How’s the Market?
Supply keeps ticking up, BUT, still a seller’s market.
No, it’s not balanced yet, BUT, it’s getting easier to buy a house…
As predicted, we are seeing signs of the classic summer slowdown. Coupled with a cooling effect rippling down the highway from the stagnant Toronto real estate market, the trend is clearly towards more balanced conditions in the marketplace. It remains a sellers market according to the hard/fast numbers, but the trend is something worth paying attention to, if you are planning a real estate move sometime in the next few months.
The details…. Here are the hard and fast stats from the Woodstock Residential Real Estate Market for June 2017
Active inventory continued it’s rebound in June, with 118 homes for sale in the city of Woodstock at the end of the month. This was up a meagre 3 homes from the end of June last year, but represents a large jump from end of May 2017 (at which point we had only 91 homes for sale). Although we have seen inventory jump from 53 active homes in February of 2017, up to 118 homes at the end of June, it still remains a seller’s market.
The trend is what we are watching right now…
Supply only tells half of the story, though. Has demand decreased, or increased?
In the month of June this year, we had 95 homes change hands in the city of Woodstock. That was up from June 2016 by 34%.
So, demand is maintaining itself, while supply ticks up slightly.
So 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 months, 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. June continued the trend in easing in this metric, at 1.24 months of inventory available. That means, even with the uptick in inventory, we still run out of houses to sell in just over a month, 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 tremendous gain of 21.3% over June of 2016, as demand continues to be stronger than relative supply increases. The average sale price for a Residential non-condo property in Woodstock hit $356,855 in June of 2017, which is up from June last year, but dropped a bit from last month.
Look how the June average price in Woodstock has appreciated over the past few years:
What if I’m in the market to buy?
The summer is often a little bit slower market, so shopping in the summer can be 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.