Real Estate Market Update: February 2025

The new year is here, and the real estate market remains strong! With home prices rising and inventory still on the lower side, it's a great time to buy or sell. Let’s break down how the market performed in January compared to December and what it means for you.

Single-Family Homes

• December 2024 Average Purchase Price: $598,837

• January 2025 Average Purchase Price: $607,775

• Price Increase: 8.7%

• Months Supply: 1.9 months (still a seller’s market)

Single-family home prices saw a solid increase of nearly 9% in just one month. This means sellers can benefit from strong pricing and steady demand. At the same time, buyers who enter the market now can secure a home before prices rise even further in the spring. Acting now allows buyers to take advantage of current inventory before competition picks up.

Condos

• December 2024 Average Purchase Price: $482,459

• January 2025 Average Purchase Price: $486,191

• Price Increase: 6.5%

• Months Supply: 2.4 months (still favoring sellers)

Condos also saw price growth, rising by nearly 6.5% month-over-month. Sellers can feel confident that demand remains steady, while buyers still have opportunities to purchase before prices increase further in the coming months. With interest rates expected to shift, getting into the market now could work in both parties' favor.

Market Trends & Conditions

• Average Days on Market: 44 days

• Percentage of List Price Received: 99.3%

Homes are selling in just 44 days on average, with sellers receiving close to full asking price. This is a great sign for sellers looking for a quick and successful sale. Buyers, on the other hand, should be ready to act fast when they find the right home, as properties are moving efficiently. 

Why It’s a Good Time for Both Buyers & Sellers

For Sellers:

If you're thinking about selling, now is an excellent time. Home values are rising, and buyers are eager to secure a home before rates and prices climb further. Listing now, before the spring market heats up, can give you a strong position and attract motivated buyers.

For Buyers:

While prices are increasing, buying now can help you avoid even steeper costs later in the year. Entering the market before the spring rush allows buyers to find the right home without as much pressure from additional buyers. Plus, with interest rates expected to decrease, locking in a home now could be a smart financial move.

Interest Rates & Market Outlook

Interest rates are projected to decrease again, which will benefit both buyers and sellers. Lower rates can improve affordability for buyers and, in turn, drive more activity in the market. This increased demand helps sellers achieve strong sale prices. No matter which side of the market you’re on, this is a great time to make a move. 

Final Thoughts

The current real estate market presents opportunities for both buyers and sellers. If you’re looking to sell, you can take advantage of rising home prices and eager buyers. If you’re looking to buy, entering the market now could save you money before prices rise further. No matter your situation, having a solid strategy is key. Let’s chat about your goals and create a plan that works best for you!

Real Estate Market Trends: November 2023 vs. November 2024 

Let's dive into the changes in the real estate market over the past year. If you've been following the news or have heard chatter about interest rates, you may have noticed a significant trend: lower interest rates have increased demand, leading to more home sales despite rising prices. Here’s a closer look: 

Key Numbers 

 - Average Purchase Price: Increased from $540,115 in November 2023 to $590,362 in November 2024—a 9.3% jump! 

- Sales: Rose from 300 homes sold last year to 341 this November, marking a solid 13.7% increase. 

- Interest Rates: Dropped from 5.00% to 3.75%, a major advantage for buyers! 

- Average Months Supply: Decreased from 2.5 to 2.2 months, indicating a tighter inventory. - Homes for Sale: Fell from 809 to 771, making the market even more competitive. 

 The Impact of Lower Interest Rates 

The most significant factor influencing the market is the drop in interest rates from 5.00% to 3.75%. Here’s why this matters: For buyers financing a $400,000 home, this reduction in rates means savings of over $300 per month compared to last year. Lower borrowing costs have encouraged more buyers to enter the market, contributing to a nearly 14% increase in sales.  

Why Are Prices Still Rising? 

Despite the lower interest rates, home prices continue to climb. Here's the breakdown: 

 - Reduced Inventory: We have 48 fewer homes listed compared to last year, resulting in increased competition among buyers. 

- Strong Demand: With lower rates, buyer enthusiasm is high, giving sellers the upper hand. This combination of high demand and limited supply has led to an almost $50,000 increase in the average purchase price. 

 What Does This Mean for You?

 - For Buyers: Lower interest rates lead to more manageable monthly payments, despite higher prices. However, be prepared for competition—acting quickly and making strong offers will be essential! 

 - For Sellers: You’re in an excellent position! Rising prices and strong demand mean you can maximize your return. With fewer homes available, competition is less intense. 

  What’s on the Horizon? 

