Oakville Real Estate Market Update January 2022
The seller’s market continues to burn brightly at the start of the year and there are looming interest rate hikes coming in the spring and summer. The question on everyone’s mind is how will these rate increases effect the prices of the Oakville real estate market? The knee jerk reaction answer is that prices will go down when interest rates go up, just like the stock market, that’s what history has taught us right? Before we get too excited about potentially lower real estate prices let’s take a look at the most recent history in our real estate market and see how interest rate hikes affected us then. Looking at the graph below you will notice that I have highlighted each month that we had a rate increase from back in July 2017 all the way through to October 2018 when we had endured 5 rate hikes. We started with an average price of $1,060,000 in July 2017 and ended with an average price of $1,124,000 in October of 2018.
How is July 2017 different from now in the Oakville real estate market? July 2017 was the bottoming out point in terms of our market correction which was then triggered by “The Fair Housing Plan” brought to us by Liberal Leader Kathleen Wynn in an attempt to buy votes as she was wildly unpopular at the time for many reasons that we don’t have time to list here. The main factor that contributed to the correction of 2017 was the foreign buyer’s tax, the crown jewell of the fair housing plan led to a 20% drop in prices from April 20 2017 to July 2017 (if you look back at my market updates from that time you will see that I was urging my clients that this was a great opportunity to buy.). My point is that the Oakville real estate market, even after being decimated by a sharp drop in demand, and a huge increase in supply not caused by higher interest rates the prices actually rose during the course of 5 rate hikes over 15 months.
I am expecting that over the course of this year’s interest rate increases, we will indeed lose some demand (and that will be welcomed as we have way too much demand now), but i don’t think we will lose enough demand to see declining prices. Currently, most homes being sold are receiving 15-20 offers on each home. Hopefully a rate increase might knock that down to 10-15 offers per house, and maybe 5 rate increases might even bring that number down to 3-5 offers per house, but for there to be a drop in prices we need to experience a much bigger delta in supply vs demand and as much as I hope that will happen, I really don’t think it will happen. Feel free to check my previous predictions here: https://www.michaelenglund.ca/blog
The Oakville real estate market at a glance from March 2017 until December 2021 including average sales price, days on market, and months of inventory
Gauging the market is not possible by trying to study asking prices. In order to get an accurate idea of what’s actually happening in the real estate market you need to study sold prices. With that in mind there is a section of my website which is dedicated to studying sold prices:
The page may ask you to log in to see the sold prices. Your username is your email address and your password is your phone number if you ever registered here before. If you never registered, it’s super easy.
Hope and bad advice are adding fuel to the fire and have become a bigger part of what’s driving this market than what people think.
A professional local realtor will be much better at predicting the most likely sale price before entering a bidding war and would also advise not to enter the bidding war if the buyer is not prepared to pay the estimated winning price. Why wouldn’t you want to try to get it for less??
Because your attempt at getting for less will put unnecessary added pressure on the winner to pay more. Out of the 15-20 offers per house there are likely 10 “hopeful” offers like this that only serve to drive the prices up. If you make a “hopeful” offer you have just contributed to the next comparable property being sold for even more.
How can a professional local realtor give you an edge in bidding wars? A professional local realtor is known as such amongst their peers. The confidence that a listing agent has in the deal’s probability of being brought to a successful close will be conveyed to the sellers in most cases.
Please reach out to me to discuss any of your real estate needs at 905-399-4269.
2021 Average Sales Prices and Sales Volume in Review:
Freehold Townhouses
Average Price December 2020: $932,299
Average Price December 2021: $1,136,657
Increase of $204,358 or 22%
Freehold Semi Detached
Average Price November 2020: $963,544
Average Price December 2021: $1,323,767
Increase of $360,233 or 37%
Detached Homes
Average Price December 2020: $1,724,769
Average Price December 2021: $2,135,315
Increase of $410,546 or 24%
Condo Apartments
Average Price November 2020: $666,023
Average Price December 2021: $748,596
Increase of $82,573 or 12%
Condo Townhouses
Average Price December 2020: $635,669
Average Price December 2021: $839,999
Increase of $204,330 or 32%
Click on these links to see up to date, current average sold prices for each property type in each neighbourhood in Oakville:
https://www.michaelenglund.ca/bronte-west-real-estate
https://www.michaelenglund.ca/bronteeast
https://www.michaelenglund.ca/oldoakville
https://www.michaelenglund.ca/southeastoakville
https://www.michaelenglund.ca/palermowest
https://www.michaelenglund.ca/collegepark
https://www.michaelenglund.ca/glenabbey
https://www.michaelenglund.ca/iroquoisridgesouth
https://www.michaelenglund.ca/westoaktrails
https://www.michaelenglund.ca/riveroaks
https://www.michaelenglund.ca/uptowncore
https://www.michaelenglund.ca/ruraloakville
https://www.michaelenglund.ca/iroquoisridgenorth
Categories
Recent Posts
