London’s hot housing market keeps on sizzling, with January and February resale home sales up more than 10 per cent over the first two months of last year, the local realtors association announced Tuesday.
For the first time in history, the sellers’ market in London has pushed the average home price in the city to more than $400,000.
The average broke the $400,000 mark to hit a record as the home sales hot streak rolled into February, with sales last month up 5.6 per cent compared to the same month last year and with sales in the first two months of the year up 10.8 per cent over 2018.
“In terms of an indicator, it means we are heading into high values for London by hitting more than $400,000. I think this is very significant,” said Amber Mihm, a mortgage agent with Dominion Lending Centres – Forest City Funding.
“It means high home values are here to stay. We will not go back to the 300,000s for single-family homes.”
The London-St. Thomas Association of Realtors (LSTAR), in a report Tuesday, said the average home price in London nudged up to $405,186 last month.
Underlining just how fast home values have risen, the average price topped $300,000 only two years ago and in 2009 it was $209,000, meaning residential real estate prices have nearly doubled in value in 10 years.
“There has been speculation by some waiting for market conditions to drop. This suggests that will not happen. The best time to buy is yesterday,” said Mihm.
The average sale price of $405,186 is 13.5 per cent higher than the same month a year ago.
The average sale price last month for the entire LSTAR region, which includes Elgin and Middlesex counties, was $393,911, up 12.5 per cent compared to February 2018.
Two-storey homes were the most expensive, selling for an average of $543,114, up 12.7 per cent from a year ago.
“First-time home buyers are driving the market now. It is the rule of supply and demand. There is not enough supply and prices are going up,” said Troy Couwenberghs, broker manager for Remax Advantage Realty.
“With low interest rates and low unemployment, a strong economy, people are continuing to buy.”
The No. 1 age group for buying homes are people 25 to 34, the Canada Mortgage and Housing Corp. reported recently. But the second biggest buying group is older than 65 and third is ages 55 to 64. That means people downsizing are a significant factor, said Couwenberghs.
Despite its record in average home price, London still is a relative bargain, he said. Only Windsor and Edmonton are major Canadian cities with lower average home prices. Hamilton’s average is $572,000, Kitchener’s $485,000 and in Toronto it’s $780,000.
“It has hit a new high, but we are still very affordable,” said Earl Taylor, president of LSTAR.
“The city has grown, manufacturing is doing fine, business is doing fine, the economy is doing fine and there is stability. There are a lot of good reasons to be in London. We are lucky.”
There has been speculation by some waiting for market conditions to drop. This suggests that will not happen. The best time to buy is yesterdayAmber Mihm
The association reported 603 homes were sold last month in the London and St. Thomas area. Two months into this year, 1,128 addresses have changed hands.
As for the region, the largest year-over-year gain was in Elgin County, with a February average sales price of $360,800, up 33 per cent compared to February 2018.
The average sales price for a highrise apartment condominium was $246,070, up 27.1 per cent compared to the same month in 2018. And the average sales price for a one-storey home (bungalow or ranch style) was $368,664, up 8.9 per cent compared to a year earlier.
February average home sale prices:
- London: $405,186
- St. Thomas: $306,279
- Middlesex County: $469,094
- Elgin County: $360,800
- Strathroy: $365,534
- The region: $393,911