The Spring housing market is in full swing and leading the charge for economic recovery from COVID 19. The numbers in this report are for single-family homes only, so that various areas of Nova Scotia could be compared. Data is gathered from the MLS system and the regional boundaries as determined by Nova Scotia Association of REALTORS®.
The number of new listings took a jump in the second half of May. They were down 70-75% from previous years when COVID restrictions started. For May, new listings are now only off 40% from last year and have increased 61% from April.
Many of these new listings may very well be re-lists. Many sellers chose not to renew their listings or chose to withdraw their property from the MLS system because they did not want to risk getting exposed to COVID 19 with viewers going through their homes.
These Sellers are feeling more comfortable with the COVID 19 levels and now deciding to re-enter the housing market. These listings are shown as new listings once they come back on to the MLS system.
As of the end of April, the overall the listing inventory is still at a critical low with Nova Scotia having only a 3.9 month supply, meaning if all the inventory of homes sold and now new ones came on to the market, then the supply of homes would be depleted within 3.9 months. In Halifax Dartmouth there is just a 2.6 month supply; Annapolis Valley has 5.1. months and the South Shore area has as 7 month supply. An area that has a month supply or less is considered a Sellers’ market and will see home sale prices increase.
Confirmed sales are transactions where all the conditions have been met so the contract is considered firm and binding and all parties than just waiting for closing day. This could be 30, 60, or even six months in the future.
The title to the property and funds do not get exchanged until the Closing day. Sale prices aren’t necessarily relevant with confirmed sales due to some sale prices not getting posted until closing day.
The actual sale price does not get posted to the MLS for public information until the closing day. Reviewing confirmed sales as well as the number of showings being booked gives real-time and up to the minute data as to consumer activity.
Looking from April to May, Nova Scotia saw a 42% increase in the number of confirmed sales, with the greatest number of sales increase happening in the Annapolis Valley at 47%.
Reviewing May 2019 to May 2020, understandably there has been an expected decrease in the number of confirmed sales, with the greatest area impacted being Halifax Dartmouth with a decrease of 39%. Low inventory can be impacting these numbers as well.
The number of closed deals is down 31% across the province of Nova Scotia from May of 2019. Halifax Dartmouth is off from last year’s numbers by 19%, down 33% in the Annapolis Valley, and down 47% on the South Shore.
Compared to April, the number of closed deals for Nova Scotia is down 4%. Significantly, down 38% on the South Shore and down 12% in the Annapolis Valley from April.
This decrease is most likely a result of the initial downturn back in March and April where consumers halted their property search, where if they had followed through on purchasing, they would have been closing on a property in around May.
Halifax Dartmouth did experience an increase of 8% in the number of closed deals from the previous month. This area is going to be stronger due to population density and desirability, along with booming the new construction market.
Being in a Sellers’ market, this is driving home prices up. From May of 2019 compared to May 2020 sale prices were up 10% in Halifax Dartmouth, and 11% in both Annapolis Valley and South Shore.
Current stats and data are confirming the predicted V-shaped recovery. This was predicted by industry leaders and analysts and outlined in the April blog. Contributing factors are the fact that it was already a Sellers’ market when the COVID 19 restrictions were implemented. Mortgage rates were low and steady, which stemmed from consumer confidence. Lastly, history has shown that V-shaped recoveries were typical after a health crisis or pandemics.
The housing market and construction market are so strong right now in Nova Scotia and across North America, that it is expected that these markets will be leading the economic recovery in a post COVID economy.
The lack of inventory and supply, including the lack of construction industry workforce, well be the main factor in the housing market not reaching its full potential by year-end and enabling it to make up losses from the impact of COVID restrictions.