Your 6 Month Market Update for London, St. Thomas and Area - 2018

London St. Thomas & Area Overview:

The number of homes sold over the last six months is lower that last year (a record year) by 26.5%. The number of homes offered for sale started the year with slightly over 5 months’ supply of homes and then dropped in March to an average of 4 months.  Remember a balanced market is 6 months’ supply of homes for sale.  Since the end of April, the number of homes offered for sale have increased marginally and now sit at 5 months’ supply. This will improve Buyer’s ability to negotiate in some price categories. Home Owners are now getting an average of 99% of their asking prices. This indicated that many price categories and areas are in bidding wars. Prices across our trading area are up nicely by 5.9% over last year’s record price increases. The average home across the county is now worth $385,586 which is an increase of $21,601 for the first 6 months of 2018.  If supply of homes continues to increase, we may experience some leveling in price increases.  In my last report the number of homes available was lower and we were heavily into bidding wars. This activity has cooled somewhat because of the continued increase in available properties. Prices won’t likely fall as we are still seeing an influx of Toronto Buyers cashing in on their leveling market.  Based on this activity we can expect an increase of about 6% to 8% for the year over 2017.

London:

The number of sold homes within the City of London is also reflecting a downturn, driven by sales with limited supply (less than 6 months inventory of homes for sale).  The number of homes sold is off 24.3% versus last year’s record number of homes sold.  Prices on the other hand are still rising, the average home now sits up nicely by 8.4% or $29,000 bring the average home to $370.435. 

Inventories are low in London sitting at only 3-month average until June when they rose marginally to 4 months. This low availability is what is driving the prices up across our trading area. Home owners are getting an average of 101.8% of their asking prices…Homes priced from $100,000 to $800,000 are all selling at over 100% of asking price.  If this market continues with tight supply, significant demand will continue to push prices upward.  Inventory levels are obviously the key. First Time Buyers and Move Up Buyers need to get in now to benefit from continued equity growth in the back half of this year and in the years to come and from our low mortgage rates.  This is obviously not the time to downsize unless you need to do it.

London North:
The number of homes that sold in the first 6 months is down by 26.2% versus the first six months of last year’s record year. The number of homes offered for sale has gone as low as only 2 months’ supply in March, then 3 months in April up to 4 months for May and June. This lower availability that is lower than the overall City has translated into constant bidding for homes in London North in virtually every selling situation, getting sellers an average of 101.8% of asking. In addition, limited supply like this can limit overall sales and leave unsuccessful buyers frustrated.

So, how are prices?  Remember that North London already has the highest average price. This year, this area has risen again by 7.8% in the last 6 months, or $32,310, to an average selling price of $444,863. 

This aggressiveness should continue if inventories remain well below 6 months’ supply and should deliver an average price between 8% and 10% by year end.  Right now it takes between 15 days and 21 days to put an average home up for sale and get it sold.

Once again, the bidding wars in this area are reinforcing that London North continues to be the most desirable area of London.  The area offers so many conveniences, great schools and the home of University of Western Ontario.

London South

The number of homes that have sold is now down 23% over the same sales period of 2017. This is actually a return to more normal levels. This area is also still very much in a Seller’s market with only 3 to 4 months’ supply of home to sell, based on demand and inventories.  This demand will continue to push prices up. Home owners are consistently getting over asking price.  They are getting on average 102.6% of their asking price. So, what has all this done to the average selling price? 

Prices are up in line with the North at 7.1% or $24,340 bring the average home price up to $366,562. The number days it takes to sell a home in this area has been steadily dropping to where it sits at just 18 days on average at the end of June and dropping.

London East:

The number of homes sold in London East have fallen by 23.8% versus last years record sales as well.  But, there is plenty of good news here. Inventories are well below the 6-month average required for a balanced market. The number of homes offered for sale dropped under 3 months’ supply in February and March and have increased since then to about 3.5 Months.  Because of these significantly lower levels of homes offered for sale, these home owners are consistently getting well over asking prices.  The average for the first six months sits at 102% of asking price.  It now takes 20 days in this area to sell a home.

