{"id":617,"date":"2021-01-21T16:18:51","date_gmt":"2021-01-21T23:18:51","guid":{"rendered":"http:\/\/www.century21yk.ca\/blog\/?p=617"},"modified":"2021-11-21T11:06:07","modified_gmt":"2021-11-21T18:06:07","slug":"617","status":"publish","type":"post","link":"https:\/\/www.century21yk.ca\/blog\/2021\/01\/617\/","title":{"rendered":"2020 Year End Review: A Look Back at Yellowknife’s Real Estate Market"},"content":{"rendered":"

This and other articles about the Yellowknife real estate market are available in our e-newsletter.\u00a0 Click on this link<\/a> to sign up and receive our latest edition.<\/em><\/p>\n

\"\"<\/a>Well, 2020 was pretty crazy. Just like most economic sectors in most countries in the world, COVID-19 left the Canadian real estate sector facing great uncertainty in the months of March and April. Initially, it seemed as though we here in the Northwest Territories would be in the same rough waters as every other province and territory, but while we did experience some things in common with our neighbours, there were some big differences.<\/p>\n

Like everyone else, we experienced a significant slowdown for March, April and May, but the market more than compensated with very strong activity starting in June. In some parts of Canada sales hit record monthly highs all the way through to December. In Yellowknife our peak season didn\u2019t quite last that long, but not because the demand wasn\u2019t there. Starting in about October we simply ran out of listings to sell. If you were following our monthly updates you will recall that each and every month the most startling statistic was the drop in inventory compared to a year earlier.<\/p>\n

The graph below sums it up very well. Compared to the last five years, we had the highest number of sales and the second lowest number of listings. When you combine these two factors, you end up with a Sales-to-New-Listings Ratio* of 82% – well into seller market territory.<\/p>\n

\"\"<\/a>\"\"<\/a><\/p>\n

A lot of folks have asked me how it\u2019s possible that sales are so strong, given that Yellowknife is normally such a transient city, and that right now people aren\u2019t really able to come and go like they normally would. Can all of this business really just be coming from folks moving within town? Well, yes and no. We have all read headlines about people buying bigger homes because they are cooped up and want more space, or buying up lumber to build nicer back yard decks, buying snowmobiles, jet skis, etc. We\u2019re seeing these trends here too, and this certainly accounts for some of the \u201clocals-buying-local\u201d real estate activity.\u00a0 But another big chunk comes from renters. Whether or not we\u2019re in a pandemic, renting is an expensive proposition in Yellowknife and is something folks often do only temporarily until they can afford a down payment on a home. So the rental market is always a source of local demand for homes and probably even more so in a year when people are finding it easier to build up a down payment.<\/p>\n

But it\u2019s not just local demand that is driving the market. Yellowknifers have not experienced the same COVID-19-related restrictions on our lifestyles as many Southern Canadian residents, and because the public sector is such a huge employer up here, we haven\u2019t had the same economic uncertainly either. Given these factors, people have continued to move here for work \u2013 probably in greater numbers than people going in the other direction for work or retirement. I don\u2019t really have the quantitative data to back this up yet, but I suspect that when we eventually get statistics on employment and apartment vacancy, we\u2019ll find that Yellowknife is about as full of people as it can be without adding net jobs and new houses. [UPDATE: the good people at the NWT Bureau of Statistics sent me data today confirming that we experienced less out-migration from the NWT in the 2nd and 3rd quarter of this year than any of the last ten years.\u00a0 People just aren’t moving out at the same rate as usual.]<\/em><\/p>\n

I mentioned above that although our 2020 market was similar to the broader Canadian market in some ways, it was also different. That statement requires a bit more explanation. First, here is a graph from the Canadian Real Estate Association<\/a> that shows you that we are not alone in experiencing plunging listing inventory levels and high Sales-to-New-Listings ratios.<\/p>\n

\"\"<\/a><\/p>\n

That\u2019s a pretty crazy chart . There was a huge spike in inventory in April but then it resumed its nosedive while sales-to-listings went through the roof. We didn\u2019t see anything quite as dramatic as that here, and we certainly didn\u2019t experience the same price increases as many other places:<\/p>\n

