You Market Update for the First Nine Months of 2017 - London, St.Thomas and Area

London/St. Thomas and Surrounding Area:

The strength continues. It has been a year to remember…Sales of homes across our trading area are up 13% on the base of 8700 homes that sold last year. Prices rose further since June 30 and now sit up 17.1% or $49,053 compared to the last 9 months of 2017 to an average of $324,704. Listings of homes for sale during this period only rose 1.1% or 147 more homes listed for sale.  The increase in the number of homes that sold in the same 9-month period was 1131, almost 8 times the increase in the number of homes coming to market.  This represents a 13% increase in sales.

Will things slow down? It does not appear to be happening, this number did not change much with 1391 homes listed compared to virtually the same number of homes, 1379 for September 2016.  With Sales increases of 13% there were over 1100 fewer homes to choose from across our trading area than offered for sale in September last year. The number of homes sold in September increased marginally again, up over last year by 1% and the trend appears to be continuing upward with an average selling price for the month of September 2017 across Middlesex and Elgin hitting $394,700 compared to $337,694 for September 2016.  Sales and number of homes listed this time of year are slower….But…Not slower than last year and homeowners are getting 100% of asking on average. This indicates that many homes are still getting over asking.

City of London:

The increase of sales across the city continues. The number of homes sold, year-to-date, to the end of September is up a whopping 15 % or 757 more homes over the same period in 2016. This momentum continued in September with Sales up again 11% for the month. This increase drove prices up by 23.2% or $64,791 since January of this year to an average of $329,861.  The number of homes coming to market has increased over the last 9 months marginally by 2.1% against this huge sales and price increase environment.   This means the number of home to view is still down versus a year ago.  For example, this past September there were 931 homes across the city to choose from. This was 24.1% fewer homes for Sale than last September. Today is the BEST TIME TO MOVE UP or BUY YOUR FIRST HOME! Prices will still rise. Think about it! A fixed rate 5-year mortgage term today is still below 3.5%, a great deal. The economy is still solid…Toronto buyers may now take longer to sell, but they still want to take advantage of our much lower prices….

London North:

Remember this is a slower time of year. The smaller volume of homes sales is still driven by supply and demand for the season. This area remains the highest price area of the City of London. The average price of a home in this area now sits 20.2% higher at $403,860 for the last 9 months of 2017. In September 2017, 206 Residential Properties sold, up again over last year by 3%. Their average price was $409,251, clearly indicating that the upward trend is continuing. The number of homes sold in the North is up 9.2% above the first 9 months of 2016. current year-to-date inventories are down 4.4% still creating upward pressure on selling prices because of fewer homes to choose from.  The number of homes offered for sale in September was down 5.4% versus 2016. Think about this…291 homes for sale in September and 206 sold. Not much left to choose from? It now takes an average of 22 days to sell a house versus 36 days a year ago and home owners are getting 100% of asking.

Some potential move up buyers have given up their search because they don’t want to be homeless.  This remains a pent-up demand potential area of buyers and sellers. In our opinion this climb in prices is not over yet and the recent hike in interest rates to less tha 3.5 % for a five year finxe rate is marginally higher than last year. Don’t forget that the economy is significantly strengthened.

London South:

The number of homes sold across South London increased 14.7% during the first nine months of 2017 over the same period a year ago. 2,152 homes sold during this time-period. Inventories of homes coming to market to be offered for sale rose by only 3.4%, a shortening of supply of homes to choose from and increased number of buyers continues to drive prices upward. The average home is now selling for an average of $329,450 for the last nine months. This represents an increase in the average value of a whopping 19.5% or $53,637 for the nine-month period.  There were only 365 active homes for sale in the South in September down 25% from a year ago.  With sales in September of 281 homes, it did leave much to choose from.  Prices for the month hit $351,686 on average for these 281 homes.  Home owners are getting 100% of asking on average compared to 98.6% last September.  As stated, this climb in prices is not over yet and a five-year locked-in interest rate below 3.5% won’t change the enthusiasm much.

London East:

Affordability continues to be the driving force in this area. The number of homes sold in the first 9 months of 2017 sits up 22.7%.  The number of homes coming to market for this same period increased only 9% above the same period in 2016. As you can see sales well outpaced the number of homes that came to the market resulting in fewer homes to choose from. The average house price increased 17.7% over the same nine-month period of 2016. The value of this increase was $31,158 for the average home owner for an average price of $247,635.

197 homes sold in September, while there were 278 active listings.  This left a residual of 81 homes left to choose from. Last year in September there were 77 more homes to choose from in September.  All this means that our prices are still rising. A mortgage rate below 3.5% for a five-year locked in term is not by any means a hindrance for the future of this market.