  

What has this low availability of home for sale done to prices?

Prices in this area are breaking records…Prices are up a whopping 13.2%.  This represents an increase of $33,700 on average bring homes in this area to a new base price of $288,602.  The East is beginning to move.  What an opportunity for First Time Buyers to get into the Market.

  

St. Thomas:

In my opinion St. Thomas continues to be one of the best priced areas of Southwestern Ontario.  It is really a Bedroom Community of London and had all key services including bus services.  The fact that Ford is no longer in Tabotville has little relevance.  St. Thomas is also near Port Stanley, a wonderful summertime destination for food, entertainment and beaches.   The average price of a home in St. Thomas is still lower than Ingersoll currently at $322,838 with much less services and infrastructure. I believe people are beginning to get the message!

Sales this year have returned to normal levels like all other areas, but off only 20.1%. The number of homes offered for sale here compared to demand has been consistently lower than all other areas.  St. Thomas has had an average of only 3 months supply for 5 months in a row.  It takes an average of about 20 days to sell a home in this area.  This limited number of available homes is pushing up prices like the other areas. Home owners have been getting around 101% of their asking price. Again, experiencing multiple bids.

What has happened to prices?

Selling prices for the first six months of 2018 are up a record of 15.2% in this area! Wow St. Thomas is leading the price growth in the area!  This means the average home increased in value $38,307 since January bringing the average home to $290,821.  Still a bargain in any market in Southwestern Ontario.

Summary:

What does all this mean. The market is buoyant and will finish with a strong finish once again. Interest rates are still at record lows. Remember demand is the key. 

Example: If you are a Toronto Area resident about to retire or kids have left for University, or you work from home and are sitting on a home worth even $800,000 and you have a low mortgage… What would you do… Move to Southwestern Ontario! Buy a beautiful dream home for even $600,000 and put close to $200,000 into the bank for a rainy day! That is what is going to continue to drive this market.

I love to point out when the average price in 2004 in Mississauga was $240,000 and London and area were at $200,000.  Logically, which market will experience potential correction, I doubt it will be London and area!

There is no better time to buy your first home, make a lateral move or move up!  If you are thinking of downsizing, wait until the market comes back into balance.

Please share this update with anyone who will benefit…and …. Remember, Mary and I are here to help you, your family, your friends, your co-workers. Call us with their names, timing, phones and email and we’ll get to work saving them money. There are differences between realtors. We are proud of our results and our Friendships with our many Clients.

Gib Heggtveit                           Mary Heggtveit

Broker                                                               Sales Representative         

RE/MAX Centre City Realty Inc                        RE/MAX Centre City Realty Inc

Cell: 519-535-3975                  Cell: 51-535-7355              

Gib@YourFavouriteRealtors.com                         Mary@YourFavouriteRealtors.com

Full Year Market Activity Results for 2017 for London/St.Thomas Trading Area

CITY OF LONDON:

Well, what a year! This was clearly a record setting year for my 15 years of Real Estate experience. Our City experienced a value increase for the average home of 18.3% in one year. The average home rose from $283,510 to $335,607. This new record sale price was driven by an 11.6% increase in the number of homes sold versus 2016. What contributed to these records? Based on statistics it appears that inventories dropped signicantly in 2017 and Buyers from Metro Toronto started capitalizing on their equity across central Ontario.

