2019 Market Review: 2020 Real Estate Predictions in London, ON

Let’s take a look at some predictions for the real estate market in 2020 for London, Ontario.

To quickly recap:

• Sales grew in the 2019 market - it was 3rd highest year recorded

• Prices grew by 45%

• Supply is not meeting the demand of the market

In 2020, I think we can expect to see a shortage of homes for sale, and the demand (along with prices) to grow as well.

Why a shortage?

Immigration plays a role in the real estate market, whether it be international students or empty-nesters from the GTA. London is an attractive place for folks from the GTA because London has a lot of great infrastructure, not to mention the real estate is cheaper. We have a wonderful healthcare system, and the amenities London has to offer is still quite substantial.

The economic base is strong as well. LHSC, Western University, and Fanshawe college are 3 huge employers here in London, not to mention the large growth we see in other industries and sectors.

We also see historically low interest rates, and it wouldn’t surprise me to see those interest rates stay where they are. Even though London is experiencing a strong real estate market, there’s a lot of Ontario cities that aren’t; there’s even a lot of Canadian cities that aren’t. As lending rates stay low, it allows first time homebuyers to continue to push into the real estate market, and there’s still demand in the upper-end price ranges.

It’s a Seller’s market

There is strong demand across all price ranges and all houses are moving, so it’s a wonderful time to be a seller in the London real estate market. I think we’ll continue to see that in 2020, unless we get a huge push in supply where all of a sudden we are flooded with houses on the market. But even still, there is such a pent up demand that we would chew through that supply pretty quickly. We would need to see a lot of houses on the market to return to a balanced market.

Unless something substantial changes with immigration, London’s economy, or lending rates, I think we’ll continue to see 2020 be a strong sellers market. We’ll continue to see the prices grow, and we’ll likely see more and more homes sell.

Have someone on your side

At any rate, it is an important time to have a realtor on your side - buying or selling. It’s a very competitive market out there. As a buyer, you want to have a realtor out there who knows how to navigate that competitive market, and help you get the property that you want. As a seller, it’s important to know how to market your home and position is properly on the market for potential buyers, in order to maximize those dollars.

As always, if you have any questions about what’s going on in the real estate market, I would love to hear from you.

Click the button below to send me an email.

2019 Market Review: House Prices in London, ON

Let’s talk about what has happened with home prices in 2019. Have they gone up, like we have seen in previous years? Or have they dropped? Unless you have zero interest in real estate, then you likely know that things have been good for London real estate prices over the past few years and 2019 was no different. 

A price increase…

Prices jumped by just over 10% year over year, meaning between 2018 and 2019, prices were up across the city by an average of just over 10%. See Table 2.1.

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Table 2.1 Sales Price vs. New Inventory

2019’s growth is stacked on the past two years of record breaking price growth. When looking over the past three years, we see that prices have grown a whopping 45%. It has been a good time to be a home owner over the past three years in London. 

But why are prices growing so rapidly? Let’s look at Table 2.2.

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Table 2.2 Historic Average Sales Price/Year

Trends over the past year see the number of new listings hitting the market (supply) declining, and the number of sales growing (demand). If we were to look more specifically at 2019, we can see that anytime we were low on inventory, prices grew. On top of that, if we saw an increase in inventory, we didn’t actually see prices drop, which compounds the growing prices. As long as we continue to see low supply and growing demand, we will see prices rise. 

On a regional basis

Let’s take a look at how the prices shake out in the different regions of London. East London continues to be the most affordable with an average price of $323,041, while the North was most expensive at $491,668 and the south landing in the middle at $416,420. While those numbers are nice to know, what we really want to know is how have these numbers grown over the years? See Table 2.3

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Table 2.3 - London Average Sales Price by Region

To be honest, when we look at the three different regions of the city, there are no real exceptions. All areas over the past five years have grown equally, with less than 1% deviation. 

Living in an ecosystem

While this breaks down the city a little bit, and as much as we look at London as a whole market, each neighbourhood is like it’s own little ecosystem. There are factors at play in each community that will affect supply & demand, as well as prices. This is why I send a complimentary home evaluation to all my past clients within the first few months of the year to show them exactly what is happening in their neighbourhood and what their home is worth.

Here is my offer to you: if you would like to have me provide one of these complimentary home evaluations for your community and home, then send me a message and I will be in touch with the details.

2019 Market Review: Sales in London, ON

2019 was another exciting year in real estate here in London and I am going to take sometime and break down some of the numbers for you. It is important to understand what it actually means, to help us look forward into 2020. If you love numbers, then you are going to love this video.

Diving into the numbers

Let’s start by jumping into the number of sales - the actual number of houses that sold in 2019. We want to know if they’ve gone up or down, how it compares historically, and the areas are that had more sales than others. 

We saw 6,607 homes change hands in London proper.  To give you a sense, that is the third highest we have seen since we started recording the stats back in the 80’s, only topped by 2016 & 2017. (See Table 1.1)

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Table 1.1 - Number of Sales vs. Primary Year

If we look back over the past ten years, our lowest sales were around 5400 homes sold, and our highest in 2017 at 7500 homes sold. So, a 2000 home variation. Why is that important? (See Table 1.2)

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Table 1.2 - Sales vs New Listings

The battle of Supply vs. Demand

Well, we see that the number of new listings have steadily been decreasing over the past ten years and the number of sales have been increasing. Inventory continues to decrease while overall demand is growing. If we look specifically at 2019, we see that around 75% of all new listings are selling. This is the stat that would indicate we are in a market that favours sellers.

Let’s take a quick look at how home sales were broken down by each area. At some point, West London was exiled and so we have London broken into three areas.

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Map of London with Number of Sales for 2019

We can see that London North had the highest number of sales, and East London actually had the fewest sales. I will leave that for now, as I will explain why that is important when we look at price in these areas in the next video.

Overall, 2019 was reminiscent of what we saw in 2017 & 2018. Check out the next post where I break down what happened with London home prices.