What goes up quickly, must come down slowly… or at least that is the case for the Regina housing market. The summer of 2020 was a far cry from “normal” for a variety of reasons, however, one of the biggest differences was the dramatic shift in the real estate market.
With Canadians being unable to travel, having to work from home, and spending most of their time on their own property, the desire to own a large home with plenty of green space quickly took hold in markets from coast to coast. Last year, the Regina housing market flourished, with demand for homes rising, supply decreasing, and prices inflating at an exceptional rate. Not surprisingly, this led many to wonder when the market would cool down.
While Regina real estate is still hovering above average levels for the year, it is beginning to moderate, which gives hope that conditions could eventually swing back into balance. However, only time will tell if that is where the Regina housing market is heading. Here’s what the latest figures reveal.
Demand Slowly Beginning to Drop in Regina Housing Market
In late 2020, RE/MAX anticipated the Regina housing market would cool slightly by the end of 2021, and it seems as though that expectation may be materializing. At the end of July 2021 (which are the most-current numbers available at the time of writing), sales in the city were down 10.1 per cent compared to July 2020, dropping from 385 sales in 2020 to 346 in 2021. While the number of residential home sales is still 30.5 per cent and 25.1 per cent above the five- and 10-year averages respectively, it is still hinting that demand may be trending downward, closer to the rate expected for this time of year.
On a year-to-date basis, home sales in the Regina housing market rose 42.9 per cent in the first seven months of 2021 compared to the same period in 2020; the larger region saw year-to-date sales rise from 2,031 units in 2020 to 2,873 units in 2021.
With just 4.4 months of supply in Regina, the Saskatchewan city sits firmly in seller’s territory. For the market to inch closer to neutral ground, the number of new listings must continue to outpace unit sales for the remainder of the year.
The number of new listings in July 2021 was down 1.1 per cent compared to last year, but was 13 per cent above the five-year average for the month of July, and 10.2 per cent above the 10-year average. However, the real story here is just how much sales are outpacing new listings. While the number of new listings is above typical values for this time of year, sales are also markedly higher than usual, thus keeping the market in favour of sellers.
“Prior to Covid, Saskatchewan had excess supply in the market. However, since July of last year, sales reached new record levels for most months, causing a steady decline in inventory levels. Over the past quarter we have seen that pace of sales ease from the record high; however, some of this can be related to declines in new listings and low inventory levels in the market,” says Chris Guérette, Saskatchewan REALTORS® Association CEO.
The MLS Home Price Index benchmark price has also shown modest growth, with the price of a residential home increasing by eight per cent on a year-to-date basis, sitting currently at $286,600.
The province of Saskatchewan reflects the trends surfacing across the Regina housing market. Sales are beginning to slow, marked by an almost 12-per-cent decline from August 2020 to 2021; however, levels still remain above average.
The average price of a home in Saskatchewan also increased compared to last August. At month’s end, the average price of a home in the prairie province hit $287,900, indicating that while sales are beginning to drop, low inventory is continuing to push prices in the province upward.
Looking Ahead at the Regina Housing Market
As the year continues, demand is expected to continue easing, potentially allowing inventory to build up as we move into 2022.
Prospective homebuyers can anticipate that as interest rates eventually rise, the market may become slightly less competitive, theoretically resulting in homes remaining on the market for a little longer. If this transpires, the market should show signs of regaining balance – hopeful news for local and out-of-province buyers who have their home-buying sights set on this prairie market.
Saskatchewan Realtors Association