Unveiling housing market challenges
Our housing market is standing at a critical juncture, grappling with a persistent mismatch between housing demand, supply and the risk of displacement
THE MOST RECENT weekly report from our industry association, the London St. Thomas Association of Realtors (LSTAR), showed 116 sales and 237 new listings. Once again listings outpaced sales by a factor of two to one. We’re approaching the end of August, and the school year is but a week away. Vacation schedules are getting used up and we’ll all be back to work ― and potentially back in the real estate market.
Next week we expect to see a further decline in the Bank of Canada’s prime lending rate. Inflation and jobs reports support another cut ― the big question may be if the Bank limits the cut to a quarter point. The U.S. fed signalled its intention to cut rates, thus providing some cover for Canada’s central bank to do the same.
Although volume over the last year has been down from historical averages, pricing has remained relatively steady. This raises some interesting questions: Is the real estate market considered “strong” only when prices are rising, and “weak” when pricing is stalled or falling? Is a stable real estate market better for our economy than an inflationary market? Does borrowing to purchase existing housing stock, creating “bid up” valuations, tie up resources that could be employed in more “productive” ways (such as machinery, equipment or intellectual capital)?
Our region’s future success, and that of our country, will be measured in livability. One of the key drivers of that is housing affordability
Our region’s future success, and that of our country, will be measured in livability. One of the key drivers of that is housing affordability. Quality roads and public transportation have an enormous impact on access to employment and housing affordability. If people can commute effectively from lower-priced housing markets outside of expensive metro areas, liveability is enhanced.
Those of us already invested in the housing market appreciate run ups in valuations, but we must temper that enthusiasm with the downside risk of losing housing affordability. The next generation won’t be inclined to stay and work here. We may struggle to attract talent ― workers willing to pay the price of poor livability just for a good paying job. The GTA has struggled for years to fill positions at any wage. Other extremely expensive markets, such as Silicon Valley, have to provide housing as an incentive to attract employees such as teacher’s and nurses. That’s a slippery slope when employment is tied to housing ― you lose your job, you lose your house.
We have active government policy makers trying to “fix” our housing market. We should applaud the fact that the real estate market has been stabilized over the last 28 months. We can be thankful for a steady approach and a measured response by the Central Bank and all levels of government. Going forward, this complex problem will require thoughtful solutions that address land use policy, help control the costs associated with new construction and make sure we incentivise the kind of housing that’s missing.
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: 429 Kathleen Avenue
MLS number: X9265449
List price: $349,900
Days on market: 5
Size: 3 bedroom, 2 bathroom
Listing agent: Jill Chapman, Sales Representative, Sutton Group – Select Realty, Brokerage
High
Address: 129 John Street
MLS number: X9234740
List price: $5,595,000
Days on market: 26
Size: 9 bedrooms, 19 bathrooms, 5,000+ square feet
Listing agent: Trent Forristal, Salesperson, Sutton Group – Select Realty, Brokerage
London North
Low
Address: 147 Wilson Avenue
MLS number: X8380834
List price: $439,900
Days on market: 118
Size: 3 bedroom, 2 bathroom, 1,410 square feet
Listing agent: Sally Jia, Salesperson, Initia Real estate (Ontario) Ltd.
High
Address: 20735 Denfield Road
MLS number: X8375688
List price: $3,799,999
Days on market: 9
Size: 5 bedrooms, 6 bathrooms, 3,500-5,000 square feet
Listing agent: Shawn Nagy, Sales Representative, Sutton Group – Select Realty, Brokerage
London South & West
Low
Address: 29 Elmwood Place
MLS number: X9253312
List price: $429,900
Days on market: 14
Size: 2 bedroom, 1 bathroom
Listing agent: Ian Leishman, Salesperson, Royal Lepage Triland Realty
High
Address: 9385 Elviage Drive
MLS number: X9231344
List price: $3,899,000
Days on market: 28
Size: 5 bedrooms, 6 bathrooms, 3,500-5,000 square feet
Listing agent: Ashley Winder, Sales Representative, Sutton Group – Select Realty 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.