Where have all the buyers gone?
It may be a buyers’ market, but the buyers have gone missing. And no one knows exactly why
OUR CITY HAS grown dramatically in population and housing inventory in the last decade. Despite this growth, we continue to see a dramatically slower real estate market. For the five years prior to the pandemic, our market averaged 1,120 transactions in May. In May 2024, we had a total of 774 deals. That’s more than a 30 per cent decline in volume as compared to the average from 2015 to 2019.
Year-to-date date numbers tell a similar story. As of May 31, we’ve had 3,161 transactions so far this year. That compares to an average from 2015 to 2019 of 3,979. That represents a 20 per cent decline. Over 800 fewer homes sold in our market this year as compared to pre-pandemic levels ― five fewer house sales per day, every day, since the beginning of the year. That represents a reduction of a half a billion dollars in transaction value ― just in the last five months.
“Over 800 fewer homes sold in our market this year as compared to pre-pandemic levels ― five fewer house sales per day, every day, since the beginning of the year. That represents a reduction of a half a billion dollars in transaction value ― just in the last five months”
Where have the buyers gone? Why are we choosing not to move as much as we had in the past? Is it anxiety? Affordability? Concern over mortgage rates? Economic uncertainty? Buyer demographic changes?
The answer is no one really knows. But regardless of the cause, this represents a significant change in economic activity for our region. Realtors are having to adjust, as are mortgage brokers, lawyers, home stagers, inspectors, moving companies, etc.
Despite growing inventory (three months of supply) and what appears to be tepid demand, prices are holding and even increasing slightly, month over month. Perhaps the volume is down because sellers refuse to accept lower prices, and fewer buyers are willing to meet the prices demanded by sellers.
This morning, Canada’s central bank moved to cut its key interest rate for the first time in more than four years. Will it stimulate market activity? Perhaps, but the desperation among many is palpable. I don’t imagine one rate decision will have much affect. If rates start to decline, it likely means our economy is struggling ― not necessarily something worth hoping for.
Affordability, fuelled by lower mortgage rates and reduced seller expectations, may bring volume back to the market, but it will take time. Patience, unlike housing, may be in short supply.
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: $165,000
Days on market: 288
Size: 1 bedroom, 1 bathroom, 683 square feet
Listing agent: Sean Monteith, Sales Representative, Nu-Vista Premiere Realty Inc.
High
Address: 1745 Kilally Road
MLS number: X8337350
List price: $2,499,900
Days on market: 22
Size: 3 bedrooms, 4 bathrooms, 3,500-5,000 square feet
Listing agent: James Smith, Sales Representative, Sutton Group – Select Realty
London North
Low
Address: 153 Wharncliffe Road North
MLS number: 40598478
List price: $299,888
Days on market: 4
Size: 0 bedroom, 1 bathroom, 928 square feet
Listing agent: Andy Lai, Sales Representative, StreetCity Realty Inc.
High
Address: 1597 Gloucester Road
MLS number: 40592875
List price: $4,250,000
Days on market: 2
Size: 5 bedrooms, 5 bathrooms, 6,701 square feet
Listing agent: Kim Mullan, Broker Sutton Group – Select Realty Inc.
London South & West
Low
Address: 905-1105 Jalna Boulevard
MLS number: H4194680
List price: $239,900
Days on market: 14
Size: 1 bedroom, 1 bathroom, 589 square feet
Listing agent: Daniel Hale, Sales Representative, EXP Realty
High
Address: 1659 Hamilton Road
MLS number: 40550571
List price: $2,999,000
Days on market: 89
Size: 5 bedrooms, 4 bathrooms, 5,680square feet
Listing agent: April Gray, Sales Representative, Century 21 First Canadian Corp.
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.