Set to stabilize?

Struggling with subdued demand and an economy stuck in neutral, will the latest rate cut put London’s housing market in recovery mode?

THE MOST SIGNIFICANT news in the last week is it stopped snowing! Home ownership brings with it many demands, and responding to the weather is high on the list. Managing for heavy snows and rainfalls (and sudden snow melts) test our metal and exposes our properties weaknesses. A strong word of advice: find your property’s water weaknesses and deal with them. You’ll enjoy your property more knowing an issue is resolved, and when it comes to sell, you can nullify a problem by illustrating the action you took as a conscientious homeowner.

Now that the roads are clear another deep freeze is imminent. This morning, the Bank of Canada lowered its key interest rate by 50 basis points (bps), bringing it to 3.25 per cent, a move that may help to further thaw our real estate market and lower variable rates for the minority of those holding floating rate mortgages. This comes in response to growing unemployment in Canada and the uncertainty inherent in tariff threats.  We’ve already had rates fall by 125 basis points since July but seen little impact on the real estate market. The big question remains… will this additional large 50 bps cut be enough to energise the real estate market for the start of 2025?

Canada’s economic performance and uncertainty in the future has kept our market relatively stable. Since rates started dropping in June, real estate sales have seen historic low volumes, and only recently started picking up from that very low level. June sales were about 37 per cent below 2017 levels, and November sales were two per cent below 2017 numbers ― a definite move back to normalcy.

From a valuation standpoint, the average price of a home in London was $656,935 in June and in November it was $614,399. While rates have been falling steadily for five months, with more rate cuts expected, real estate pricing in London has continued a slow decline. The median price of homes has fallen about $44,000 in that same period (half the homes sold above that price/ half below that price). Inventory has continued to grow from 3.4 months of inventory to 3.9 months of inventory. And finally, the average number of days a listing is on market has increased from 16 to 26.

Generally speaking, prices seem to have levelled off over the last two months, with activity picking up as we quickly approach the Christmas and January lull. The news today from the Bank of Canada may decide the fate of the market in the first quarter. Our economy is facing some very strong headwinds ― rate cuts have been introduced over the last five months to try to stave off the effects of a slowdown. Improved affordability in a time of increasing economic uncertainty likely means the real estate market will remain somewhat neutral for the foreseeable future ― unless we suffer an unexpected shock, such as a tariff war.

Market analysis provided by Marcus Plowright, Sales Representative, A Team London. Marcus can be reached at 519-872-8326 or marcus@ateamlondon.ca.

High- and low-priced real estate listings around town this week

London East

Low

Address: 117 Sterling Street
MLS number: X11822326
List price: $299,900
Days on market: 8
Size: 2 bedroom, 1 bathroom
Listing agent: Pete Keillor, Sales Representative, HouseSigma Inc.

High

Address: 1839 Parkhurst Avenue
MLS number: X10429127
List price: $1,699,000
Days on market: 22
Size: 4 bedrooms, 3 bathrooms, 3,500-5,000 square feet
Listing agent: Durga Prasad Aaripaka, Sales Representative, Century 21 first Canadian Corp.

London North

Low

Address: 28 Napier Street
MLS number: X10929928
List price: $439,900
Days on market: 14
Size: 2 bedroom, 1 bathroom, 1,100-1,500 square feet
Listing agent: Richard Houston, Sales Representative, Sutton Group Select Realty

High

Address: 864 Clearview Avenue
MLS number: X9298104
List price: $4,675,000
Days on market: 97
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: 5 Dudley Crescent
MLS number: X11824266
List price: $389,900
Days on market: 8
Size: 4 bedroom, 2 bathroom
Listing agent: Shane Saker, Sale Representative, Saker Realty Corporation

High

Address: 1011 Cherrygrove Drive
MLS number: X9053822
List price: $3,999,999
Days on market: 139
Size: 4 bedrooms, 4 bathrooms, 5,000-plus square feet
Listing agent: James Smith, Sales Representative, Sutton Group – Select Realty

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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.