St. Thomas:

We predicted it! The average price in June sat at $240,412 for the last 12 months. The average house price for the 7-month period now sits up 7.1% or $17,877 (for nine months) delivering an average price of $251,190.  Inventories of homes available for purchase remain the tightest in the entire trading area. After nine months the former increase 10% increase in available homes for sale dropped to only 3.8% above last year.  Active listings in September dropped in September 2017 versus a year ago by whopping 43.2%, leaving only 5 homes available for sale going into October in the whole city.  Virtually everything listed sold! These inventory levels should be driving prices through the roof.  Homeowners, over the 9 previous months have been getting an average of 99.6% of asking price compared to 98.3%. In September this jumped to 100% for the month.  If this tight inventory situation for this time of year continues this will only drive prices up further. The average time it takes to sell a house has now dropped to an average of 27 days for the 9 months ending September 30, 2017 compared to 45 days for the same period a year ago.

Comments:

Inventories remain tight and demand continues to be strong.  The increases in the lending rate as predicted are still below 3.5% for a 5-year fixed rate. The Toronto market with selling period back to normal and prices off 20%… We are 300% lower than their average... If you need to drop the price on your resale home in Toronto to $800,000 from $1,000,000, our $344,128 City of London average price will still let you live here Mortgage free and have a bank balance that most of us would dream about…. They are still going to come until our prices get much closer to each other.   Prices will continue to rise and TO-DAY is the best day to move up or buy your first home.  Remember, there are several strategies for making a purchase in this market.  First the house must “appraise” to get a bank to finance.  If you bid $50,000 over asking, you must have the difference between the appraised value and the bid price if you are using a down payment based on a CMHC insured mortgage. 

Moving up this is not a problem because of equity and “Cash” offers are always the best strategy. The major concern is finding appropriate month to month accommodation until you find the right home. Sublets are your best option.

For 1^st time buyers there is considerable risk if thinking of cash offers…Best advice is set reasonable goals for that first home…You can always move up when you build equity. Now that things are quieter and bidding wars are not as frequent it is a great time to move forward.

Sometimes a good approach is to try and submit a backup offer after another bid has been accepted.  The number of offers falling apart has been increasing because ill-informed buyers can’t come up with the difference between bank valuation and what they as the Buyer offered.

We are here to help with strategy to approach this market in a meaningful and productive way.

With Sellers, we are proud of our Listing Marketing Program and are well equipped to maximize exposure to get the “highest” and “best” selling price possible in the shortest time possible from this market.

Want to know what your home is worth?  Call us for a market update.

Gib Heggtveit – 519-535-3975

Broker

Mary Heggtveit – 519-535-7355

Sales Representative

Email:            gib@gibandmary.com

                        mary@gibandmary.com

RE/MAX Centre City

Your 6 Month Market Update for London, St. Thomas for 2017

London/St. Thomas and Surrounding Area:

It has been a year to remember…Sales of homes across our trading area are up 21% on the base of 3206 homes that sold last year. Prices rose 15.6% or $44,966 compared to the last 12 months (July 1 2016 to June 30, 2017) to an average of $336,622. Listings of homes for sale during this period only rose 4% or 187 more homes listed for sale.  The increase in the number of homes that sold in the same 6-month period was 675, almost 4 times the increase in the number of homes coming to market. 

Will things slow down? In the month of June this number was offset a bit with 1017 homes listed compared to 890 for June 2016 adding 127 homes to the number of available homes for sale. The potential effect was significantly minimalized by an increase in sales in June of 85 more homes than last year adding only 42 more homes for sale across our entire trading area.  The trend appears to be continuing upward with an average selling price for the month of June 2017 across Middlesex and Elgin hitting $367,647 compared to $308,141 for June 2016.  The pressure is still on…. Remember, June is traditionally the biggest selling month of the year...

City of London:

The Sale prices reflected in this section are Year-to-Date. All other sections are 12 month average prices and therefore include 6 months of prices from a lower 2016 market.

Here is a look at the City itself for the first 6 months of this year.  Rather than looking at the average price for the last 12 months we are now going to look at the average for the last 6 months only trying to get a better handle on recent activity. The average home in the city of London is now selling at $384,511 (6-month average). This represents an increase of 22.1% year to date or $69,633 for the average home.  To try and predict the future, we need to look at Supply and Demand. A ¼% increase in the lending rate this month and perhaps a further ¼% in October will not really affect Buyers, moving up, or buying their first home in our market.  The average price of a home in east London @ $252,066 or St Thomas @ $240,412 is still very affordable. Supply is another story, we finished this first 6 month with 705 homes actively offered for sale in London. Last year at the end of June we had 1013 homes for sale. This is a further reduction coming into July of 30% fewer homes to choose from across the City of London.  The average home owner got 105% of asking price during this six-month period.  It will continue...Think about it! A 3.5% fixed rate 5-year mortgage term offered around year end in 2017 will still be a great deal. The economy is still solid…Toronto buyers may now take longer to sell, but they still want to take advantage of our much lower prices….

