May home sales tank but prices stay strong

London home sales fall by over 40 per cent in May, but prices as high as ever

ACCORDING TO FIGURES released by the London St. Thomas Association of Realtors (LSTAR), London area home sales fell by more than 40 per cent in May as the Covid-19 pandemic and social distancing rules incurred continued to slow the real estate market. 

But while volume was way down across the board, home prices in London continued to post healthy gains.

Last month, there were 668 home sales in the entire LSTAR jurisdiction, down 41.6 per cent from May 2019. The number of LSTAR’s listings dropped to 973 in May, which represents a 42.3 per cent decrease from a year ago. Active listings for the month of May came in at 1,556, a 17.7 per cent drop from 2019 figures for the same period.

Compared to April 2020 sales, however, the area market picked up steam: month-over-month figures show a 42.4 per cent gain in home sales and 31.8 per cent in listings.

With the reduction in units sold, supply started to make some gains on demand, with 2.3 months of inventory recorded at the end of May, up from 1.7 a year ago. For comparison, the months of inventory figure stood at 1.2 three years ago, 3.6 five years ago and ten years ago was 4.0.

Compared to a year ago, the overall average home price saw an increase of 7.4 per cent, rising to $445,732 in May. This average sales price includes all housing types, from single detached homes to high-rise apartment condominiums, in the five major areas of LSTAR’s region.

“Despite the new social distancing rules, the open house prohibition and the lay-offs caused by Covid-19, the local real estate market succeeded in staying in sellers’ territory, which speaks to the strength of its fundamentals,” said Blair Campbell, LSTAR’s 2020 president. “Looking at London’s three main geographic areas, London South saw the highest number of home sales last month, while London East saw the biggest price gain compared to May 2019.”

The average home price in London East was $365,261, up 8.4 per cent from the same time last year, while in London North increased 7.7 per cent over the same period to $531,626. In London South, which also includes data from the west of the city, the average home price was $462,334, up 6.5 per cent over May 2019. St. Thomas saw an average price of $370,182, an increase of 1.7 per cent from last May.