The real estate market in New Brunswick may not be exactly what realtors were hoping for this spring, but it still remains a seller's market. Michele Morris, president of the Real Estate Board of the Fredericton Area, explains that although there were a good number of spring listings, the average sale prices were slightly higher compared to earlier in the year, reaching almost $335,000. However, this is still a decrease of a couple of per cent compared to May of the previous year, as well as the year-to-date average.
The Impact of Interest Rate Hikes
One of the factors affecting the housing market is the rise in interest rates. This, coupled with increasing levels of household debt, is causing people to reconsider their plans and adjust their budgets. Some individuals are even forced to continue renting instead of buying a home. According to Morris, higher interest rates are also making potential sellers think twice about selling their homes, as finding a new place to live after selling is becoming a challenge. In addition, the vacancy rate in Fredericton is currently at an all-time low, making it just as competitive for apartments as it is for single-family dwellings.
Unlicensed Real Estate Activity
The New Brunswick Financial and Consumer Services Commission recently issued a warning regarding unlicensed pop-up real estate agencies taking advantage of the hot market. These unlicensed agencies have been making false offers to purchase undervalued or off-market properties, and then attempting to resell the purchase agreements to others for profit.
Fredericton Area Statistics
In the Fredericton area, over 260 units were sold through the multiple listing service in May. This represents a decrease of more than 10 per cent compared to May of the previous year. Year-to-date sales in 2023 are down 20 per cent from the same period in 2022. It now takes an average of 1.9 months to sell a property, an increase from the 1.3 months it took during the peak of the pandemic. Despite this, the current selling time is still significantly shorter than the traditional average of five months.
Saint John Area
The housing market in the Saint John area, which includes the southern part of New Brunswick, experienced a cooler spring market. In May, a total of 210 units were sold, representing an 18 per cent decrease compared to the previous year. It is worth noting that this number is just above the 10-year average for the month. The average price of homes sold in May was $312,366, only slightly lower than the May average from the previous year. The number of new listings in May was also down by about a third compared to last year, resulting in the lowest May inventory in more than two decades.
Northern New Brunswick
In northern New Brunswick, including areas such as Edmundston, Miramichi, Bathurst, Campbellton, and the Acadian Peninsula, 164 homes were sold in May. Although this represents a decrease of close to 15 per cent compared to May of the previous year, it is still almost 25 per cent higher than the 10-year average for the month. The average price of homes sold in the region for the first five months of 2023 was $186,941, a year-over-year decrease of 3.9 per cent. The total number of active listings at the end of May remained relatively stable compared to last year and was 35 per cent below the 10-year average for the month.
In conclusion, while the spring real estate market in New Brunswick may not have met all expectations, it is still favorable for sellers. Interest rate hikes and unlicensed real estate activity are factors that have influenced the market. Furthermore, specific regions like Fredericton, Saint John, and northern New Brunswick have experienced varying market conditions. It is important for both buyers and sellers to stay informed about the latest trends and adapt their strategies accordingly.
