It’s beginning to look a lot like…. Too soon? Maybe for some, but as we wind turn the page from October to November, it’s the beginning of the holiday season in our household. How soon is too soon to put up the tree? We were discussing last night. I’m in favour of waiting until December 1st but my wife thinks mid November sounds juuuuuuust right. Regardless, November is here and we can look back on the month of October and smile (or cry, or laugh, or ignore it).
Last month was not the best month in the London real estate market that any of us have ever experienced. Was it the worst? Maybe, depending on how you look at it. The trends that I have been keeping an eye on over the past few months continued and there have been no major shifts in the dynamics of the market that might make us think things might change anytime soon. Again, whether or not that is a good thing is highly subjective and is probably different for most people.
On an anecdotal note, things are very quiet in the real estate world. I believe all of my colleagues would agree. Buyer activity is low, as evidenced by our upcoming stats, but you can just feel it out there in the streets.
Alright, let’s dive in to prices to begin with. Last month, the average sale price fell to $604,506 which was down for the 6th month in a row. We have now lost about 10% from the high point of 2023 in April at $666,975. Like I said, nothing new in terms of market trends this month. I am actually surprised to see that the average price has only dropped 10% since April which is a testament to how stubborn sellers are. I kid, I kid. Stubborn is not the right word. The reality is, there are just not as many “desperate” or “distressed” sellers as a lot of people think there are. If folks were being forced to sell their homes at a larger rate, we would have seen a bigger hit in average sale price. But those situations are not contributing in large numbers to the actual sales that are happening. Another point I would like to make about the average sale price: far fewer high end homes are selling. There is a lot of inventory in the 1.5M+ range, but almost zero sales. Not surprising, but it is worth considering when we evaluate the actual state of the market.
Number of sales is also down, coming in at 339 across London. I like to compare that figure to what we might have expected in years past, and on average, we would have seen just over 520 sales in the month of October. So we had only 65% of the 10 year average. Not great. Again, I know there are a lot of people that would like to move into a new home sometime soon, but are prevented from doing so by these market dynamics.
Number of new listings was high, coming in at 885 which would represent a surplus of 25% over the 10 year average. Those two diverging numbers continue to go their separate ways, something we have grown accustomed to this year.
The result is just a ton of inventory sitting on the market. Active listings are now at 1407 in London, again, more than I have ever seen in my time as a Realtor. There are a gluttony of attractive listings available today but the buyers just aren’t there.
Other stats that I keep an eye on, and they all point to the same thing. Sales to new listings is at 38.3% and months of inventory is just over 4. The market is screaming “BUYER’S MARKET” for any buyers that care to listen.
Something else I took a look at this month, days on market and days to sell. Those numbers are two different things even though they sound similar. Days on market apply to all active listings and days to sell applies only to listings that actually sold, which according to the data this month is only about 38% of them.
Average days on market is currently at 50. Meaning the 1407 active listings have been available for 50 days on average. This number is slowly creeping up and has been for a few months.
Average days to sell however is only 25. So houses that are going to sell typically do so around 3-4 weeks. If your home has been on the market for longer than that, it is time to very seriously look at the price of your listing. Unless you have been receiving feedback indicating some other defect or deficiency with your home in the eyes of any potential buyers, the answer is always price.
I was curious if any price point was selling faster than others and there was some interesting data there. Homes under $500,000 sold on average within 26 days. Home between $500-700,000 sold in 22 days. Homes $700-900,000 sold in 25 days. And finally, homes $900,000 or more sold in 26 days. That middle price point remains the most attractive.
Also of note, very few homes are selling for more than they are listed for or in multiple offers. In almost all cases, buyers are negotiating with sellers for a price under the list price and without competing against other buyers. Again, something that almost all buyers were clamouring for less than 24 months ago. Those market conditions should be attractive to anyone who wants to get into a new home this year.
I am curious to see if any of these trends reverse course over the next few months. I don’t think they will, but I do think that new inventory will start to shrink as it always does over the winter months. Will that be enough to tighten up the market and bring some urgency back into the equation? That remains to be seen.
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