Durham Region Winter Market Report 2022

2022 was a year of two halves for Durham Region real estate. The first quarter saw the peak of the pandemic-era boom, with prices hitting all-time highs and bidding wars on nearly every listing. The second half saw the sharpest correction in a generation, driven by the most aggressive interest rate hiking cycle in the Bank of Canada's modern history. As we close out the year, the market has found a level, and it is telling us something important about what comes next.

The average sale price for a detached home in Durham Region ended 2022 approximately 18% to 22% below the February peak, depending on the municipality. Oshawa averaged in the $680,000 to $710,000 range for detached homes. Whitby finished higher at $830,000 to $870,000. Ajax and Pickering held in the $800,000 to $850,000 range. Clarington, including Bowmanville and Courtice, settled around $730,000 to $770,000.

Compared to December 2021, prices are down roughly 8% to 12% across most of Durham. Compared to December 2020, prices are still up 15% to 25%. Perspective matters when reading these numbers.

Active listings at year-end were roughly double what they were in December 2021, giving buyers meaningfully more choice than they have had in years. However, inventory is still below the long-term historical average for Durham Region. We are not in a buyer's market by traditional metrics. We are in a balanced market with buyer-friendly conditions.

Days on market for detached homes finished the year averaging 28 to 40 days across Durham, with well-priced, well-prepared homes selling significantly faster than the average. The spread between well-prepared homes and poorly-prepared homes has never been wider. In a hot market, a dated kitchen is a minor objection. In this market, it is the reason your home sits for 60 days.

The Bank of Canada raised its overnight rate seven times in 2022, from 0.25% in January to 4.25% in December. Most economists expect one or two more increases in early 2023 before a pause. Five-year fixed mortgage rates, which most buyers use, ended the year around 5% to 5.5%, roughly triple what they were at the start of 2022.

The rate environment has fundamentally changed buyer purchasing power. A buyer who qualified for $900,000 in January 2022 now qualifies for roughly $650,000 to $700,000, all else being equal. This compression in purchasing power is the primary driver of the price correction, and it will continue to anchor prices until rates come down or incomes rise.

We expect Q1 2023 to be relatively quiet, which is typical for winter in Durham Region. The spring market will be the inflection point. If the Bank of Canada pauses rate increases and signals a hold, buyer confidence will return, and Durham's spring market could be surprisingly active. If rates continue climbing, expect more of the same: a functional but price-sensitive market where preparation is the difference between a good outcome and a frustrating one.

For sellers: if you are planning to list in 2023, start preparing now. The homes that win in this market are the ones that look finished. Paint, flooring, kitchen, staging, professional photography. Every detail matters because buyers have choices. For buyers: you have negotiating power you have not had since 2019. Use it wisely, get pre-approved, and work with an agent who tells you what a home is worth, not just what the seller is asking.