For statistical purposes it is important to understand what a balanced market is.  A balanced market has 6 months’ supply of homes for sale. A Buyers’ market offers more than 6 months’ supply while an Sellers’ market offers less. inventory in January 2016 sat at 1168 homes (4 months’ supply) for sale and then dropped to 721 homes (2 months’ supply) for sale in January 2017. This represented a 38.3% decrease in supply starting the year. These set things on fire. Over the year it took an average of only 23 days to sell a home.  In December last year this rose to only 35 days.  Home owners received 100% of asking in 2017 versus 98.3% of asking in 2016. This month we are averaging 99.4% of asking (based on 80 sales to January 15, 2018).  We are starting the year with only 3 months’ supply. This means the pressure on “Supply versus Demand” will continue.  When we add in the continued projected interest rate offered below 4% on Mortgage Rates (assuming the Feds increase interest rates next week (even ½%) and continued demand from Metropolitan Toronto cashing in on equity. We can anticipate at least a 5% increase across the city in the year ahead unless inventory of homes increase dramatically. Fewer choices equals higher prices!

LONDON NORTH:

The number of homes that sold in North London rose only 4.4%, based on limited supply for most of the prime selling season. The number of average days it took to sell a home in 2017 was 21. In 2016 it was significantly higher at 34 days. This severely limited inventory drove the average price of a home in North London beating the London average, up 18.1%, up from $345,113 to $407,397 ($62,287). Many home owners enjoyed competing offers. This delivered an overall list price to selling price ratio of 101.1% (up from 98.7% in 2016). Let’s look at supply, we started 2017 with only 2 months’ supply of homes for sale.  By December we sat at 4 months’ supply based on time of year heading into January 2018. Inventory in December 2016 sat at 216 homes.  In December 2017 we finished with 283 homes available for sale.  This is still well below a balanced market.  This would indicate that supply will not pace demand in 2018 resulting good price increases estimated to be above 5% for 2018.  The influence of Toronto Buyers with deep pockets of equity, and continued bargain Mortgage rates bringing First Time Buyers and Move Up Buyers to market, will easily bring these projections to reality.

SOUTH LONDON:

This area like North London started the year with only 2 Months’ supply of homes offered for sale. This limited number of homes available ended 2017 delivering the second highest increase for all areas of the city of London with a 13.2% increase.  This increase drove prices up 17.6% or an average of $56,900. The average house price now sits at $380,000 in the South. Homeowners in this area in 2016 received 97.1% over the calendar year. Last year with this higher increase in demand the difference between listing price and selling price tightened to 98.2%. For the month of January to January 15, 2018, homeowners are getting a healthy 97.7%.   Inventories are a bit higher in South London coming into the new year.  In December inventory hit 4 months’ supply or 488 homes offered for sale.  In December 2016 the carry-over was only 2 months’ supply or 255 homes offered for sale.  The fact that there are more homes to choose from should allow a bit if negotiation on listing price. However, 4 months’ supply is, by definition a Sellers’ Market.  We will see continued price increases. With North London continuing to have limited inventory supply, this will definitely drive prices and activity in London South.

EAST LONDON:

This area of the city has always had the best bang for your home dollar with the lowest average prices in the city.  In 2017 East London delivered the highest increase in homes sold at 18.2% over the previous 12 months. This outstanding result in the number of homes also delivered the highest percentage increase in home values. The average price rose 18.1% or $38,675 and now sits at $252,820 in this area. Home owners were able to get 100% of their asking price in 2017 up from 97.7% during the previous year. The time it took to sell a home dropped from 32 days in 2016 to 24 days in the heated market of 2017. In December 2016 inventory sat at 2 months’ supply of homes for sale, 186 homes listed.  This was a major contributing factor to high demand and increases in prices for this area.  In December 2017 inventories of homes available for sale increased to 3 months’ supply or 266 homes available.  Once again inventories are tight with only 3 months to start things off.  All indicators are that prices will do well in this area of the city again…Should see leading sales volume and price gains driven by the lower average prices in this area.

