Ben Sage, Moving Woodstock
July 2017 Woodstock Residential Market Report
Easing continues in July, but the market still strongly favours sellers
Continued easing in the marketplace has made it a better place for buyers, but overall the fundamentals still point to appreciating values and sellers market.
The dog days of summer are upon us. Many people have taken the kids off to celebrate Canada150 by camping in a National Park, or have headed out to a cottage, or otherwise gone off to explore this great nation we live in. For those that are left at home, working through a real estate transaction, the market has continued to show signs of easing off from the craziness experienced earlier this year. Supply still keeps ticking upwards relative to demand, yet demand remains more or less constant.
Anecdotally, it seems as though all of the ridiculous overpaying that we were seeing come out of the GTA area has all but disappeared, and the buyers who are active in the marketplace right now are generally local families, who perhaps put off buying as a result of the insanity in March/April/May. These buyers are less likely to take the “moon shot” if confronted with competing offer situations, and therefore we have seen average sale prices slip a bit over the past two months, yet still increasing by quite a margin over last year at this time.
Read on for some more specifics:
Active inventory dipped slightly from June to July, with 115 homes for sale in the city of Woodstock at the end of the month. This was down from end of June (118) but up 32.2% from July of 2016. Although we have seen inventory jump from 53 active homes in February of 2017, up to 115 homes at the end of June, it still remains a seller’s market.
The trend continues to ease…
Supply is half of the story. Has demand decreased, or increased?
In the month of July this year, we had 67 homes change hands in the city of Woodstock. That was more or less FLAT from July 2016 (66 homes)
So, demand is constant, while supply ticks upwards.
This takes us to the metric of supply and demand, known as Absorption Rate. 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 absorption 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%).
As you can see, we have been enduring a period of extremely low supply relative to demand. Also, you can see that July 2017 was statistically the best month to be a buyer since March of 2016. With days on market increasing to 26 on average, the atmosphere around buying a home has changed significantly. Buyers have more time, are able to insert more conditions to benefit themselves, and have a FEW more homes to choose from, though, the “good ones” are still selling very very quickly, and often in multiple offers.
June continued the trend in easing in this metric, at 1.72 months of inventory available. That means, even with the uptick in inventory, we still run out of houses to sell in just less than two months, if nothing else gets listed for sale!
We still have a long way to go to find “balance”, but the trend has become clear….
So what does all this mean in terms of values?
Well, average sale price showed another healthy gain of 9.8% over July of 2016, as demand continues to be steady. The average sale price for a Residential non-condo property in Woodstock was $320,912 in July of 2017, which is up 9.8% from July last year, but dropped a bit from last month.
Look how the July average price in Woodstock has appreciated over the past few years. You’ll note we had great increase last year, and a reasonable increase this year.
What if I’m in the market to buy?
The summer is once again proving to be a slower market, so shopping now is a great opportunity to get a better deal on your dream home. Statistically, you are also looking at a confluence of events that appears to be showing a great opportunity to get a better deal than earlier this year. The slowdown in the GTA market has had a measurable effect on the market fundamentals in the city of Woodstock, and I don’t believe it will last forever.
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. We are constantly examining market fundamentals, to give our clients the best opportunity to make their dreams a reality.
The market is slowing down. 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.
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...