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
1st 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
RE/MAX Centre City