PRICED OUT OF THE MARKET
The Guelph real estate market has undergone a lot of changes in the past few weeks. The most significant change in our small real estate bubble was an update to our MLS® system. We not only upgraded our MLS® system, but we’ve also combined the MLS resources of 21 real estate boards and 14,000 Realtors® throughout Ontario. Next to the Goliath Toronto Real Estate Board (40,000+ Realtors), we have covered the majority of the Ontario Market. It was a big move to allow better access to listing information and to help Realtors better serve their clients. Over the past 35 years, I’ve been through multiple MLS system changes and upgrades, and this was probably the most significant and client-centric change we’ve seen.
Thankfully I’m a tech-focused guy, and I look forward to new technology being introduced and understand that there will be change and glitches. Some of those changes over the past week have temporarily impacted the way we make our reports available to our subscribers. Our sale reports may not be as pretty as they were 2 weeks ago, but the information is there. We’ll keep tinkering with the reports to get the best possible results for you.
I read a lot of real estate articles and reports in order to stay on top of trends and the pulse of the industry, and I’ve been a Globe & Mail subscriber since my undergrad days at the University of Guelph. I have to chuckle, because in all the years of reading the Globe, the one area of bias that consistently shows up is “their” disdain for real estate. Rob Carrick, a business and personal finance reporter, in particular doesn’t usually have much good to say about real estate as an investment and a wealth generator.
This week was no different, as he wrote an opinion piece on affordable entry level real estate and how far one needs to travel from Toronto to find it. You can read his article here: Priced out of the market. Even more entertaining were the comments at the end of the article from various readers. It’s humorous to see that a lot of people in the GTA still see Toronto as the centre of the universe.
Rather than rant and rave about the Toronto bias, I’ll focus on affordability and the tradition of searching for your first home.
There’s no question about affordability being a major issue for entry level buyers. It’s not isolated to the major urban areas. Even the remote areas that the Globe identified as affordable to big city first time buyers will represent an affordability issue for local buyers. Guelph and the surrounding areas are no different.
Currently 10% of the homes being purchased in Guelph are being sold by “out of town” Realtors who are not members of our local real estate board. Typically these are agents from the GTA bringing their clients to our local market in search of more affordable housing options. Our sellers love these buyers because they find our prices so much more affordable than the GTA. Our local buyers don’t appreciate the additional competition and pressure on prices.
Some of the entry level buyers in our region are making a similar drive to find more affordable options for themselves. It’s not that every entry level buyer is priced out of our market, they just may not be satisfied with the options available. 30-45 minutes of commuting may provide options that are more attractive than can be found here. You don’t have to drive far to find communities where your housing dollar will go further.
This isn’t something new – it’s just become more evident as real estate has become more prevalent in our lives. Generationally our parents dealt with the same struggle. The numbers might have been significantly lower, but when you look at the ratios and the qualification process/options, they just might have had it a little tougher.
We’re going to spend some time over the course of the next 2 months and look at some of the outlying communities and what opportunities they present to homebuyers. I think you’ll be pleasantly surprised at what we’ll find without having to go to Saskatchewan for affordable options.
THIS PAST WEEK IN THE GUELPH REAL ESTATE MARKET
43 homes were reported sold in Guelph this past week. That’s 22% less than the number of homes sold in 2019 for the same week. This is likely the result of a much lower supply of homes available for sale and some last minute vacation time being taken. Even for pandemic conditions, the streets and email are unusually quiet this past week.
That said, the action around the 43 homes sold was pretty intense. 58% of the homes selling went at or above list price, compared to 20% selling above list in 2019.
The median home selling in Guelph this past week looked like the following:
3 beds, 2 baths, 1520 sqft and sold for $670,000 or $416.33/sqft. That home took 10 days to sell and sold for –not surprisingly – 100% of the original listing price.
Compared to the same week in 2019, the median home was 200 sqft smaller and sold for $520,000 or $400.16/sqft, took 21 days to sell, and homeowners negotiated 98% of their original listing price. A slow market when compared to conditions today!
JULY HOUSING MARKET REPORTS – NOW AVAILABLE
Reports for July are now available for Guelph, the Tri-Cities, and the surrounding townships. Find them below:
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Guelph, ON
2+2 BED / 1 BATH / 810 SQ FT
Cute as a button and ideally located! This mid-century bungalow has a mix of great original features and newer updates. While move-in ready, there is plenty of potential for updates to increase the value and make this home yours! The best part? The fantastic oversized lot and proximity to all the Exhibition Park has to offer!
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