Oakville Volume Slumps, Prices Remain Buoyant

The Oakville resale home market recorded 243 sales in May – down by a sizeable 43.6% versus the 431 homes sold in May 2016. This brought year-to-date (January thru May) sales to 1,340 units – down by 12.9% versus the comparable period last year. This is the second consecutive month of extreme volume weakness and is largely attributable to a dramatic shift in buyer psychology caused by the perceived future impact of the Ontario Government’s Fair Housing Plan (which was announced in April) and to the perceived impact of a large influx of new listings onto the market.

These factors have combined to convince many would be buyers to postpone their home buying intentions temporarily in the hope of seeing prices decline from their current lofty levels. That said, the pause will likely be short-lived as buyers will come to realize that the government’s plan is not likely to materially affect prices.

Related: Burlington Prices at All-Time High, Volume Slumps

The average price of an Oakville resale home sold through the Oakville-Milton MLS® system in May was $1,270,295 – up by a whopping 20.8% versus the $1,051,630 average price of May 2016. On a year-to-date basis (January thru May), prices are up even further to the tune of 28.4% ($1,314,733 versus $1,023,993 last year). Although down from the peak level of $1,428,664 in February, prices have stabilized in May as compared to April suggesting that a current “bottom” may have been found.

This augurs well for potential sellers especially when put into context of the weak demand of the past few months. It is now likely that more buyers will come back to the table in the months ahead given the lack of indication of prices falling any further. Improved short term demand may even cause prices to return to the stratospheric levels experienced in February.

Related: Monthly Neighbourhood Market Reports

What’s Your Oakville Home Worth? Get a Free market evaluation of your home.

Oakville Transactions - MAY 2017

NeighbourhoodTotal TransactionsAvg Sales Price ($)Avg Days on Market
Bronte Creek12$1,078,25018
Bronte20$1,142,07512
Central4$1,240,00014
College Park12$917,68822
Clearview5$1,189,60011
Falgarwood17$714,14114
Ford7$1,586,17112
Glen Abbey16$1,257,71310
Glenorchy6$1,088,33312
Joshua Creek8$1,535,35013
Morrison14$2,579,77921
Old Oakville7$4,992,71440
River Oaks30$1,011,79314
Southwest9$3,241,11143
Wedgewood Creek4$1,126,75022
Westmount24$1,112,37012
West24$1,108,79214
West Oak Trails16$954,59416

Burlington Prices at All-Time High, Volume Slumps

The average selling price for a resale home in Burlington in May was $837,719 – up by a jaw-dropping 28.9% versus the $649,936 average price recorded in May 2016. This set a new all-time high for the market, handily eclipsing the previous record of $814,187 which was set in March. On a year to date basis (January thru May), prices are now up to the tune of 26.6% versus last year. This represents the seventh month in a row in which there was an annual increase in home prices over $100,000 for the average Burlington homeowner, with an average increase of $156,000 over this time frame.

Price growth is clearly showing no signs of easing off despite some recent buyer hesitation and despite a huge influx of new listings onto the market in recent months. Burlington home sellers are still also getting prices well above asking (104% of asking in May) although average days on market is beginning to normalize (19 days in May versus 20 days in May 2016).

Related: Oakville Volume Slumps, Prices Remain Buoyant

The Burlington resale home market recorded 325 sales in May – down by 10.5% versus the 363 homes sold in May 2016. This is the second consecutive month of volume weakness and is largely attributable to a dramatic shift in buyer psychology caused by the perceived future impact of the Ontario Government’s Fair Housing Plan (which was announced in April) and to the perceived impact of an improved supply situation.

On the supply side, total homes available for sale at month-end were 442 – up by a whopping 44.0% versus May 2016. Of interest, this marked the first-time in the past 25 consecutive months that inventory has actually increased on a year-over-year basis. These two factors have combined to convince many would be buyers to postpone their home buying intentions temporarily in the hope of seeing prices decline from their current lofty levels. That said, prices are not going down so this buying pause is likely to be short-lived.

Related: Monthly Neighbourhood Market Reports

WHAT’S YOUR BUrlington HOME WORTH? GET A FREE MARKET EVALUATION OF YOUR HOME.

