What a crazy year for real estate.COVID certainly didn’t stop people from buying or selling.In fact we saw an 8% increase in sales over the previous year.I personally feel there were a few converging ideas.Some of them had to do with the trends which I addressed in Real Estate Trends 2020 but I also felt there was a large movement of single family investment properties.With record sale prices (15% over 2019) and with so much uncertainty with tenant rights during COVID, I think these types of investors are thinking its time to cash out while the going is good.
On the other side of the coin we are seeing multi-residential buildings flying off the table including places like Napanee and Gananoque. Toronto investors are swooping in and taking advantage of much lower pricing.
2020 was also the year we had a record number of house sales with multiple offers.My prediction is that 2021 will bring more of the same.Let’s hope I’m wrong!
This year the statistics show a larger percentage of buyers were eitherbuyers moving to larger homes and/or out-of-town buyers.Additionally, unsurprisingly, buyers under 35 years of age are realizing they want more space. These trends will likely continue into next year with some experts also predicting an additional 10% increase in pricing in the Kingston area.It’s all about supply and demand.This is leaving first time home buyers with more frustration as they attempt to purchase a home.Help may be on the way??
The federal government just released details that it will expand the foreign buyers tax on non Canadian homeowners.Currently this has been applied in Ontario’s Greater Golden Horseshoe and Vancouver areas as a way to bring down home prices by increasing supply.This plan obviously doesn’t come without controversy.
The Federal First-time Home Buyers Incentive plan may be an option for some.It’s a shared-equity mortgage with the Government of Canada.Introduced in 2019, it allows first-time buyers to purchase a home 4x the household income.As of the spring of 2021 it will increase to 4.5x .Learn more about this at https://www.cmhc-schl.gc.ca/en/nhs/first-time-home-buyer-incentive
There continues to be conflicting reports in the industry as to what this HOT MARKET means in the long run and if we are in for a down turn.I’m not so sure that consumers are focused on this today but there appears to an uptick in searches for this term.I pulled search terms “Real Estate Market” in BLUE and ” Real Estate Bubble” in REDfrom GOOGLE.Here is what it shows.
It appears there was a closer correlation between these two phrases in the spring of 2017 versus what is happening this fall.I find this interesting and may directly relate to the Buyer and Seller behaviour which we are seeing!Toronto, who saw a 215% increase in CONDO listings in September, will be most affected by a price correction than any of the suburbs.This certainly may indicate that price decreases are on the way.
As this year progresses, the real estate market remains unpredictable and crazy. As the COVID cases rise we may see a downward shift in sales activity this winter.I am personally seeing a bit of what I call “OFFER FATIGUE” from buyers.Some feeling a bit of hopelessness.Who would have thought it would be so hard to purchase a home.
But with so much economic turmoil, the question remains as to the effect this will have on the housing market in the coming months.There seems to be consensus that next year we will see a softening of the market.I’m not so certain this will happen in Kingston and Area as we continue to have a greater demand for single family homes, as well as a increasing portion of out-of-town cash buyers .
The impact of COVID-19 on the housing market is complex, and we believe it will lead to diverging price trends among regions and housing categories. The pandemic is affecting demand and supply of various market segments quite differently. It is cooling demand for and boosting supply of rentals in large urban areas. This, in turn, is reducing investor interest in condos. The pandemic is also altering the housing needs of many current owners who look for more spacious properties in less crowded settings. This is simultaneously shifting demand from condo apartments to single-detached homes and other low-rise categories, and increasing the supply of smaller condos in core urban areas. Work-from-home arrangements and the lesser appeal of big-city living (with reduced cultural and socializing opportunities during these times of social distancing) are increasingly driving buyers further away from downtown locations into suburbs, exurbs and even cottage country. We believe this trend will sustain strong demand in smaller markets, putting intense pressure on their housing stock. The bottom line is we expect condo prices to weaken in larger markets next year, while we see prices for single-detached homes remaining generally resilient—albeit increasing at a slower pace. “RBC
There continues to be a good percentage of homes which are going for over asking price.More people are now offering greater amounts of money to get a home.Recently a house priced at $259,000, sold for $350,000.It had 17 offers.The question is was this house actually only worth $259k or $350k to begin with?
Year to date we have seen a 14% increase over same period last year for the Kingston & Area market.September sales were higher and as you can see the days on market was significantly less for the month of September.
