Ben Sage, Moving Woodstock
April 2017 Woodstock Residential Real Estate Market Report
When will the madness end?
The question I hear the most these days is: “When will this crazy real estate market come to an end?”
I wish I knew! In this month’s stats report, I will be explaining some of the fundamentals driving prices in the Woodstock real estate market, and also signs to look for when it comes to a correction, or normalization of the real estate market.
I have been spending a LOT of time making market value estimates for past clients who are curious as to what their home might be worth today. The key word there is TODAY. If we put your home on the market RIGHT NOW, we can accurately predict what might happen. I have been delivering these estimates of market value with a word of warning. I have been saying:
“Be careful not to anchor on to these current market values. Woodstock, and surrounding communities, has been experiencing increased demand, as home buyers from more expensive markets head west on the highway and ‘drive ’till they can afford it.’ There’s a high likelihood that at some point in the mid term there will be a softening of real estate prices, as the Toronto market cools.”
So that said, if you need to sell right now, and have a place to live, you’re golden. We have the right plan to expose your home to all the qualified buyers out there, searching.
Now, lets cut to the chase: Here are the hard and fast stats from the Woodstock Residential Real Estate Market for April 2017
At the end of April there were only 54 homes for sale in the city of Woodstock. YIPEE, we have one more home to look at, compared to the end of last month! (Remember, February = 51, March = 53, April = 54… I see a trend?)
Reality check: in April 2016 there were 218 homes for sale.
Yep, supply is down a staggering 75.2% from this time last year.
Average sale price showed another tremendous gain of 24.8% over April 2016, as demand increases and meets historically low supply. The average sale price for a Residential non-condo property in Woodstock hit an impressive $371,288 in April of 2017.
Look how the April average price in Woodstock has appreciated over the past five years:
The number of sales was consistent this month vs. last year. April this year saw 86 Woodstock Residential non-condo sales, which was up only 1 from April 2016.
The real metric to use when calculating market trends, however, is the Absorption Rate. Every piece of information tells a different part of the story, but absorption rate blends supply and demand into an easily understandable single metric. Essentially, Absorption Rate is the story of “How much supply exists, relative to the current demand?” and it is expressed as a number. This number is the “number of months of inventory” currently on the market.
Simply put, if the Absorption Rate were 2, that would mean that at current demand, all homes for sale would be sold in two months (assuming no new listings come on the market during that time).
It is said that an absorption rate of between 5 and 6 months of inventory is a “balanced market,” and of course as the rate decreases, prices go up as demand outstrips supply. As the rate INCREASES, prices drop, as buyers have more options, and therefore have enhanced bargaining position to negotiate better deals in the marketplace.
Check out this chart, which I update every month. It measures supply relative to demand.
Lower Line = Sellers Market / Prices increasing.
Blue Line = Absorption Rate in 2017.
Yellow Line = 2016 (property values increased by 13.5-16%).
Green Line = Last Five Years Avg Rate.
As you can see, we have been enduring a period of extremely low supply relative to demand. April showed a BIT of easing in this metric, at 0.63 months of inventory available.
We have a long way to go, to get back to a balanced market.
What if I’m in the market to buy?
I’m not going to lie to you. It’s not going to be easy. In fact, we just sold a house yesterday to a lovely couple who wrote FIVE OFFERS before finally getting one accepted! Additionally, our team has been working diligently to create the “Dream Home Finder,” which is an exclusive plan to find the right home for buyers who are looking to purchase. Over the past 16 months we have invested time and money into sourcing off-market homes for our buyers. We employ many different strategies to find off market, expired, and privately for sale properties, for the benefit of our buyer clients.
Over the past year and a bit, when supply has become extremely tight, we have continued to work diligently for our buyer clients, employing strategies to help them win in this challenging market.
The market is showing no signs of slowing down at all. It remains a great time to be a seller, and our Dream Home Finder program is the perfect tool to help you navigate this market, if you are looking to buy a home.
We take enormous pride in understanding the market, to best assist our clients to capitalize on current conditions.
The Woodstock Homes Team is ready to help. CLICK HERE to connect with us and let’s chat about your plans!
So, when does it end?
For almost my entire career I have noticed that the Woodstock market trails the Toronto market by roughly 4-6 weeks. As prices climb in the big city, Toronto buyers find themselves priced out of the market, so they head out of the city, and “drive ’till they can afford it.” This is what CMHC is calling “spillover effect.” It has caused drastic increases in virtually every market within a 3 hour drive of Toronto. Here in Woodstock it driven demand to crazy levels, and just like the big city, locals here don’t want to sell their homes, because the values have been driven so high, they cannot imagine BUYING another home here, compounding the problem.
If I were a wanna-be clairvoyant, I would tell my clients, and everyone interested, to keep a watchful eye on the Toronto market. Be careful not to obsess over the overly positive, or overly negative newsmedia reports about the market in the city, and focus on the middle ground. Remember, sensationalism sells clicks/papers. When you start to see things softening in Toronto, look forward to it hitting Woodstock in about 4 – 6 weeks time.
At the moment, despite the governments efforts to cool the housing market, I have only heard anecdotal musings about a theoretical cooling of the Toronto housing market. You can trust me to keep track of what is happening up there, as it does directly effect the way our market behaves in Woodstock. One thing is for sure:
As soon as there’s a shift, you’ll know it, if you keep reading here.
For now, Party on, Wayne!
I have been successful helping clients buy, sell, or lease residential, commercial, or investment properties in the Woodstock, Ontario area since August of 2007. With technical experience ... Read More...