Eric | Jul. 17, 2018
June saw a slow down in the number of homes sold and an increase in the average home price.
It seems counter-intuitive given supply/demand dynamics. However, because the average home price is below $500,000 and the mortgage stress test rules have forced Buyers into a range between $400,000 and $600,000 the volume isn’t spread like it has been in the past. Volume has been concentrated in this $400,000 to $600,000 price range.
This is verified by the median price and the movement in the Median price at $450,000 up 5.9% vs June 2017. The concentration of Buyers in that range is creating competition and driving prices (as well as the median) in that range up which is affecting the overall average price because of its weight.
What we are seeing is strong demand in the lower price ranges and slowed demand in higher priced homes pushing some of those prices down.
850 properties were listed in June – down 21.5% vs June 2017
604 properties sold in June – down 15.6% vs June 2017
Average Home price in June was $489,584 – up 5.2% vs June 2017
In the first half of 2018 there have been 3096 home sales, this represents a 19.1% decrease in sales versus the first half of 2017. 604 sales in June is 12.8% lower than last month and 15.6% lower than June 2017.
365 Detached homes Down 21.2%
151 Condominiums Up 6.3%
38 Semi-detached Down 29.6%
43 Townhomes Down 15.7%
Detached homes average price $575,003 UP 7%
Apartment style condo average price $314,180 Up 13.2%
Townhouse average price $378,562 UP 10.8%
Semi-detached average price $391,830 UP 2.9%
We are heading into the summer months where the Real Estate market tends to slow – kids are home, people are away on vacation, and it’s too hot to go house hunting. I’m hoping for some strength into the fall. There are definitely deals to be had compared to last year. And there are definitely deals in the higher price range above $700,000. The market is chugging along nicely and the big picture looks good. There is a reset happening for Seller expectations on how fast their homes will sell and for how much money. Buyers have also reset how they are buying by looking at more homes, taking their time and not chasing homes and paying huge premiums.
The Apartment Condo market is hot – we have seen entire buildings sell out in hours as the price point is very attractive to first time home Buyers, students, young professionals, investors and down-sizers. Both Kitchener and Waterloo core landscapes have evolved dramatically in a very short period. Transportation infrastructure, amenities and proximity to work are all factors that are driving interest in the core areas.
There is still the overhanging uncertainty of how US trade will affect our economy. Interest rates are also creeping up while Canadian wages aren’t going up as fast as would be expected given near 2% inflation. Stock markets keep rising and making new highs.
In KW we see construction everywhere. We see new business opening. The Universities expanding. And condos going up. Large Corporations are also moving and expanding in the area. A high speed rail line between Windsor and Toronto is on the horizon and is very exciting.
Have a great July!