Southern Ontario Market Update ending July 2018
I’m still experimenting with the best way to deliver such a wide range of data in the most efficient manner possible so this quarter we’ll use a blog post (and at minimum I’ll do this every quarter) and whether you found this article through my monthly newsletter, Facebook or some other means – please don’t hesitate to share this socially 🙂
Before we begin I want to be real clear about what I’m presenting here (since last time someone decided to go on a bit of a rant about consumer debt and how dare a certain generation burden the next with debt and I’m still not sure how these charts generated that kind of thinking but I digress….)
There are 2 main data points I want to articulate that I see as indicators of market health:
- The price per square foot of properties that are listed
- What this indicates is if home values are going up or down over time and across price points
- If you have a 2,000 square foot home priced at $700,000 in the same market that you have a 1,200 square foot home price at $420,000 they have the SAME price per square foot ($350) – meaning we can compare the two drastically different homes on a level playing field
- The close price to list price ratio – or how much under/over are properties selling for
- If the price per square foot indicates whether prices are going up or down over time then this ratio shows you how volatile the market is over that same period of time
- If prices are valued at a certain level BUT other factors make the market volatile (up OR down) then logic be damned and you get what happened last year which is that people were over bidding on properties by tens of thousands of dollars that artificially inflates the PRICE not the VALUE
So, just ignore 2017. It was a blip and it’s over. Seriously look all these charts and just hold a finger over the 2017 portions and you’ll see that the blue line actually looks pretty flat. We’re not in a “depressed” or “down” market (the green line would indicate that) it’s just that people aren’t losing their minds!
On to the good stuff..
So Brantford started the year on the right track, homes continued to be listed at a modestly increasing rate and the closing prices averaged between 98%-100% of asking price. For context 98% of $500,000 is $490,000. With such a tight band pricing your home appropriately the first time is critical, buyers are obviously not willing to over pay in Brantford and so as a seller, if obtaining a specific dollar value is an absolute must you’re going to want to have a very frank discussion with your REALTOR® regarding that objective and make sure it’s obtainable in today’s market.
Similar to Brantford, though a bit less smooth on the upward trend in listing price per square foot, Cambridge offers a bit more uncertainty in terms of market health but still nothing to be concerned about. The first few months the list price to sale ratio average is pretty much bang on 100% so good job Cambridge REALTORS® in knowing your home values! Slight dip there to just over 99% for June and then you see the up ticket pretty much back to 100% for July.
A little blip there at the new year (too many new breweries opening up? 🙂 ) and then pretty flat in terms of list price values so far, the up tick in listing prices being mostly offset by the down tick in list to sale price ratio (see why these two numbers are important to look at TOGETHER). So Hespeler has flattened out this year, which isn’t necessarily a bad thing but obviously for those that missed the boat on the craziness of last year this will come as a disappointment.
Well what on earth is going on in Preston? You can see the fluctuations in the close to list price ration basically swing up 3% from Jan to May then down 4% over May to July, and remember this particular metric is more about are things selling for what the REALTORS® listings them think they should go for (assuming we all price homes in that manner, individual strategies vary and could throw that off the more granular you look at things).
In my opinion when I read this chart I see homes going for over asking on average from March to May, then you see the price per square foot jump up (because hey if people are actually paying more why not price them higher?) but then of course as soon as you do that people go HOLD ON and stop paying over asking and in this case it shrunk a bit and things went down. If that will continue we will have to wait and see.
You go Guelph! After a particularly tumultuous 2017 things are looking steady-Eddie in Guelph with average cost per square foot continuing to rise and then the close:list ratio staying right around 99%-100% so far in 2018. Now this data is just for the region considered the city core and doesn’t include Elmira, Eramosa, etc – going to try to have all those added into this update next quarter just FYI. Average price per square foot is still on the rise and the offers are coming in, so it’s still a good time to sell but just don’t be expecting 10+ offers after the first week.
Looks like a good time to think about selling your home in Kitchener! Though obviously maybe not as good as it would have been last year (ok so at the start I asked you to forget about 2017 and here I am continuing to harp on it.. I just don’t want you to think I’m ignoring it!). Facts are you’ve got, on average, properties still moving at or over asking price each month this year so far and a pretty healthy climb in the average price per square foot .. everything happens in cycles so even though Kitchener is still on the rist just remember it won’t be that way forever!
Last but certainly not least, Waterloo. Waterloo has always been a fascinating city with MANY diverse variables to consider, much I’ve done with Cambridge I’ll need to look at breaking each of these cities up into more manageable chunks. But overall as a city you can see here that so far this year things have been good in terms of prices fluctuating but rising overall, and the close:list price staying right around 100% for all but the first month or two of the year. There are great rental opportunities in all the cities covered here but none as exaggerated as Waterloo (these charts and all the data here are just on sales NOT rental transactions), so a good chunk of the residential re-sale transactions around the Uptown core (where the University of Waterloo, Wilfred Laurier and Conestoga College also has a campus) are these income properties that investors purchase (and pay a premium for). You’re going to see those transactions show up outside of the school year more than likely as students move out and current owners debate whether they want the responsibilities of renting for another year. With a typical closing being some manner of 30, 60 or 90 days long we’re already past the break point for this years student-rental-investment season and moving into the fall we’ll see the usually volume from single/multi family residential properties.
That’s the update for this quarter – of course these are all broad strokes and each of these cities (or sub cities) can still be broken down further. If you’re curious about obtaining a chart similar to the ones displayed above for your neighbourhood please just send me an email: [email protected]
Gordon J. Wallace, Sales Representative
RE/MAX Real Estate Centre Inc., Brokerage