London’s real-estate market has been red-hot in recent years – so it was a question of when, not if.
And August was the month that the average home-sale price in the London region shot past the $500,000 mark – a once-unthinkable milestone that underscores the surging local market but also tightens the binds even more on young would-be buyers.
“It’s been a very hectic market,” said Blair Campbell, president of the London and St. Thomas Association of Realtors (LSTAR).
“Passing the half-a-million-dollar mark is a big milestone, one that I thought we would make probably within the next six months anyhow, but this has happened a little sooner than I personally anticipated.”
The LSTAR region includes London, St. Thomas, Strathroy and parts of Elgin and Middlesex counties.
Its just-released figures, for August, show:
The average home-sale price here is $501,584 That’s a jump of 22% over August 2019 – and a whopping 55% more than August 2017 It was just last year that the average local price cracked $400,000 931 homes were sold here, the second-best August on-record (data goes back to 1978) A monthly record was also set in July, when 1,275 London-area houses were sold While many national forecasts predicted home prices would drop nationwide due to COVID-19, the pandemic has had the opposite effect locally, Campbell said.
“I think it’s been a very high-demand time with low inventory and that’s driving the price up faster than expected,” he said, adding people who put off buying a new home in the pandemic’s springtime early days did so in the summer.
He added: “(There’s also) a bit of demand from people who typically buy in the fall months (but) have concerns over a second wave, so they are saying: ‘Hey, let’s speed things up and act now as well.’”
Home prices continue to be driven by deep-pocketed buyers from the Greater Toronto Area, a trend Campbell said he doesn’t see ending any time soon.
“That baby boomer generation is still retiring over the next 10 years,” he said. “And if you can sell a much-higher home price (elsewhere) and move to an equal home and put away a sizable amount for your retirement fund, that’s an attractive option.”
But not everyone is celebrating.
The surging market is making it even harder for young families and first-time buyers to purchase a home, said Austin Titus, a broker with Century 21. A growing number need their parents to co-sign or help with down payments.
“A lot of these buyers out there are making, you know, good money at the $60,000, $70,000 income range, and they’re still having difficulties getting a home on their own,” Titus said.
“Parents are stepping up to the plate,” he added.