It’s safe to say: the average home value in Guelph is back to what it was in the summer of 2021.

Guelph real estate buyers are taking control

Although technically we’re in a sellers market in Guelph real estate, buyers seem to be taking their time to do much of anything. And, as a result, are seemingly in charge into December.

Our monthly GuelphToday video this month talks about an interesting dynamic in the local real estate market. One where there are more listings than last year and seemingly no new ones. In this market of almost monthly rising interest rates, buyers are waiting to see what shakes out in the next rate announcement. Less new inventory, less buyers and as a result, a stagnant market.

Reminds us of April 2020

In the early days of COVID, the real estate market came to a grinding halt. Buyers weren’t doing anything, while sellers were caught completely off guard. Prices plummeted as no one was sure what the next weeks or months would bring.

Although a much less swift decline, todays market is reminiscent of those days but dragged out. At what point will the buyers come back? When interest rates stop rising?

Less new listings

As of Dec 13, we have 177 active listings in Guelph. This time last year. Because our team watches data weekly, we can tell you that at this time last year we had only 46 listings. That’s a 300% increase vs 2021.

The difference is that last year, interest rates were still quite low and buyers had no reason not to buy. It was full steam ahead and buyers were starting to get a little panicky. After all, listings were decreasing by about 10% per week.

As we all know, it got much worse. Eventually we got to an incredible 15 listings- yes 15- for all of Guelph in early Jan 2022.

But we don’t see that happening this time. That’s because we’ve had a serious pullback in buyers.

Fewer buyers means greater home value

You’d probably be under a rock if you didn’t notice the headlines today. They’re all about high food costs, high rent and rising interest rates. As of the December 7th interest rate announcement from the Bank of Canada, we’re now at 4.25%.

These increased interest rates directly impact consumers ability to purchase homes, both from a qualifying perspective and a cost perspective.

A buyer who would qualify a year ago for a $1 million home value may now only qualify for an $800K home now. A buyer who had an interest rate below 2% in 2021 may be looking at 5.5% today.

And, not to mention line of credit rates. They’ve gone up every single month since March and those who do rely on them for borrowing are feeling a big pinch.

All of this means that buyers are thinking long and hard about purchasing a home. Does their budget allow them to purchase the home value they want? That’s if they even qualify. What are their “new” monthly expenditures on things like groceries, car payments, lines of credit and more.

This hesitation has also impacted sellers- instead of “trading up” their new home, they’ve decided to resist the urge to take on more debt or a bigger mortgage. Less sellers, less buyers and a really weird market.

Levelling off of home value

All of this means prices have declined- and perhaps, levelled. For now. There are glimmers in the local real estate market that we’ve seen some support at certain levels.

Overall, 4 of the last 5 months in Guelph have had a median sales price between the very tight range of $725,000- $730,000 (all types of home). In the stock market, this is called “consolidation” where prices move in very tight range until something happens.

Either they move upwards or downwards

Median home value in Guelph 2019- 2022

Home value by home type

Detached homes are selling in the median range of $800,000, which is a price range that we consistently saw in the summer of 2021. This type of support typically means that buyers and sellers are comfortable in this range. It will break one way or another in the coming months.

The brightest spot here are smaller detached, which we notice a rebound. This makes sens as buyers evaluate whether they buy a condo or for slightly more move into small bungalows for sale in Guelph.

Townhouses are back to their median range of $600,000- $650,000. We’re back there again after November 2022, again a number we saw in the summer of 2021.

Condos are on trend with both detached and townhouses, back to summer 2021 levels. The bright spot here are 1 bedroom units which saw a boost in median price.

One thing to note with both townhouses and condos are that they have monthly fees. These fees directly impact the services they offer: snowplows, landscaping, garbage removal, pools etc. If the costs of these go up, so will your monthly fees.

Be sure to have an offer contain a review of a Status Certificate if you purchase, so that you can review the financials.

To us this makes sense, as first time buyers jump into this segment. They are now comfortable after being priced out last summer.

What does all this mean?

Of course, if we knew the Guelph home value for 2023, we’d be geniuses. But, it’s important that you work with Guelph real estate agents who are active in this market. They’ll know the trends and can negotiate the best deal for you, whether you’re buying or selling.