The Canadian Real Estate Association (CREA) says the country's housing market continued to slow in September, a stark contrast to the typically frenzied pace of autumn sales. The association also said on Friday that September sales fell by 3.9 percent compared to August, a slight increase in the current sales slowdown that began with the first Bank of Canada interest rate hike in March. Compared to last year, home sales in September dropped by 32.2 percent and about 12 percent below the 10-year pre-pandemic average for this month. Sherry Cooper, Chief Economist at Dominion Lending Centres, considered the numbers a sign of a housing correction but noted that it is an “unusual” correction because it is “orderly” and “not chaotic.” She wrote in a note to investors: “Home sales have slowed, but there are also new listings, so the price drop has been quieter than we expected. We have seen few distressed sales, as most potential sellers have lots of home equity and low mortgage rates, so they are not eager to buy new properties immediately. Moreover, with rising rents, most potential discount sellers are not keen to make that switch.” The national slowdown reported by CREA comes about two weeks after real estate boards in many major cities, including Toronto and Vancouver, announced a decline in sales and new listings much lower than expected in the busiest times of the year. Instead of a frenzy, they found few bidding wars and many sellers discouraged from listing their properties because they feared they would not fetch as much money as their neighbors did earlier in the year, when the market was moving at a weak pace. Also, Robert Kavcic, Senior Economist at BMO Capital Markets, said conditions are causing a “market crisis.” He wrote in a note to investors: “Buyers cannot qualify for or afford early-year prices. But sellers can withstand market conditions, and in the case of investors, they are putting units on the rental market. In other words, the market is not clearing right now, hence the lack of transaction volume.” He pointed out that while the market balance is weak, there is no forced sale or flooding of properties, adding that he still sees the country’s new listings as “very well-behaved” because the number of newly listed homes fell by 0.8 percent on a monthly basis in September. On an annual basis, new listings declined by 1.5 percent. Similarly, James Orlando, Managing Director and Chief Economist at TD Economics, said in a note to investors: “Listings declined for the third consecutive month, indicating that the soft economy and higher interest rates have yet to force a significant increase in supply. If anything, soft price conditions keep potential sellers on the sidelines.” Also, the actual national average home price was $640,479 in September, down 6.6 percent compared to the same month last year. CREA said excluding Greater Vancouver and the Greater Toronto Area, two of Canada’s most active and costly housing markets, reduces the national average price by more than $117,000. With the Bank of Canada expected to raise its policy rate further, Orlando forecasted additional pressure on prices and a 22 percent drop in average home prices between early 2022 and 2023.