February 2023: home sales go up, prices report the smallest decline in almost a year

The latest report by the Canadian Real Estate Association (CREA) shows that home sales were up by 2.3% in February on a monthly basis, even despite an ongoing decline in new listings.

Meanwhile, the number was down by 40% from a year ago, when interest rates were still low and the real estate market remained active. However, the results reported an improvement compared to January when activity was unchanged.

The benchmark home price fell by 1.1% from January to $704,300, marking the smallest monthly drop since last March.

According to CREA, the number of new listings went down by 7.9% on a month-over-month basis, and the MLS Home Price Index went down by 1.1% from January and by 15.8% from February 2022.

CREA chair Jill Oudil says February numbers point to a potential for a “stronger market in the nearest future,” although she added that the state of the 2023 market would be clear not sooner than in spring.

“While we don’t notice it in the sales or listings data yet, I believe homeowners are preparing their properties for the market and potential buyers are getting mortgage preapprovals,” – she noted.

CREA’s senior economist Shaun Cathcart says the February report shows the ongoing similarity with 2019, the last year before the pandemic. At that moment, the market conditions were tighter, and monthly price decreases were becoming smaller.

“The main similarity is a sharp decline in seasonally adjusted new listings,” – he explained. “Future sellers, many of whom will also become buyers, are probably waiting for the perfect timing to list their property and buy a new one.”