June is typically the month where the number of new real estate listings begins to slow. The number of sales follow. Summer is on the way and sellers and buyers head off to the cottage, the coast and parts unknown, at least parts not here, sending real estate into a summer slumber.
Of course, this year is not typical. January and February saw an extremely early start to the spring market. Then in March the real estate market began a general cooling due to interest rate hikes and buyer reticence. In March, April and May as a result, we witnessed listings lasting longer on the market and home prices falling. So, what happened in June?
The volume of new listings increased by about 20% in June. But interestingly, many of the other indicators stayed the same. The average number of days that a listing stayed on the market remained at 14. The average list price was near constant, as was the average selling price. But here’s the big news — the metric that bucks the tend happening in the majority of Ontario real estate markets — the number of sales more than doubled!
It seems that home buyers just couldn’t stay away from some of the excellent real estate that Waterloo Region has to offer. Whereas 90 homes sold through the Kitchener Waterloo Real Estate Board in the rural towns and townships in May, June saw 185 homes sell. What’s going on?
I’ve been predicting Waterloo Region home prices to stabilize over the summer months and then in Autumn to continue a slow rise north. (This prediction does not take into account any further interest rate hikes. If hikes happen, the market will cool.) So with prices and other indicators remaining pretty much unchanged since May and the number of sales doubling, have prices stabilized already? Time will tell.
Here are the stats:
There are currently 120 homes listed for sale with the Kitchener Waterloo Real Estate Board in the rural towns and townships.
The average list price for homes listed in Rural Waterloo Region is $1,272,426.
The Median list price for homes currently listed for sale in Rural Waterloo Region is $977,450.
Last month, there were 185 homes sold through the Kitchener Waterloo Real Estate Board in the rural towns and townships.
The average list price for homes sold in Rural Waterloo Region last month was $973,646.
The average sold price was $1,083,688.
This represents 13.04% over list price.
The average days on market for these sales was 14.
The median days on market was 9.
The median list price for homes sold in Rural Waterloo Region last month was $899,000.
The median sold price was $990,000.
This represents 11.64% over list price.
Now that we are halfway through the year and the extreme price gains made during the wintertime have been taken back during the corrections in the spring, is it too soon to predict that we have found a new balance? Normally, the real estate market goes into a bit of a summer slumber. Will that happen this year?
The sale price to list price ratio is an excellent indicator of buyer demand. Like rising prices, this ratio peaked in February, began falling in March. June saw this ratio remain near 13% in the Rural regions of Waterloo, whereas currently in the cities of Kitchener Waterloo, the sale price to list price ratio has fallen to about 7%. The rural market is a lot hotter than the city market!
There has been a lot of talk about interest rates increasing by another .75% this summer. If that happens, it will be a cool real estate summer.
Finally, it’s important to point out that real estate reporting is often in the aggregate. Real estate reporting highlights the trends and the averages, the medians, sales volumes, ratios… What real estate reporting does not do is consider what is happening locally, at a granular level. Clearly every real estate market though at least somewhat connected to each other, is unique. What’s happening in the downtown Toronto one-bedroom condo market may be very different to what is happening with the Conestogo or Breslau 3,000 square-foot home market..
Demand for homes in rural Waterloo Region clearly remains high. It remains a seller’s market. Although the situation is improving for home buyers, we still have a supply/demand imbalance that has not fully corrected.