The average selling price for London-area homes remained virtually unchanged in August, the latest local market snapshot shows, a “quiet” month as fence-sitting buyers await the Bank of Canada’s next moves, one observer says.
The average selling price for London-area homes remained virtually unchanged in August, the latest local market snapshot shows, a “quiet” month as fence-sitting buyers await the Bank of Canada’s next moves, one observer says.
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A new report on August home sales released by the London St. Thomas Association of Realtors (LSTAR) says the average local sale price was $663,663 in August, down about $5,000 from the month before.
“It wasn’t too shocking. We thought we would see a quieter August just with the interest rate hikes and the bit of uncertainty with what the September interest rate could be,” LSTAR president Adam Miller said Tuesday.
“I think a lot of people hit the pause button on the housing market in our area.”
The average August home sales price in the LSTAR region – which includes Strathroy, St. Thomas and parts of Middlesex and Elgin counties – is an increase of 4.2 per cent from the same month in 2022, a time when a series of central bank interest rate hikes helped cool the local market.
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Since higher interest rates increase the cost of borrowing for homebuyers, Miller said it’s all eyes on the Bank of Canada’s next move, which is expected Wednesday. The central bank is widely expected to hold its key rate steady, after 10 hikes since March 2022.
“I think the demand for this area is huge. There’s a lot of people who are very interested in getting into the market, waiting to see a little more stability on the interest rate side,” Miller said.
Single-family homes continued to carry the day in August, representing 427 of the 596 homes that changed hands in the London region last month, the LSTAR report says.
The average home sale price in August varied widely within the LSTAR district. St. Thomas homes sold for an average price of $555,000 last month while the average home price in Middlesex County was $959,400.
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About 1,200 new listings came online last month, compared to 1,333 the month before. A solid block of inventory is important, Miller said, particularly if buyers waiting in the wings decide to move on a home purchase this fall.
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Even a few years ago, realtors would be hard-pressed to find a homebuyer deeply tuned in to the central bank’s moves, Miller said. But now – amid inflation and successive hikes – buyers are more sensitive to the Bank of Canada’s outlook.
“It’s never been talked about more. The average buyer, the average seller five years ago even, if you asked them what interest rates were doing or when the next announcement is, most wouldn’t know. Now, everybody knows,” he said
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“There are a lot of fence-sitters out there. They’re ready to come to the market and if they see some positive signs, they’re ready to move.”
The average local home price last month was far off the record set in early 2022, before a series of Bank of Canada interest rate hikes to address inflation put the brakes on the runaway market. Average home prices in the LSTAR area hit $825,000 in February 2022, dropping to $762,400 by May and hitting $648,000 by August 2022.
London-area average home selling price
January: $585,252, 344 men sold
February: $621,912, 436 men sold
March: $653,611, 685 men sold
April: $664,149, 723 men sold
May: $682,561, 846 men sold
June: $675,923, 735 men sold
July: $668,821, 640 men sold
August: $663,663, 569 men sold
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