Home Sales Dip in December, While Prices Increase
KITCHENER-WATERLOO, ON (Jan 4, 2019) –– There were 5,823 residential homes sold through the Multiple Listing System (MLS® System) of the Kitchener-Waterloo Association of REALTORS® in 2018, a decline of 11.1 per cent compared to 2017.
With 263 transactions taking place last month, December’s home sales were down 13.2 per cent from this time last year and slightly behind the previous 10-year average of 268 sales for the month of December.
“The combination of rising interest rates and the mortgage stress test definitely took some steam out of the market relative to what we saw in the previous two years,” says Brian Santos, President of KWAR. “These types of impediments are most impactful on first-time as well as other buyers entering the housing market.”
Total residential sales in 2018 included 3,355 detached (down 16.2 per cent), and 1,553 condominium units (up 6.4 per cent) which includes any property regardless of style (i.e. semis, townhomes, apartment, detached etc.). Sales also included 417 semi-detached homes (down 23.6 per cent) and 431 freehold townhouses (down 7.7 per cent).
The average sale price of all residential properties sold in 2018 increased 3.4 per cent to $483,537 compared to 2017. Detached homes sold for an average price of $575,412, an increase of 4.8 per cent compared to 2017. During this same period, the average sale price for an apartment style condominium was $304,676 for an increase of 12 per cent. Townhomes and semis sold for an average of $373,307 (up 5.5 per cent) and $396,391 (up 4.7 per cent) respectively.
The median price of all residential properties sold last year increased 3.6 per cent to $445,304, and the median price of a detached home during the same period increased 6.1 per cent to $525,000.
The average time it took for a home to sell in 2018 was reflective of demand continuing to outpace supply. The number of months of inventory remained at under 2 months of supply throughout the year (3-4 months is historically normal for Waterloo region) and the average days to sell in 2018 was 24 days, compared to 19 days in 2017 and a previous 10-year average of 40 days.
While we may be seeing fewer buyers coming down the 401, Santos believes they are still a component of the Waterloo region real estate market, just not as speculative as what we saw in the previous two years. Santos says, “2018 continued to be a seller’s market in the region with stable sales activity and homeowners realizing solid gains in their property values.”
Santos points out that, “Even though prices increased more moderately overall compared to the last two years, they continue to respond to strong demand and the desirability of our area. For those would-be buyers who have been sitting on the fence these past two years, home prices are only getting further out of reach, as supply remains low and demand strong.”
Dollar volume of all residential real estate sold last year decreased 8 per cent to $2.8 Billion compared with 2017.
While the majority of residential MLS® System activity is properties for sale, REALTORS® are increasingly representing landlords and tenants. Last year 733 residential leases occurred through KWAR’s MLS® System, an increase of 22 per cent compared to 2017 and, a 40% increase compared to 2016.