October 2018 Market Intelligence

Higher Prices on Increased Volume in October

Following another interest rate hike, the real estate market in Oakville continued to increase in volume and average price in a big way. Sales volume increased by 9.4% in one month and the average sale price increased from $1,063,734.00 to $1,124,532.00 for an increase of 5.7% in one month. As you can see on the charts above, this is the first time the average sale price has broken through the $1,100,000 barrier since May of 2017. The average price increase was bolstered by the sale of quite a few homes in the $3,000,000 range as well as a few over $7,000,000. The months supply of inventory remains relatively unchanged at 3.1 months (not to be confused with days on market which is 31) which indicates a balanced market.

The market is still hyper local, meaning within this general market there are many different pockets that are performing very differently from one another. We are still experiencing some multiple offer situations but they are pretty chill compared to 2016 and early 2017. Now a multiple offer would consist of 2 or 3 offers (compared to 10-15 in “the glory days”) and the winning bids are usually the asking price or $10,000 over with both finance and home inspection conditions accepted by the sellers. Another big difference between now and then is that these multiple offers now are typically only happening on highly desirable properties that are priced aggressively, compared to 2016/2017 where you could put absolutely anything on the market and watch it get record prices with little effort.

Getting back to the 3.1 months supply situation for a moment, I also want to point out that included in that number is the 29 months supply of newly built “Custom Homes” in South West Oakville that are priced in the $2,000,000 to $2,600,000 range. There are typically two sizes of lots and corresponding homes to choose from, 60×120 ft lots with 3000 sq ft homes and 75×150 ft lots with 4000 sq ft homes. the smaller ones used to sell for around $2,200,000 and the larger ones for $2,600,000. The bigger ones are fairing a bit better these days because there are less of them available, but the smaller ones are in big trouble, they are selling for $1,900,000 now, which is a great deal in comparison to what people were paying for them in 2016/2017. A buyer’s market is defined as 6 months supply so imagine 29 months supply, it will take 29 months to sell all of these homes. A great buying opportunity there.

If the entire market is at 3.1 months supply including the aforementioned subsegment, it tells me that the overall market is really moving along very well. As a realtor I hate seeing rising prices on declining volume, that’s what tells me the end is near and a turning point is inevitable, so when I see what I’m seeing now, which is increasing prices on increasing volume, it gives me confidence in the market. I’m not a fortune teller, I don’t have crystal ball, I can’t tell you whats going to happen over the next two or three years, but I a firm believer that supply and demand determines price and with 3 months supply and rising prices on increased volume is a strong market that is still allowing for finance and home inspection conditions. It’s a solid market with 31 days average days on market (sell first, buy after).