Despite being in the middle of a pandemic, Canada housing market shattered records in July. What the fall brings to the housing market will be anyone’s guess. There are still many uncertainties. Questions remain as to how the changes to the federal CERB program, which is due to change in October, and the mortgage deferral program, which is set to end around the same time, will effect Buyers & Sellers. Approx. 16% of mortgagors have deferred at least one payment. Has this put homeowners into a financial situation in which they will not recover from? I personally think there will absolutely be casualties which will result in mortgage defaults. The extent will not be known till later this year and perhaps into next.
Amongst these Canadians, are workers who have not yet been able to get back to work. The hybrid model for school reopening will leave parents without options for childcare.Those who can go work may be making difficult choices. And amongst all this chaos is whether there will be a resurgence of new cases. Let us not forget that the U.S.A. is in the middle of a presidential election!
As you can see… so many questions… not enough answers. Is it the right time to buy, sell, or hold? Will prices continue to go up or down? Each buyer or seller is unique and I’d be happy to discuss your situation in person or by phone.
If you know of someone thinking about buying or selling I’m always looking for more great people like yourself.Always here to help!
Last month I showed that the number of sales over the same period as last year was down by almost 20%.July’s sales were strong and the gap is closing-in with now recording only an 8% drop YTD.Still low based on history in the Kingston & area but it shows that despite COVID, people are still buying homes.
Average SOLD price YTD is slightly up over last month with a +11% change.
Average sold price for Kingston & area is now $435,696 with 45% of buyers this year in the $300 k – $450 kprice range.
We continue to see multiple offers on many properties and there appears to be a slight uptick in more aggressively priced offers over last month.But despite this, almost half of all sales were below or at asking price.
Many buyers have been discouraged but if they work with the right Realtor® that can provide guidance, their success in finding the right home will be greater.
COVID-19 and the subsequent lockdowns have certainly shifted our “spring” market. June has seen the flood gates open as Kingston and area went into Phase 2 of reopening. Although sellers have not completely embraced listing their homes at this time, we are seeing buyers out in full competitive force.
Our average SOLD price Year-To-Date 2020 has seen a 10% increase over the same period as last year . Prices prices have been affected by mainly the lack of inventory & the number of buyers. Listings are down 16% from the same period last year. To give you another perspective as well, Kingston and area has seen a sellers market for the last 4 years. So if we compare with the number of houses listed from 2015 (same period), inventory is down 46% from that time frame.
Recent CMHC rule changes which came into effect July 1st, in addition to mortgage companies increased scrutiny of the buyers employment records due to COVID, are going to make things tougher for buyers. We are just not seeing the effects of this in Kingston yet.
MULTIPLE OFFERS Buyer are increasing finding themselves in multiple offer situations in today’s market. This is discouraging to many. To buyers, it appears ALL houses are in “bidding wars” which in fact only 30% of sales sold over asking. How much over asking is another good question. This table shows 2019 vs 2020 $$ over ask price. As you can see the bulk of those which did sell over asking (the 30%), were distributed between $1 – $20,000 .
Without perspective, it would appear that there is lots to get discouraged over. I strongly encourage you to work with a Realtor® who has their pulse on what is going on in the market and to provide you with advise which will prepare you for what you need to do to BUY or SELL your home. Additional stress is not what we need right now and certainly not during your house hunting. This is suppose to be a time of joy.
I’m always here to answer your questions. Give me a call!
Kingston & Area Real Estate Statistics - YTD Ending May 2020
The real estate market continues churn for the Kingston & Area markets, but at volumes significantly less then normal!
MONTH to MONTH Units sold were up by 67% over April 2020 from 177 Units to 295 for Kingston & Area. To put this into perspective… May of 2019 saw 464 sales.
YEAR over YEAR Kingston and area started off very strong again until the breaks were applied in March. Since then approx. 35% less houses have sold for the same time frame of 2019.
PRICES Yet… despite COVID-19… prices YTD shows a strong increase of 8%. This is mainly due to the strong start to 2020 but even so, you can see that prices for May 2020 have increased by approximately 7% over May 2019.
CAVEATS The numbers shown reflect the Kingston and Area which includes Lennox & Addington, Frontenac, Thousand Islands etc. . Price increases in each area, even neighbourhoods, may be completely different and you need to consult a real estate professional to evaluate how a particular neighbourhood is performing.
