As housing market stays red-hot, listing levels show signs of rebound
Published Tuesday, April 4, 2017 4:39PM EDT Last Updated Tuesday, April 4, 2017 6:27PM EDT
Here’s what wasn’t unusual about the Kitchener-Waterloo real estate market in March: Sale volume and sale prices were both up significantly over one year before, many homes sold for more than their asking price, and houses listed for sale were snapped up quickly.
Here’s what was unusual: In a departure from the trend seen over the past year-plus, homes were being listed for sale more often in past years.
“There’s definitely lots of action happening,” says James Craig, president of the Kitchener-Waterloo Association of Realtors.
The average sale price of a home in the area – which includes Kitchener, Waterloo, Wellesley, Wilmot and Woolwich – hit $493,226 in March.
That number represents a 32 per cent increase over March 2016, and an increase of more than six per cent over February 2017.
It’s based on the average sale price of the 729 homes sold during March – a record number for that month. In the prior decade, the highest tally reached was 607 in 2010.
Increase prices are seen across all forms of housing, from detached homes to condos and townhouses.
“Everything is up,” Craig says.
With prices having increased so much in recent years, Craig says some first-time homebuyers may have to re-evaluate their expectations and aim for a townhouse or condo apartment instead of a more expensive detached house.
While 729 homes were sold in the area last month, 844 were listed for sale. On average, homes were on the market for 14 days before they were snapped up, compared to 35 days one year earlier.
Those 844 listings represent a slight increase over the average in recent years – but the 434 properties listed in the final minutes of March was less than 30 per cent of the normal figure for that time.
The difference, Craig says, is that instead of most homes being bought by people already living in the area – who then put their own homes up for sale – Toronto-area buyers are now driving the demand.
“What we’re seeing is outside pressures from the GTA coming to our market,” he says.
“The problem there is (that) they’re not also listing something as well – they’re basically just taking away from our inventory.”
Like most local real estate agents, Michelle Wobst says the biggest factor in skyrocketing house prices is Toronto and GTA residents casting their eyes westward in search of better value for their money.
Many of those buyers are coming down Highway 401 having already sold their current homes, giving them one big advantage over prospective buyers already living in the area – particularly since they sold their homes at Toronto-level prices.
“They can come down here and buy homes for straight cash instead of needing to mortgage,” she says.
The upcoming provincial budget is expected to contain measures aimed at cooling Toronto’s market.
The specifics of those measures, and whether they encompass the whole province or just Toronto or the GTA, could have major repercussions for market trends in Waterloo Region.
In Vancouver, a 15 per cent tax on foreign homebuyers was instituted last summer in a bid to curb the rapid price increases that city’s housing market was seeing.
Since then, far fewer properties have been listed for sale, those that have gone up have taken longer to sell, and detached home prices have started to fall.
Craig has his eye on the possibility of something similar being introduced for Toronto. If that happens, he says, it could push prospective foreign buyers to areas like Waterloo Region.
With reporting by Marc Venema