Sarnia-area real estate market remained slow in July

Recent interest rate cuts by the Bank of Canada have yet to light a fire under Sarnia-area real estate sales, particularly higher-priced homes.

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Year-to-date sales and the median home price were both down locally in July, Sarnia-Lambton Association of Realtors’ monthly figures show.

“It’s mostly more of what we saw the last couple of months. . . (which was) just kind of slower than normal,” said association president Jeremy Guerette.

There were 143 home sales in Sarnia-Lambton last month – four fewer than June – and the average price of $542,600 was down from June.

“I think that’s just indicative of that higher-end stuff not moving as much,” Guerette said of July’s average price drop.

Sales of higher-priced homes tend to be more sensitive to higher interest rates, he said noting “the middle portion of the market is moving at a decent pace.”

Higher-priced home sales “slowed down the quickest” when interest rates began to rise, Guerette said.

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“I would think and hope that with a couple more rate drops, we’ll see that part of the market move.”

In late July, the Bank of Canada cut its overnight rate to 4.5 per cent, following a similar cut in June.

Rising prices and a limited supply of homes created a seller’s market during the early years of the pandemic until inflation concerns led the central bank to begin raising its interest rate.

It remained high until halfway through this year, when the bank rate began to drop.

“If inflation continues to broadly ease in line with our forecast, it is reasonable to expect further cuts in our policy rate,” Bank of Canada governor Tiff Macklem said last month. “The timing will depend on how we see these opposing forces play out.”

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“That first rate drop didn’t make a significant impact. . . (and) we’ll have to wait and see what August shows” about the impact of the second drop in late July, Guerette said, who suggested late August numbers may look similar to those earlier this summer.

August tends to have lower sales because homeowners are busy with vacations and preparing to send kids back to school, Guerette said.

“September, October we usually get a little bit of boost in the market,” he said.

July’s home listings and sales remained “balanced,” Guerette said. “We didn’t stock up a whole lot more inventory” and maintained a roughly four-month supply of homes for sale.

The Sarnia-Lambton market added 285 new residential listings in July and homes spent a median 24 days on the market before selling, up just two days from June.

Higher inventories have been a trend around Ontario, which may help influence the Bank of Canada toward another rate cut in September, Guerette said.

“I’m cautiously optimistic that we’re going to see a couple more rate drops by the end of the year, barring any spike in inflation,” he said.

With files from Postmedia

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