With COVID-19 cases rising in Ontario, there may be a continuing surge in home sales in anticipation of another lockdown, Waller says.
There were many predictions on how the housing market would be impacted during the initial COVID-19 lockdowns, with a major concern of a market correction.
This didn’t happen.
Instead, there was a pause in activity and the Spring market was squeezed into June, July and August where buyers were scrambling to buy homes in Guelph.
Through August, overall dollar sales have increased by almost 6%, at the same time the number of homes sold overall has decreased by 6%. As a result, this means that the average price of a home in Guelph has increased by about 12% this year for single-family homes.
This doesn’t mean that all Guelph homes have increased 12% in price. Although there is some appreciation, the main contributor is s greater number of higher-end homes selling since the start of COVID-19, which is driving the overall average price up.
There have also been some new trends that have emerged in the past few months. This includes a spike in popularity (and prices) of Guelph homes with pools. Also, amenities such as backyard entertaining areas and homes with landscaping already completed. Lumber, appliances and contractors are in huge demand this year. People are doing more home renovation projects instead of getting away. Sales in South and East Guelph have been leading the way as they are more commutable to the GTA.
And like many industries, COVID has changed the way real estate transactions are handled. From REALTORS® showing houses in less time to fewer people, touching less and no public open houses.
COVID-19 safety precautions are in place
In this Spotlight, Beth and Ryan Waller, Guelph REALTORS® discuss the influx of Guelph home buyers coming from the GTA. Although public open houses are permitted, not everyone is participating.
“It’s not in the best interest of anyone to participate in public open houses right now,” says Beth. “Of the open houses that are happening, you have to wonder who is benefiting.”
September is traditionally the start of the “second spring market”. Listings rise as sellers have their kids back in school and want to make a move before Christmas. Halfway through September this year, sales have averaged close to 4% over asking price. This is despite an initial rise in listings. Those new listings were quickly bought up.
Almost 50% of listings sold in Guelph in September were homes that were on the market 7 days or less.
With COVID-19 cases rising in Ontario, are we going to see another surge in Guelph home sales? Will people rush to buy a home ahead of a potential lockdown?
Guelph real estate market not slowing
It may be one of the reasons that over half of all homes listed in Guelph have sold over the asking price.
“We get asked fairly often how the market performed during COVID. It’s not in the past – we’re still in the midst of COVID,” says Ryan Waller.
Using the initial period in March as a guide, we could expect similar behaviour in the market. That is, a “quiet period” of little activity, followed by a rush of buyers. Should this play out, it would mean that the slow month of January would be the start of the next buying frenzy in the market. Update: that’s what happened!
With just over one month’s inventory available, Guelph is already in a strong seller’s market. Add in record low interest rates and you have a dangerous recipe. This includes an extremely aggressive and sometimes irrational seller’s market in the coming months.
Source: GDAR 2018-2020 single family residential home sales.