City of London:
For the Sake of this
exercise, we are going to look only at Pandemic activity and trends.
For the period from April 1,
2020 to May 31, 2020 Sales were unbelievably slow across the City. There were
287 homes sold in April and 438 homes sold in May. Sales improved 52.6%, on a month-over-month
basis, for this 2-month period. This is
a positive result, considering the circumstances and does indicate the start of
a trend. On the other hand, these
numbers still represent a year-over-year decline with April 2020 sales falling
to 339 units or -49.4% and May 2020 sales off 342 units or -43.9% versus 2019
results.
The other component to the future
of sales and pricing will be inventory (the number of homes available for
purchase). Inventories fell 55.2% from 850 homes available in March to 469
available across the City in April.
Inventories gained by 32.4% in May to 621 homes available across London. This is still well below normal levels.
We will do further analysis
of price impact by specific market area below.
London North:
In this popular area of London, there were 101
residential Sales in April 2020 and 125 sales in May 2020, down from 235 and
237 homes sold in April and May 2019. As a result of the higher average listing,
and selling prices, the month-over-month increase in homes sold this year was only
23.8%.
To put things in perspective, sales for the first two months ending February 29, 2020 were flat year over year. March 2020 finished up 12% over March 2019 in spite of stalling mid month with 195 homes sold. We now know what happened to sales, but what about the
number of homes that were offered for sale in this area? During the first 3 months of 2020 inventories
of homes available increased an average of 8% each month. In April, inventories dropped 19.3% from 804
homes available in 2019 to 642 homes. In
May, inventory dropped 34.5% over April 2019 results to 603 homes for sale, even
below April 2020 inventories. This put upward pressure on pricing due to significant
decrease in homes available for sale.
It is important to know that the average price in this
area for the first 3 months of 2020 averaged up with an increase of 7.1% over
the same period in 2019 reaching $520,444 up from $486,040. During the month of April prices continued to
rise moving from $504,846 in 2019 to $528,134 for this year. In the month of
May this increase held, with prices moving from $491,014 In 2019 to $528,933 in
May 2020.
Thinking of Selling fast? Now
is great time to take advance of lower
competition. We still believe prices
have not peaked yet, so if you do not need to sell or upgrade, wait. This means this is a great time to move up
or buy that dream home.
London South:
There were 109 residential Sales
in April 2020 and 198 sales in May 2020, down from 250 and 318 homes sold in
April and May 2019. As people are still cautiously coming back to the market in
this new environment and the appeal of a lower average price, the month-over-month
increase in homes sold this year was up 81.7%!
Homeowners during April and May 2020 received and average of 100% of
asking prices, indicating bidding wars on homes priced to market. The increase in sales month-over-month and
the average selling price are solid indicators that prices are going to go up!
The average price in London South
followed these trends and increased to an average of $473,059 in May after a one
month decline in April to an average of 422,955.
The average house prices in South London were off to a ripping start for
the first 3 months of 2020, up 21.9% to an average of $449,616 compared to an
average in the first 3 months of 2019 of $368,753!
It is apparent that the Purveyors
of Doom and Gloom for the prices of homes, are currently misinformed. If a significant
number of people are forced to sell their homes as result of employment losses
this may have some dampening effect, but for now, prices will rise.
London East:
The Month of April delivered 101
residential Sales in in London East and 125 sales in May 2020, down from 201
and 225 homes sold in April and May 2019. In May 2020, London East experienced
a significant reduction in normal availability of homes offered for sale. May 2019 had 554 homes offered for sale. In May 2020 this availability dropped 35.4% to
358 homes offered for sale. The month over month increase in homes sold this year
was up 23.8%!
The average price in London East
also followed these trends and increased to an average of $354,947 in April and
then to an average of $365,096 for May. The average house prices in London East set
the 2020 record for the City so far with average home price increases of 22%
for the first 3 months to $368,753 compared to an average in the first 3 months
of 2019 of $302,381!
Homeowners this year received
103.7% of asking prices in April and 103.0% in May. The significantly low inventories and average
pricing in London East will result in bidding wars for homes properly priced to
market. These current conditions are solid indicators that prices are going to go
up! No better time for first time buyers
to buy, than right now!
St. Thomas:
The Month of April delivered 42
residential Sales in St Thomas and 51 sales in May 2020, down from 84 and 72
homes sold in April and May 2019. May 2019 had the same number of homes for
sale as April 2020, a total of 196 homes listed for sale. In May 2020, this availability dropped 11.7% to
173 homes offered for sale. This also represented a decrease of 20.6% versus May
2019 inventory levels at 218 homes offered across the city for sale.
The average price in St
Thomas enjoyed the highest gains in prices in the area once again in the first
3 months of 2020 prior to the pandemic closures, up 16.2% for the City to
$385,525. Since then, prices have leveled
from a high in March 2020 of $393,668 to $363,177 in April and a gain in May of
$369,462.
A contributing factor for May’s
gain was the reduction of homes available for sale from 5 months of supply in April
to only 3 months availability in May 2020. Homeowners are consistently getting an
average of 100% of asking prices indicating that bidding wars are still at play
in this area on homes priced to market. St. Thomas continues to be an ideal investment
market based on an average price for the area below $400,000.
Summary:
There is no doubt that the
factors that drove prices up in the last few years are still at play. Demand is
there but being cautious because of fears of contamination of individuals and
homes.
The Real Estate industry is
being cautious as well. For example, Offices and Realtors have been practicing social
distancing, aggressive sanitization and protection of clients, staff, and themselves.
My team is discouraging speculation
buying and dealing primarily with fulfilling the legitimate needs of Buyers and
Sellers who must participate in this unique market.
To address the health and
safety of our clients we are adding the following specific enhancements to our already
extensive Marketing Program:
·
Fine tuning needs
to specific homes to discourage unnecessary viewings of homes.
·
Team Heggtveit is
now using Virtual Open Houses and 3d Online Tours (provides ability to use
computer mouse to view and walk through every aspect of a home as if visiting
yourself).
·
Team Members all
practice Social Distancing, wear masks while constantly washing and sanitizing
hands, whenever meeting or going out in public. Showing respect for others.
·
Providing hand
sanitizers, masks, gloves, and boots for home visitation with our Clients.
·
During home
visits we will personally guide our client through the home, answer all
questions, open any doors, cupboards etc. This will allow our Clients to walk thorough
without having to touch anything. We
will subsequently dispose of protection materials following the showings.
·
All showings will
be exclusive. No other person or Realtor
will be permitted to enter a home at the same time.
·
Young Children must
be left at home or with caregiver to protect them from touching something in
the home that could affect the family’s health.
Ready to take part in this
new Social Distancing World? Give us a call
and we are ready to go to work just for you.
Gib Heggtveit Cell: 519-535-3975
Mary Heggtveit Cell: 519-535-7355
