With snow still on the ground in many parts of Canada and chilly temperatures persisting, it might seem too early to talk about the spring real estate market. However, for those considering buying or selling in the spring, the groundwork and planning have already begun. Pent-up demand from buyers unable to purchase a home last year has been accumulating and momentum is ramping up as spring approaches.
National home sales were up 12.9% month-over-month in January according to the Canadian Real Estate Association, with local Ontario markets particularly active. The Greater Toronto Area, Hamilton-Burlington, and London & St. Thomas all experienced month-over-month sales increases of more than 20% last month, suggesting the spring market may be just around the corner. But that begs the question, when exactly is the spring market and when do home sales typically peak?
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To better understand what could happen in 2024, Zoocasa analyzed the past five spring markets using data from the Canadian Real Estate Association and compared when home sales peaked in each year in seven major markets across Canada.
The Annual Ebb and Flow of National Home Sale Peaks
The spring real estate market typically heats up between March and May every year, however, depending on economic and social conditions of the time, the exact month when home sales reach their highest differs. In some years, the spring market comes much earlier in the season and can result in an uptick in activity as early as February, while in other years a ramp-up in market activity is delayed until May.
In 2019, the last year before there were significant disruptions to the real estate cycle, national home sales reached their peak in May with 54,599 sales. January and February of that year were slower, with home sales in the 20,000s before sales reached above 40,000 in March and April. June and July were only slightly slower months than April, with home sales still above 47,000. This was a typical year for real estate and the following years were much more unpredictable and varied.
In 2020, the spring real estate market was dampened by the pandemic. National home sales reached a small peak in March with 43,283 sales, however, a much larger spike happened in July with 62,533 home sales. In 2021, which was a more typical year than 2020, national home sales reached a record-high of 76,259 sales in March. This was despite the national benchmark price also reaching a record-high of $669,600 in the same month. Following this, home sales in 2021 stayed above 60,000 until July when they dipped to 53,683. With interest rates at their lowest in years, the spring and summer markets merged and created a longer period of home-buying fervor.
When interest rates started to go up in 2022, buyers entered the market early to lock in purchases before rates climbed further. This resulted in home sales peaking in March 2022 with 63,797 sales. In the same month, the national benchmark price reached a new record high of $855,800 before decreasing for the rest of the year.
As a result of tightened affordability, sales last year were much lower than in the previous five years. However, national home sales still reached a peak of 54,241 in May 2023 before tapering off to below 23,000 in December. Similar to in 2021 when interest rates lowered and buyer activity picked up in March, it is likely the spring 2024 market will pick up earlier rather than later.
No Uniform Peak: Variability in Home Sale Highs Across Major Markets
In 2019, home sales in every major market peaked in May except Montreal, where home sales peaked in April. Since then, home sales peaks have been less synchronized.
Across all the markets we analyzed, 2021 was the standout year for home sales. Greater Toronto Area home sales peaked at 15,651 sales in March 2021, while Greater Vancouver, Hamilton-Burlington, Ottawa, and Montreal also reached record-high home sales in March. However, Calgary and Edmonton’s home sales peaks didn’t come until April 2021. This is why it’s important to pay attention to local market trends because sales activity will vary by city and is influenced by a combination of regional and national variables.
For example, last year Hamilton-Burlington and Edmonton were the first markets to experience their spring surge in activity, with both cities reaching home sales peaks in April 2023. Home sales in the Greater Toronto Area reached their peak in May, while in Greater Vancouver, the upward trend in home sales didn’t begin until May and peaked in July.
If 2024 follows pre-pandemic trends, then home sales may peak across the board in May. However, it is more likely that each market will heat up at different times, especially as many homebuyers try to get into the market before interest rates drop too much and prices skyrocket.
Want to discuss your home-buying plans for the year? Give us a call today to speak to a real estate agent in your area who can guide you through every step of the process.
