Ben Sage, Moving Woodstock
October 2017 Woodstock Residential Market Report
Number of Sales down, and Inventory Up! Read on for BIG NEWS for BUYERS!
The brief “cooling” market shift that occurred in August and September, with supply trending upwards, and number of sales very low, will be classified as a traditional summer slowdown. It was perhaps magnified by buyer fatigue, due to the intensity of sales in the first half of the year. The fall market has established itself this year as a time with lower than expected sales activity, and slightly rebounding inventory.
We are now in somewhat unfamiliar territory……
The overall real estate market turned a corner in October of 2017. As inventory continues to climb, we are beginning to see a slowdown in the appreciation of housing prices. At the end of September we had 96 homes for sale, and End of October showed 112 homes for sale. Although we have seen inventory jump from a dizzying low of 54 active homes in March of 2017, up to 112 homes at the end of October, because of reasonably consistent demand, it still remains technically a seller’s market.
In the month of October this year, we had a reasonable 61 homes change hands in the city of Woodstock. Which was actually DOWN a 19% from October of 2016.
So, demand has rebounded somewhat from last month (with 10 more homes sold in October than September 2017), increased supply has outpaced demand.
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, and now that metric has decreased once again. With days on market increasing to 55 on average, the atmosphere around buying a home has changed somewhat. Buyers generally 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.
October was more or less consistent with September, in terms of absorption rate. 1.83 months of inventory available. That means, even with the decrease in demand, we still run out of houses to sell in just under two months, if nothing else gets listed for sale!
So for now, it’s more of the same. It’s a reasonable market if you’re a seller, but as you’re about to see, it’s becoming a great time to be a Buyer!
With demand and supply staying more or less consistent, the average sale price for a Residential property in Woodstock was $301,485 in October of 2017, which represents a drop of 1.48% over last month, and an Annual DROP in average sale price of 3.3%
This is the first drop in Average Monthly prices (when compared to same month, previous year), since December 2015!
What if I’m in the market to buy?
We are seeing the beginning phases of a fall market with a modest to high level of activity. The trends leading into the fall market are indicating stable pricing, with the potential for dropping prices, albeit very gradually. It is expected that if you are planning to buy a home in the last couple months of 2017, you will have a bit more leisure to shop around, but you need to stay on your toes, as well priced homes continue to sell very quickly.
If I were a buyer looking to time the market, I would keep an eye on the GTA. 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. This is already beginning to happen again.
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. Now that the market is softening somewhat, hiring real estate professionals with a solid understanding of the market fundamentals is more important than ever.
We take enormous pride in understanding the market, to best assist our clients to capitalize on current conditions.
We are the modern and competitive choice for real estate services in Woodstock and area.
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...