To the question: “How is the market in the first quarter?” The answer will vary depending on what you’re in the market for. 

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Lately, I’ve been fielding the question: “How’s the market?”, frequently. While this is a typical query for any real estate broker, it appears that there’s a genuine desire for a deeper understanding. 
Most people grasp the correlation between fluctuating interest rates and market dynamics. For instance, when rates plummeted during COVID, the market soared. Conversely, when rates rose in the fall of 2022, the landscape shifted. Some areas experienced stagnation, while others witnessed a decline. However, with rates currently stable, those monitoring real estate trends are noting signs of improvement and, in some instances, robust growth.

So, what’s happening exactly? And how is the market faring in the first quarter of this year?

I’ll save the intricacies for another conversation, but here’s what I’ve fundamentally observed: The most commonly used method to gauge market performance is by assessing the inventory-to-sales ratio. For example, if there are 3000 homes listed for sale in Montréal, and 300 transactions were completed last month, this equates to a 10-month supply of inventory.
A seller’s market prevails when the inventory-to-sales ratio falls within the range of 0-8 months, indicating robust demand and limited supply.
A market equilibrium is evident when the ratio hovers between 8-10 months, reflecting balanced supply-and-demand.
A buyer’s market emerges when the ratio exceeds 10 months, signaling an oversupply of properties relative to demand.

So, in clear terms, this is how the market has progressed since the beginning of 2024 in Montreal:

However, interpreting market conditions hinges on the perspective of the inquirer.
For sellers, the outlook seems promising. Hence, the response is favorable! Nevertheless, it’s crucial to acknowledge that subsequent purchasing endeavours may unfold within the same market landscape.
For prospective buyers anticipating a decline in prices, the response may be less encouraging. However, it’s worth considering that the current market conditions may present advantageous opportunities compared to potential scenarios with future rate adjustments.
For brokers, a favorable response only materializes when successful negotiations align the interests of both buyers and sellers.
And for this, we are just a phone call away.

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