The 2017 Regina real estate market performed lower than hoped due to a combination of government policies, a sluggish job market and a lower purchasing power from home buyers. On the other hand, an increase in housing inventory and a downward trend in home prices should benefit homebuyers in the second half of 2018.
No getting around it — 2017 wasn’t the best for Regina
Last year was a slow year for the Regina residential market. According to the Association of Regina REALTORS and CREA, the reported number of sales reported in the Regina area was lower in December 2017 compared to December 2016. This decrease puts the market well below the 10-year average, and at the lowest number of December sales since 2008.
The number of new homes on the market is also at the highest point in the last decade for December. At the end of the year, there were 1,183 listings on the multiple listing service (MLS). Supply was at its highest in August, reaching 1,537 listings, which has also caused the average home selling price to go down.
This significant increase in inventory during December was to be expected since home buyers nationwide rushed to buy a home before the new mortgage stress tests came into effect. Though, it seems that in Regina’s case, there were fewer qualified buyers capable of offsetting the said increase in inventory.
There was also an increase in time spent in the market for new listings. In 2016, the average time spent in the market for a house was 53 days. In 2017, it was up to 64 days before selling. According to Gord Archibald, the Chief Executive of the Association of Regina Realtors Inc., “By all key measures, 2017 was the slowest year since the residential real estate boom of 2007. A combination of slower economic and job growth, higher supply levels and public policy decisions such as the federal government making it more difficult for buyers to qualify for mortgage financing all contributed to the slowdown.”
An increase in relative affordability will be silver lining for 2018
While it’s true that the start 2018 will be even slower than 2017, there are some reasons to be cautiously optimistic about Regina’s market. For instance, Regina’s employment trends show a mostly full job market with an unemployment rate at 4.7% by the end of December 2017. Due to those trends, we shouldn’t expect a dramatic increase in buyer purchasing power. Adding to that, newer and more stringent mortgage rules introduced by the federal government will make it more difficult for buyers to qualify for home mortgages. Those regulations will cause a nationwide slowdown in home price appreciation, but we can expect Regina to feel its effects even more so. Although it is uncomfortable news for sellers, who are already struggling in a sluggish market, it is good news for buyers. In fact, buyers that missed their chance to buy in November and December will have another shot at homeownership if they can save up enough cash for their downpayment by the second half of 2018.
A seller's best strategy would be to work alongside their trusted realtor, to accurately price their properties to sell, to stand out in Regina’s full inventory, and not have their property sit in the market for too long.