Market Overview for the First 8 months of 2021 in London Ontario.
Sunday Sep 26th, 2021Share
Active & New Listings continue to decline since the peak in May at 1,114 new listings coming to market. In July only 804 homes were listed. In August this number dropped to 736 new listing across the city. When added to the few remaining previously listed homes supplies remain limited. The number of homes offered for sale dropped further under the current 1.25 months’ supply level to about only 80% of a single month’s supply. Remember a balanced market, where bidding wars don’t take place, is 6 months’ supply!
The bidding wars are continuing. In March, Homeowners enjoyed the highest level of bidding wars with the listing price to selling price ratio averaging over 14% above asking prices. Since then, the level of bidding wars prices has been steadily dropping. Usually, June is the top selling month of the year. The average price for June was 8.5% above asking prices. The average selling price to listing price in July, fell to 5.3% above asking prices. It has started to climb again due to further reduction of inventory in August to an average of 6.5% above asking prices. This will cause prices to climb again as we enter the Fall selling period. Remember in January we started the year with 402 homes sold across the city. We peaked in May with sales of 924 homes selling. June was quieter, as detailed above, with sales dropping to 924 sales, falling again in July to only 677 homes sold and finishing the summer months up marginally to 690 sales in August.
Inventories of available properties remain unusually tight, however, even with constant bidding wars occurring the average selling prices have been sitting around an average of $630,000. The average selling price peaked in April across the City, at $642,978, falling during July to $621,546. The average prices have not started to rebound yet due to the smaller selling base. In August the average selling price came in at $608,034. The average number of days it takes to sell a home has risen from a low in April and May of 9 days, to 11 days in June, 13 days in July and 14 days for the month of August. July and August are usually slower months. Everything indicates higher prices in September and October.
The reason the Listing Price to Selling Price ratio has declined is the result of some Homeowners trying to push the market by listing at a top selling price for a specific size and feature of a home and are therefore not receiving bidding wars and usually end up selling 2% to 3% below listing price. Homes priced below market, say at $599,900, about $50K to $75K below value are getting massive bids and often do better than a market priced home. Buyers from out of town, with an out-of-town Realtor, are looking at Realtor.ca and can only see competing homes for sale. Out of Town Realtors cannot see what homes are actually selling for.
The London Area which includes Oxford County in terms of Pricing is offering the 4th lowest priced market of the 12 major markets monitored across Canada.
Always remember, I am here to help in any way that I can be of service to you and your family.
First, I have a message for First Time Home Buyers. In this crazy on-going Covid Market, you may need Family support for the down payment to help you bid what appears to be 10% to 15% over the asking price or look for a real fixer upper with good potential. The first step is to get pre-qualified by a Mortgage Broker or your Bank. Once you find out what you can reasonably afford, plan to bid above the asking price as described above with a Cash, Non-Conditional Offer with a short closing if you are renting. With the average price still rising, you will logically be able to pay back Mom and Dad within 24 months. Sweat equity in a fixer upper can yield big dividends. As your Realtor, I will investigate market values in your planned neighbourhood and provide comparable sales.
Now for you Move-Up Buyers, now is the best time to use some of that equity that you have built up over the last year. The first step is to get pre-qualified by your existing mortgage holder and outline how your new mortgage will be blended without penalty. Once you find out what you can reasonably afford, I will evaluate the Market Value of your home and outline all contingencies at no cost to you. This will give you the ability to safely overbid the asking price with a Cash Non-Conditional Offer and a closing of 2 to 3 months. If priced reasonably, you can expect the same over-bidding that you are making. Your equity will cover the excess price on Closing. With the average home selling within 2 weeks, the risk is virtually non-existent.
Lastly, if you do not have to sell, this is the worst time to do so! Every day that passes brings increased equity to our current homeowners.
I am here ready to assist!
Do not wait, pick up the phone, or email and I will be at your side, looking after the best interests of You and Your Family!
Home Office- 548-688-8833
MLS connected Website – http://YourLondonRealor.com