The City of London:
Back in 2015 the average price of a home in the City of London for the 12 months ending December 31 sat at $265,717. The average price of a home as of December 31, 2019 rose 55.4% to $413,005 over the 5 years.
Looking at results by year:
Year Avg Price $ increase % increase
2016 $283,624 +$17,907 6.7%
2017 $336,038 +$52,414 18.6%
2018 $373,283 +$37,245 11.8%
2019 $413,006 +$39,723 10.6%
The inventory of homes available for sale has contributed to price gains as this graph illustrates. Low supply and high demand. Remember a balanced market is 6 months of supply. It took an average of 22 days to sell the average home across the City in 2019.
As you can see the January inventories each year are the highest as these are the slowest traditional months each year. This graph also indicates that we are slowly moving toward a balanced market. We will address what the average homeowner is getting for their home in each price category later in this analysis.
The number of homes sold over the five years is as follows by year:
Year Sold % increase
2016 6,715 +7.0%
2017 7,498 +11.6%
2018 6,420 -14.3%
2019 6,612 +3.0%
This is where we look at what percentage of asking price people are getting for their homes across the city of London. Typically, in a balanced market homeowners average around 97% asking and selling time is about 3 months. Clearly higher inventories are indicating the ability to some negotiation is on the increase. Homes priced between $250,000 and $450,00 are the categories that will experience bidding wars at peak times of the year.
This next graph illustrates the importance of sales activity by month in a calendar year. For the purpose of this exercise we are using 2019 actual activity.
The number of homes sold in London North rose 4.9% during the 12-month period ending December 31, 2019. From June to November inventories in this area are lower than the city average and have been sitting constantly at 3 to 4 months of supply. Inventories this past summer were identical to the same period last year.
Over the past years the North outpaced the the average selling price for the city and rose 55.% from $316,618 to $491,591. Selling prices rose 8.1% over the last 12 months from $454.339 for 2018.
Homeowners in North London experienced an average of 100% of asking price like 2018, driven by lower inventories in all price categories and by a desire to live in the North of the city. This graph will better illustrate this activity by price.
London south outpaced the city as a whole in 2019 with the number of homes sold increasing 4.65% over 2018. The city itself had a sales increase of 3%. Once again, the average supply of homes available did not change year over year by month averaging between 3 and 4 months of supply keeping upward pressure on prices once again.
The average home price in London South rose 11.6% or $43,249 raising the average price above $300,000 range to $416,619. Outpacing the City and North London.
In spite of low supply of homes, competition in London South softened marginally from an average of 100.3% of asking price to an average of 100% of asking price. As you can see by the graph above the highest growth in prices was in the back half of 2019.
The number of actual homes sold in 2019 was virtually the same number as 2018, with 1944 home sold compared 1,950 a year earlier. A drop of 8 homes. This result is due to a limited supply of choices available. This area of the city consistently runs at only 2 to 3 months of supply. The average months of supply was 9.6% lower over the 12-month period putting significant upward pressure on prices. The average difference between asking price and selling price rose from 101.2% to 101.5% resulting bidding wars in most price categories.
As a result of these conditions, the average price of a home in this area rose from an average price in the $200,000 range to over $300,000. The average home now sits up $33,741 or 11.7% to $323,041.
Over the last 5 years the average home price has risen 54.8%.
The number of homes sold in St. Thomas has dropped over the last 2 years from a peak in 2018. Inventories remain consistently tight at 3 months’ supply keeping upward pressure on prices. In other words, the number homes offered remains below demand, the average homeowner is getting 100% of asking price and bidding is common.
Year Homes sold % Change
2016 800 +3.6%
2017 865 +8.1%
2018 780 -9.8%
2019 761 -2.4%
So, what did all these changes do to prices in the area? The average home price, barring any catastrophe, has made a significant move into the $300,000 price range enjoying an average price increase of +16.1% across the city. The average price rose $47,988 to $346,726
Year Avg Price % increase
2016 $226,024 +15.9%
2017 $259,993 +15.0%
2018 $298,738 +14.9%
2019 $346,725 +16.1%
All indications are that the price run is not over yet. St. Thomas is poised to set more record price gains followed by East London. East London may surprise all in 2020 setting the highest price gains due to very limited choices for homes and the lowest prices available to the first time Home Buyer. The number of homes available in this area has been consistently at 2 months supply for the last 3 months. Be ready for at least 8% gain across the Area for home prices in 2020. Inventories are creeping higher as we saw over the last 2 years.
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RE/MAX Centre City Realty Inc
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