February was a slow month but, prices are still up.
The start of 2019 feels like some of the air has come out of the sails. Buyers seem to be more cautious: maybe it’s because prices have risen so quickly, maybe it’s tighter mortgage rules, maybe it’s what looks to be a global growth slow down, maybe it’s the fear mongering media, maybe it’s household debt levels that have risen to a point where credit is drying up, maybe it’s a Millennial culture that is taking control of the way people spend money, or maybe it is just the weather?
I sound pessimistic – but I mean to sound cautious.
We all know the dangers of driving our cars when it’s snowing outside: this doesn’t mean we sell our cars and give up driving. Rather, it means that we take the safer route and drive a little slower. It means doing the math on an investment property and offering a purchase price that is based on return rather than hoping for a quick 2-year hold and sell because of big appreciation gains. It means looking at comparable properties and shopping around for a home that you can buy at market value – not some bid up price against other Buyers. It means really understanding the cost of a renovation on a house so that you don’t over-build the home. I don’t think the bottom is going to fall out of the Real Estate market by any means! I think we are headed for a more balanced market place where we return to a more normal 3-4% price appreciation. Like Crypto currency or Pot Stocks, Canadian Real Estate caught fire and had a great run up. The emotion of it all, the fear of missing out, helped this run up and guess what – we’ve all done very well. I think we just have to work a little harder and a little smarter going forward.
Like they say, “Races are won in the corners, not on the straightaways.”
Here’s info on February:
KW residential sales were down 8.3% versus February 2018 with 343 total sales. Listings were down 1.1% with 562 homes listed in February, where at the end of February the number of available properties for sale on MLS numbered 785, up 9%.
Single detached homes: 178 down 14.8%
Condominiums: 105 down 11.0%
Semi-detached: 23 down 8.0%
Freehold townhomes: 36 up 112.0%
The average residential home price increased 3% in February versus the same month a year ago. The average home price sat at $490,668.
Below is a break down of the average price by property type:
Single Detached homes: $597,965 UP 3.9%
Apartment Condos: $319,536 UP 20.5%
Townhomes: $395,331 UP 2.6%
Semi-detached homes: $448,123 UP 14.4%
The median price of all homes sold in February was $465,000, an increase of 6.9%
The average days on market in February was 25, up 4 days vs last year.
The thing to keep in mind is that a lot of these graphs and data points are short term noise. I think we can get caught up in the daily moves and love taking in the latest. As usual the key is to enter the market wisely with the ability to avoid a situation where you are forced to sell until conditions are appropriate.
If you have any questions about the market give me a call!