December Real Estate Market Update: Shifting Plates and What Lies Ahead

As we wrap up December, it’s time to reflect on the latest real estate trends, political shifts, and what these mean for investors and homeowners. December’s stats are never the most exciting, but they’re part of the bigger picture that sets the stage for the year ahead. Let’s dive into the key takeaways and market insights.

Local Market Recap: Peterborough Real Estate Stats

The Peterborough market saw a modest price increase of 6.2% year-over-year in December. However, it’s essential to take this with a grain of salt. December 2023 was a rough month, while December 2024 showed more resilience. The real story is how the seasonal trends have played out:

• Average Days on Market: 35 days, slightly up from last year.
• Sales-to-Listing Ratio: 98%, indicating that sellers and buyers are becoming more aligned on pricing expectations.
• Months of Inventory: Slightly higher than last year, suggesting a more balanced market.

These numbers show us that the fall market was stronger than expected, with some of that momentum carrying into the winter months.

Broader Economic and Political Context

December wasn’t just about the stats. There’s a lot happening politically that will shape the real estate market in 2025. Here are the highlights

1. Trump's Tariff Threats

Newly re-elected U.S. President Donald Trump has made headlines again by threatening 25% tariffs on Canadian goods if certain border security measures aren’t met. While this might seem like a political headline, it’s important for real estate investors to consider how this could impact the economy. Tariffs like these could:

• Increase inflation, particularly for Canadian goods.
• Create uncertainty for businesses, leading to more conservative hiring and investment.
• Potentially soften the housing market due to economic instability.

2. Canadian Political Shifts

With Prime Minister Justin Trudeau stepping down, the Liberal Party is in the process of selecting a new leader. There’s a strong possibility that we’ll see a Conservative government form in the next election. Why does this matter for real estate?

• Immigration Policies: Conservatives tend to take a more workforce-focused approach to immigration, which could result in lower overall numbers and a shift in the types of immigrants coming to Canada.
• Housing Programs: Government-backed programs like CMHC financing could be at risk. It’s essential for investors to remain cautious about relying too heavily on government incentives.

Toronto Market Trends: The GTA’s Impact on Peterborough

Toronto’s real estate market often sets the tone for surrounding areas, including Peterborough. Here are some quick insights from the GTA:

• Months of Inventory saw a spike in September, but by October the inventory really goes down
• This drop in October was prior to rate cut announcements
• We typically see GTA trends trickle to Peterborough, and everyone who didn't sell before Christmas seems to be coming back on the market

Seasonality: Timing Your Real Estate Moves

One of the key insights from the December update is the importance of seasonality. Historically, we see 5% price fluctuations between winter and spring. If you’re considering selling, the best time to list is between March and May to capture the highest prices before inventory peaks in the summer.

Final Thoughts: What to Watch in 2025

As we head into the new year, here’s what we will be keeping an eye on:

1. Political Changes: The impact of a new government on immigration and housing programs.
2. Economic Uncertainty: Tariffs, inflation, and interest rate changes will all play a role in shaping the market.
3. Local Market Trends: Inventory levels and buyer demand.

The real estate market is always shifting, and staying informed is the best way to make smart investment decisions. If you’re looking to buy or sell this year, now is the time to start planning.

I am taking on new clients - so if you'r looking to make a move, you can book me in for a call or you can just message me, DM me on the socials. I look forward to hearing from you.

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Take care everybody!

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Mitch

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