ST.THOMAS:

In our opinion this trading area offers the best current value for a Home Buyer.  We look at ST. Thomas as a “Bedroom Community” for London. Ideally located south of London and the 401 and just north of the Summer destination of Port Stanley with its beaches, restaurants and bars, St. Thomas has greater infrastructure than Ingersoll Ontario, yet is better located and offers lower average selling prices. That being said, sales in the city increased an average of 8% for 2017. City wide inventory of homes for sale carried over to this area as well, finishing 2016 with only 2 months’ supply available. This limited supply resulted in the average homeowner getting 99.2% of asking price versus 98.1% a year earlier. This would indicate many homes enjoyed competing offers at peak market time. The result, was a 15% increase, or + $33,959, to an average price of $259,983 for 2017. The number of days it takes to sell a home also dropped from 41 days to 27 days.  Inventories of homes offered for sale in December 2016 had dropped to 2 months’ supply. At the end of 2017 the number of homes for sale increased to 3 months’ supply (105 active listings) . This is still lower than the 4 months’ supply (135 active listings) for start of 2016.  This also still positions this area as a Sellers’ Market. Once again we anticipate +5% growth for the area. Sellers are already getting 98.5% of asking above the average for 2016.

SUMMARY:

What to do?

Don’t need to move or upgrade?   Don’t sell! The average Home will enjoy a good increase in value again in 2018.  

However, If you are a First Time Buyer or a Move Up Buyer, TODAY is the best date and time to get moving. BUY! Why?  Interest Rates on Mortgages are still lower today (less than 4%) than they will be by year end. Each payment is going to reduce your mortgage on “your” home and not into your landlord’s pocket.

With prices rising, Move Up Buyer will make somewhere better that 5% on every new dollar that they invest in a bigger home.  That’s +$500 on every $10,000 investment in 12 months. Going from a $400,000 home to a $500,000 home, theyll make +$5,000. Payments will increase, less than +$500 a month.  Where else can you build for the future with tax free dollars like this?

CALL:

Gib Heggtveit or Mary Heggtveit

Broker & Sales Representative

RE/MAX Centre City Realty inc.

Home Office:      519-421-1991

Email:                   gib@yourfavouriterealtors.com

You Market Update for the First Nine Months of 2017 - London, St.Thomas and Area

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 1^st 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

                        mary@gibandmary.com

RE/MAX Centre City

Your 6 Month Market Update for London, St. Thomas for 2017

London/St. Thomas and Surrounding Area:

It has been a year to remember…Sales of homes across our trading area are up 21% on the base of 3206 homes that sold last year. Prices rose 15.6% or $44,966 compared to the last 12 months (July 1 2016 to June 30, 2017) to an average of $336,622. Listings of homes for sale during this period only rose 4% or 187 more homes listed for sale.  The increase in the number of homes that sold in the same 6-month period was 675, almost 4 times the increase in the number of homes coming to market. 

Will things slow down? In the month of June this number was offset a bit with 1017 homes listed compared to 890 for June 2016 adding 127 homes to the number of available homes for sale. The potential effect was significantly minimalized by an increase in sales in June of 85 more homes than last year adding only 42 more homes for sale across our entire trading area.  The trend appears to be continuing upward with an average selling price for the month of June 2017 across Middlesex and Elgin hitting $367,647 compared to $308,141 for June 2016.  The pressure is still on…. Remember, June is traditionally the biggest selling month of the year...

City of London:

The Sale prices reflected in this section are Year-to-Date. All other sections are 12 month average prices and therefore include 6 months of prices from a lower 2016 market.

