In a real estate market where things are always seeming to change, it’s the age old question we get as Guelph realtors: what’s the market going to look in like in 3 weeks from today? 10 weeks from today?
A supply and demand real estate market changes with the seasons
Like many industries, real estate has its own seasonality. Traditionally, the strongest sales months are March, April, May and October making it a great time for sellers to fetch higher prices in an active housing market.
November, December and January are typically slower months meaning buyers can take advantage of less competition. Consider it an off-season discount.
This month, we look back on a January that was almost identical to January 2021 in terms of houses sold, but the key difference is that the average price was much higher.
In early February, the Guelph real estate market started to build inventory, for a variety of reasons including interest rate hikes, an uneasy stock market and sellers noticing higher prices around them. Now, mid February: we’re at 100 houses on the market. Just four weeks ago that number was 50.
Interest rate hikes are likely to start in March, with a forecast of a total of four in 2022 totalling 1%. These hikes only impact those who are on a variable rate mortgage, not fixed rates. For more on the pros and cons of each, you can read our blog: Variable vs fixed rate mortgage
So where does that leave us 3 weeks from today?
Well, depending on when you read this post, 3 weeks from today is going to change. 3 weeks from today right now is March Break in Ontario and a pivotal time for real estate. It marks the beginning of the Spring Market.
The end of the holidays and the season’s pleasant weather provide the perfect conditions for house hunting. Put simply, buyers tend to flood the market in the spring – and they’re ready to make a move. Sellers usually like to wait until spring because the snow is gone.
Houses tend to look better when there is greater curb appeal! Trees blooming, flowers growing and green grass are all emotional elements for buyers. In the springtime, it doesn’t take much to make your home’s exterior look incredible versus a snowy, ice covered driveway in November.
Due to COVID in March/ April 2020 and 2021, the market was not in it’s usual pattern. As you could expect, March 2021 was the peak of COVID which sidelined many buyers and sellers. However, once May 2020 rolled around, buyers rushed back to the market and the frenzy began.
In 2021, there was more of a traditional real estate market in Guelph with average prices of a house in Guelph hitting new highs. This calmed down in July and August before ramping up again in the fall months. Traditionally, summer months are stuck somewhere in the middle, quite possibly because buyers and sellers spend more time vacationing and enjoying the warmer weather.
What do we anticipate in Spring 2022?
We wrote an article with our best guess for 2022. When we look ahead 3 weeks from today, we’re going to be coming up to the period of time where we anticipate increased supply to peak. In fact, the volume share of non-Guelph real estate brokerages has increased significantly over a 2-year period in Guelph, reaching over 40% of sales in 2021.
Each month, we produce real estate videos for Guelph Today. These videos are meant to give a snapshot of how the Guelph real estate market is performing. It seems to be changing so frequently that each month the videos are completely different!
Real estate trends are just basic numbers
In 2021, the average sale price of City of Guelph homes grew an incredible 23%. But are all neighbourhoods in Guelph seeing these trends? Not all the relevant information is available online through apps like HouseSigma, so you need a real estate agent who can help you navigate the city.
These Guelph neighbourhoods are facing challenges for buyers
In South Guelph, there continue to be challenges with lack of supply and demand from buyers. As a result, multiple offers are common with new highs happening on a daily basis.
In particular, Kortright East, Kortright West and Pine Ridge neighbourhoods have surpassed the City average in 2021.
For those looking for a townhouse or semi, you’ve likely noticed how competitive it is in the east and south ends of Guelph- these areas remain very hot for two reasons: they’re in a price bracket that is suitable for many first time buyers and they are located in a commuter friendly location to the Greater Toronto area for those who need to commute occasionally.
Further, the price of detached houses in Guelph has skyrocketed. Where you could buy a bungalow in Guelph for under $500,000 in 2019, it’s now above $900,000 in 2022.
Competitive areas mean higher prices
The downtown neighbourhoods have become significantly more competitive. The downtown core, Exhibition Park, and St Georges Park have an increase in prices because supply and demand is imbalanced.
As a result, averaging a sale price that is 108% of the original asking price. Because there is limited land to build on and short supply of houses available, demand is far outpacing supply. You can’t expand the downtown area housing if you don’t have the land. However, the next phase is further development and gentrification of older downtown areas such as the Ward (related read: Tim Hortons near me: how business impacts real estate).
We’re starting to see a trend of bungalows where the roofs are taken off and the builder adds a second storey on top- and sometimes a garage on the side. This doubles the footprint of the house and if the neighbourhood can support it, a doubling of the price as well.
For longer term potential, data is showing strength in the Willow West/ Sugarbush/ West Acres area, as well as Dovercliffe on the west side of the Hanlon Expressway. Many homes here were built in the 1970’s and 1980’s. They have mature trees, family oriented neighbourhoods and standard city sized lots. They also have space that may be good for working from home for those who may work in the Greater Toronto Area but have the flexibility to work at home.
Opportunity areas for buyers in 3 weeks from now:
What are 3 areas of Guelph that could outpace City growth in the coming 3 weeks from now? Even moreso in the coming months include neighbourhoods outside of the downtown core. Riverside Park, General Hospital and Onward Willow are key. These areas offer a discount compared to downtown neighbourhoods and many of the same housing styles. The most desirable and versatile is the post war bungalow. It can be used by downsizers, first time buyers or modified for a legal accessory apartment. All three of these neighbourhoods offer that style.
Your next real estate move: get started with a Guelph real estate agent
Regardless of where you live in Guelph, if you’re considering selling you’ll need a Realtor® with a marketing and negotiation strategy. This strategy should also include recent comparable sales and neighbourhood statistics to justify the proposed listing price. If you’re buying, you’ll need a Realtor® who understands your goals, timelines and situation
Have any questions? Get in touch with Guelph real estate agents Beth and Ryan’s team directly, they’re happy to help!