London North:

This area remains the highest price area of the City of London. The average price of a home in this area now sits 19.9% at $433,365 for the last 12 months (July1, 2016 to June 30, 2017). In June 2017, 206 Residential Properties sold. Their average price was $476,405, clearly indicating that the upward trend is continuing. The number of homes sold in the North is up 10.4% above the first 6 months of 2016 Sales for the month of June were marginally lower than last year. But current year-to-date inventories are down 7.4% still creating upward pressure on listing.  Inventory in June we up marginally by 1.7%, not enough to impact this demand. Some potential move up buyers have given up their search because they don’t want to be homeless.  This remains a pent-up demand potential area of buyers and sellers…In our opinion this climb in prices is not over yet and a 1/4 % hike in interest this week won't change much...Don't forget that the economy is significantly strengthened.

London South:

This is the area of the city with the most sales of homes since January 1, 2017. Prices in this are up 16.4% based on the average of the last 12 months.  This means the average home in this area has increase by $51,385 and now sits at $369,613.  There were 208 sales of homes in the South in the month of June 2017 with an average selling price of $399,913. Once again, a reflection of a rising market.  Inventories in the south are a bit better delivering an increase of 10.6% since the 1^st of January 2017. With more to choose from, this increase helped increase sales throughout the area. Sales are up 24.3% on a year-to-date basis.

As stated, this climb in prices is not over yet and a ¼ % hike in interest rated this week won’t change the enthusiasm much.

London East:

Based on affordability this area has enjoyed a 27.4% increase, this is the highest year-to-date increase in the number of homes sold in the City. The average price of a home in this area rose 12% over the last 12 months by $27,049 to $252,066.

Inventories rose 10% for the same period.  This means inventories are now significantly diminished based on the increase in the number home sold in the same period (27.4%). This climb in prices is not over yet and a ¼ % hike in interest rated this week won’t change much.

St. Thomas:

This is a market that should see significant price gains in the next few months.  Inventories are the tightest in the entire trading area. They did increase in number of available homes for sale by 10% over the last 6 months.  But to really put things in perspective we need to look at total sales versus total number of homes listed for sale since January.  All residential homes listed for sale = 563, all residential homes sold = 504. Virtually everything listed sold! The average price for the last 12 months rose 10.2% or $22,101 to $$240,412.   There were 107 homes sold in June, the average price of those homes was $272, 255. All of this indicates that St. Thomas will see an average year end price increase of around 20% for the Calendar year 2017.

Comments:

Inventories remain tight and demand continues to be strong.  2 projected increases in the lending rate of ¼ % will only bring mortgage rated to around 3% or slightly above. The Toronto market has cooled in volume and prices may adjust slowly downward… We are 300% lower than their average... If you have to drop the price on your resale home in Toronto to $1,000,000 from $1,100,000, our $384,511 City of London average price will still let you live here Mortgage free and have a bank balance that most of us would dream about…. They are still going to come until our prices get much closer to each other.   Prices will continue to rise and TO-DAY is the best day to move up or buy your first home.  Remember, there are several strategies for making a purchase in this market.  First the house must appraise to get a bank to finance.  If you bid $50,000 over asking, you must have the difference between the appraised value and the bid price. 

Moving up this is not a problem and Cash offers is the best strategy. The major concern is finding appropriate month to month accommodation until you find the right home. Sublets are your best option.

For 1^st time buyers there is considerable risk if thinking of cash offers…Best advice is set reasonable goals for that first home…You can always move up when you build equity. Remember the average selling price is currently about 10% over asking based on recent sales and the area.

Sometimes a good approach is to try and submit a backup offer.  The number of offers failing is on the increase because buyers can’t come up with the difference between bank valuation and what the Buyer offered.

We are here to help with strategy to approach this market in a meaningful and productive way.

With Sellers, we are proud of our Listing Marketing Program and are well equipped to maximize exposure to get the “highest” and “best” selling price possible in the shortest time possible from this market.

Want to know what your home is worth?  Call us for a market update.

Your Year End Market Update for London, St. Thomas and Area.

Our Trading Area:

Get ready for another ripping year of price increases in our Trading area.  The average price of a home finished the year up 6.6% or $18,590 across all communities served by London St.Thomas Association of Realtors. The average home now sits at $299,646.   The North side of London enjoyed the highest increases which we will detail below.

