Muskoka Market Update – October 2023

October saw a strange split in trends. While the sales of non-waterfront residential properties are steadily declining, there’s a contrasting increase in the sales of waterfront homes. This period has also seen a remarkable rise in new listings, which has caused overall property inventories to slightly exceed the usual averages. This is particularly notable in the waterfront segment, where there seems to be either a gradual market recovery or a decrease in the rate of decline. Matthew Lidbetter, President of the Lakelands Association of REALTORS, remarked, ‘As the colder months approach, it might be challenging to identify clear trends in this market sector, but we plan to monitor it closely and revisit our analysis in the early spring’.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

What do we mean when discussing months of inventory?

Months of inventory is a crucial metric in real estate that helps gauge the balance between supply and demand in a specific housing market. Months of inventory is calculated by dividing the current number of active listings in a market by the average monthly sales over a certain period. The result represents how many months it would take to sell all the available properties at the current sales rate, assuming no new listings are added.

Here’s how it works:

– If the months of inventory is low (e.g., 3 months or less), it generally indicates a seller’s market. In such conditions, there are more buyers than available properties, which often leads to rising prices and sellers having more negotiating power.

– On the other hand, if the months of inventory is high (e.g., 6 months or more), it typically indicates a buyer’s market. In this scenario, there are more properties for sale than there are buyers, which can put downward pressure on prices and give buyers more negotiating power.

– A balanced market usually falls in the range of 4 to 6 months of inventory. It suggests a relatively stable market with a fair balance between supply and demand.