January was yet another strong month for home sales in the London area — the second best start of the year since 2010 — despite some signs the market may be stabilizing.
The latest numbers from the London St. Thomas Association of Realtors (LSTAR) show 525 homes were sold last month, up 17.4 per cent over January 2018.
Prices also continued to rise, with the average sales price for all residential property types — single detached, townhouses and apartments — at $387,859. That is up 11.2 per cent compared to the previous January and up 3.2 per cent from the average sale price of $375,782 in December.
The largest year-over-year increase was seen in Strathroy, where homes were going in January for about $398,150 on average — a 41.4 per cent increase compared to the same month last year.
Despite these increases, the London region remains an affordable market compared to other large centres across Canada — a key factor for the strong sales numbers, said LSTAR president Earl Taylor.
“We are the third most affordable area in the country and basically the second most affordable in Southwestern Ontario only behind Windsor-Essex,” he said. “When you have to pay $1 million for a home in Vancouver or $800,000 in Toronto, a home for $380,000 looks very appealing.
“Buyers are coming from everywhere because of that affordability.”
Another possible explanation for the strong sales in January, Taylor said, is the number of homes that came onto the market earlier than usual.
“It’s possible that people thought, ‘Let’s put our house in the market in January so it may take a month or two for it to sell’ . . . and I think they got surprised” by how quickly they sold, he said.
After being a seller’s market for much of the last couple years, however, things may be reaching a balance, Taylor noted.
In January, the sales-to-new listings ration — the ratio between the number of homes sold and the number of new listings — was 60.9 per cent for the area.
“At one point, we were at 100 per cent, so every new home that came on the market sold immediately,” Taylor said. “Now we have moved back closer to that 40 to 60 per cent ratio, which is what the Canadian Real Estate Association says it’s more appealing as a balanced market,
“But we are not still there yet,” Taylor added. “It’s still on the side of a seller’s market, but it has changed.”
The exception to this trend was St. Thomas, which had a ratio of 80.3 per cent in January. St. Thomas also reached a new high in the last 10 years with its average home sale price of $343,178, which is up 34 per cent compared to January 2018.
Taylor also said he remains cautiously optimistic about 2019, noting inventory remains low.
“If we didn’t take any new homes on the market, we would run out of homes to sell in under two months,” he said.
BY THE NUMBERS
January home sale prices in the London region
Elgin County: $326,049
Middlesex County: $493,780
St. Thomas: $343,178