December 2024 Peterborough Real Estate Market Update

Alright, what's going on everybody? Mitch here. After a two-year hiatus, I'm back with a market update, and there's a lot to cover. The last two years have been a whirlwind — from personal milestones to market shifts — and now, we're stepping into what feels like a pivotal moment for real estate in Peterborough. Let’s break it down.

The Last Two Years in 60 Seconds

I won’t deep dive into every detail here (we’d be here for hours), but in short, it’s been a ride: secondary suites, course creation, new home builds, working with Dan & Nick from The Canadian Real Estate Investor Podcast, learningCole Gordon’s sales structure, a new baby, a move, and now, as of August 2024, I’m officially taking on new clients again.

If you’re looking to buy, sell, or just want a consultation, please reach out. My goal? Get back to regular monthly market updates and keep you informed.

Macro Economic Trends: Forces Pulling in Opposite Directions

Right now, the future of the real estate market is uncertain. We're caught between two opposing forces:

• Rate Cuts: The Bank of Canada recently dropped the overnight lending rate by 50 basis points, and further cuts are expected. This usually signals optimism for the market.
• Household Debt and Mortgage Renewals: The "renewal wall" is looming. Around 20% of ultra-low interest rate mortgages are renewing in Q1 2025, shifting homeowners from sub-2% rates to 3.5% - 5% rates. This increase in mortgage payments will siphon cash away from the broader economy — think Canadian Tire, Walmart, even fast food.

Factor in immigration policy changes and a potential slowdown in population growth, and we’re recalculating demand for new housing units.

Local Market Stats: Context is Key

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Prices: Average Sale Price Down, But It’s Not as Dire as it Looks

Let’s address the sticker shock:

• Average Price Last Year: $646,903
• Average Price This Year: $581,964

That’s a $65K drop, but context matters. October 2023 was an outlier, and this year’s prices have been hovering just below $600K. Rolling averages paint a more stable picture. Prices are down, yes, but the decline is more nuanced than the headline suggests.

Days on Market: 28 Days

Buyers, if a house has been listed for under 30 days, you’ve got time. No need to race out and make an offer on day one. Sellers, be prepared to wait a few weeks before seeing offers unless you’re priced aggressively to move quickly.

List-to-Sale Price Ratio: 98%

Most homes are selling for about 2% below asking price. Buyers are cautious, conditions are common, and the days of multiple offers are rare unless a property is strategically underpriced.

Inventory Insights: The Barometer of Market Pressure

Months of Inventory is a key indicator of market direction. Early 2024 saw a typical low-inventory February, leading to a hot spring market. But by summer, inventory levels rose steadily. In October, we saw a notable dip in inventory, a potential sign of stabilization.

My base case? Expect a flat market in 2024, maybe with a slight uptick come spring. Inventory levels will likely remain under control, but don’t expect a sudden surge in prices.

Boots-on-the-Ground Insights

• Investors: Appetite remains low. High interest rates make cash flow hard to achieve, and rents are stabilizing.
• First-Time Buyers: They’re cautiously entering the market, trying to time the bottom. Many are deciding that now is "close enough" to the bottom based on rate policy.
• Homeowners Facing Renewals: Some are downsizing or reshuffling finances to manage higher mortgage payments. Power of sales are increasing, and we’re seeing price pressure on mid-range and high-end properties.

Final Thoughts & How to Connect

This market is complex, and there's no one-size-fits-all approach. If you’re looking to buy, sell, or just chat about real estate, I’m open for business. Click here to book a 15 or 20 minute call with me directly.

Expect more updates like this monthly. Whether it’s through YouTube, Instagram, or email, let’s stay connected and navigate this market together.

Talk soon,
Mitch

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