March 2023 saw a rise in home prices as seller-friendly conditions continued to prevail in the market. Sales and new listings improved from the beginning of the year, resulting in expected monthly inventory level gains. However, low inventory levels of just 3,233 available units left purchasers with limited choices, pushing up home prices.
Residential home prices in March reached a total of $541,800, a two per cent gain over the previous month and almost one per cent higher than last year. While prices are still below the May 2022 high of $546,000, the pace of price growth in the first quarter exceeded expectations due to the persistent seller's market conditions.
According to CREB® Chief Economist Ann-Marie Lurie, the challenge lies in the limited supply of available homes, with existing homeowners hesitant to list their homes due to difficulties in finding acceptable alternatives in this market. Additionally, higher lending rates may also reduce incentives for homeowners to sell.
Overall, while the market conditions are not as tight as last March, low inventory levels continue to impact homebuyers' choices and drive up prices.