Eric | Jun. 12, 2018
In May we saw the monthly average home price is KW tick up from the previous month. The May average price is down 2.4% vs May 2017 however 2018 prices are much more stable than the wild ride we saw last year and seeing the average price move up and not break down is very positive.
Below you can see the monthly average price over the past 10 years. The new trend line is holding (shown in red). Note that the May average home price is not yet plotted on this chart.
Is this new trend sustainable? Given that the new trend started in early 2016 when the average home price was just above $350,000 and that today’s average home price is about $483,000 we note that appreciation over that period in residential homes is about 37% or 15% annually (1.28%/mth).
Below is a chart of the Average price of Real Estate in Toronto over the last 113 months (9 years, 5 months). The stats show that the average price in Toronto has risen on average by $4070/mth or 1.18% over that 113 month period. It provides proof that it is possible; we could see the average price of Real Estate in KW rise to $800,000 over the next 8 years. I don’t think this is realistic though. What we actually see will be something in the middle of what we saw prior to January 2016 and the trend since then.
For the 7 year period starting January 2009 to December 2015 we saw annual appreciation of about 5.6%. Something in the middle of this 5.6% and 15% puts us around 10% which is incredibly healthy!
Residential Home sales in May:
414 Single detached homes Down 15.7%
169 Condominiums Down 7.1%
46 Semi-detached homes Down 28.1%
53 Freehold townhomes Down 24.3%
$572,206 Single detached home Down 3.4%
$301,052 Apartment Condominium Up 2.7%
$365,715 Townhouse Up 1.3%
$393,616 Semi-detached home Up 2.0%
Average price of all Residential homes in the KW area: $482,873 – Down 2.4%
The median price of all Residential homes sold in the KW area in May was $445,000
Homes listed in May: 1068
Active MLS listings at the end of May: 1062
Average days on market: 20
We are still seeing high demand for homes under $600,000. Multiple offers and quick sales are dominating this price range. Buyers are more picky than last year however, and homes that aren’t well kept or haven’t been updated are sitting longer and aren’t selling for big premiums. Updated homes, renovated homes, staged homes, cared for homes are what Buyer’s are waiting for. These homes are getting top dollar. Homes over $600,000 are sitting a little longer than before as Buyers have more options and are taking their time to make the right decision.
We still have headwinds in the form of a US government that is creating uncertainty through trade talks. On the other side we have Doug Ford who may have an impact on Real Estate by reversing some of the things the Liberals did to cool the market. We’ll wait to see.