Q1 2024 Real Estate Insights:

Key Trends and Buyer Behavior

As we continue through 2024, the real estate market remains dynamic with some notable trends and insights. The Association of Interior Realtors has just released their Q1 statistics from the buyer survey, offering a snapshot of the current marketplace and what has been driving sales, this information allows us to reverse engineer the potential buyers and market/cater to them.

A key takeaway if you don’t make it any further,  cash is king, 29% of the market is relatively unaffected by the costs of interest rates, albeit majority of the cash likely coming from the sale of a property, which has a 71% chance of needing financing. Alberta buyers right now are holding steady and I would expect the percentage of Alberta buyers to increase over the Summer and finally first time homebuyers seem to be making moves.

Market Overview

The real estate market in 2024 has seen a shift in activity, particularly among first-time home buyers. This demographic has made up a quarter of overall sales, indicating that many are taking advantage of the increased inventory to make their move into the market. The average age of first-time buyers in Canada has risen to 36 years, reflecting the extended timeframe needed to save for down payments amidst rising prices over the past five years. Many are increasingly reliant on the "bank of mom and dad" for assistance.

Buyer Demographics

• First-Time Home Buyers: Representing 25% of sales, this group is leveraging the higher inventory to enter the market without the need to sell an existing property. This positions them strongly compared to other buyers who may have to sell their current home first.

• Single people also have been making some moves accounting for over 33% of the transactions. Naturally the shift would be assumed for the majority is on the lower priced properties.

Household Composition

• Couples: Couples dominate the market, making up over 67% of transactions. Of these, couples with children account for 29%, while couples without children represent 22%. The need for dual incomes to qualify for mortgages is a significant factor here.

Buyer Origin and Property Type

• The activity from the lower mainland at 15%, ill be honest surprised me a bit, normally that number is between 20-25%.  With travel easier, we will have to continue to watch that.  But Alberta right now has remained steady at 8% of the marketplace, with a good current market in Alberta this is one area that might increase over the summer.

• Property Type: Single-family homes remain the most popular choice, making up 66% of the sales. Other types of properties include strata to single-family home (15%), similar properties (8%), and recreational properties (3%).

Finance Type

• Cash Purchases: Despite fluctuating market conditions, cash remains a significant component, with 29% of sales being all-cash transactions and proving that 29% of the market is relatively unaffected by the costs of interest rates, albeit majority of the cash likely coming from the sale of a property, which has a 71% chance of needing financing.

• Conventional Mortgage: Conventional mortgages are the choice for 56% of buyers, while high-ratio mortgages and rental income to qualify are less common at 14% and 1%, respectively.

Key Insights

The survey provides valuable insights into the segments driving the market. While it’s important to note that the survey's accuracy depends on participation and accurate reporting by agents, it still offers a useful glimpse into current trends. This information we use to reverse engineer our ideal clients for properties and know where to market the properties.

What This Means for You

Understanding these trends can help you make informed decisions whether you are buying or selling.  With the activity from First Time Homebuyers and what we went over last week with the months of inventory, the lower priced properties have good demand. Townhomes at 5 months of inventory and Condo’s at 6 months of inventory those properties are on the fringe to being a sellers market, even despite high inventory.

I would expect the demand on those properties to drive up prices starting in the townhomes and condo’s and then will filter into the single family home market.  If you're considering entering the market or making a move, now is a good time to assess your options and strategies.

If you have any questions about these trends or need personalized advice, feel free to reach out. I'm here to help you navigate the market and make informed decisions.

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Have a great week, enjoy the sunshine and reach out if there is ever anything we can do for you!

Mark Coons, Maddie Coons and Brittney Cam

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