The Market Minute

“May you live in interesting times!” This phrase, often attributed to John F. Kennedy in 1966, feels more relevant than ever. With major and unpredictable shifts occurring south of the border, an upcoming provincial election, and a federal election on the horizon, the landscape is anything but stable.

In a move that surprised no one, the Bank of Canada announced another 0.25% rate cut on Wednesday, January 29, 2025, bringing the prime rate down to 3%. Trump’s 25% tariffs on nearly all Canadian exports to the U.S. has been postponed for 30 days but it seems very likely that something will materialize in the future, and many speculate that the BoC may push rates even lower—potentially into the 2% range—to shield the slowing Canadian economy.

There’s widespread debate on what happens next. Some predict a recession by late 2025, though the severity remains uncertain. The BoC could take aggressive action, as it did during COVID, by rapidly cutting rates to stimulate economic activity. Meanwhile, despite the tariffs, Trump’s policies remain unpredictable—some duties may increase while others could be rolled back. The only certainty right now? Uncertainty.

What About the Housing Market?

Real estate is hyper-local, so let’s focus on what’s happening in Southern Georgian Bay. Surprisingly, January—typically one of the slowest months for real estate—saw strong transaction activity. Additionally, we’re seeing a noticeable uptick in buyer interest, including more showings and increased engagement across online platforms. Regardless of BoC policy, buyers are re-engaging with the market.

Despite this momentum, I still believe we’re in a buyer’s market. Many deals are closing below asking price, signaling that sellers are willing to meet buyers where they are. However, if interest rates continue to drop, we may see upward pressure on prices, shifting leverage back toward sellers.

Looking ahead, I anticipate inventory levels to rise from late February into March, likely peaking in early spring. Whether this creates a buyer-friendly environment or tightens supply remains to be seen.For now, the key takeaway is this: opportunities exist on both sides of the market—buyers are active, and motivated sellers are making deals happen.