The real estate market in New Brunswick during the spring and summer of 2023 has fallen short of realtors’ expectations. Nevertheless, it continues to favor sellers, as confirmed by Michele Morris, President of the Real Estate Board of the Fredericton Area. This period witnessed a substantial influx of listings, with over 500 properties available for sale. Average sale prices displayed a slight increase, nearing the $335,000 mark compared to earlier in the year. However, these figures experienced a slight decline of a few percentage points in comparison to May of the previous year, with the year-to-date average also reflecting a downward trend.
Notably, certain properties were sold below their listed price, while others commanded prices that surpassed the initial asking amount by $50,000 to $100,000. The driving force behind these higher prices typically stemmed from buyers who had already sold their homes and urgently needed new accommodations or had faced repeated disappointments in multiple bidding scenarios.
Conversely, properties selling below their listing price could be attributed to unrealistic pricing based on peak figures from previous years. Michele Morris suggested that these outdated price expectations no longer align with the current market conditions.
Rising interest rates and escalating household debt levels have made a noticeable impact on the market. Many local residents have been priced out of the housing market due to the combined effect of higher interest rates and limited affordability. Consequently, there has been a surge in demand for rental units, while the number of potential sellers has dwindled due to concerns about finding new homes after completing a sale. The scarcity of available properties in Fredericton has intensified competition not only for single-family dwellings but also for apartments, resulting in a highly competitive rental market.
Despite the challenges faced by local residents, there remains significant interest from buyers coming from other regions of Canada, particularly Ontario and Alberta. These buyers, having sold their higher-priced homes, remain undeterred by rising interest rates and often have the ability to pay in cash. They can seize the opportunity to acquire properties that surpass their previous standards at a fraction of the cost.
It is important to stay vigilant as the market attracts unlicensed pop-up real estate agencies seeking to exploit the relatively hot market in New Brunswick. These agencies make fraudulent offers to purchase undervalued or off-market properties, attempting to resell the purchase agreements for profit. The New Brunswick Financial and Consumer Services Commission has issued a warning concerning these deceptive practices.
In the Fredericton area, the number of units sold through the multiple listing service experienced a decline of over 10 percent in May compared to the previous year. Year-to-date sales also suffered a decrease of 20 percent. Moreover, the average time required to sell a property has increased to 1.9 months, up from 1.3 months during the peak of the pandemic, yet still significantly shorter than the traditional timeframe of approximately five months.
The Saint John area, encompassing southern New Brunswick, witnessed a cooler spring market. May saw a total of 210 units sold, representing an 18 percent decrease compared to the previous year. However, this figure marginally exceeded the 10-year average for the month. The average sale price of homes in May experienced a minor decline of a few percentage points compared to the previous year. The number of new listings in May decreased by approximately a third compared to the previous year, resulting in the lowest May inventory in over two decades.
In northern New Brunswick, including areas such as Edmundston, Miramichi, Bathurst, Campbellton, and the Acadian Peninsula, 164 homes were sold in May. Although this figure represented a decline of close to 15 percent compared to the previous year, it still surpassed the 10-year average for the month by approximately 25 percent. The average price of homes sold in the region during the first five months of 2023 experienced a year-over-year decrease of 3.9 percent. The total number of active listings at the end of May remained relatively stable compared to the previous year but was 35 percent below the 10-year average for the month.
