immediately translate into a spike in demand. Instead, it led us toward a more balanced market.
Today’s Market: A Shift to the Buyer’s Advantage
As we approach Fall of 2024, our Peterborough and Kawartha Lakes real estate market has shifted gears. The initial surge in buyer interest following the rate cut has now settled into a more measured pace. Inventory levels have started to rise, providing buyers with more options. The earlier frenzy has cooled, and we’re seeing properties staying on the market a bit longer, giving buyers more time to make decisions.
This transition to a buyer’s market means that buyers now have the upper hand in negotiations. With more properties available and less competition, there’s greater room for price negotiations and securing favorable terms. For sellers, this shift underscores the importance of pricing properties competitively and being prepared for longer sales timelines.
What This Means for Buyers and Sellers in Peterborough and Kawartha Lakes
For buyers, the current market conditions are ideal for finding the right property at a better price. With lower borrowing costs and a more balanced market, it’s an opportune time to make a move, especially with the guidance of a knowledgeable real estate agent like Shaun Pearce, who understands the nuances of the local market.
Sellers, while facing a more challenging environment than earlier in the year, can still achieve successful outcomes by working closely with their agent to develop a strategic approach to pricing and marketing their property. With the right strategy, it’s still possible to attract serious buyers and close deals in this evolving market.
As the market continues to evolve, staying informed and working with an experienced real estate professional is key to navigating these changes and making the most of the opportunities that arise.
