Actual property roller-coaster: London-area house gross sales plunge however costs rise


London-area home sales fell off a cliff last month, with area realtors recording the fewest sales in nearly 30 years, the latest market snapshot shows.

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Only 436 homes were sold last month, the fewest in February since 1995, London and St. Thomas Association of Realtors (LSTAR) reported Friday.

But in a surprising turn, the average resale price of a home increased for the first time in nearly a year.

According to LSTAR, the average price of a home was $621,000 in February, up $36,000 from January’s $585,000. But it was still 24 per cent lower than February 2022, when prices hit a record high of about $825,000.

The two trends, prices rising while sales slump, underscore the uncertainty buyers face amid rising interest rates and persistent inflation, said Adam Miller, LSTAR’s president.

“The buyers are out there looking, but they’re just waiting to see what the economy is going to do over the next couple of months,” he said.

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“Some were waiting to see if . . . the market was going to go down, and we didn’t see that in London . . . So I think that also kind of factored in a bit into the confusion with buyers.”

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Calling February’s sales total “worrisome,” Miller said the local market’s behaviour will depend on the Bank of Canada’s next rate moves. The central bank’s decision to start raising interest rates last spring put the brakes on what had been a booming real estate market.

“I don’t think we’ll see a rebound in March,” he predicted. “I think it will be a low month, but if the Bank of Canada decides not to increase interest rates . . . I think we’ll see a bit of a shift of the spring market to almost an early summer market.”

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February’s poor sales followed a slow month in January, when only 344 homes sold. That was the worst January since 2009, in the wake of the financial crisis.

Besides rising interest rates, a drop in the number of out-of-town buyers, who helped fuel a booming housing market in recent years, also is contributing to the home sales slump, industry insiders say.

“Those Toronto buyers, if they’re not here, that makes a big difference,” said Phil Bailey, a real estate agent with HouseSigma Brokerage.

“There were homes that I sold where nine out of 10 offers were coming from the (Greater Toronto Area). Now you may only have one offer from the GTA.”

Properties that once sold in days now take 30 to 60 days to sell, he added.

“That in itself isn’t actually that abnormal,” Bailey said. “But when you compare it to what was happening in January . . . or February of 2022, it’s a vast change.”


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