Top 4 Headlines – 2022 Real Estate

Written By: Jeff Gilbert

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The 2022 real estate market is off to a fast start. In this blog post I am going to show you my top 4 headlines after reviewing the numbers from January 2022 for the Barrie, ON real estate market.

1. The SALES/NEW LISTINGS Ratio for January 2022 real estate was well above the 10-year average for January at 71.5%.

10-year average for sales/new listings ratio in January is 56%.

The higher this number is, the more likely we are to see continued price increases in the months to come. What is interesting is that we are closely following the same trend as we saw in 2021 with similar figures in December and January. If the trend continues we should see this number drop in February as we normally see an increase in new listings in February.

sales/new listings ratio, Barrie, jeffgilbert.ca

2. The NUMBER OF ACTIVE LISTINGS for January 2022 real estate was far below the 10-year average for January with only 74 active listings.

This is down about 74% off the 10-year average for active listings in January which is 280. This is by far the biggest story when it comes to market statistics for January.

  • High – 515 Active listings on the market in January 2012
  • Low – 74 Active listings right now, January 2022

This chart shows how active listings have fallen off a cliff:

Number of Active Real Estate Listings, Barrie, January 2022, JeffGilbert.ca

This has had a profound effect on Months of Inventory.

3. The MONTHS OF INVENTORY for January 2022 real estate was considerably lower than an already low 10-year average at 0.3 months.

10-year average months of inventory for January is 1.2 months.

  • High – 2.2 months in January 2012
  • Low – 0.3 months right now, January 2022

To put this into context. If no more properties were listed for sale and we kept selling properties at the same current average rate of sales, all properties would be sold in 3 days!

A healthy balanced real estate market would see anywhere from 4 to 6 months of inventory.

Low levels of inventory will only see sales prices continue to rise.

Check out this chart:

Months of inventory effect on real estate sales prices, Barrie, jeffgilbert.ca

As inventory drops, sales prices increase. As inventory rises, sales prices drop. Orange line represents the median sales price, and the blue line shows the months of inventory.

To further emphasize the effect of low months of inventory on prices, look at this:

In Barrie there has been less than a months worth of inventory since September 2020.

From October 2020, when MOI dropped below 1 month and has remained below 1 month until current day, January 2022, sales prices have increased nearly 58% in the city of Barrie.

Compare this to the 16 month period before this, June 2019 to September 2020 where inventory was above 1 month, sales prices increased nearly 17%.

This data further highlights and shows the effects of supply and demand on real estate prices.

Here is another interesting figure, in the current market place, we would need to see roughly 750 more listings come on the market to bring MOI above 3 months and this would still be considered a sellers market, however historical data shows that price growth would definitely slow if not turn horizontal, possibly even a slight decline at this level of inventory.

The most amount of new listings in any month that the Barrie real estate market has seen in the past 10 years is 608 new listings in March 2021. The other important note, is that we have to factor in the demand side, and even if we saw 750 new listings, it would actually need to be even higher to factor in the number of sales.

Safe to say, taking into account current market fundamentals, we are going to see sales prices continue to rise.

4. The NUMBER OF NEW LISTINGS for January 2022 real estate was below the 10-year average for January with 193 new listings, which is about 18% off the 10-year average pace of 237 new listings in January.

10-year average for new listings in January is 237 New listings

  • High – 319 New Listings on the market in January 2013
  • Low – 179 New Listings on the market in January 2017
number of new real estate listings, Barrie, January 2022, jeffgilbert.ca

People are quick to suggest that we have a “supply” problem that has resulted in the decline of active listings across the country. None other then the Bank of Canada at the latest interest rate announcement on January 26th, 2022. Here is a link to see what I mean, fast forward to 33:01 in the timeline:

What is interesting is that from January to May 2021, this period saw the highest number of new listings come on the market ever, by a wide margin, going back 10 years to 2012.

While I will admit to not looking at data for the entire country, when it comes to Barrie, ON, the data suggests we have a demand problem which would lend (pun intended) itself to suggest that the historic low interest rates have been one of, if not the biggest contributor to the rapid increase in sale prices and the low inventory problem we are seeing across the country.

Thank you for reading and visiting my website. I specialize in the Simcoe County real estate market, helping buyers and sellers. If you are looking to make a move in the Simcoe County area, contact me and let’s talk some real estate.

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