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
gib@yourfavouriterealtors.com
