Why were house prices down in November?

House prices were down in November. Here are the headlines:

House Price Index Shows Declines In 8 Of 11 Cities

NOVEMBER HOME SALES ON PAR WITH 2013, UP ON A YEAR-TO-DATE BASIS

Canadian house prices decline 0.3 per cent in November, the first monthly drop this year

 

Down, but up

According to Teranet’s latest house price index report, house prices in Canada fell by .29% in November in 10 of the 11 composite cities it measures. They all edged down slightly but remain at historic highs.

Prices for 2014 are up nationally by 5.2%

Sadly Kitchener-Waterloo is not one of the cities in the Teranet report (but Hamilton is – go figure).  According to our local real estate board, The Kitchener Waterloo Association of Realtors, KW was down by 1.3% from last November. Prices here are up by 3% and the volume of sales is up slightly by 2.7% over last year.

 

Why prices fell in November?

 

Prices can’t go up forever

It is bound to happen. Prices can’t go up forever. We have had so many months in a row of strong growth, prices have risen at a higher rate than can be sustained over the long run. Think of it like this: You are running a marathon. Maybe mile 15 is uphill and into the wind. If you run that mile slightly slower than all the rest, does that mean you’re not going to be able to finish the race? It is not all doom and gloom and the beginning of the end.

Remember, the last mile might have been slow but you are 5% faster than the last time you ran this marathon.

 

All the good houses got sold in September and October

After price increased and the volume of sales we went through in the late summer and early fall, only the leftovers were available for sale in November. Of course prices went down. The good houses were all gone.

 

Bad weather

November was crappy with snow and car crashes and an abrupt end to a warm autumn. Who wants to shovel out their driveway and then go looking at houses.

 

Falling oil prices

What happens in Calgary, Toronto and Vancouver affects real estate here. It is a global economy and a national housing market.

 

 

Prediction

House prices will fall again in December. You watch. They will but it doesn’t mean anything.

 

 

Written By
More from Keith
August 1 2018 Kitchener Waterloo Real Estate News
Kitchener Waterloo Real Estate News August 1 2018   Wednesday August 1...
Read More
0 replies on “Why were house prices down in November?”