Burlington Transactions - MAY 2017

NeighbourhoodTotal TransactionsAvg Sales Price ($)Avg Days on Market
Aldershot South23$1,015,52212
Alton Central3$1,140,96711
Alton West10$1,063,70012
Brant Hills18$675,73912
Central15$941,55016
Dynes7$575,21414
Elizabeth Gardens9$721,69912
Headon Forest26$792,85012
Longmoor10$776,7009
Maple11$639,03612
Millcroft23$972,84810
Mountainside10$590,3247
Orchard13$919,87711
Palmer9$726,88914
Pinedale9$684,34711
Roseland16$1,437,59421
Shoreacres10$1,782,31023
Tansley5$754,0008

Oakville Market Showing Signs of Moderation

The average price of an Oakville resale home sold through the Oakville-Milton MLS® system in April was $1,268,198 – up by a whopping 22.2% versus the $1,038,056 average price of April 2016. While still displaying outstanding growth, this price marks the second consecutive month where prices have actually declined versus the all-time record of $1,428,664 which was set in February.

The fact that the sensational price increases versus year ago have started to wane somewhat is likely a function of the pause in demand noted above and strong indications of strengthening inventory. Savvy sellers may want to take advantage of prevalent market conditions before these new impacts take full effect in the months ahead. April days on market of 11 (down by 8 days from last year’s 19 days) reveals that the market is still buoyant among buyers whose psychology has not yet changed.

Related: Burlington Market Showing Signs of Change

The Oakville resale home market recorded 325 sales in April – down by 22.8% versus the 421 homes sold in April 2016. This brought year-to-date (January thru April) sales to 1,080 units – down by 2.4% versus the comparable period last year. The downturn in sales during April may be due to a shift in buyer psychology prompted by the Ontario Government’s Fair Housing Plan which was unveiled mid-April.

Some buyers may now be taking a “wait and see” attitude based on the notion that the government’s plans may cause prices to subside in the months ahead. While many pundits do not believe that the measures contained in the government’s Fair Housing Plan will have enough teeth to materially affect demand in the long run, there is no question that the announcement can affect buyer psychology in the short run. Other potential buyers may be waiting for prices to come down with a rising tide of new inventory coming onto the market.

Related: Monthly Neighbourhood Market Reports

What’s Your Oakville Home Worth? Get a Free market evaluation of your home.

Oakville Transactions - APR 2017

NeighbourhoodTotal TransactionsAvg Sales Price ($)Avg Days on Market
Bronte Creek14$1,174,64311
Bronte33$1,261,19714
Central12$1,253,54310
College Park9$1,068,0568
Clearview7$1,086,28612
Falgarwood16$903,4627
Ford8$2,054,37514
Glen Abbey22$1,291,4559
Glenorchy15$1,101,13311
Joshua Creek17$1,682,9648
Morrison10$2,809,20017
Old Oakville8$1,856,25010
River Oaks26$1,206,1199
Southwest10$1,913,10012
Wedgewood Creek21$1,103,3519
Westmount22$1,116,25010
West36$1,312,6449
West Oak Trails25$1,046,5158

Burlington Market Showing Signs of Change

The Burlington resale home market recorded 335 sales in April – down by 9.2% versus the 369 homes sold in April 2016. That said, year-to-date (January thru April) sales remain in positive growth territory to the tune of 7.6% (1,062 units in 2017 versus 987 units in 2016). The pause in sales during April may be due to a shift in buyer psychology prompted by the Ontario Government’s Fair Housing Plan which was unveiled mid-April.

Some buyers may now be taking a “wait and see” attitude based on the notion that the government’s plans may cause prices to subside in the months ahead. Others may be waiting for the impact of rising inventory – which has finally started to occur – to have on housing prices. Speaking of inventory, 462 new listings came onto the market in April (+15.8% versus last year) and total active listings at month-end were 278 (down by 9.2% versus last year). That said, this was the smallest drop in total inventory in the last 18 months.

Related: Oakville Market Showing Signs of Moderation

The average selling price for a resale home in Burlington in April was $782,897 – up by a whopping 22.6% versus the $638,531 average price recorded in April 2016. Despite the major increase, the average price declined versus the all-time record of $814,187 which was set in March. This represents the sixth month in a row in which there was an annual increase in home equity of well over $100,000 for the average Burlington homeowner, with the average increase actually topping $150,000.

