First two things to do in Stratford, this weekend:

In my last newsletter, I recapped 4 major trends in 2025. In this issue, I will look ahead.

Last year, we saw almost as many sales as the previous year, but prices fell. When more people want to sell their houses than there are buyers, house prices face downward pressure because sellers must price their homes competitively to stand out.

Simply put, for prices to start rising again, more people need to be out there buying houses than selling them.

Eventually, this will happen. Below, I outline 6 trends to watch in 2026 that will shape when, how soon, and by how much.

The Return of Affordability After peaking in 2022, Stratford’s median price has moderated, now sitting in the mid-500k range, with the average house selling for over 600,000.

While we aren’t back to 2019 levels, the "price-to-income" ratio is much healthier (see last month's newsletter). A couple with a combined median income can now buy the median home. Still, measures to improve affordability are needed.

Buyers also have time to think, conduct home inspections, and negotiate—things that make the homebuying experience much more pleasant.

A Stable Interest Rate Floor. After beating down the first instance of inflation in decades (which, arguably, they were part of the cause) with higher interest rates, the Bank of Canada has been on a cutting spree.

Ratehub.ca now quotes the best 5-year interest rate at 3.45%. This has improved affordability, and talk about "more cuts" has decreased. Stability is a positive: if you think rates will fall further, why buy now when you could lock in a lower rate later? The end of this wait-and-see mentality could encourage some purchasing. Near-zero pandemic-era interest rates fueled the surge in house prices, and the hikes brought prices down. With that behind us, things should stabilize.

Pent-Up Demand Life didn't stop just because prices went down. People still got married, changed relationships, retired, looked to downsize, wanted to enter the market, had kids, or took new jobs in Stratford. Some people held off moving in 2024 and 2025 because prices fell or interest rates were high. Now that affordability has improved and rates have settled, those "life-event" buyers are returning. At a certain point, you can’t outwait the market.

Consumer Confidence and the Trade War Cloud: The dark cloud of US tariffs, the upcoming CUSMA (NAFTA 2.0) renegotiation, and the unpredictability of the US president hang over the Canadian economy. Stratford is a manufacturing and cultural hub; our economy is connected to the world. When people are nervous about their job, they're less likely to upgrade to a larger home.

Fortunately, local data suggests our local economy has held up much better, with the Stratford-Bruce Peninsula region's unemployment rate at 4%, far below the national rate of 6.8%.

The Population "Pause" For years, the story was "Ontario is growing by 500,000 people a year. Buy everything!" That narrative has hit a wall. Federal changes to immigration targets and student caps have slowed population growth. Demand in 2022 and 2023, caused by immigration, has cooled.

Stratford was not the same magnet for this immigration boom as other municipalities in Ontario, which have seen larger declines in real estate prices. But consumer confidence is shaped by headlines, many of which originate from the GTA. Overall, this is less of a headwind for Stratford, where our population is growing.

Inventory Overhang: We are starting 2026 with high inventory levels. This is great for buyers, but it drags on price growth. Sellers still anchoring their expectations to 2022 prices are finding their homes sitting on the market. It now takes on average over 50 days to sell a home, though ours sell much quicker. Eventually, this overstock will clear; the question is how long it will take.

Putting it all together.

Overall, the local real estate market has shown greater resilience than other real estate markets. Unless the US causes further harm to the Canadian economy beyond what it already has, I predict things will stabilize and eventually return to a normal, balanced market. However, this could take some time. The caveat is that ‘normal’ means slow, predictable rises in house prices. It never made sense for a house to earn more money per year than someone working full-time, as we saw during COVID.

​If you are a buyer…

This is likely the most "balanced" buying opportunity we have seen in a decade. You have a choice, you have time. This is a great time for people entering the market and people seeking an investment opportunity.

If you are a seller…

This is not amateur hour. The days of putting a sign in the lawn and reviewing offers at 7 p.m. are gone. You need to price for the current market, not the market you wish we had. You also need expert advice to help you position, prepare and price your home to maximize its value.

For people up-sizing, you can afford more house on the other side of the transaction than before. And for downsizers, there is a case to sell. If you downsized last year and put the money in the TSX, you’d be up 28.24% on whatever you netted. If you stayed in your house, you’d be down. Houses build wealth through leverage. If you put 5% down on a $500,000 home and it goes up 5%, your $25,000 down payment nets you $25,000, a 100% return. But if your house is mostly or fully paid off, your return on that equity is tied to the housing market, which has traditionally underperformed the broader equity market.  

Maklane deWever

519-301-2214

[email protected]

Apologies for the delay on this one. I was off for most of December since I got married, so I was a bit busy playing catch-up.

Sources: Habistat/CREA, Statistics Canada, Ratehub.ca, Yahoo Finance

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