Here is a look at the City itself for the first 6 months of this year.  Rather than looking at the average price for the last 12 months we are now going to look at the average for the last 6 months only trying to get a better handle on recent activity. The average home in the city of London is now selling at $384,511 (6-month average). This represents an increase of 22.1% year to date or $69,633 for the average home.  To try and predict the future, we need to look at Supply and Demand. A ¼% increase in the lending rate this month and perhaps a further ¼% in October will not really affect Buyers, moving up, or buying their first home in our market.  The average price of a home in east London @ $252,066 or St Thomas @ $240,412 is still very affordable. Supply is another story, we finished this first 6 month with 705 homes actively offered for sale in London. Last year at the end of June we had 1013 homes for sale. This is a further reduction coming into July of 30% fewer homes to choose from across the City of London.  The average home owner got 105% of asking price during this six-month period.  It will continue...Think about it! A 3.5% fixed rate 5-year mortgage term offered around year end in 2017 will still be 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:

This area remains the highest price area of the City of London. The average price of a home in this area now sits 19.9% at $433,365 for the last 12 months (July1, 2016 to June 30, 2017). In June 2017, 206 Residential Properties sold. Their average price was $476,405, clearly indicating that the upward trend is continuing. The number of homes sold in the North is up 10.4% above the first 6 months of 2016 Sales for the month of June were marginally lower than last year. But current year-to-date inventories are down 7.4% still creating upward pressure on listing.  Inventory in June we up marginally by 1.7%, not enough to impact this demand. 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 a 1/4 % hike in interest this week won't change much...Don't forget that the economy is significantly strengthened.

London South:

This is the area of the city with the most sales of homes since January 1, 2017. Prices in this are up 16.4% based on the average of the last 12 months.  This means the average home in this area has increase by $51,385 and now sits at $369,613.  There were 208 sales of homes in the South in the month of June 2017 with an average selling price of $399,913. Once again, a reflection of a rising market.  Inventories in the south are a bit better delivering an increase of 10.6% since the 1^st of January 2017. With more to choose from, this increase helped increase sales throughout the area. Sales are up 24.3% on a year-to-date basis.

As stated, this climb in prices is not over yet and a ¼ % hike in interest rated this week won’t change the enthusiasm much.

London East:

Based on affordability this area has enjoyed a 27.4% increase, this is the highest year-to-date increase in the number of homes sold in the City. The average price of a home in this area rose 12% over the last 12 months by $27,049 to $252,066.

Inventories rose 10% for the same period.  This means inventories are now significantly diminished based on the increase in the number home sold in the same period (27.4%). This climb in prices is not over yet and a ¼ % hike in interest rated this week won’t change much.

St. Thomas:

This is a market that should see significant price gains in the next few months.  Inventories are the tightest in the entire trading area. They did increase in number of available homes for sale by 10% over the last 6 months.  But to really put things in perspective we need to look at total sales versus total number of homes listed for sale since January.  All residential homes listed for sale = 563, all residential homes sold = 504. Virtually everything listed sold! The average price for the last 12 months rose 10.2% or $22,101 to $$240,412.   There were 107 homes sold in June, the average price of those homes was $272, 255. All of this indicates that St. Thomas will see an average year end price increase of around 20% for the Calendar year 2017.

Comments:

Inventories remain tight and demand continues to be strong.  2 projected increases in the lending rate of ¼ % will only bring mortgage rated to around 3% or slightly above. The Toronto market has cooled in volume and prices may adjust slowly downward… We are 300% lower than their average... If you have to drop the price on your resale home in Toronto to $1,000,000 from $1,100,000, our $384,511 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. 

Moving up this is not a problem and Cash offers is 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 1^st 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. Remember the average selling price is currently about 10% over asking based on recent sales and the area.

Sometimes a good approach is to try and submit a backup offer.  The number of offers failing is on the increase because buyers can’t come up with the difference between bank valuation and what 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.

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

www.YourLondonRealtor.com

gib@yourfavouriterealtors.com

Your London & St.Thomas Market Update for Third Quarter of 2016

Your Third Quarter Market Update for London, St. Thomas and Area.

Our Trading Area:

The year has been outstanding for those of you who purchased their new home last year and earlier this year.   The average home selling price is now up $18,006, an average of 6.5% over the last 12 months.  The average selling price of a home in our trading area, as of September 30, 2016, now sits at $297,231. 

