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February 2019 Real Estate Roundup – Cold February Home Sales

KITCHENER-WATERLOO, ON (Mar 5, 2019) –– There were 343 residential sales in February through the Multiple Listing System (MLS® System) of the Kitchener-Waterloo Association of REALTORS® (KWAR), a decrease of 8.3 per cent compared to February 2018.

“The series of winter storms in February not only kept buyers indoors and off the roads, but also away from open houses and viewings,” says Brian Santos, KWAR President. “This was the lowest amount of sales we’ve seen in February in a long time, but it really isn’t surprising given the wild weather we experienced last month.”

Total residential sales in February included 178 detached (down 14.8 per cent), and 105 condominium units (down 11 per cent) which includes any property regardless of style (i.e. semis, townhomes, apartment, detached etc.). Sales also included 23 semi-detached homes (down 8 per cent), 36 freehold townhouses (down 112 per cent).

The average sale price of all residential properties sold in February increased 3 per cent to $490,668 compared to February 2018.  Detached homes sold for an average price of $597,965 an increase of 3.9 per cent compared to February of last year. During this same period, the average sale price for an apartment style condominium was $319,536 for an increase of 20.5 per cent. Townhomes and semis sold for an average of $395,331 (up 2.6 per cent) and $448,123 (up 14.4 per cent) respectively.

The median price of all residential properties sold last month increased 6.9 per cent to $465,000 and the median price of a detached home during the same period increased 2 per cent to $533,500.

“Despite the chill we saw in the number of sales last month, the price gains reflect that demand continues to outpace supply,” says Santos.

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January Real Estate Roundup – Better than Last January

There were 307 residential sales in January through the Multiple Listing System (MLS® System) of the Kitchener-Waterloo Association of REALTORS® (KWAR), an increase of 14.6 per cent compared to January 2018.

“January was surprisingly busy with an above average number of home sales,” says Brian Santos, KWAR President. “The number of units sold last month were up nearly fifteen per cent compared to the previous ten-year average for January.”

Total residential sales in January included 189 detached (up 26 per cent), and 80 condominium units (up 19.4 per cent) which includes any property regardless of style (i.e. semis, townhomes, apartment, detached etc.). Sales also included 20 semi-detached homes (down 28.6 per cent) and 17 freehold townhouses (down 19 per cent).  

The average sale price of all residential properties sold in January increased 5.3 per cent to $484,076 compared to January 2018.  Detached homes sold for an average price of $564,718 an increase of 1.9 per cent compared to January of last year. During this same period, the average sale price for an apartment style condominium was $303,379 for an increase of 22.1 per cent. Townhomes and semis sold for an average of $368,227 (up 0.7 per cent) and $407,852 (up 4.6 per cent) respectively.

The median price of all residential properties sold last month increased 5.3 per cent to $455,000, and the median price of a detached home during the same period increased 7.1 per cent to $530,000

“It was a positive sign to see an uptick in the number of residential listings hitting the MLS® system last month,” says Santos. “However, the total number of homes available for sale continues to perform well below historical averages.”

REALTORS® listed 585 residential properties in K-W and area last month, an increase of 25.5per cent compared to January of 2018. The number of active residential listings on the KWAR’s MLS® System to the end of January totalled 810, which is 11.4 percent more than January of last year, but still well below the previous ten-year average of 1,189 listings for January.

The average days it took to sell a home in January was 26 days, which is 5 days less than the amount of time it took in January 2018.

Santos says, “We have a positive outlook for 2019. I think we’re going to see home prices remain steady or have small increases, sales will continue to be strong but we’re also beginning to see more homes being listed for sale to increase our inventory and provide buyers with additional options. So long as everything else remains equal Waterloo Region should remain a strong and stable market.”    

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December Real Estate Roundup – Kitchener Waterloo Dips in December Sales

Like the title says – the Waterloo Region saw a dip in sales through MLS compared to December in recent years. Not only that, but there were 5,823 homes sold in 2018 this is an 11.1% decrease from 2017. 263 transactions took place in December and this is a 13.2% decrease from December. This is only a slight dip from the 10-year December average of 268 sales for the month.

Similar to previous months the reasoning for this is rising interest rates and mortgage stress test is causing this. KWAR believes the first time and young home buyers are most impacted by these types of scenarios.

Total residential sales in 2018 included 3,355 detached (down 16.2%), and 1,553 condominium units (up 6.4%) which include any property regardless of style (i.e. semis, townhomes, apartment, detached etc.). Sales also included 417 semi-detached homes (down 23.6%) and 431 freehold townhouses (down 7.7%).   

But… The Average Price Still Went Up in 2018?

The average sale price of all residential properties sold in 2018 increased 3.4% to $483,537 compared to 2017. Detached homes sold for an average price of $575,412, an increase of 4.8% compared to 2017. During this same period, the average sale price for an apartment style condominium was $304,676 for an increase of 12%. Townhomes and semis sold for an average of $373,307 (up 5.5 %) and $396,391 (up 4.7%) respectively.  The gross dollar amount actually decreased by about 8% year over year.

This is simply due to supply and demand. Ultimately, the area is still very desirable next to its Ontario counterparts as an extremely viable area to invest in. However, outside investors aren’t as speculative as they used to be. They are starting to understand the area’s trend line and are investing based on that.

