The Reiss Report: Condo Real Estate Blog - Winter 2024

Article from Volume 11, Issue Number 1, 2024

The Reiss Report: Condo Real Estate Blog - Winter 2024

By Alan Reiss | Other articles by Alan Reiss | Regular Column

The Reiss Report

Sales outlook bright for 2024

Condo sales ended 2023 on an optimistic note

Canadians everywhere, including Manitobans, took a pause on real estate last year. The main reasons were tougher interest rates and an overall preoccupation with reining in high inflation and wrestling with cost-of-living increases on essential items such as gas and food. It’s important to note, however, that the last five months of 2023 showed much better adjustment to what was happening, as three of the months after July outperformed 2022 in total MLS sales.

When you compare our local market to far more expensive housing markets, and you compare condominium sales to the leading single- family property sales, it isn’t difficult to take a glass-half-full approach when looking ahead to 2024.

Let’s first look at the condominium numbers for 2023 and how the year closed. Here is how Jeremy Davis, the Winnipeg Regional Real Estate Board’s director of external relations and market intelligence, highlighted December and a few annual results:

MLS® sales of 103 condominiums in December was 24 per cent above the 83 seen in 2022 and nine per cent below the five-year average of 113.
Active MLS® listings of 385 condominiums was up nine per cent above the 352 seen in December 2022 and four per cent below the five-year average of 401.
Of the 103 total MLS® condominium sales across the Winnipeg Regional Real Estate Board’s market region in December, 87 were in Winnipeg and 16 outside Winnipeg.

Of the 385 active condominium MLS® listings, 289 were in Winnipeg and 96 outside Winnipeg.
The average price for a condominium in December was $269,141, 10 per cent above the $244,939 seen in December 2022 and 10 per cent above the five-year average of $244,750.
The highest numbers of MLS® sales in December were in the Osborne Village area and Downtown, followed by River Park South.
The most active price range in December for condominiums was the $175,000-$199,999 range, which represents 14 per cent of all MLS® condominium sales.

Other condominium 2023 highlights:

December sales of new listings: 78.63 per cent
December sales of active listings: 26.75 per cent
The highest-priced condo sale in December was $779,900
There were four active listings in December above $1 million.
The highest was $2.2 million.
Seventy-eight percent of condominium sales in December were for less than list price.
The December average price was up over every year from 2019 to 2022, as was the five-year average.
Year-to-date listings were down three per cent over 2022 anddown 12 per cent over the five-year average.
Year-to-date average prices were down two per cent over 2022but up four per cent over the five-year average.
Year-to-date dollar volume was down 12 per cent from 2022and two per cent below the five-year average.

Other highlights and observations in 2023:

The highest condominium sales price was for a detached bungalow condo on 150 Creekbend Rd. in River Park South. It sold for $1.375 million. The second highest was also on 150 Creekbend Rd. It sold for $1.05 million. A condo apartment at 180 Tuxedo Ave. sold for $1.018 million.

The highest average MLS area selling price for condos in 2023 was East St. Paul at $551,815. All eight listings sold on average in 15 days.

Despite a 11 per cent drop in sales volume from 2022, falling below the 2,000-sale mark for the first time since 2021, Winnipeg's average condominium price held steady in 2023 at $259,420, just a 2 per cent dip from the previous year. Notably, 2021 had set a record with 2,572 sales, which dipped slightly to 2,184 in 2022. The most popular price range in 2023 was $150,000-$199,999, accounting for 23 per cent of all sales, followed by the $200,000-$249,999 range at 21 per cent.

Reinforcing the steadiness of condo prices the last few years is CREA’s MLS Home Price Index (HPI), which for condo apartments shows a small difference from the end of 2023, where the benchmark price of $228,00 compares very favourably to its high point of $230,600 in July 2022.

With respect to MLS area sales activity, Osborne Village continues to be well out in front in 2023 with 171 but was well off its nearly 200 sales in 2022, when nearly 60 per cent of its listings sold.
In 2023, just 51 per cent of the 338 listings sold.

The second busiest MLS area, with a 45 per cent sales rate, was Downtown, with 104 sales.

If both leading condo sales areas matched the much-better sales rate that Linden Woods and River Park South experienced in 2023, the total number of sales would have surpassed 2,000 again. The Linden Woods and River Park South MLS areas were third and fourth respectively, with 94 and 89 sales.

The Morden/Winkler MLS area led the way in rural areas with 77 sales out of 91 listings.

As in 2022, the percentage of condominium listing conversions to sales was almost identical to single-family property sales, with condos one percentage point higher at 64 per cent. In previous years, single family dwellings always won out by definitive margins in the double- digits; for example, in 2021 a remarkable 86 per cent of single-family listings sold, compared with 71 per cent of condominiums.

December's inflation report, showing a slight increase from November, casts doubt on an early Bank of Canada rate cut as hoped by some. This has led to mixed economic forecasts, with April now looking less likely for the first rate cut. Some suggest June or even the second half of the year may be more realistic to kickstart condo sales activity.

Even if we do see a respectable percentage sales increase in January and first-quarter market activity higher than in 2023, we must keep in mind that 2021 and 2022 were much stronger, so comparing the five-year average will be more meaningful to gauge what kind of bounce-back we can expect this year.

CREA‘s senior economist, Shaun Cathcart, sees Manitoba with a MLS sales increase around five per cent and prices up close to two per cent, so nothing too dramatic but a recovery from a notable drop in 2023, with both buyers and sellers learning to adjust to the new reality of higher mortgage rates and a rising cost of living to manage.

Alan Reiss is a director of CCI Manitoba and a condo specialist realtor for RE/MAX PROFESSIONAL.