 As we head into 2025, the market's direction will largely depend on interest rates and the availability of homes. If rates remain low, demand will likely stay strong, potentially driving prices even higher. However, an increase in inventory could relieve some pressure on buyers and moderate price growth. 

In Conclusion 

This past year has been quite a journey for the housing market. Lower interest rates have kept buyers engaged despite rising prices, resulting in a notable increase in sales. If you're considering buying or selling, staying informed and ready to act will be crucial to navigating this market. Knowledge is power, and I have the expertise to guide you every step of the way! 

 Have questions and want to discuss your next move? 

Let’s connect—I could talk about real estate all day (and I usually do)! 

 ~ Real Estate & More With Kor!

I have recently been in discussions with multiple individuals regarding the Nova Scotia Secondary and Backyard Suite Incentive Program and have realized that there is confusion on the topic. I figured I would do my best to explain the differences between the “Incentive Program in Relation to Secondary and Backyard Suites” and the “Municipal Planning Strategy for Backyard and Secondary Suites” as these have very different meanings but sound very similar.

Municipal Planning Strategy

The Municipal Planning Strategy was revamped back in September 2020. The idea of this strategic plan was to complete communities and meet affordable housing targets. It is important to remember that this plan was to be self-funded by the homeowner.

For more information and to understand the difference between secondary and backyard suites, please check out my previous blog written back in February 2023: https://koreeburt.com/blog.html/secondary-back-yard-suites-7850120

Incentive Program in Relation to Secondary and Backyard Suites

Now let's get into the Nova Scotia Secondary and Backyard Suite Incentive Program. This is where I am seeing some confusion. Both programs allow you to build a secondary suite; the difference between the two is that one option has a forgivable loan and the other doesn't.

This incentive program is available to eligible homeowners who plan to build a secondary suite within their existing property or on the property of their existing home. Homeowners may receive up to 50% of eligible project costs, to a maximum of $40,000.

Eligible project costs include:

• Labour and materials

• Design fees

• Purchase and placement of a prefabricated suite

• Taxes and other associated costs with the application for and building of the suite

How does this all work and what is required to receive the forgivable loan?

First, qualifying homeowners will be required to sign a Promissory Note and an Operating Agreement. The loan will be provided to the homeowner AFTER construction is complete. Homeowners must have the available funds up front to complete the project, obtain an occupancy permit, and submit the invoices to the program staff. A portion of the loan will be forgiven each year that the homeowner meets the tenant eligibility requirements. This is important to note. Once the project is completed and approved, the program provides a letter of Conditional Approval that outlines the conditions of the loan. The loan is not outright forgiven until after the 5-year period and all tenant eligibility requirements have been met.

In order for the loan to be forgiven over 5 years, the homeowner and tenant must meet the criteria for either the supportive housing or affordable housing streams. There also needs to be a year-to-year or month-to-month lease signed for the 5 years that the loan is active on the suite. (Short-term leases are not allowed while there is still a loan on the suite.)

Supportive Housing Stream:

• Is 65 years of age or older and/or a person living with a disability.

• The homeowner is 65 years or older and/or a person living with a disability.

Affordable Housing Stream:

• An individual or household whose income is below income limits and to whom the unit will be rented at below-average market rates.

Under this incentive program, you are agreeing to provide affordable housing. Affordable housing is when the rent is below average market rent. If you are renting under the affordable housing stream, there are certain limits that you must rent under.

For example, below are the household limits and average market rent caps in HRM:

Household income limit:

• $47,000 for a 1-bedroom suite

• $60,000 for a 2-bedroom suite

• $67,500 for a 3+ bedroom suite

The average market rent (with a 20% reduction to accommodate affordable housing criteria):

• $880.00 a month for a 1-bedroom suite

• $1,124.00 a month for a 2-bedroom suite

• $1,334.00 a month for a 3+ bedroom suite

In conclusion, it's essential to differentiate between the Municipal Planning Strategy for Backyard and Secondary Suites and the Nova Scotia Secondary and Backyard Suite Incentive Program. While both aim to address housing needs, they operate very differently.

Understanding how these programs work is crucial, especially regarding eligibility criteria, loan forgiveness conditions, and tenant requirements. I encourage anyone who is thinking of going down either one of these routes to thoroughly research and know exactly what you as a homeowner have to gain or loose based on your own personal scenario. These programs are not a one size fits all and have many moving parts that I believe need to be fully understood before starting any construction.

As housing continues to be a pressing issue, initiatives like these play a big role in providing inclusive communities and addressing housing affordability challenges. 

If you have any further questions about these programs, get in touch. I am always here to help =) 

~ Real Estate & More With Kor!