What is driving this increase? The number of homes sold across our trading area has increased over the same period in 2015 by 5.9%, pushing prices up because of poor supply.  Inventories have decreased in this same period, over what was available last year, by 8.4%. 5,262 Buyers since January 1, 2016 have had 977 fewer homes to choose from.

What can we expect? We can look at trends. Let’s look at only the month of September by itself…. The number of homes offered for sale had decreased again by 5.2% across our trading area…The number of homes sold in September rose by 8.4% placing more pressure on upward pricing.  Unless a significant number of homes come to market changing this balance this trend will continue into next year.

The qualifications have changed for those putting less than 25% down on a mortgage. This will reduce the number of qualified Buyers. This may slow the market. CMHC now requires qualification at 5% interest for 5 years to buy a home. 

On the other side, there are Buyers coming from Greater Toronto to our market.  They can live mortgage free, and in many cases, have a large cash balance in the bank (remember your home equity is tax free). They can continue to bid up prices in a tight inventory market.  Our belief is that this tight inventory and strong sales environment will continue into 2017.  Just matching 2016 Sales would be a healthy market.

North London:

Anyone who knows me is aware, I have predicted that the average price of a home in North London would rise by 10% by the end of 2016.  As of September 30, 2016, based on the last 12 months, the average home is now worth $374,839 which is 9.4% above last September’s average.  This means the average homeowner has enjoyed an increase in value of $32,335. The number of homes sold across London North, for the first nine months of 2016, has increased by 11.7% over the year before.   The inventory of home offered for sale in the first 9 months dropped 5.5% versus the same period a year ago.  The average home price in this area is still rising. ($404,735 versus $348,541 for the month of September 2015). The number of homes coming to market for sale for this September is down 11.1% over September 2015.  Sales for the month were off marginally by 1.6%. With inventories, still below 2015…Prices will continue to rise.

London South:

As of September 30, 2016, based again on the average increase over 12 months, our selling prices rose 8.5%. The average sale price now sits at $321,756. This represents an annual increase in value of $25,838 for homeowners in the South.  The number of homes offered for sale dropped during the first 9 months of 2016 by 8.5%, further limiting the choices available for buyers.  Sales rose, as well versus this same period a year ago, by 2.4%. In my opinion, the rise in prices of homes will continue driven by limited supply. As an example, the number of homes being listed for sale in September dropped 6% while sales for the month rose a whopping 16.2%

London East:

Once again looking at the average increase in the cost of a home over the last 12 months, prices rose 5.2% or $11, 170. The average sale price now sits at $225,714 across the East of London. The number of homes sold for the first 9 months of 2016 increased as well, rising 3.6%. During this same period the number of homes being offered for sale dropped significantly by 7.8%. The number of homes being listed for sale is continuing to drop.  In the month of September home coming to market dropped again by 3.1% while sales increased by 8.4%. 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 5.6% or $11,739 on an average house selling price of $221,103. This is based on 12 months of sales history.   The overall London St Thomas Real Estate board is reflecting a 6.4% market increase over the same period.  This number is $17,905 with a new average price of $297,231. Probably a better reflection of the area and rural sales mix. Homes offered for sale are continuing below last year with the number of homes sold sitting 5.4% above last year.  The tight supply of homes offered for sale is continuing for the overall trading area. St Thomas inventory jumped during September from 50 homes listed in September 2015 to 75 Homes listed in September 2106. Sales for the month jump as well from 50 last September to 70 this September.  

Summary:

CMHC (Central Mortgage and House Corporation) insures all Bank Mortgages with down payments less than 25%. The changes in higher income qualifications initiated by CMHC, we believe the number of homes offered for sale will remain in line with this year. This projection is based on supply and demand repeating at the same levels as occurring in this calendar year. If demand increases over 2016 and the number of homes available does not change, prices will take off.

Basically, there is no better time to buy your first home. There is no better time to Sell your existing home and make that move to a larger home.   At the same time, there is no worse time to liquidate or move down, as prices will continue to rise.

