London home buyers — and sellers — already know.
Now, it’s official.
A strong economy, helped by buyers from the Toronto area cashing out of a white-hot market, has pushed London-area home sales to new heights, smashing a yearly record with one month left to go.
More homes were sold in the first 11 months of this year than during any full year, the London and St. Thomas Association of Realtors (LSTAR) reports.
A total of 10,790 homes have changed hand so far this year, smashing the record 10,193 properties sold last year with more than enough time left on the calendar to pound up that total even more.
“I think it’s a bit of a perfect storm,” Jim Smith, head of the realtors association, said Tuesday.
“I would officially call it the new world order, the new norm.”
Home sales and new construction have been on a tear in the London market this year, whose unemployment rate — another key economic barometer — fell as low as 5.4 per cent this summer, about as good as it gets in the city, before edging up to 6.3 per cent this fall.
LSTAR, which began tracking home sales in 1978, said 637 homes changed hands in November.
While that’s down 13.6 per cent from the same time a year ago, year-to-date sales are up 9.1 per cent — making for the record year.
Monthly sales records began falling early in the year.
Smith attributes the boom to low interest rates, low unemployment and outside buyers, especially from the Greater Toronto Area, moving to the Forest City to get a bigger bang for their housing buck.
“They were coming down the 401,” Smith said.
“They’re willing to pay ($625,000) for (a home. They think it’s a deal.”
Last month, the average sales price in the London-St. Thomas market was $322,303, up nearly 12 per cent from the same time a year ago, LSTAR said.
That’s still well below the roughly $500,000 Canadian average, and a bargain compared to the average of more than $760,000 for all types of homes in the GTA, where detached homes average nearly $1 million.
In the London area, the average year-to-date sales price is $330,039, up 18 per cent since last November.
Realtor Alex Lau, with clients in both London and Toronto, has seen the local market from both sides.
“All I can tell you is, there were at one point signs up in Toronto advertising townhomes in London,” Lau said. “And yes, people are going into London to purchase.”
“They can get twice the house for the same amount,” said Gerry Macartney, head of the London Chamber of Commerce. “It’s always healthy to have a lot of inventory churn.”
Macartney attributes part of the strong sales to Londoners who are upgrading, moving out of medium-sized houses into bigger, higher-end homes. He shares Smith’s rosy view of the local economy – up to a point.
“We have to be careful not to get too complacent. We have fewer people in the work force looking for work. A number of people have taken themselves out of the workforce,” he said.
“We’re not doing as well as we should.”
Macartney said while sectors of the local economy including the defence industry, digital gaming and multinationals are doing well, manufacturing has still not recovered from the last recession in 2008. “It’s not all good news and certainly not all bad news. I doubt we’ll ever see it back the way that it was,” he said.
“We’ve got a lot of work to do to get our ducks in the row” on international trade, he added.
But Smith said forecasters see next year being equally robust in real estate.
“They expect this market to continue into the spring and June 2018,” he said.
One thing that could make London even more attractive to GTA residents looking to move would be a high-speed rail link with Toronto, as the provincial government is vowing will be built, putting London in the commuter orbit of Canada’s largest city and cutting the time it takes to travel there.
Smith calls that “the game-changer of all game-changers.”
Area realtors need sell only 211 homes in December to push this year’s sales past the 11,000 mark.
“Which is unheard-of,” Smith marvelled.
London-St. Thomas home sales:
Sold so far this year: 10,790
Previous record (full year): 10,193, last year.
Sold in November: 637
Year-to-date sales: Up 9.1 per cent
Average price, year to date: $330,039