For the last year, the news headlines about the real estate market have been focussed on the surge in sales. However, while it is typically assumed that sales in larger urban centres will continue to climb as time goes on and populations grow, the real story sparking national attention is how smaller, suburban and rural communities have seen consistent record breaking sales and spiking prices since the summer of 2020. For the better part of the last decade, Atlantic Canada had been known to experience some economic hardships, especially when it came to the real estate industry. It appears, however, that the COVID-19 pandemic has impacted the eastern provinces’ real estate market in a positive way. The Moncton housing market is one of those recent success-stories.
Ryan Davison, the president-elect of Greater Moncton Realtors, credits the pandemic with people either moving out east, where they can work from home or retire early, in a less expensive market than Ontario. “They can sell there and come here, and pick up a house that they enjoy and is great and they can either park some money or even look at a cottage or something like that.” Indeed, both factors have driven demand forward within local markets across New Brunswick, but this unprecedented activity is depleting inventory levels, which is contributing to soaring real estate prices.
Record-Setting Demand Taking its Toll on the Moncton Housing Market
With the uptick in demand for homes in the Greater Moncton area, the real estate industry is flourishing. However, in order to sustain this demand and achieve balanced conditions, there needs to be enough housing inventory on the market in order to meet demand.
As 2020 concluded, Greater Moncton was on a record-setting high for homes sold. The trend continued strong into the first quarter of 2021. Parise Cormier, President of the Greater Moncton REALTORS® du Grand Moncton says while the uptick in homes sold is great, there needs to be more new listings posted, “Home sales in Greater Moncton continued to set new records this past month. We also saw a modest uptick in new listings in February. Unfortunately, they still lagged the number of sales during the month, further depleting overall inventory to levels not seen since the early ’90s. With active listings sitting at such a low level and demand showing no signs of waning anytime soon, we expect that upward price movement will continue for the foreseeable future.”
Simply put, high demand and low inventory drives up pricing – and Greater Moncton is no exception to this rule. At the end of the fourth quarter of 2020, inventory of single-detached homes was down approximately 64.8% when compared to the fourth quarter of 2019. Similarly, semi-detached properties also saw inventory decrease by 29% in the fourth quarter of 2020, compared to the same time in 2019. This trend from late 2020 continued into the early months of 2021, when the months of inventory at the end of February 2021 were down approximately 60.8% compared to February 2020, and down a staggering 82.9% compared to the long-run average for the month of February.
Come the end of February 2021, houses were being snatched up much quicker than they were coming on the market. While the number of new listings in February 2021 was 1.8% higher than that in 2020, the total number of homes left on the market at the end of the month was drastically less than the previous year – an astonishing 50.2% fewer homes were listed for sale. This sharp decline in listings has set a record for the lowest number of listings on the market in the Greater Moncton area in the last 25 years.
This consistently low supply led to a steep increase in home prices across Greater Moncton; a ripple effect which continued through early 2021. The overall MLS Home Price Index (HPI) for February 2021 was $247,200; indicating an inflation of 28% when compared to February 2020. The steep increase in price created a record-setting value of home sales for the month of February with a total dollar value of $77.6 million – a gain of 69.2% when compared to the same time in 2020.
Looking to Buy in Moncton? Get in While You Can.
It is expected that these current trends of high demand, tightening inventory, and swelling prices will persist throughout this region in the months ahead. That means the time is now if you are looking to purchase a home in the Greater Moncton area, but ensure that you’re navigating this competitive market with the guidance of an experienced professional REALTOR®. It could make all the difference as you battle your way through multiple bidding wars.
As 2021 continues, national housing market activity is expected to remain strong, with the country positioned firmly as a hot sellers’ market from coast-to-coast. Should this projection play out in real time, this will result in a record year for real estate in Moncton, and in both urban and rural housing markets across Canada.