THE SPRING MARKET IS OPEN FOR BUSINESS

With the mid-point of 2020 rapidly approaching and with the region slowly opening up as we take tentative steps back from the pandemic closures, the Guelph real estate market continues to defy the doom and gloom projections of many experts.  Locally and regionally, the numbers we’re going to review will surprise you in a number of ways. 

Before we get into this week’s sales, let’s discuss a number of interesting variables that came into play this past week:

There was an interesting article well off the main page of The Globe and Mail, published on June 8th concerning Genworth Capital, one of the main competitors to CMHC in the mortgage insurance industry. Genworth stated that it will not follow CMHC in raising the standards for qualifying mortgages – something they have been vocal about for over a month now. This will give many entry-level buyers and those that don’t fit the standard qualifying criteria, like self-employed buyers, an alternative insurer to work with. 

In COVID-19 news, the Province has started to open up again.  Unless you’ve been sheltered in place without internet then you’ve likely heard and seen that people are becoming more mobile.  Today restaurant patios are now open, the local malls will be open again, and we’ll be required to wear masks in any shop or business we go into.  Yes, good news that we can start working and restart the economy.  Lots of business owners and employees have felt the pain over the past 3 months.  Let’s just hope we don’t overdo the opening and invite a more severe rebound of the virus.  

Our local real estate market has been showing “spring market” conditions in the past couple of weeks, which is great news for the local economy.  Home sales drive professional services such as home inspectors, mortgage brokers and lawyers, as well as photographers, stagers and tradespeople. Local retailers are also seeing increased activity, as most home buyers will spend anywhere from $5,000 to $10,000 or more in purchases around their move.  That’s a substantial amount of economic activity.  

While these variables as singular events won’t substantially affect the market, collectively they have had a large positive impact on our local real estate market.  

Real estate in Guelph has defied predictions and so far has emerged from pandemic conditions in good shape.  

Home prices are still 7.4% above 2019 prices year over year.  This, despite the number of home sales being 40.6% lower than 2019, year-to-date. We have talked about this extensively throughout the pandemic – if sales alone were down by 40%, we would expect a significant decrease in home prices.  That hasn’t happened because the number of homes available for sale are down as well (38.5%).  This time last year, we had 2.2 months of inventory (homes available for sale).  This year, we’re sitting at 1.2 months of supply (that’s a 40% decrease).  

It’s difficult to say how many buyers have stepped back from the market, but I would say that based upon how many homes are still selling in competitive offers (42.3% this week) that buyers have continued to shop despite COVID-19.  The interesting thing is that the way buyers have been looking and researching homes probably hasn’t changed much since the pre-pandemic days.  Buyers have been quite comfortable looking at homes online for some time now.  The multimedia that good agents and brokerages use in marketing homes today means that, in most cases, you can see as much of the house as you would during a public open house but without the health risk. 

The imbalance in supply and demand, in my opinion, is partially a result of sellers’ beliefs that they will need public open houses and a constant stream of buyers physically going through their homes.  Sellers, rightfully, are afraid of having people they don’t know going through their homes, and as a result they have been hesitant to actively go to the market.  But, that might not be the reality: our agents and their buyer clients are relying heavily on the new influx of digital material available to narrow their search well in advance of the in-person showing stage. In our opinion, home sellers are missing out on a great market right now.  Who knows what the fall market and winter will bring?

THIS WEEK IN THE GUELPH REAL ESTATE MARKET

We are reporting 62 homes sold. this week – that’s a 19.23% increase over the same week last year, where we reported 52 sales. 27 or 43.54% of the sales this week were sold at or above list price. Similar to 2019, when 22 of 52 sales (42.3%), sold at or above list.  

The median home sold in our area this past week was a 3 bedroom, 2 bath 1,374 sqft home that sold for $638,000, or $418.02/sqft.  That home took 12 days to sell and homeowners were able to negotiate 99.24% of their original list price.

Overall, pretty incredible results and a strong sign that our spring market is finally here after an enforced break. 

While we might be seeing some mixed messages in the marketplace, we believe that the underlying strength in our local real estate market is sustainable.  Now if only we could convince a few more sellers to step forward.

Thanks for reading and enjoy the weekend. Keep your distance and your guard up while you enjoy our newfound freedom.  

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