Ben Sage, Moving Woodstock
August 2017 Woodstock Residential Real Estate Market Report
Inventory up, Sales down, compared to August last year…
The number of sales dropped 30% from August of 2016, down to only 47 homes changing hands in the City of Woodstock. While the number of homes sold dropped, the available inventory dropped on a month over month basis, but increased 23.1% from the same time last year.
Summer, such as it was, has come to an end. The cool summer was duplicated by a relatively cool Real Estate market in the city of Woodstock. This is a natural continuation of easing off from the craziness experienced earlier this year. Has held it’s ground from last month, but is way up from the same time last year.
Although some homes still sell over asking, the “spirited bidding” coming from buyers to the east 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 again this month, marking three consecutive months of inventory decline. At the end of August we had just 112 homes for sale, which was down from 115 last month. Although we have seen inventory jump from 53 active homes in February of 2017, up to 112 homes at the end of August, it still remains a seller’s market.
Supply is half of the story. Has demand decreased, or increased?
In the month of August this year, we had only 47 homes change hands in the city of Woodstock. That was DOWN a remarkable 30% from August of 2016.
So, demand is now dropping, while supply remains steady.
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 August 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.
August continued the trend in easing in this metric, at 2.38 months of inventory available. That means, even with the uptick in inventory, we still run out of houses to sell in just over 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 11.4% over August of 2016, as demand continues to be steady. The average sale price for a Residential non-condo property in Woodstock was $333,193 in August of 2017, which is up 11.4% from August last year, and posted a gain of 3.8% over last month.
Look how the August 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?
Many people are predicting a fall market with a modest to high level of activity. The trends leading into the fall market are indicating increasing prices, albeit far more gradually than experienced in the first half of 2017. It is expected that if you are planning to buy a home in the last four months of 2017, you will have a bit more leisure to shop around, as the absorption rate has ticked up to over 2 for the first time in well over a year.
As a buyer, you will still experience pressure to make a decision relatively quickly, however, as the average number of days on market remains quite low, at just 26. There’s also the inventory, which seems to be struggling to regain any real quantity.
If I were a buyer, I would keep an eye on the GTA market. When the GTA market begins to show signs of heating back up again, you can be assured that the pressure on prices in Woodstock will follow in lockstep, trailing by 30-60 days.
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...