That said, this string of major price increases versus a year ago may start to wane in the months ahead given the pause in demand noted above and strong indications of strengthening inventory. Savvy sellers may want to take advantage of prevalent market conditions before these new impacts take full effect. April days on market of 13 (down by 6 days from last year’s 19 days) reveals that the market is still buoyant among buyers whose psychology has not yet changed.

Related: Monthly Neighbourhood Market Reports

WHAT’S YOUR BUrlington HOME WORTH? GET A FREE MARKET EVALUATION OF YOUR HOME.

Burlington Transactions - APR 2017

NeighbourhoodTotal TransactionsAvg Sales Price ($)Avg Days on Market
Aldershot South15$1,018,88054
Alton Central3$823,33312
Alton West7$1,110,42912
Brant Hills21$698,9496
Central19$939,4478
Dynes11$713,8556
Elizabeth Gardens13$867,2387
Headon Forest23$793,3249
Longmoor13$719,6318
Maple6$900,42110
Millcroft25$972,11710
Mountainside14$676,0718
Orchard21$898,7198
Palmer10$689,23910
Pinedale14$756,9938
Roseland9$981,0569
Shoreacres7$1,127,2866
Tansley5$618,2604

Why Now Is The Time To Get In The Real Estate Game

Five Strategies for the skeptical Investor

Buying and selling in this fast moving and aggressive market can sometimes scare people away due to a fear that the market is out of their reach. In the 25 plus years we have been in the industry, we have experienced markets like the one we are currently in. We understand that real estate is the most significant investment you will make in your life.

We have compiled our top five tips that will provide context and understanding about the current market which will answer your questions:

#1 – Borrow Money to Invest

Affordability to borrow is a hot topic right now. Interest rates to borrow are at all time low making money cheap to borrow. This really is a good time to get a mortgage and lock into a manageable monthly payment. Keep this in mind as you look at higher housing costs as lower borrowing costs help to balance this out.

#2 – Invest in a Long-Term Purchase

If you are deciding to buy a home, look at your purchase as a long term Investment. With this mindset and plan, you can afford a slight decrease in the market when it happens. As we have seen in the past, everything is cyclical, as the stock market illustrates to us regularly. It’s inevitable, the value of your home will have small dips and rises but don’t let that stop you from buying.

#3 – Housing Market Correction

When the United States Housing crisis occurred we in Canada had fears that our market would fall into crisis as well. What we actually saw happen was that our market did not crash but plateaued for a few years. What we see happening in the past 3 years is an increase to make up for that plateau that previously occurred.

#4 – GTA Growth Rate

The GTA has a growth ranges between 35% – 43%. This is a huge factor of why the market is not slowing down. As a result of this growth, there is a huge demand for real estate in the GTA. That demand needs to be filled and we are seeing that and homes are selling within record times of a day or two on MLS. We can also see the GTA’s response to this huge growth rate in the dozens of Condo developments that have been filling our shorelines the last 5 years.

#5 – The Current GTA Market

The GTA housing costs are definitely rising but they still have room to grow. When we look at other urban cities like London and New York our housing prices here in the GTA don’t compare. New York and London are extremely high in comparison to the GTA and it look like Toronto is just catching up. According to analysts, our market in the GTA can still sustain higher price points.

What does this mean for you?

Here are the stats. According to the Government of Ontario, GTA is projected to be the fastest growing region of Ontario, with its population increasing by over 2.8 million to reach almost 9.5 million by 2041. This means that the demand for housing will continue to rise and therefore the price of real estate is expected to hold and grow.

With that said, don’t let the fear of the unknown stop you from investing in real estate. The market is hot right now, but do yourself a favour and make an informed decision and work with a realtor that has experience in the housing market. Trust the team that has been around and has lived through the past 25 years of ups and downs. Let us lead you through the process of buying or selling your home. Contact us today and we will help you make an informed decision.

 


 

*The material in this article is presented as general information only. It is not intended as legal, financial or real estate advice and must not be relied on as such. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions.