Earl Taylor, president of the London-St. Thomas Association of Realtors, stands outside a home for sale in St. Thomas. (JONATHAN JUHA, The London Free Press)
Don’t expect a sizzling London-area real estate market whose average price shot through the $400,000 mark for the first time this year to settle down any time soon, the area industry’s umbrella group says.
“We are ending the year with a very, very strong seller’s market . . . and this market will continue through 2020 for sure,” said Earl Taylor, president of the London St. Thomas Association of Realtors (LSTAR).
A key reason for the projection is the relative affordability of the local market, which will continue to attract deep-pocketed buyers from the Greater Toronto Area looking to get a bigger bang for their buck usually in the form of larger, more luxurious properties, Taylor said.
In November, for instance, the average sale price for a home in the London region, which also takes in St. Thomas, Strathroy and Elgin and Middlesex counties, was $416,000. That is almost half of what homes are selling for on average in Toronto.
Though up by more than 10 per cent compared to a year ago, those prices also make the London area the fourth most affordable among 12 major markets in the country, only surpassed by Calgary, Windsor-Essex and Edmonton, according to the Canadian Real Estate Association, which also is projecting the national average price of a home in 2020 will reach the $530,000 mark.
The additional influx of buyers will only eat further into an already limited supply of homes for sale in the region, Taylor said.
“It used to be that if you bought a house, you sold a house and that cycle maintained inventory,” he said.
“But we’re seeing families coming to our area in great numbers that are buying our inventory without a house coming back on the market.”
“That’s what is pushing our inventory low and our prices higher,” Taylor added.
Locally, the sales-to-new listings ratio — the ratio between the number of homes sold and the number of new listings – sits at 90 per cent, meaning that practically all of the homes hitting the market on any given month are selling. Anything more than 60 per cent is considered a seller’s market.
In some areas like east London, attractive for first-time homebuyers because of its cheaper prices, the ratio has reached 100 per cent, according to LSTAR numbers.
The market is so strong for people selling their homes that there’s no need for them to wait until the spring, traditionally seen as a good time for sellers, to list their properties, Taylor said.
“There’s no sense waiting,” he said. “January and February are now strong, strong months.”
But despite the high demand for homes, many people are wary of selling their properties, fearing the still common bidding wars and lack of options, only compounding the supply issue.
“People that are buying and selling within our area, unless they are prepared for it, could be holding off and being cautious about (selling), unless, of course, their family growth requires it,” Taylor said.
