Housing market cooldown? Depends what you’re comparing it to
Ryan Flanagan, CTV Kitchener
Published Tuesday, September 26, 2017 5:11PM EDT
Last Updated Tuesday, September 26, 2017 6:26PM EDT
These facts about the Kitchener-Waterloo real estate market are true: Homes are selling for, on average, less money than they were earlier this year. They’re spending much longer on the market. Bidding wars are far less common.
These facts about the Kitchener-Waterloo real estate market are also true: Homes are selling for quite a bit more money than they were one year ago. They’re still being snapped up more quickly than usual. There remain fewer listings than the market typically sees.
So when you hear that the market is cooling down, remember that it’s all relative.
“We’re moving toward a more normal market,” says Keith Church, the broker of record with Royal LePage Grand Valley Realty.
“Moving toward” a return to normalcy. Not there yet. Certainly not a buyers’ market. If it seems otherwise, that could be because the all-bidding-wars-all-the-time, no-conditions-allowed, homes-sold-within-days market of this spring makes anything else seem extremely unusual.
“It’s still a sellers’ market,” says James Craig, president of the Kitchener-Waterloo Association of Realtors.
“It’s not as crazy as it was back in April. That activity was not sustainable.”
April was when the local real estate frenzy was at its peak. The area’s average residential sale price hit an all-time high of $512,656.
Since then, the average sale price has fallen for four straight months. For August, it stood at $441,992.
September figures will be released next week. Whether the sale price continues its slide or not, analysts have their eye on another figure – the year-over-year increase, which has consistently been in the 10 per cent range even as sale prices have dipped.
Craig says some higher-priced properties might be taking longer to sell, but first-time buyers are “very active” and creating lots of demand for mid-range and lower-priced homes.
When prices were taking off, people in the industry were blaming it on the combination of high demand and low supply. The demand doesn’t seem to have abated, but the supply has increased significantly – leading to homes now sitting on the market for 30 days or more before they sell.
Church sees these things going hand-in-hand, with homebuyers taking more of a “stand back and watch approach” as they discover that the market has cooled down.
“They see that the prices are sagging a little bit, and so they’re not in a hurry,” he says.
Most adversely affected by the changing conditions, Church says, are people who think they can get the same price for their home now that their neighbour got for a similar property a few months earlier.
“They’re not going to get that today,” he says.
“The market has sagged for the sellers.”
With reporting by Tina Yazdani