The spring real estate market in New Brunswick has seen some ups and downs, but it remains a seller's market. With over 500 properties listed, there has been a surge in activity. However, average sale prices have only increased slightly compared to earlier in the year, reaching nearly $335,000. While this is down a few percentage points from the previous year, there are still instances where properties are being sold for more than the asking price.
According to Michele Morris, President of the Real Estate Board of the Fredericton Area, these higher prices are often driven by buyers who are desperate to find a home. They may have already sold their previous property or have lost out on multiple bids. This sense of urgency can cause buyers to be willing to pay well above the listed price.
On the other hand, there are cases where properties sell for less than the list price. Morris suggests that this may be due to unrealistic pricing based on peak prices from a couple of years ago. These high prices are no longer attainable in the current market.
Interest Rate Hikes and Housing Challenges
Interest rates and rising household debt levels are having a significant impact on the housing market. Many potential homebuyers have been priced out of the market, forcing them to remain in rental units. The challenge of finding a new home after selling their current one has also made potential sellers think twice about listing their property. The vacancy rate in Fredericton is at an all-time low, making it equally competitive for apartments and single-family dwellings.
Despite these challenges, there are still many buyers coming from other provinces, particularly Ontario and Alberta. Rising interest rates do not deter them because they are paying cash from the proceeds of selling their more expensive homes. This allows them to find properties in New Brunswick that far exceed what they are used to for a fraction of the price.
Unlicensed Real Estate Activity
It is essential for buyers and sellers to be aware of some unlicensed pop-up real estate agencies that have appeared in the market. These agencies are attempting to take advantage of the current market conditions by making false offers on undervalued properties. They then try to resell these purchase agreements to others at a profit. The New Brunswick Financial and Consumer Services Commission have issued a warning about these activities to protect consumers.
Market Insights for Specific Areas
Fredericton Area
In May, over 260 properties were sold in the Fredericton area through the multiple listing service. This represents a decrease of more than 10% compared to the previous year. Year-to-date sales are down 20% from last year. While it used to take just 1.3 months to sell a property during the peak of the pandemic, it now takes an average of 1.9 months, still significantly less than the traditional five-month timeframe.
Saint John Area
The Saint John Real Estate Board, which covers the southern part of New Brunswick, saw a cooler spring market. In May, 210 units were sold, down approximately 18% from the previous year. This is only slightly above the 10-year average for the month. In the first five months of 2023, 704 homes were sold, representing a drop of almost 30% compared to the same period in 2022. The average price of homes sold in May was $312,366, only a few percentage points lower than the previous year. The inventory of active listings was at its lowest in over two decades.
Northern New Brunswick
In northern New Brunswick, which includes cities like Edmundston, Miramichi, Bathurst, Campbellton, and the Acadian Peninsula, 164 homes were sold in May. While this is approximately a 15% decrease from the previous year, it is still almost 25% above the 10-year average for the month. The average price of homes sold in the region during the first five months of 2023 was $186,941, representing a 3.9% decrease compared to the previous year. The total number of active listings at the end of May was 724, similar to last year but 35% below the 10-year average.
These insights provide a comprehensive overview of New Brunswick's housing market this spring. While challenges exist, there are still opportunities for buyers and sellers alike. It is crucial to stay informed and work with trusted real estate professionals to navigate the current market conditions successfully.
