Durham Region Summer Market Report 2023

Durham Region's real estate market in the first half of 2023 has been a story of quiet recovery. After the sharp correction of 2022, prices have stabilized, buyer activity has returned, and the market is functioning normally. There are no headlines here, and that is actually the good news. Normal is what sustainable looks like.

Average detached home prices in Durham Region ticked up modestly from Q1 to Q2 2023, gaining 2% to 4% depending on the municipality. This is not a boom. It is a healthy normalization following a correction that was itself a normalization of an unsustainable boom.

Oshawa detached averages are now in the $700,000 to $740,000 range. Whitby is holding at $860,000 to $900,000. Ajax and Pickering are steady at $830,000 to $870,000. Clarington, including Bowmanville and Courtice, is averaging $740,000 to $790,000.

The upward movement is driven by the strongest segment of the market: move-in ready, renovated homes in established neighbourhoods. These properties are seeing the most buyer interest and the firmest prices. Dated and as-is homes continue to trade at a significant discount.

Inventory levels are healthy. There are enough homes for sale to give buyers genuine choice, but not so many that the market is oversaturated. Months of inventory across Durham Region is hovering around 3 to 4 months, which is the balanced-to-slight-seller's-advantage range.

Buyer behaviour has matured compared to the pandemic era. Conditions are back in offers: financing, inspection, and sometimes even sale of the buyer's existing home. This is healthy for everyone. Buyers are protected. Sellers are working with qualified, serious buyers. The system works better when conditions are part of the process.

Multiple offers are still happening, but only on the best properties. A well-priced, well-prepared home in a desirable Whitby or Ajax neighbourhood might see 3 to 5 offers. A dated home in the same area will receive 1 or 2, likely below asking.

The Bank of Canada held rates steady through the first half of 2023 before surprising the market with a 25 basis point increase in June. Five-year fixed mortgage rates are hovering around 5.5% to 6%, which continues to compress buyer purchasing power compared to pre-2022 levels.

The rate environment is the biggest wildcard heading into the second half of the year. If rates hold or decline slightly, the recovery trajectory continues. If rates climb further, the pace of improvement will slow. Most economists expect rates to hold steady for the remainder of 2023, with potential cuts beginning in 2024.

If you are listing this summer, the fundamentals have not changed. Preparation is the difference between selling quickly at a strong price and sitting on the market for weeks. Paint, flooring, kitchen and bathroom updates, staging, and professional photography are the non-negotiable investments.

Summer is an excellent time to showcase outdoor spaces. A clean, landscaped yard with a freshly stained deck photographs beautifully and creates an emotional connection with buyers. If your outdoor space is a selling point, schedule the photo shoot for a sunny day when the yard is at its best.

Price to the current market. Use comparable sales from the past 60 to 90 days, not from spring 2022 or even winter 2023. The market is moving, and your pricing needs to move with it.

Summer is traditionally a competitive time for buyers because families want to be settled before the school year starts. This year is no exception. If you are buying, be prepared to move quickly on homes that are well-priced and well-prepared. Have your pre-approval in hand, your deposit ready, and your agent available to book showings on short notice.

For buyers willing to look at dated homes that need work, this market presents a genuine opportunity. The discount on as-is homes is significant, and if you are handy or willing to manage a renovation, you can acquire a home well below the cost of a comparable renovated property. Just make sure your budget accounts for the full renovation cost, and include an inspection condition in every offer.