SUMMARY We have seen a lack of inventory for the last 4 years. COVID has and will have an impact on both Buyers and Sellers.
Those who have lost their jobs will find it more difficult to meet the demands of the mortgage companies. As household debt increase and the downpayment accounts are dwindling the dream for many could be delayed. Talking with a REALTOR® can assist with your long term game plan going forward.
Sellers are fearful of the associated risk of COVID and may feel that the house values are dropping and feel anxiety and fear.
Things may not be as bad as you are imagining and the best course of action would be to talk with a REALTOR® who is in touch with the market and trends during this new day and talk about your individual situation.
What we know for sure is that homes are being listed and buyers are buying and we are seeing multiple offers again. So this is great news for anyone looking to Sell as it is still a Sellers market!!!
Give me a call to chat about your situation… I love to help!!
When we look at the sales information for the first three quarters of 2014 vs 2015, Kingston saw an increase in single family home sales of 7.7%. This is considerably better than last year which saw a decrease over 2013 sales of nearly 6%. We don’t see this changing much by years end.
There were 553 new residential listings on the Association’s MLS® System in October 2015, down 5.5 per cent from the record October last year. However, this was still the second highest October level ever. Active residential listings on the Association’s MLS® System numbered 1,899 units at the end of October, down 10.5 per cent from the end of October 2014. There were 7.8 months of inventory at the end of October 2015, down from 8.5 months at the end of October 2014 and below the long-run average for this time of the year. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.
The sales-to-new-listings ratio continues to be around the 37%. Effectively, what this means is that for every 3 houses which are put onto the market, only one sells. This is important to understand when listing your home.
Kingston’s average selling price of $290,580 saw a nice increase of 5.7% over the same period as last year. This increase is not seen as prices taking off but more so of a weakness of the prices in the 4th quarter of 2014.
Mortgage rates continue on the downward slope. As of October 21st, 2015, the advertised five-year lending rate stood at 4.64 per cent, unchanged from the previous Bank rate announcement on September 9th, and down 0.15 percentage points from one year ago. The next interest rate announcement will be on December 2nd, 2015, while the next update to the Monetary Policy Report will be On January 20th 2016. It is unknown what effect the introduction of the new Liberal government will be on these rates.
Employment and unemployment figures remained pretty steady. All these factors are great news for the Kingston housing market. It is forecasted that Ontario home sales over the next couple of years will be stable. This could change if we see increases in the mortgage rates.
New Home Sales
The price of buying a new home has been steadily increasing. The average price in the Kingston area for a single family home is $323k vs. 2010 when we saw the average price of $277k. New home starts have been steadily decreasing since a boom in 2003. The Kingston area saw a high of almost 900 new units started in 2003. Comparatively, 2014 saw 462 starts, and as of the end of October 2015 we are at 257 starts, a drop of 28% over the same period as last year.
Home sales recorded through the MLS® System of the Kingston and Area Real Estate Association posted a double digit year-over-year increase in August 2015.
Residential property sales numbered 297 units in August, up 13.4 per cent from the same month a year earlier. On a year-to-date basis home sales are currently running almost seven per cent ahead of the first eight months of 2014.
“August was an above average month for home sales in the Kingston area, not record breaking but an improvement from earlier this year,” said Jack Green, President of the Kingston and Area Real Estate Association. “Meanwhile, the average sales price this year is running more than three per cent ahead of 2014.”
The average price for homes sold through the Association’s MLS® System in August 2015 was $280,234, up 6.4 per cent from August 2014. The less volatile year-to-date average sale price was $294,338, an increase of 3.1 per cent from the first eight months of 2014.
There were 725 new residential listings on the Association’s MLS® System in August 2015, down 9.9 per cent on a year-over-year basis.
Active residential listings on the Association’s MLS® System numbered 2,204 units at the end of August, down 6.8 per cent from the end of August 2014.
There were 7.4 months of inventory at the end of August 2015, down from nine months at the end of August 2014 and on par with the long-run average for this time of the year. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.
The value of all home sales was $83.2 million in August 2015, an increase of 20.6 per cent from a year earlier. This was the highest August on record.
Sales of all types of properties numbered 335 units in August, climbing 12.4 per cent on a year-over-year basis. The total value of all property sales jumped 25.6 per cent from a year earlier to $95 million in August.