Real Estate Sales Volume Down 30 Percent In Halifax
HALIFAX — As a Halifax real estate advisor, James Dwyer keeps a close eye on market indicators in the city. The Engel & Volkers advisor has seen significant recent reductions in home prices. A year ago, homes were selling for six figures more than the asking price. Now, the opposite is happening.
Last week, Dwyer tweeted that he saw a Bedford house (not his own listing) drop $100,000 in asking price over eleven days–from roughly $650,000 down to about $550,000.
Dwyer says it’s a sign that sellers may have too-high expectations from the historically high prices seen before interest rates skyrocketed.
“It’s a big waiting game because buyers work in a real-time environment with interest rates. When interest rates go up, there’s potential that their purchasing power will decrease,” said Dwyer in an interview with Huddle.
“Buyers work in real-time and sellers don’t. The sellers see Joe’s house sold six months ago for an obscene amount of money and they think they can achieve that as well. And this market literally changed in a 24-hour period when the interest rates went up by 100 basis points [in July].”
The most recent stats show a historic slowdown in Halifax home sales. Dwyer provided Huddle with monthly statistics, from the Nova Scotia Association of Realtors, for the Halifax-Dartmouth area dating all the way back to 2009. This October saw only 355 sales, which is the slowest October recorded over that time.
There were 481 home sales in the same month back in 2009. In October of 2021, there were 506 logged sales, while 2020 saw 729.
The stats show a dramatic slowdown in Halifax starting in July of 2022. That’s when home sales dropped from 643 in June to 468. Sales continued to drop in August (436) and September (348).
Dwyer predicts the winter will continue to be relatively slow for the Halifax market leading into 2023. He believes there will be a large increase in inventory come Spring, making it a competitive environment for buyers.
“Right now, we still have an inventory issue. We’re hovering around 750 active listings here in HRM and we’re used to seeing pre-pandemic levels that were 1,500-2,100 listings,” said Dwyer.
The extreme ups and downs Halifax has seen in home sales and home prices is a reminder that Realtors must plan ahead for the slow times. This means putting money aside for rainy days.
“This business does have extreme ups and downs. It’s very susceptible to interest rate hikes. We’re always taught that you want to make sure that you’re in a cash-flow position for six months,” cautioned Dwyer.
“When the summer numbers were low, and we didn’t have that rebound, my adjustments started coming into my business.”
Nonetheless, Dwyer said there are realtors who are concerned about seeing a significant drop in their incomes and the uncertainty that is brewing.
“We’ve seen a reduction already in about 30 percent of volume or total sales compared to last year, and last year was an anomaly,” said Dwyer. “If you told anybody ‘you’re going to see anywhere from a 20 to a 40 percent decrease in your income next year, they’d be concerned, right?”
“When the good times are happening, you’ve got to make sure that you are chucking away money because there’s usually a downfall to at the end.”
Dwyer also brought up the dreaded “R” word when talking about what the real estate market is signaling in broader economic terms.
“The question then becomes who is taking care of that back end to prepare for what’s about to transpire? Real estate is an early indicator of a recession; it always has been because interest rates are so tightly connected to it.”
Dwyer also recognizes the current climate raises ethical questions about the real estate business. Realtors aren’t just expected to help people buy and sell their homes. They also are required to educate their clients about the market–even if it means the information may dissuade them.
“Business is all about doing what’s right for the people that you work for, and making sure that their best interests are being taken care of,” said Dwyer.
“It’s more important now than ever to make sure that you’re doing your due diligence and then having your realtor be your advocate and to be the one that’s protecting your blind spot because it’s been volatile and nobody wants to be put into a bad position.”
Derek Montague is a Huddle reporter in Halifax. Send him your feedback and story ideas: [email protected].
Editor’s note: This story was last updated on December 1, at 2:30 p.m.