New for First time Home Buyers, 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. Call us today if you or someone you know can benefit from our help.

Gib & Mary Heggtveit                              

519-421-2626

www.YourLondonRealtor.com

Market Update London Area 2015

London and Area Market Overview 
for Residential Homes:
Sales increased across our Real Estate Board Jurisdiction by a whopping 8.5% when compared to 1 year ago.  The average price of a home in the area, for this 12 month period, rose by $11,906  or another +4.4%.  The average house price across Middlesex and Elgin including all major centres now will cost the average buyer $281,016.   Still one on the most affordable Major markets in Canada.

Will this trend continue? Traditional year over year inventories declined marginally.  This is also true of the last 2 months of the year.  This means prices should continue to rise marginally and will also depend on what comes to market for sale in the Spring and Summer of 2016.  The Bank of Canada appears not to be pushing up interest rates significantly in Canada and have implemented programs to slow down Markets like Vancouver and Toronto using CMHC (Canada Mortgage and Housing Corporation).   These changes will not affect the average buyer in London.  It remains an excellent time to move up or buy that first home.

City of London:
The average house price in the city of London now sits at $295,096, this represents an increase in value of 4.8% or $13,507 over the last 12 months.   The number of homes that sold across the city during this same period increased by 7.8%.  Looking ahead there is no doubt that 2016 is poised for another year of great performance. Looking at the last 2 months individually we found that the number of homes that sold remained relatively flat with 2014 numbers, but the average selling price in each month rose once again, up 4.8% in November and 10.8% in December. December year end inventories at the same time, (what Consumers have to choose from) finished down by 16.4%.

London South: 
The average house price for London South (below Oxford), has now broken the $300,000 threshold for the first time.  The average home now sits up 5.94% versus a year ago at $305,647. The average home owner made $17,025 during the last 12 month in increased home equity.  Inventories of homes available for sale in London South were lower and down 5.9% for the year. This resulted in only a 3.7% increase in unit sales while delivering the higher home price for the area due to few homes to choose from. This reduction in available homes for purchase pushed the Sales/Listing ratio up from a 56% chance of selling your home during the listing period to a 62% chance of selling your home during the listing period. London south was the hottest segment of London in 2015.  The trend is likely to continue in 2016 as the number of homes listed for sale in the South in December declined by 26.4% once again putting pressure on inventory in the South.

London North:
The North continues to grow year over year,  This area had the highest growth on Inventories for the year increasing by 9.4%, keeping the market competitive by giving the Consumer lots of choices.  This tempered the growth in pricing of the average home but still delivered an solid increase of 2.83% or $9,535 in average value for the area. The average home price now sits at $346,638 for the area. Sales continued Strong because of area desirability, up 11.7% versus a year ago.  Prices in the North are projected to grow marginally as it appears once again inventories and sales will stay in balance with lots to choose from.  New Listings of homes offered for sale in December 2015 were up over December 2014 by a whopping  53.6%. If this increase in homes offered for sale continues each month values will increase only marginally,  A balanced market is ideal for all parties involved, excellent value and reasonable return on equity.

London East:
The East of London (basically east of Richmond except below Hamilton Road) continues to be the most affordable part of London and area. The average house price now sits at $222,192 up 3.59% or $7,699 versus the previous 12 months. The East enjoyed the second highest percentage growth in number of homes sold during the calendar year increasing by 6.4%.  There has been pressure on inventories in this area similar to the South.  The number of homes coming to market in the East actually declined by 6.8% over the twelve month period.   This reduction in the number of homes to choose from helped to drive prices upward.  Listings coming to market in December 2015 were down 10% versus the previous year.  This will marginally assist value improvement in this area for current home owners if this trend continues.   The Sell to Listing Ratio (chance of securing a sale during the listing period) is the highest in the city at 66%