Should You Postpone Your Real Estate Plans Until Spring? | Issue 180 Guelph Weekly Sales Report
November 15, 2019 Sales Summary:
Should You Postpone Your Real Estate Plans Until Spring?
Relatively speaking, this week was considerably better than the same week last year and even better than the same week in 2017. Looking at the recently released October numbers for the City of Guelph, we see that this past October set the new high water mark for Guelph, with 202 homes sold. Since 2008, when 127 homes changed hands, there has been a 59% increase in home sales for the month of October. The Guelph market has been increasing, not only in price, but in the number of homes changing hands as well. Further evidence that the Guelph market is growing and not likely to see any downward pressure on pricing.
The chart above shows 3 key elements we watch. Leading indicators of market conditions are the number of new listings that enter the market each month (grey) and the number of homes for sale in any given month (light blue). Leading indicators like new listings and available listings are good indicators of what kind of activity and sold prices we can expect.
The monthly sales (dark blue) are a lagging indicator, showing how busy the month has been. The October 2008 data shows 451homes for sale and sales of 127 or 28.2% of the available inventory and median market time of 33 days. The median sales price was $249,750 and home sellers were getting 96.9% of their list price. Most would have called 2008 a balanced market, or slightly leaning towards a buyer’s market. This, despite the meltdown that had been going on in the US market.
Fast forward to 2019, with 202 sales in October out of 274 homes available for sale that month meant 73.7% of the available homes were sold – certainly contributing to the 99.2% sales price to list price ratio that sellers were achieving along with a median sales price of $535,000. These indicators point to a continued strong seller’s market.
Looking at the increasing number of sales, the dropping inventory of available homes, and declining number of new listings coming into the market suggests that our market will be in for some turbulent weeks and possibly months. A couple of scenarios could come into play here. If buyer demand remains strong over the winter, you can expect prices to continue on their upward trajectory. Typically prices dip over December through February, as fewer buyers will brave the cold conditions and holiday period to buy homes.
With continued strong demand we may see an early spring in terms of sellers rushing to the market to take advantage of the strong sellers' market, which will mitigate prices moving much higher. In the past, the bulk of sellers will wait for spring-like weather before going to the market. That also ties in with most people not wanting to move during the cold and wet months.
What’s your strategy?
As a buyer, and depending on your timeline, you might want to try doing something sooner than later, because if conditions prevail I suspect prices will be up another 5-10% by spring. You might not have a wide range of homes to choose from but I believe this will be your opportunity to get the best pricing.
A home seller’s strategy? Listing sooner will give you exposure to a hungry pool of buyers that are much more active this year than in previous years.
The one strategy that will work for both buyers and sellers; make sure the agents and brokerage you choose to work with understand the local market dynamics and are able to give you the market intelligence to make a decision that gives you full advantage. The Home Group Realty Team digs deep into the local market conditions and numbers to make sure their clients get every possible advantage in what is a challenging and potentially confusing housing market.
LAST WEEK IN THE GUELPH MARKET
The past week in the Guelph real estate market was quite active. 47 homes were reported sold with the median house sale looked like the following;
4 bedrooms, 2 baths, 1435 square feet and selling for $550,000 or $383.55/sqft. That median home took 27 days to sell and the homeowner was able to negotiate 98.02% of their original list price. 23.4% or 11 of the 47 homes sold at or above list price. A week of sales at prices that reflect strong buyer demand.
Enjoy the weekend and thanks for reading.
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