September has come and gone and what a month it was for real estate in Sarnia-Lambton! Prices are way up and the market is moving fast.
The average sale price across residential listings on the Sarnia-Lambton Real Estate Board (SLREB) increased to $430,165. That is an increase of 25.87% over September 2019. The average sale price year-to-date is also on the increase to $395,479. The competition out there is fierce and people are willing to pay to buy houses.
The number one question I still get from people is “why is the market so hot right now?” The biggest issue that we have is still a lack of listings. I am honestly not sure why there are so few listings out there. I think either people want to stay put for now and see what will happen, or they are worried about selling their house and having nowhere to go. This is not a local issue. Some who I have talked to are concerned that this is simply a Sarnia problem, but it is across Ontario in pretty much every market that I have seen, and across most of Canada.
The total number of listings that went on the market in September 2020 was 183, down 4.19% compared to 2019. Total sales remained the same (146 compared to 145 last year). If you look at the year-to-date numbers, the total number of listings is down 8.23% compared to the same period in 2019.
What has the effect of COVID been on the real estate market? It looks like it hasn’t really had much effect overall. Some months early on were affected by a drop in both listings and total sales, but the buyers and sellers left the market at the same pace which allowed prices to remain strong. By the end part of May, people were getting pent up and listings and sales started to increase again, leading to a very strong summer market.
I don’t think it has had any effect on where the market is right now. I think it would have been here right now with or without COVID. Total sales year-to-date are almost exactly the same as they were in 2019 (1,235 vs. 1,251, a difference of 1.28%), which I think can easily be explained by the increasing prices taking would be first time buyers out of the market.
Where the market is heading is very difficult to say. With COVID being unpredictable, and how the market is going, it is really difficult to predict. If there is a down turn, it will have to be a very severe hit before most people would notice it. First, the highest end is going to take the brunt of the downturn. High priced houses and condos in the biggest markets (Toronto, Vancouver, Montreal) would probably be hit first and the hardest, and then it would make its way to outward markets. Second, we have to go from a very strong seller’s market to a buyer’s market before we see prices decreasing. There are many who would not sell their homes for a loss, and would rather stay in their home or keep it on the market until it sells. I think prices will only start to decrease if people are in bad financial shape, with no government programs and have no other option but to sell. I think that is a long way off for most people in our area, so I don’t believe there will be a huge downturn in our prices across Sarnia-Lambton.
If you have questions or comments, feel free to contact me! I would love to chat about what you think and if you ever need any advice about real estate, I am happy to help!