What Trump means for real estate
OMG, he won. Now what impact will Trump have on our housing market?
DYSTOPIA: AN IMAGINED state or society in which there is great suffering or injustice. It’s November 6, 2024 ― dawn of a new day with our largest trading partner selecting a new and former president who is protectionist, tariff loving, environment denying, vindictive and now without guard rails. He is backed by a U.S. Senate that has turned red. The House of Representatives outcome is inconclusive.
What does this have to do with real estate in London, Ontario?
The local housing market has a great many influences, and almost all are external. Aside from local municipal government policy, all other factors are outside our local control. The U.S. election may be one such factor. A Trump presidency will likely see tax revenues fall (tax cuts for the wealthy), deficits rise and include tariffs as a trade negotiating tool. All these moves are inflationary, driving bond prices up and consequently Canadian fixed mortgage rates.
Additionally, with inflationary pressure, the U.S. Federal Reserve is less likely to reduce rates as they will have to guard against an inflationary economy overheating. That limits Canada’s ability to continue rate cuts, affecting housing affordability and limiting Canada’s hope of stemming a recession. Recessions are not good for the Canadian housing market.
“This market is not one where sellers are confident, so I somewhat disagree with our local real estate board’s assessment of the supply situation”
Within Canada, we’ve had some recent announcements that may affect our market in the long run. A tightening of immigration numbers will limit available workers and reduce the supposed housing shortage. As our own federal election creeps toward us, all parties are proposing tax schemes to spur housing construction, which continues to languish. It would likely be 2026 before any changes in provincial or federal policies trickle down to the housing market. Given the three- to five-year lead time to get projects off the ground, housing is a slow ship to turn.
Our local market saw a slight uptick in activity this past month. Ten per cent more homes changed hands in London in October than in September (443 in October vs. 400 in September), but that volume is still well below the 10-year average. Prices in London fell again, with an average price decline from $620,976 to $615,895. For context, since the Bank of Canada starting easing interest rates in June, responding to a softening economy and easing inflationary trend, prices have only gone in one direction. Prices have fallen every month, from a June high of $656,000 down to October’s average of $616,000 ― a six per cent decline during a period of lowered borrowing costs.
Year to date in 2024, 10,018 houses have been listed in London and 4,717 have sold. Less than half the houses listed this year sold. London continues to have a record 3.3 months worth of inventory. This market is not one where sellers are confident, so I somewhat disagree with our local real estate board’s assessment of the supply situation. In its summary of October activity, the board stated, “This level of new listings is one of the highest in the past decade, indicating robust seller confidence.” It is a very challenging market to sell a home. Selling during a period of declining prices and strong buyer power is a stark contrast to recent times, when there were more buyers than sellers.
The “balancing” of our market from the peak post Covid bubble is a slow and arduous process. Despite our policy makers best efforts, and considering the external effects beyond their control, it may take years rather than months for the London market to “settle” on a valuation that equates supply and demand and achieves sustained affordability.
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: 703 Elias Street
MLS number: X9510585
List price: $319,900
Days on market: 12
Size: 2 bedroom, 1 bathroom
Listing agent: Patricia Broadhurst, Sales Representative, The Realty Firm Inc.
High
Address: 129 John Street
MLS number: X9234740
List price: $5,595,000
Days on market: 96
Size: 9 bedrooms, 19 bathrooms, 5,000+ square feet
Listing agent: Trent Forristal, Salesperson, Sutton Group – Select Realty, Brokerage
London North
Low
Address: 19 Empress Avenue
MLS number: X9493483
List price: $469,900
Days on market: 14
Size: 2 bedroom, 1 bathroom
Listing agent: Andrew Stinson, Salesperson, Century 21 First Canadian Corp.
High
Address: 864 Clearview Avenue
MLS number: X9298104
List price: $4,675,000
Days on market: 62
Size: 5 bedrooms, 6 bathrooms, 5,000-plus square feet
Listing agent: Michael Reis, Sales Representative, Sotheby’s International Realty Canada
London South & West
Low
Address: 511 Ferndale Court
MLS number: X9509891
List price: $399,900
Days on market: 12
Size: 2 bedroom, 1 bathroom, 700-1,100 square feet
Listing agent: Craig Van Wees, Sales Representative, Sutton Group Select Realty Realty Inc. Brokerage
High
Address: 1011 Cherrygrove Drive
MLS number: X9053822
List price: $4,250,000
Days on market: 104
Size: 4 bedrooms, 4 bathrooms, 5,000-plus square feet
Listing agent: James Smith, Sales Representative, Sutton Group – Select Realty
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.