A canary in the coal mine?
Declining confidence, minimal risk tolerance and the expectation of something less on the horizon. Is real estate trying to tell us something?
JUNE IS BEHIND us now, and as we wait for the London St. Thomas Association of Realtors (LSTAR) to complete its calculations and tell us just how slow the local real estate market is, we can glean some insight from activity during the final week of the month.
The week ending June 27 saw 119 transactions and a dramatically reduced average sale price of about $639,000. Seventeen transactions per day translates to just over 500 for the month of June home sales. For comparison purposes, June 2019 ― the last year before Covid ― saw almost 1,000 transactions.
“Just as we begin to believe interests rate may start a steady decline, inflation slaps us in the face again, possibly delaying mortgage rate relief”
These are unsettling times. Just as we begin to believe interests rate may start a steady decline, inflation slaps us in the face again, possibly delaying mortgage rate relief. Locally, our largest hospital and largest employer is running a deficit equal to 10 per cent of their budget, handcuffing them from investing in community services and threatening staffing levels ― just when they’re needed most.
Our much-hyped Whole of Community System Response to Health and Homelessness initiative, after raising $35 million from generous donors, seems stuck in bureaucratic inaction with too little accomplished for our most vulnerable population. Results matter, especially on this file. Lives are at stake.
Political uncertainty surrounds us. Provincial funding for essential services seems to be at the whim of the premier rather than based on need or simple economics (see LHSC operating shortfall!). Federal by-elections suggest a rocky road as we approach the next national election. South of the border, our largest trading partner seems to have given up on their system of government, creating unimaginable uncertainty for their future and ours. Beyond our continent, nationalism is taking hold (France) and the war in Ukraine is as perilous as ever.
Real estate may be the canary in the coal mine. It tells us a story about declining confidence, low risk tolerance and the expectation of something less on the horizon.
Market analysis provided by Marcus Plowright, Sales Representative, A Team London. Marcus can be reached at 519-872-8326 or [email protected].