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.
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.
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!
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.
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