Experts believe it will still be a seller’s market in 2018 and anyone that is trying to decide whether or not they should purchase should only expect the price of purchasing a home will rise. Not to create any unneeded urgency, but come on people! If you purchase a house, by the time it’s move-in date you will have already seen an increase in your investment.

The Rental Market Continues to Be Hot

Last year 733 residential leases occurred through MLS, an increase of 22% compared to 2017 and, a 40% increase compared to 2016. This is an interesting stat and is a result of the oversaturation of the rental market in the area. More and more owners are being represented by Realtors because they don’t know the area as much. They are investors from Toronto and abroad that ultimately need help getting a return on their investment. KW should see this number continue to increase and then plateau as the occupancy rate starts to return to normal.

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Real Estate Roundup November 2018 – KW Performing Above Average

Even with the rise in interest rates, the Kitchener-Waterloo area outperformed yearly averages and had the second most homes sold in November to date. 483 residential properties were sold in the area. This number is 14.2% higher than the same time the year previous as well as 19% higher than the yearly average for November.

Experts believe this is a result of the area continuously being discovered as a desirable place to live despite it being very expensive. People see the LRT, a thriving tech sector, and a variety of other factors as being the main reason it is a good idea to invest in the area. This was also the second straight month with stronger than average sales.

Basically, all property types saw an increase in sales. There were 152 condo units sold which is a 52% improvement from the previous November. This could be a result of more prebuild opportunities and builds finishing construction. In addition, those GTA investors don’t want to spend their time managing property or are purchasing for their children who are students in the area.

According to KWAR this could also be as a result of the increase in interest rates. Homeowners are seeing this as a chance to make some cash as home-buyers are worried the interest rates will continue to rise in Canada as a potential recession looms.

Prices Continue to Rise

As previously mentioned, the prices have risen and are above average for the property types being sold. That continued this month where the average sale price increased 7.6%. There have been rises in all property types similar to the amount sold.

Decrease in Realtor Listed Properties

There was a decrease compared to last year’s number of just 1.8%. There are also 12.8% less active listings. That said, the amount listed are well above the projected 10-year average – by about 18%. I don’t believe the decrease in realtor listed properties is an indicator of poor health in the area. There can be a lot of reasons that account for this that ultimately do not affect investors to substantially.

In conclusion, the area saw healthy growth compared to other areas in Ontario. Even outperforming area in Southern Ontario. London still looks like a fantastic area to invest as it continues to perform extremely well next to its Southern Ontario sister cities. The numbers above indicate its basically a good time to buy and a good time to sell. Buying now is a safe position to make even if interest rates don’t rise, real estate is generally a good investment when the economy is bad. Selling now would also be an intelligent decision in order to make the margin on rising home prices in the area.

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October Roundup – Southern Ontario Real Estate Still Performing

As interest rates rise, Canadians are finding it more expensive to borrow funds and take on loans. The rate stands at 1.75% – the highest it has been in ten years – and the local mortgage industry is feeling pressure.

Compared to the same time last year, the median price of all residential properties sold in October 2018 saw an increase of 6.5 percent. Rising construction prices and stringent mortgage rules are additional factors also contributing to this trend. However, the high borrowing rate has proven to be the real back-breaker.

While the real estate industry all over the country is facing its pressure, a few markets like Southern Ontario, are performing better than most.

The Rise in Sales

Despite all the market reports that are suggesting a tightening up of market due to high prices, the figures from Kitchener-Waterloo, based in Ontario, suggest that sales are on the rise.

According to statistics presented by Kitchener-Waterloo Association of Realtors, their agents sold 514 homes in the month of October. These sales were made through the Multiple Listing System (MLS) and  saw an increase of 7.8 percent, compared to last year.

There has been an increase in the sale of almost all types of homes, including detached homes, condominiums, and freehold townhouses. Interestingly, the sales figures for semi-detached homes suffered the most as a direct result of the factors surrounding the market at this moment, down by 18.2% from last year.

The highest performing market however, remained that of the London, ON region. Despite an 11-24% hike in prices, the city remains one of the most affordable, and desirable locales in terms of buying property. Almost similar reports are emerging from the Brantford area too.

Higher incomes and stable finances factor into the burgeoning strength of the real estate industry. The Ontario region’s high median incomes have helped to keep the markets stable, especially when compared to what’s happening in the rest of the country. In Brantford, for instance, a strong, food-processing industry alongside companies like Ferrero – the maker of popular products like Ferrero Rocher Chocolates, Tic Tac, and Nutella – are an integral part of the local economy.

With low unemployment rates and slow inflation, the city boasts some of the most affordable homes in the country. According to a report by Money Sense, a house that would cost around $720,000 in Mississauga, would only cost about $420,000 in Brantford. The prices have increased, but steadily.

High Affordability

Plentiful job opportunities are the biggest selling point of the region of Southern Ontario. Fertile land and a good river system, along with an excellent, industry-led economy have created numerous avenues for financial and personal growth..

This is reflected in the average income of the region’s cities as well. For example, in the city of East London, the median income is $62,011, about 46% higher than what is required to qualify for a mortgage. Similarly, an average-priced home in Strathroy costs about $354,854, while the average income stands at $66,123. This data suggests that the average buyer in Strathroy makes 37% more than what they need in order to qualify for a mortgage.

Therefore, while more people have been buying homes, rising incomes have allowed Ontarians to keep up with increasing prices and rising interest rates, thus ensuring continued affordability in the real estate market in the region.

 

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