The frenzied real estate market in London, Ontario, seems to be calming down
Real estate agents in London, Ont., say the city’s frenetic real estate market is starting to show signs of slowing – with fewer bidding wars and more inventory available.
Last month, the London St Thomas Association of Realtors (LSTAR) said 1,835 new homes had been listed on the province’s Multiple Listings Service (MLS), the highest number on record for the region for the month.
At the same time, 844 homes were sold, bringing the sales-to-listings ratio down to 46%, which LSTAR says hasn’t been seen in this area in a decade.
It’s a sign that the London market is starting to regain its footing and a far cry from the start of the year, according to Durgesh Tiwari, a property agent who has been selling homes in the city for seven years.
House prices have been falling slowly since February
“In January, February and March, there were only 300 registrations,” Tiwari said. “People were freaking out and saying, ‘Oh my God, there’s no houses to buy,’ and people just paid $200,000 sometimes more for a house, which is not healthy for any market. “
And London isn’t alone in seeing a cooling domestic market, as sales volumes and listings in other parts of Canada have plummeted as interest rates have begun to rise.
Tiwari said for new buyers who can afford to wait and plan, that’s a good thing. For investors hoping for a quick turnaround or buying when the market peaked, rising interest rates could be a harbinger of bad things to come.
Now, I think we even see a lot of listings of homes at price and price is price.– Mark Vieira, real estate agent
“There are people who have bought houses without assessing saturation. They pour money into it thinking that it will still grow,” he said. “The market is moving down and everyone is scared.”
Prices have been slowly falling since February. At the time, the average London-area home was selling for $825,221, according to LSTAR. In May, the average price was $762,397, down 8% over three months.
Less competition and less bidding wars
“We’re seeing prices go down since the first quarter,” said real estate agent Mark Vieira, who noted that sales had slowed to a much more normal pace.
“We’re seeing a shift in homes that sell for an average of seven days on the market. Now we’re pushing above that rate.”
Bidding wars are also becoming increasingly rare, according to Vieira, who said slower sales meant less competition for buyers who faced fierce competition until a few months ago.
“We were seeing such low inventory and buyers were competing with multiple offers and had no idea exactly where their figure should be and now I think we’re even seeing a lot of listings of homes at price and price is the price,” he said. “A bit of the guessing game is gone.”
Ultimately, Vieira said he thinks the market downturn is a good thing. This will give buyers more flexibility and choice and, with good planning, allow first-time buyers to gain a foothold in a market that was becoming increasingly inaccessible over the months.
“With the increase in supply, we are seeing people making more moves.”