Bidding Wars Escalate In January 2020
The New Year has brought a resurgence of pressure on local residential real estate. Local inventory (the number of listings on the market) is nearing depletion levels seen only in 2017. Our current listing supply is sitting at 1/2 of a month’s worth of inventory (for reference the ten-year average is 3 months supply). Fewer homes are selling as a result, but that’s not a result of Buyer demand but the lack of property available to purchase.
The average days spent on the market dropped below 10 days for the second time in our market’s history with Kitchener averaging just 9 days for a residential real estate transaction in January of 2020.
The Average Days On The Market: Kitchener
The Result? Average Sales Price Posting Huge Double-Digit Gain
The average list-price to sale-price ratio climbed up above 105% in January 2020 for the first time since 2017 meaning consumers are paying 5% on average above the list price. We know Buyers almost never pay over list price without competition so this indicates bidding wars are escalating. Furthermore, if we look at the average sales value for January 2020, the increases are averaging far higher then the list to sales price ratio. The average detached home sold for $670,992 which is up an astounding 18.8% from the year previous. The average sale price for all residential real estate in Kitchener-Waterloo was up 15.7% at $561,029. Apartments style condominiums were up 26.1% ($382.636) year-over-year for January while townhomes and semi-detached properties were up 18.7% ($439,765).
List-price to Sales-price Ratio 2017-2019
Good News, Bad News For Buyers
Buyers are being buoyed by falling interest rates. Global concerns over continued trade tension with China and fears over the coronavirus have placed downward pressure on bond markets (bonds often move in conjunction with key lending rates by the major banks). TD recently moved its 5 year fixed rate below 5% for the first time since 2018 and analysts predict the other major banks will soon follow. Essentially, all of this adds up to improved purchasing power for buyers, however, they are being met head-on by added competition in the housing market. Buyers will need a solid plan and an excellent agent to help them acquire property in this type of market. Contact Us to find out how we can make that happen for you despite the bidding wars.
Only Good News For Sellers (especially those downsizing)
What does this mean for Sellers? We are seeing the most amount of purchasing pressure for local residential real estate since the Spring of 2017. Last time our market experienced this amount of price surge, the market eventually flattened out and prices did not reach the market peak of Spring 2017 until two years later in the Spring of 2019. This means, those who bought at the peak in 2017 and perhaps paid a little more then they should have, would not have been able to sell for the same amount until only recently. As a Seller, the goal is generally to pull in the most amount of money possible on the sale of your home. There may not be a better time then right now to accomplish such an objective. Contact Us to discover how Benjamins Realty Inc. combines compelling and highly effective marketing to leverage Buyer demand towards achieving peak sale prices for Sellers and their property or simply fill out the form below!