This past month turned out to be one of the more shocking months as far as real estate stats are concerned since the back half of 2020. Once we got past the initial shock of the COVID shut down, the real estate market started ripping. It was such a 180 degree turn from what everyone expected to happen at the onset of the pandemic that month after month, my jaw hit the floor as we set new highs for prices as well as sales.
Then the insane “bidding wars” when 20 offers were considered a bad turnout began in 2021 and that was still shocking to see.
Everyone became numb to it eventually. Agents knew what to expect whenever a house was listed, buyers knew they had a slim shot of actually having an offer accepted and sellers (who were those same buyers just weeks before) were the only ones to experience excitement on “offer night”. What a different world.
Back to this past month: January definitely surprised me. I suppose I could say that I had once again become numb to the market stats, or perhaps I looked at them with a certain malaise.
Throughout the past 2 years, the story was the same, month after month: lots of listings, low sales, and prices (pretty much) flat. Over and over again. I’m sure the people that read these reports began to think “my god, how does he make these monotonous stats seem so exciting!” And for that, I thank you.
But alas, we finally had some momentum in the market beginning last September. Sales started to increase and resembled numbers we were used to seeing in years past. Active listings started to decline despite the fact that new listings remained elevated. Prices were still moving sideways but it appeared the relationship between supply and demand was shifting.
Sounds like the perfect time for a 180 degree turn.
After this past month, I am sure that for the foreseeable future, potentially the whole year (or maybe next four years) that our economy is going to be operating under a certain level of uncertainty.
Things seem less certain now than at any point since we hit 8.1% inflation back in 2021, rates subsequently skyrocketing, and then inflation declining with rates in close pursuit.
Where did this uncertainty come from? You guessed it! Our dear neighbours to the south and their new (old) fearless leader. The Don himself.
How did our new uncertain economic climate play out in the local real estate market? I will gladly answer that for you.
To start, we did a 180 on the sales trend. In London last month there were only 248 sales which was 26.2% fewer sales than a year ago (336) and 29.14% lower than the 10 year average for January (350).
That is a shocking decline. Is it a blip on the radar or is this the start of an even newer trend? Who the hell knows is the right answer and I’m certainly not going to make a prediction.
Right now, the average Canadian is way more concerned with tariffs and layoffs than they are about interest rates and inflation. And guess which one of those things is the least predictable.
The unfortunate thing is that these tariffs are going to loom over the economy until something concrete changes. If this proverbial bucket keeps getting kicked down the road every 30 days, that’s no way to live.
Moving on to the second most shocking number of the monthly stats: prices rose fairly substantially both month over month and year over year.
The average sale price in London last month was $635,604 up 5% from the month before and 4.4% from January 2024. That a significant change and it marks the highest average sale price in January since 2022.
I want to share with you a fun little stat that I was told in my first month ever of being a Realtor. It goes like this:
If you own a home in London, Ontario for at least 4 years, you will never “lose” money.
Essentially it boils down to this: the average sale price in London has always increased, and I do mean always, every 4 years. Sometimes the increase isn’t that much, sometimes it’s a lot. But for all of the years that I have data, this has proven true.
2025 is really going to test that stat.
We are comparing the average sale price in 2025 to that of 2021 and things could be very dicey. 2025 surpassed 2021 in January by a mere $20,426.
Given that number, we can calculate that over the 4 years since 2021, the average sale price has increased 3.3% or 0.8% per year. Hands up if you want that return from your investment portfolio.
Just FYI the average sale price in December 2021 was over $700,000 which means the market has a long way to go if it’s going to beat that.
New listings did not disappoint at a robust 733 in January, 13.3% higher than January 2024 and 23% higher than the 10 year average. This was not surprising to me considering how many of these “new” listings were just homes that didn’t sell in 2024 being relisted in 2025.
This would be a fun but impossible to track stat that I would like to see: what is the average number of times a home is listed before it sells in 2025. Realtors prefer to relist a home at a new price rather than do a traditional price reduction but there are also a lot of homes that are relisted after the initial listing expires. Does anyone else care about this? Just me? Cool, moving on.
The low number of sales and high number of new listings led to a big increase in active inventory. There were 1265 homes available for sale in London at the end of January. That number was 1164 at the end of December but it was only 1015 at the end of January 2024.
The numbers point directly to this being a “buyer’s market” but I maintain that it just isn’t working like that in reality.
New listings that are truly new listings, not relists from 2024, priced well, presented well, are selling quickly and in some cases through multiple offers. There are definitely buyers out there, a lot of them want a deal, but prices remain sticky. Why? Because sellers aren’t distressed. Again, it’s not really a buyer’s market out there.
Thank you for reading, I will be back in a month to pick this story up with February’s fine stats. Until then, buy Canadian?
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