Your Special Market update and overview for the first 9 Months of 2021 for London & St. Thomas
Monday Nov 01st, 2021
City of London:
Listings have been steadily decreasing. In July, new listings fell significantly to only 804 homes coming to Market across the city of London. This was down from 1,100 homes listed in June. In August, this number fell again to 736 new listings in the city. In September, as we entered the fall selling cycle, this number remained in the same range finishing at 779 new listings. When added to the few remaining previously listed homes, listing supplies remain very limited. The number of homes offered for sale has consistently remained at about 1 1/4 month’s supply or less. This is down from June and July when this level of inventory peaked at about 1 1/2 month’s supply. Remember, a balanced market, where bidding wars don’t take place, is 6 months’ supply!
As Predicted, this excessive pressure on the limited number of homes coming to market drove the List to sell ratio up and delivered higher prices! Starting In July, the list Price to Selling Price ratio fell to the lowest price variance to homeowners averaging +5.3% of asking prices. In August, this ratio rose marginally to +6.5% and rose again in September to +7.2% of asking prices. Back in February this ratio had peaked at +14.2%. What has changed? Many homeowners are pricing their homes at a top value based on recent sales and don’t receive bids and take longer to sell. Homeowner offering their homes just below market are enjoying extensive Bids. There are a lot of overpriced homes offered for sale, encouraging well priced properties to enjoy massive numbers of bids.
Across the City, the number of sales has dramatically decreased since June when 828 homes changed hands. In July, this dropped significantly to 676 homes sold, August 691 homes sold and in September only 639 homes were sold. The average days it takes to sell has increased from 11 days in June to the current average of 13 days for September.
With this unusually tight inventory of homes available, prices continued to climb. In July the average selling price had fallen across the city to $620,982. In August the average price fell to $608,584 on a smaller number of homes sold. The average selling price after nine months sits at $627,215. As predicted, Prices rose sharply for September, due to the shortage of new listings in August and again in September when we hit an average of $640,911, despite the smaller sales base. Homes priced to a top selling price, for a specific size and features for a home, as previously stated, are not experiencing bidding wars and usually end up selling 2% to 3% below listing price. Homes priced strategically below market at say $599,900, which is about $50K to $75K below final selling price are getting massive bids and often do better than a home priced to market. To reinforce this analysis, the average list price in September was $629,909 with an average selling price of $640, 911 delivering and as a result delivered average Listing to Selling Price ratio of only +1.7% and not the +7.2% that was achieved. This clearly indicates significant overpricing is occurring across the city.
Apparently, some realtors are just taking listings at the price that the Seller wants and are obviously not doing a proper Market Analysis to see what the market will bear. These Sellers statistically lose out!
Remember, out-of-town Buyers, with an out-of-town Realtor, are looking only at Realtor.ca and can only see competing asking prices for homes that are actively offered for sale. With excessive over-pricing this makes a well prices property enjoy a top selling price resulting from massive Bidding Wars!
In July, the number of homes coming to market fell dramatically to only 233 new listings, since then the number of homes offered for sale has remained low at 222 homes in August and 246 home offered for sale in September.
The number of sales occurring as a result, are limited as well, with 219 homes sold in July, then 210 homes sold in August, and finally finishing September with only 199 homes sold in this area. When added to the few remaining, previously listed homes, inventories of available homes remain limited. The last couple of months have seen a marginal decrease of about a quarter of a month’s supply of homes offered for sale to a total of about 1.5 months’ supply. Remember a balanced market is 6 months’ supply!
The bidding wars are still occurring as a result. In July homeowners averaged just over 5.3% above asking price for July and August. This number increased in September as predicted significantly to an average of 8.3% over asking prices. This means a lower priced home are experiencing Bidding Wars. As a result, the time it took to sell the average home across North London [GH1] in September dropped to average of only 12 days.
The tight inventory of homes available continues to drive prices upward. We finished the first 9 months of 2021 with a record average selling price of $695,047 in North London. July finished with higher prices, than June, at $704,788. August rose again to $725,220 and we finished September up again, as predicted, to the second highest average price for the year of $746,523.
In March, April, May, and June the number of new listings coming to Market averaged around 400 homes each month. The number of new listings since then have dropped significantly putting upward pressure on prices. In July 303 homes came to market, in August the number of new listings fell again to 283 new listings and regained marginally is September to 315 new homes listed. Not enough new listings to stop further sale price increases. When added to the few remaining previously listed homes, the inventories of available homes remain limited. The number of homes offered for sale in June & July settled at about 1 ¼ months’ supply. However, because of the fewer number of homes coming to market in August and September, inventories are now under 1 month’s supply. Remember, a balanced market is 6 months’ supply!
