Navigating the changing tides
With home sales remaining sluggish, buyers begin to take the upper hand
THE LOCAL REAL estate market warmed up in March, with the benchmark, average and median prices all up for the month. The median moved only about one per cent, with the average up between four and five per cent.
Median prices holding steady and average prices up dramatically suggest there were a few high-priced outliers skewing the average. Even though pricing edged upwards in the month, so did inventory, providing for 2.4 months of inventory, up dramatically from one year ago. Also worth noting that houses are still selling for about one per cent below asking price on average.
“London sold relatively the same number of houses this March as it did seven years ago. The takeaway: demand remains low”
A deeper dive into market activity suggests we are moving further towards a market that favours the buyer. The ratio of sales to new listings has fallen to its lowest level (54.7) since 2015. Sales data in March reflects this malaise in the market ― the number of homes sold was at its lowest level for March since 2017. London sold relatively the same number of houses this March as it did seven years ago. The takeaway: demand remains low.
As the market shifts in favour of buyers, relatively affordability has improved compared to the peak of real estate values in 2022, although perhaps not enough to bring strong demand back to the housing sector. Rents have fallen in London for the last couple of months, which is a great trend given the need for improved affordability is of paramount importance.
On the macroeconomic front, Stats Can reported this week that Canadian core inflation continued to cool, which is good news for rate watchers hoping for a June bank rate cut. Despite this, bond yields and fixed mortgage rates have been climbing, because U.S. inflation continues to be too high, and the labour market in the U.S. is booming. As American’s consider possible rate increases, Canada is looking to justify rate declines. This disparity could create a gap in Canadian and American interest rates, thus pressuring the dollar to fall ― creating inflationary pressure due to higher cost imports. Canada’s productivity challenges and high government deficits ($40 billion per year) aren’t going to be helping to prop up the dollar. Relatively high oil prices haven’t been able to protect the dollar recently, so it may be vulnerable to a correction.
A new federal budget dropped yesterday, full of complexity and skewed towards driving the housing industry, specifically in relation to rental inventory. Although the sentiment was that the policies were constructive, the impact won’t likely be felt until later in the decade. There are no short-term fixes to housing shortages. Of late, a lack of affordability and corresponding lack of demand has driven up available housing inventory. The housing shortage continues to only be at the very low-priced end of affordable and supportive housing.
As always, mortgage and real estate advisors are essential to navigate this market and protect you when making moves, for new entrants or seasoned pros. It’s an increasingly complicated environment.
Market analysis provided by Marcus Plowright, Sales Representative, A Team London. Marcus can be reached at 519-872-8326 or [email protected].
High- and low-priced real estate listings around town this week
London East
Low
Address: 1106-573 Mornington Avenue
MLS number: 40472962
List price: $179,000
Days on market: 239
Size: 1 bedroom, 1 bathroom, 680 square feet
Listing agent: Sean Monteith, Sales Representative, Nu-Vista Premiere Realty Inc., Brokerage
High
Address: 1745 Kilally Road
MLS number: 40517811
List price: $2,675,000
Days on market: 141
Size: 3 bedrooms, 4 bathrooms, 4,760 square feet
Listing agent: James Hudson Smith, Sales Representative, Sutton Group – Select Realty Inc.
London North
Low
Address: 27 Ardsley Road
MLS number: 40568131
List price: $288,000
Days on market: 8
Size: 6 bedroom, 2 bathroom, 1,924 square feet
Listing agent: Dion Edwards, Sales Representative, StreetCity Realty Inc.
High
Address: 1509 Ryersie Road
MLS number: 40543261
List price: $2,999,900
Days on market: 54
Size: 4 bedrooms, 4 bathrooms, 4,977 square feet
Listing agent: Drew Johnson, Broker of Record, Coldwell Banker Power Realty, Brokerage
London South & West
Low
Address: 1407-1103 Jalna Boulevard
MLS number: 40572380
List price: $269,900
Days on market: 1
Size: 1 bedroom, 1 bathroom, 589 square feet
Listing agent: Kimberley Vilos, Salesperson, EXP Realty Brokerage
High
Address: 3845 Deer Trail
MLS number: 40562817
List price: $2,999,999
Days on market: 20
Size: 3 bedrooms, 4 bathrooms, 4,442 square feet
Listing agent: Mark Morningstar, Sales Representative, StreetCity Realty Inc. Brokerage
Disclaimer: London Inc. does not guarantee the accuracy of the statistical data on this page. The data does not represent the listings of any one agent or agency but represents the activity of the real estate community in the area. Any real estate agent’s ad appearing is separate from the statistical data provided, which is in no way a part of their advertisement.