Supply and demand is a fundamental concept of economics and the backbone of a market economy. Take a look at Guelph to get an idea of just how little supply there is right now

A market that 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.

So where does that leave summer?

Summer months are stuck somewhere in the middle, quite possibly because buyers and sellers spend more time vacationing and enjoying the warmer weather.

However, this year trends have shifted. July 2018 was a record July in Guelph in terms of houses sold. Average home prices also reached a record high of $503,000 in July, within Guelph.

But why?

One theory is that Greater Toronto Area (GTA) sellers are “cashing out” of their higher priced homes and moving to Guelph where the same sized home is significantly cheaper. In fact, the volume share of non-Guelph real estate brokerages has increased significantly over a 2-year period in Guelph, reaching over 30% of sales at the peak in 2017.

Year to date, the average sale price of City of Guelph homes is 99.6% of the original asking price. But are all neighbourhoods in Guelph seeing these trends? In short: No.

Some information you can’t get from Guelph, which includes neighbourhood trends. Beth and Ryan can help with that.

These neighbourhoods are facing challenges for sellers

In South Guelph, there continue to be challenges with excess supply and less demand. As a result, many price decreases as sellers get more competitive to sell to potential buyers.

In particular, Kortright East, Kortright West and Pine Ridge neighbourhoods have lagged behind the City average in 2018. Combined, these neighbourhoods are realizing sales prices that are 98.5% of the original asking price.

There are a variety of factors that could influence this. For instance, greater supply than demand in these neighbourhoods puts pressure on prices.

Competitive areas mean higher prices

The downtown neighbourhoods have become significantly more competitive: The downtown core, