Nova Scotia Real Estate Market Forecast for 2022

Well, that’s a wrap for 2021! Real estate wise, it was the busiest that I have seen in my 17 years of selling real estate. I cannot even imagine what it would have been like had there been enough inventory to meet the demands of the number of buyers we had.

Lots of Inquiries

Much of the business had to do with responding to tons of inquiries from Buyers. Upon activating a new listing, the listing agent had been prepared from day one for a barrage of leads from Buyers and other agents. A well-priced listing could get as many as 30-50 showings in the first few days and then an average of 10 offers was not uncommon.

Records were broken this year for sold for over asking and number of competing offers received on a property. Properties being sold $50-$75,000 over ask price was not uncommon, with few or no conditions.

Great Expectations

Many of these Buyers were from out of province so they needed to be educated on various areas and rural services such as wells and septic. Buyers’ expectation of living standards in Nova Scotia were often not what they found as norm by local lifelong residents. Buyers from away were often expecting higher quality finishes, higher quality craftmanship and better upkeep of properties overall.

Alerts and Sneak Peaks

With such low inventory, this meant we REALTOR® had to be scouring the MLS system throughout the day, so we didn’t miss any new listings that might fit our buyers’ criteria.

I personally would set my buyer leads up on two different alert systems as well as researched for sale by owner listings, “sneak peaks” on social media and did cold calling to see if owners were interested in selling to my buyers.

We had to be ready to go view properties ASAP, because new listings often were only accepting offers for a limited time as multiple offers were expecting to be received.

Current market data

Realtors really had to know the ever-changing market numbers and be able to be analysing comparable sold properties to properly advise their Buyers on the best price to offer. Since properties were selling for over asking for most of the year, and selling so quickly, we had to keep an eye on what was selling daily.

Buyers from Away

With so many buyers unable to travel into the province to view properties due COVID restrictions, Buyers needing to purchase relied heavily on their REALTOR® for virtual tours and being present for property inspectors. Assisting buyers with getting quotes from contractors or getting them in touch with various service providers were common requirements when working with buyers from away.

Year in Review

For Nova Scotia, home price increases for this past year saw a 20 % increase province wide. Some areas in the last few months of 2021 jumped as high as 42% increase compared to November of 2020.

https://nsar.stats.showingtime.com/infoserv/s-v1/r89Q-IHS

2021 Home Sale Price By Area in Central NS

Forecast for 2022 The Year Ahead

The Royal LePage just released their Market Forecast for 2022 and are predicting a 10.5% market value increase over the next year nationally.

The cooling of prices can be attributed to Buyer exhaustion. Buyers from away have given up searching for a new life in Nova Scotia due to the competition and lack of inventory and instead decided to stay put or search in other areas of Canada.

Interest rates to increase

The Bank of Canada is expected to increase rate multiple times over the next year. This may encourage gun shy Buyers to get back in the game before mortgage rates get too high, but because of government program incentives for immigrants and first-time buyers, any increase that may occur with inventory will negligible and those gun-shy Buyers may not have much better luck in 2022.

Expanding Property search

Buyers are going to have to expand their property searches and think outside the box if they want to enter the Nova Scotia housing market. Being flexible with features as future options, such as adding a garage or creating finished basement later.  Perhaps purchasing a property with a family member that can accommodate an in-law suite.

Seller Hesitancy

3 factors that I feel will keep inventory low for the first few months of 2022. Many Sellers have chosen to “Love it” over “List it” after homeowners invested record amounts into the renovation sector of the economy this past year.

Secondly, with the highly infectious COVID variant at our doorsteps, some Sellers will be putting off listing their homes right away in 2022 until COVID number come under some sort of control.

Lastly, Sellers still have the concern about where to go if their home sells fast and not being able to find a suitable purchase with the limited inventory or long construction wait times. The task of coordinating a purchase and a sale can be daunting without out an experienced REALTOR® to guide you. (See my article “Should I buy or sell first in a Seller’s market?”)

Inventory story for Nova Scotia

The inventory is strongest in the Cape Breton and Southern Nova Scotia areas where properties are older, modest, and most rural. Shelburne and Digby Counties on the South Shore have the strongest months’ worth of inventory at over 4 months.

Whereas Lunenburg County has the most selection at 2.1 months’ worth and still be within 1 hr to Halifax.  The inventory of higher end properties priced $800,000 and over is still busy, but still more selection than first time home buyers or mid-range buyers.

Investment properties will continue to be a hot commodity, due to the increasing rental rates and low vacancy rates that have been occurring as long as the seller’s market has been here in Nova Scotia.

Summary

Expect home sale prices to still increase at least 10% from this year’s record-breaking numbers, which could mean 30% above what sellers could have expected to have sold in 2020! If you had a market analysis done recently in the past, it would be worth knowing getting an update to how prices have changed in the even within the last 6 months.

Home sales will undoubted be down in the detached single family home due to lack of inventory. There will be blips with home buyers wading back into the market to take advantage of mortgage rates before they increase and there will be blips in other housing sectors such as condo sales and semi-detached where Nova Scotian are now considering them as affordable options.

 

Even with record breaking numbers in the new construction industry, it will take a few years of new builds before new construction takes the pressure off the lack of housing availability in the resale homes. Hopefully, with the opening up skilled labour immigration again and public pressure on municipalities to make changes to support this sector, this will progress faster than currently anticipated.

 

2021 Home Sale Price and % Increase over 2020 Sale Prices

 

 

 

 

 

 

2021 Number of Sales and % of Increase over 2020 Number of Sales

 

 

 

 

 

 

 

Number of Homes Currently Available Compared to Year End in 2020

 

 

 

 

 

 

 

https://nsar.stats.showingtime.com/stats/market

https://www.ctvnews.ca/business/canadian-home-prices-expected-to-rise-by-10-5-per-cent-in-2022-royal-lepage-1.5707993

https://financialpost.com/moneywise-pro/no-relief-in-2022-experts-predictions-for-canadas-housing-market

https://dailyhive.com/vancouver/rising-interest-rates-low-housing-supply-canada-2022-real-estate

https://www.crea.ca/housing-market-stats/quarterly-forecasts/