Sarnia-area real estate market slows in November

If interest rates begin to drop early in the new year, as some experts predict, it will be welcome news for the real estate market in Sarnia where sales slowed in November.

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There were 92 home sales in November, which is down from 110 the previous month, according to the Sarnia-Lambton Association of Realtors.

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November’s sales volume in the Sarnia area totaled $49.9 million, down 3.5 per cent from the same month in 2022.

“It was a little bit slower in November, certainly,” said association president Rob Longo.

What is a typical slowdown in the final months of the year “has been compounded” by higher interest rates, he said.

The Bank of Canada, which had been increasing interest rates to battle inflation, held its benchmark lending rate at five per cent earlier this month. It was the bank’s third consecutive hold announcement after a series of increases beginning in early 2022 when the rate sat at 0.25 per cent.

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The next Bank of Canada rate decision is scheduled for Jan. 24, 2024.

Longo said buyers “are still out there” and activity among properties “under the $500,000 price point” remained busy locally in November.

The impact of higher interest rates on mortgage payments has “really slowed that upper market,” he said.

Interest rates will continue to be “the big thing” for real estate in 2024, “but going in the other direction,” Longo said.

“We’re expecting now some softening on the interest rates, certainly in the first half or even first quarter of next year, which I think is really going to push the market again,” he said.

“A lot of the economists are now predicting that we’re going to start to see decreases as soon as February, but certainly into the spring, for sure.”

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Lower rates on borrowing should see “buyers come out of the woodwork” who “have been on the sidelines for the last 18 months,” he said.

Even with the recent slowing of activity in the local market, the median house price has remained “extremely steady,” Longo said.

“We’re seen that sitting right about $490,000 pretty much for the last year,” he said. “It has been extremely stable and predictable which is a good thing.”

Sarnia home prices are lower than in communities around it, including London, Strathroy, Kitchener-Waterloo and Chatham-Kent, Longo said.

“They’re all higher and sometimes quite a bit higher. . . That makes Sarnia-Lambton very attractive,” he said.

The number of houses on the market in the Sarnia area continued to grow in November and properties were listed for an average of 30 days before selling, which is longer than it has been in the last few years, Longo said.

Locally, the market had an estimated 5.2 months of inventory in November.

The “six-month mark” is typically when it will begin to transition into “more of a buyers’ market,” he said.

With files from the Financial Post

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