\"\"<\/a><\/p>\n

As folks who follow real estate news will know, the double-digit price increases in many cities were driven by the rise of remote working and a \u201cflight to the burbs<\/a>\u201d. Condo prices in downtown Toronto, Montreal and Vancouver dropped significantly (or at least plateaued in the case of Vancouver) because employees have been permitted\/forced to work from home. And since they can work from home, why not live a bit further away where homes are cheaper and bigger? Places like Woodstock Ontario (128km from Toronto) have seen price increases of almost 30% over last year. But in Yellowknife, we don\u2019t have burbs, so we haven\u2019t seen this same rush of buyers competing for what was previously very low-priced property relative to metro areas. Our year-over year price increase was a modest 5%.<\/p>\n

Demand Still Weakest at the Top<\/h2>\n

\"\"<\/a><\/p>\n

The table above shows that although demand rose across the entire price range, the increase was weakest at the top, with only a 59% sales to new-listings ratio. That\u2019s much better than it has been in years and technically the first \u201cseller\u2019s market\u201d for this price segment in a long time, but without the addition of new high-paying jobs in Yellowknife and the NWT as a whole, and with other housing options available in the form of Grace Lake South “estate lots”, demand for resale homes remains relatively weak at the top end.<\/p>\n

Manufactured Homes are Flying off the Shelf<\/h2>\n

\"\"<\/a><\/p>\n

Just like 2019, manufactured homes led the pack both in terms of total units sold and the number of days required to sell each property. Since I began providing these monthly and annual market analyses I\u2019ve been using the \u201cmean\u201d average to talk about \u201cDays on Market,\u201d but the even better indicator of how quickly these properties are selling is the \u201cmedian\u201d average. I\u2019ve provided an explanation of the difference below** for anyone who cares to read it, but suffice to say that a median average isn\u2019t impacted as heavily by an outlier where the Realtor or homeowner gets the price wrong and a listing takes years to sell. It\u2019s a better reflection of what you can expect when you work with a Realtor and you both work hard to make sure the price is justified by comparable sales and market trends. I\u2019ll be using median average exclusively in the future\u00a0 for days-on-market reporting.\u00a0 In 2020 the median average days on market per housing type was:<\/p>\n

Manufactured Homes:<\/strong> 32 days
\nSingle Family Dwellings (\u201cstick built\u201d):<\/strong> 39 days
\nTownhouses:<\/strong> 44 days
\nApartment Condos:<\/strong> 53 days<\/p>\n

Based on what we saw from Yellowknife\u2019s real estate market in 2020, I am left feeling very lucky to live in this city. No, we don\u2019t experience double-digit annual real estate appreciation as they do from time to time in other places, but we have stability that many markets can only dream of.<\/p>\n

Thanks very much for taking the time to read this post. My next posts will explain what I think all of this means for home buyers and sellers in 2021. This is going to be a very busy year in our real estate sector \u2013 just how busy will depend on the timing of the easing of COVID-19 Restrictions.<\/p>\n

Educating buyers and sellers about our real estate market is very important to all of us here at Century 21 Prospect Realty. If you have found this\u00a0 article useful, we would really appreciate a Google Review, if you\u2019re up for it. Just follow this link: https:\/\/g.page\/C21ProspectRealty\/review?rc<\/a><\/em><\/p>\n

*The Sales-to-New-Listings ratio has long been considered one of the most important metrics in the real estate industry.\u00a0 It compares the number of homes that came onto the market in a given period to the number of homes that found buyers in that same period.\u00a0 For example, 305 homes sold in 2020 and 372 listings came onto the market, for a ratio of 82%.\u00a0 This number is used to determine whether we are in a buyer\u2019s, seller\u2019s or balanced market.\u00a0 Analysts use the term “buyer\u2019s market” when fewer than 35% of listings find buyers.\u00a0 Between 35%-55% we would be in a “balanced market”.\u00a0 Above 55% is considered a “seller\u2019s market”.<\/p>\n

**”Mean<\/strong>\u00a0(or average) and\u00a0median<\/strong>\u00a0are statistical terms that have a somewhat similar role in terms of understanding the\u00a0central tendency<\/strong>\u00a0of a set of statistical scores. While an average has traditionally been a popular measure of a mid-point in a sample, it has the disadvantage of being\u00a0affected<\/a> by any single value being too high or too low compared to the rest of the sample. This is why a median is sometimes taken as a better measure of a mid point.”(Source: diffen.com<\/a>)<\/p>\n

\"\"<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

This and other articles about the Yellowknife real estate market are available in our e-newsletter.\u00a0 Click on this link to sign up and receive our latest edition. Well, 2020 was pretty crazy. Just like most …<\/p>\n","protected":false},"author":3,"featured_media":663,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[53,54,61],"tags":[],"class_list":["post-617","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-education-and-advocacy","category-market-analysis","category-moving-to-yellowknife"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t