As you could see from the graph I posted in my previous blog, the activity slowed down in the last 4 months. The statistics you are receiving in newspapers, usually reprint some analysts from big financial houses. An example is a Bloomberg-based article that quotes Shaun Cathcart, the national real estate bord's senior economist, who said:
"We are not returning to normal, we are only returning to where we were before COVID, which was a far cry from normal".
I completely agree, we are in no man's land with an extremely low-interest scenario where our governments are printing money as if there is no tomorrow. And no mention about what impact it will have on next-generation welfare, but it is a different story.
My suggestion is always to stop and think for yourself. For example one of my favorite sources Better Dwelling posted a very interesting article "Canada's PropertyBuggle Saw Inventory Tighten. It did that last time prices fell too". They are using one of my favorite indicators Sales to New Listings Ratio (SLNR) to show us what they mean. But it is obvious that the dip of 2008 was caused by the collapse of subprime mortgages. But the current drop is not caused by any economic hardship. Quite opposite, the COVID-initiated hysteria is over, and it is good. The underlying conditions of desire for more space and out of big town stayed, but in a more balance way.
Here are the Canmore SLNR data related to the picture above: The average SLNR for the whole year 2020 was about 50%. Year to date (2021) was 84%, but this number also includes a month of July which dropped to 67%.
Many realtors are explaining the July drop by the fact that a lot of people were fed up with restrictions to travel, they wanted to have some time off. Including us realtors;-). Therefore no economic reason for tightening, no reason to panic, just a natural path of a zig-zag pattern of going, now slowly up.
My personal opinion is that inflation is the problem and we are going for higher prices in the autumn, but the pace will be slower. Obviously, people who put their properties for sale at the beginning of summer and expected immediate sales were forced to sell at lower prices if they needed to sell fast. But this is a welcoming breather and not a reason to panic.
We are now entering election fireworks where we will be promised top $$$ left and right. Trends never move in straight lines, they move up and down, and to time the trend is as futile as attempting to time the stock market. But one underlying problem will play in favor of homeowners long term: INFLATION. And with all this printing money, are you really thinking that there will be no inflation or that it will be just temporary? Dream ON.