The bidding wars are continuing as a result. In March, April and May homeowners averaged between +12 and +14% above their asking prices. In June, this average List to Sell Ratio still finished at respectable 108.7% of asking prices. This list to Sell ratio dipped to 105% and 107% in July and August finishing September at 106.9% In May & June it took only an average of 10 days to sell. The average days to sell a home now sits at 14 days across this trading area.
Let us look at sales across London South. In June we finished up the first 6 months with a respectable 298 sales taking place during the month. Because of limited supply the number home homes sold in South London in July and August fell to 247 and 254 homes respectively, finishing September with 250 homes sold.
Continuing tight inventories of homes available, still drove prices upward. Prices leveled in March to an average of $604,796, April delivered $607,941, May delivered average $605,846. The average selling price started to rise in June coming in at $623,793. July delivered a average price of $617,077, August delivered a price that was up a bit to $620,612 and September bumped again, As I predicted, to the highest average price of the year at $650,870
The number of new listings coming to market in this area peaked in May at 350 new listing, and then dropped a bit in June to 333 homes coming to market. Since then, the number of new listings has fallen dramatically, with only 263 new listings offered in July, 225 new listing in August and finishing September with only 215 homes coming to market for sale. Added to the few remaining previously listed homes the inventories of available homes remain limited. In June and July inventories of available rose marginally to about 1 ¼ months’ supply. Since then, the supply has dropped significantly to around or just under a month’s supply of homes for sale. Remember a balanced market is 6 months’ supply!
In March, Price Wars peaked at +17.8 % above asking prices. Since then, the trend has continued downward, averaging in August and September to an an average of between 5% to 7% above asking prices. For most of the spring it took an average of 9 days to sell a home. As we move into a slower time of the year, the time it now takes to sell the average home is now sitting at around 14 days.
Let us look at sales across London East. May set a record for the year at 305 homes sold. Sales in June leveled back to sales of 244 homes and in July 205 homes were sold, August 224 homes sold and dropped to only 184 homes sold in September as fewer homes came to market to be purchased.
With this continuing tight inventory of homes available, what did this do to prices? The average house price in June in London East averaged out at $497,136. July matched the May peak in an average selling price achieved coming in at $508,045. The average selling price for the month August was $477,531, finishing up in September, as predicted, at $498,099
May saw only 101 new Listed homes offered for sale and June only 97 homes were listed. July new monthly listings came in at 101 homes, then dropped in August to 92 homes listed, falling again in September to 88 homes coming to market. When added to the few remaining previously listed homes, the inventories of available homes is very limited. Supplies of homes offered for sale in St. Thomas have been well below a single month’s demand. June and July had decreased further to a single month’s supply. These listings are well below what is currently needed to meet a single month’s Buyer demand. Remember, a balanced market is 6 months’ supply where bidding does not take place!
You can imagine the bidding wars that are occurring as a result. Bidding wars peaked in May at +12.6% above asking prices, finishing June at +8% above asking prices. Many home buyers are asking top dollar and as result the average list price in September sat at $518,432 about 2% above the final selling price average. In September the average homeowner received +9% over their asking price. This means there are an aggressive number of overpriced homes being offered across the city, with the average list price sitting at +2% over the average selling price. The reason these overpriced properties are not getting what they are asking is due to the search method used by the many out-of-town Buyers and their realtors who are coming to our market. These realtors cannot see selling prices on the London Real Estate Board site and rely only on Realtor.ca and then all they can do is compare homes and features and then bid on the best featured, lowest priced homes The average time it now takes to sell a home in St Thomas has been averaging 12 days for the last few months. In September the time it takes to sekk the average home fell to only 10 days.
Let us look at sales across St. Thomas. The month with the highest sales recorded taking place was April at 113 homes sold. Remember inventory is limited. May finished with 91 sales, June with 73 sales, and July with 91 sales. Since then, the number of sales because of lower inventories has declined steadily with August at 86 homes sold and September at 77 homes sold.
With this continuing tight inventory of homes available, what did this do to prices? March delivered the highest monthly average of $562,248 and finished April at $542,844, May $555,293 and June with a smaller sales base at $546,037 for the city. July was relatively quiet with an average price of 489,978. August jumped again back into the $500,000 range up to $570,207. September came with an average selling price of $531,472. With the sale of the Ford property to a major developer in Talbotville, with proposed clients such as Amazon, values will continue to set records here.
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 10% to 15% over the asking price. 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. You will logically be able to pay back Mom and Dad within 24 months. 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://YourLondonRealtor.com