Muskoka Market Update September 2023
Real estate sales activity for non-waterfront residential properties in Muskoka remained steady when compared to the previous year. In contrast, waterfront home sales experienced a slight uptick. Demand for both types of properties is currently below the usual levels for this time of the year. We anticipate this trend to persist into the near future as potential buyers take a closer look at their finances, particularly with the backdrop of higher interest rates and economic uncertainties. The good news, though, is that prices seem to be stabilizing, indicating a potentially more balanced market ahead.
What do we mean when discussing current market conditions?
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.