The most important question to ask is “What is most likely to occur in 2017?”. The answer to this question is based primarily on “Supply” and “Demand”.   Let’s look at just December (slowest month of the year) for Residential homes in London as an example (our largest trading area). Sales dropped 3%, relatively flat with a total of 231 sales across the City. At the same time, there continued to be upward pressure on prices due to a significant decrease in availability of homes to choose from.  The inventory of homes to choose from was down 34.5% for the month. This drove prices at the same time up by $21,076 over last year with home sellers getting virtually full asking price (in 2015 it was 96% of asking price).. The number homes available for sale on December 31, 2016, for the start of the new year, dropped 42.6% from last year. In every trading area outlined below, more homes were sold in December than came to market and offered for sale in the same period, further eroding what is available to choose from as a Buyer.  This will drive significant upward pricing starting in January 2017 unless everyone starts to think about selling. That is not likely to happen. Be prepared for a wild ride on price increases in Southwestern Ontario. Prices increases should be higher than realized during this last 12-month period.  Even if Interest rates rise 1% they continue to be a bargain compared to the historical 10% levels.

North London:

My prediction of a 10% increase by the end of 2016 came awful close.  As of December 31, 2016, based on the last 12 months, the average home in North London is now worth $378,059 which is 9.0% above last year’s average.  This means the average homeowner has enjoyed an increase in value of $31,369. The number of homes sold across North London, for the first twelve months of 2016, has increased by 11% over the year before.   The inventory of home offered for sale has really fallen versus the same period a year ago, it is now down 12%. This will put huge pressure on prices causing them to increase significantly again in this popular area of the city. The average home price in the month of December rose over $400,000. The number of homes coming to market for sale for this December dropped 36% over what was listed in December 2015.  Sales for the month were off marginally by 6.7%. Obviously, impacted by the significant decrease in the number of homes to choose from. With inventories, still below 2015…Prices will continue to rise and bidding wars can occur if priced properly.

London South:

As of December 31, 2016, based again on the average increase over 12 months, our selling prices rose 6.2%. The average sale price now sits at $324,581. This represents an annual increase in value of $18,874 for homeowners in the South.  The number of homes offered for sale dropped during the first 9 months of 2016 by 8.1%, further limiting the choices available for buyers.  Sales rose, as well versus this same period a year ago, by 3.6%.  Homes coming to market in December were the same as in December 2015. In my opinion, the rise in prices of homes will continue driven by limited supply.

London East:

Once again looking at the average increase in the cost of a home over the last 12 months, prices rose 2.6% or $5,893. The average sale price now sits at $228,158 across the East of London. The number of homes sold for the first 9 months of 2016 increased as well, rising 5.1%. During this same period the number of homes being offered for sale dropped significantly by 7.0%. The number of homes being listed for sale is continuing to drop.  In the month of December, the number of home coming to market dropped again by 12.4% Prices should continue to rise, as the reduced number of homes available continues to put pressure on upward prices. It continues to be the most affordable area in the city.

St. Thomas:

Prices in St Thomas have risen 6.1% or $12,863 on an average house selling price of $224,340. This is based on 12 months of sales history.  Homes offered for sale are continuing below last year with the number of homes that were listed for sale during the 12-month period dropping 10.7%. The number of homes sold during the 12 months increased as well by 3.9% above last year.  The tight supply of homes offered for sale is continuing for the overall trading area. St Thomas inventory during December remained flat versus December 2015 at 35 homes added for sale. Sales for the month were also flat versus December 2015 while the average selling price rose nicely to $241,202.  Remember this is only the sales in December, the slowest month of the year.  It does indicate a good year ahead.

Summary:

Finance Minister Charles Sousa said first time homebuyers won’t pay any land transfer tax on the first $368,000 of a purchase price after January 1, 2017. has increase the exemption for Land Transfer tax for first time home owners to $4000.  (typically, about 1% of the purchase price).  The Federal Government continues to offer the equivalence of a basic Lawyer’s fee as a rebate at tax time for a first-time buyer. Interest rates are still below 3%

Toronto Buyers are spreading their wings and moving out across South Western Ontario…Remember they can buy their home of their dreams here and bank the difference for retirement.  This is and will continue to cause bidding wars over our homes. If you are thinking of liquidating or downsizing… ”Don’t Do It” now! Wait another year!  You will be pleased you did.

I’ve said it before and say it again …There is no better time than “TODAY” to buy your first home! There is no better time to Sell your existing home than “TODAY” to make that move to a “larger” home.  Be prepared to bid on the house you want. At the same time, there is no worse time to liquidate or move down, as prices will continue to rise. Call us today if you or someone you know can benefit from our help.

Gib & Mary Heggtveit                                     

519-421-2626

www.YourLondonRealtor.com

gib@yourfavouriterealtors.com