Eric | Mar. 13, 2018
The fourth quarter of 2017 seemed to be the quiet before what appeared to be shaping up as a storm. We started seeing real estate action pick up in January and February. As of writing this, buying action is hot – multiple offers and quick sales seem to be the norm again – but mostly under $600,000. A quick search this morning of Kitchener and Waterloo showed only 61 single detached homes available under $500,000 – all except 12 have been on the market for under 2 weeks: meaning 49 of those homes will likely be sold in the coming days!
0-$500,000 80% listed for less than 2 weeks of 61 active listings
$501,000-$600,000 52% listed for less than 2 weeks of 65 active listings
$601,000-$700,000 33% listed for less than 2 weeks of 54 active listings
$701,000-$800,000 29% listed for less than 2 weeks of 61 active listings
$801,000 and above 24% listed for less than 2 weeks of 69 active listings
This data shows that single detached homes under $500,000 are moving very quickly and then above that things seem to slow down. This is a result of regulation and mortgage rules that have essentially squished buyers into a price range under $500,000 making it extremely difficult for these people to purchase a home. Another repercussion: rents are getting jacked up. If investors have to pay more to buy their rental properties, they have to charge more to cover their costs. I just saw a 600sqft Kaufman unit listed for rent at $1600/mth! That same unit was $1250/mth 3 years ago. That is a 28% increase in rent over 3 years. WOW!
Yes, I know – this is supposed to be a report on February.
212 detached homes sold: (down 29.3 per cent)
118 condominium units sold: (up 11.3 per cent)
25 semi-detached homes sold: (down 21.9 per cent)
17 freehold townhouses sold: (down 45.2 per cent)
The average sale price of all residential properties sold in February increased 3.1 per cent to $478,801 compared to February 2017
Detached homes sold for an average price of $577,609 – increase of 5 per cent
Apartment style condominiums sold for an average price of $265,144 – increase of 6.8 per cent
Townhomes sold for an average price of $386,515 – increase of 14.1 per cent
Semi-detached homes sold for an average price of $391,628 – increase of 6 per cent
I tried to find a correlation between the February monthly price above and the total residential sales and I just don’t see it – the monthly data set is too small I think. However, I think you will agree that there is a wave formation in the February average sale prices. The wave action indicates that we can only expect a small increase in real estate prices this year (see at the bottom of this post where I show the last 3 months).
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