Your 6 Month Market Update for London, St. Thomas and Area - 2018

London St. Thomas & Area Overview:

The number of homes sold over the last six months is lower that last year (a record year) by 26.5%. The number of homes offered for sale started the year with slightly over 5 months’ supply of homes and then dropped in March to an average of 4 months.  Remember a balanced market is 6 months’ supply of homes for sale.  Since the end of April, the number of homes offered for sale have increased marginally and now sit at 5 months’ supply. This will improve Buyer’s ability to negotiate in some price categories. Home Owners are now getting an average of 99% of their asking prices. This indicated that many price categories and areas are in bidding wars. Prices across our trading area are up nicely by 5.9% over last year’s record price increases. The average home across the county is now worth $385,586 which is an increase of $21,601 for the first 6 months of 2018.  If supply of homes continues to increase, we may experience some leveling in price increases.  In my last report the number of homes available was lower and we were heavily into bidding wars. This activity has cooled somewhat because of the continued increase in available properties. Prices won’t likely fall as we are still seeing an influx of Toronto Buyers cashing in on their leveling market.  Based on this activity we can expect an increase of about 6% to 8% for the year over 2017.

London:

The number of sold homes within the City of London is also reflecting a downturn, driven by sales with limited supply (less than 6 months inventory of homes for sale).  The number of homes sold is off 24.3% versus last year’s record number of homes sold.  Prices on the other hand are still rising, the average home now sits up nicely by 8.4% or $29,000 bring the average home to $370.435. 

Inventories are low in London sitting at only 3-month average until June when they rose marginally to 4 months. This low availability is what is driving the prices up across our trading area. Home owners are getting an average of 101.8% of their asking prices…Homes priced from $100,000 to $800,000 are all selling at over 100% of asking price.  If this market continues with tight supply, significant demand will continue to push prices upward.  Inventory levels are obviously the key. First Time Buyers and Move Up Buyers need to get in now to benefit from continued equity growth in the back half of this year and in the years to come and from our low mortgage rates.  This is obviously not the time to downsize unless you need to do it.

London North:
The number of homes that sold in the first 6 months is down by 26.2% versus the first six months of last year’s record year. The number of homes offered for sale has gone as low as only 2 months’ supply in March, then 3 months in April up to 4 months for May and June. This lower availability that is lower than the overall City has translated into constant bidding for homes in London North in virtually every selling situation, getting sellers an average of 101.8% of asking. In addition, limited supply like this can limit overall sales and leave unsuccessful buyers frustrated.

So, how are prices?  Remember that North London already has the highest average price. This year, this area has risen again by 7.8% in the last 6 months, or $32,310, to an average selling price of $444,863. 

This aggressiveness should continue if inventories remain well below 6 months’ supply and should deliver an average price between 8% and 10% by year end.  Right now it takes between 15 days and 21 days to put an average home up for sale and get it sold.

Once again, the bidding wars in this area are reinforcing that London North continues to be the most desirable area of London.  The area offers so many conveniences, great schools and the home of University of Western Ontario.

London South

The number of homes that have sold is now down 23% over the same sales period of 2017. This is actually a return to more normal levels. This area is also still very much in a Seller’s market with only 3 to 4 months’ supply of home to sell, based on demand and inventories.  This demand will continue to push prices up. Home owners are consistently getting over asking price.  They are getting on average 102.6% of their asking price. So, what has all this done to the average selling price? 

Prices are up in line with the North at 7.1% or $24,340 bring the average home price up to $366,562. The number days it takes to sell a home in this area has been steadily dropping to where it sits at just 18 days on average at the end of June and dropping.

London East:

The number of homes sold in London East have fallen by 23.8% versus last years record sales as well.  But, there is plenty of good news here. Inventories are well below the 6-month average required for a balanced market. The number of homes offered for sale dropped under 3 months’ supply in February and March and have increased since then to about 3.5 Months.  Because of these significantly lower levels of homes offered for sale, these home owners are consistently getting well over asking prices.  The average for the first six months sits at 102% of asking price.  It now takes 20 days in this area to sell a home.

  

What has this low availability of home for sale done to prices?

Prices in this area are breaking records…Prices are up a whopping 13.2%.  This represents an increase of $33,700 on average bring homes in this area to a new base price of $288,602.  The East is beginning to move.  What an opportunity for First Time Buyers to get into the Market.

  

St. Thomas:

In my opinion St. Thomas continues to be one of the best priced areas of Southwestern Ontario.  It is really a Bedroom Community of London and had all key services including bus services.  The fact that Ford is no longer in Tabotville has little relevance.  St. Thomas is also near Port Stanley, a wonderful summertime destination for food, entertainment and beaches.   The average price of a home in St. Thomas is still lower than Ingersoll currently at $322,838 with much less services and infrastructure. I believe people are beginning to get the message!

Sales this year have returned to normal levels like all other areas, but off only 20.1%. The number of homes offered for sale here compared to demand has been consistently lower than all other areas.  St. Thomas has had an average of only 3 months supply for 5 months in a row.  It takes an average of about 20 days to sell a home in this area.  This limited number of available homes is pushing up prices like the other areas. Home owners have been getting around 101% of their asking price. Again, experiencing multiple bids.

What has happened to prices?

Selling prices for the first six months of 2018 are up a record of 15.2% in this area! Wow St. Thomas is leading the price growth in the area!  This means the average home increased in value $38,307 since January bringing the average home to $290,821.  Still a bargain in any market in Southwestern Ontario.

Summary:

What does all this mean. The market is buoyant and will finish with a strong finish once again. Interest rates are still at record lows. Remember demand is the key. 

Example: If you are a Toronto Area resident about to retire or kids have left for University, or you work from home and are sitting on a home worth even $800,000 and you have a low mortgage… What would you do… Move to Southwestern Ontario! Buy a beautiful dream home for even $600,000 and put close to $200,000 into the bank for a rainy day! That is what is going to continue to drive this market.

I love to point out when the average price in 2004 in Mississauga was $240,000 and London and area were at $200,000.  Logically, which market will experience potential correction, I doubt it will be London and area!

There is no better time to buy your first home, make a lateral move or move up!  If you are thinking of downsizing, wait until the market comes back into balance.

Please share this update with anyone who will benefit…and …. Remember, Mary and I are here to help you, your family, your friends, your co-workers. Call us with their names, timing, phones and email and we’ll get to work saving them money. There are differences between realtors. We are proud of our results and our Friendships with our many Clients.

Gib Heggtveit                           Mary Heggtveit

Broker                                                               Sales Representative         

RE/MAX Centre City Realty Inc                        RE/MAX Centre City Realty Inc

Cell: 519-535-3975                  Cell: 51-535-7355              

Gib@YourFavouriteRealtors.com                         Mary@YourFavouriteRealtors.com