King City Real Estate Market Forecast 2023

Recent changes in the market have prompted more homebuyers to consider whether or not 2023 will be the right year for purchasing a new home. While the housing inventory shortage and interest rates continue to remain a problem, a balance of many factors still points toward continuing stability for the foreseeable future. So, if you’re looking into the King City, ON, real estate scene this year, read on for a guide to everything you need to know before getting started!

Predicting the market is largely based on assessing and understanding recent trends that have developed within the past few years. Many important factors, such as home price growth rates, housing inventory, the rise and fall of mortgage rates, the strength of home equity, and other economic factors, all contribute to the overall health and trends of the housing market.

In 2022, home price growth in Ontario slowed down to about 2% compared to 15% in 2021. Home prices in Canada have consistently risen over the past two decades. This slowing down of the market could be good news for homebuyers who have been waiting for prices to stabilize before making their moves.

In 2022, we also saw interest rates begin to rise in Ontario. Currently, interest rates sit at just over 4%, which is the highest they have been since 2008.

According to the most recent stats from the Toronto Regional Real Estate Board, the average sales price of properties in the Greater Toronto Area is currently $1,108,606. This is trending down slightly (by 14.6%) compared to the $1,298,666 average price seen in March of 2022. 

In addition, the number of transactions has significantly decreased, with a 36.5% drop from  March 2022 to March 2023. The number of new listings has also reduced, and homes are spending much longer on the market (11 days in March 2022 compared to 27 days in March 2023). 

While trends show some signs of cooling off, here are the top indicators that the market is expected to remain stable despite rising mortgage rates and prices tapering off in early 2023. 

According to Freddie Mac, North American market confidence has increased from last year. Forty-three percent of economists and analysts are confident that the housing market will remain strong this year. This might not sound like an overwhelmingly positive statistic, but that is up by over 9% compared to Q4 2022. This means that experts still expect to see positive market trends throughout the year.

Lower prices could be good news for potential home buyers who may have been waiting for the market to stabilize before taking the plunge. But the limited housing supply is keeping prices in check, which means homes are holding their value despite dropping slightly from 2022. In fact, although home prices have decreased year-over-year, if you zoom in on monthly trends, they show a slightly more promising story. From February to March 2023, the average sales price in the Greater Toronto Area rose by 0.8%.

Experts believe that home prices will remain stable, but you can expect to see fluctuations on the extreme end of the spectrum. How much lower will home prices go? Experts predict home prices will drop by as much as 13% in Ontario in 2023, along with a 6% drop nationwide.

In a market dictated by supply and demand, low supply presents an ongoing problem. Low housing inventory will continue to be a problem in 2023, just as it was last year. With so many families postponing their move due to the pandemic, the market was suddenly filled with new buyers competing with one another. 

Thanks to lower mortgage rates, many homeowners are still reluctant to sell and plan to stay put for a while — as evidenced by the 44.3% drop in total new listings year-over-year. This hesitation has put a crunch on the housing supply and has directly resulted in price inflation. 

The fluctuation of interest rates is an important factor when evaluating housing market trends. The Bank of Canada has raised mortgage rates in an attempt to slow down the housing market, but this seems to have had more of a stabilizing effect compared to the rapid price growth from previous years.

So, is 2023 a good time to buy? Yes! In fact, waiting until prices drop further to purchase a home isn't recommended, as there is no guarantee that will happen. This uncertainty, combined with low supply, means that it is generally not a good idea to put off a new home purchase for another year or two when you could be building equity during that time. In addition, buyers who have been waiting on the sidelines may now have an excellent opportunity to strengthen their position in negotiations. With homes spending much longer on the market, many sellers are more likely to make concessions or negotiate on the final price to achieve a faster sale.

Ultimately, deciding when to buy a home should be a decision based on personal factors, such as your specific financial situation, your need to relocate, and other criteria. Work with your real estate agent to determine whether or not now is the right time to move forward to this new milestone in life.

If you are interested in King City real estate or have questions about this evolving market, reach out to local Realtor Pablynie Calabro for top-tier advice and guidance every step of the way. With vast experience in the real estate game, Pablynie brings exceptional insight, market knowledge, and unparalleled customer service to the table. Reach out today to get started toward your goals.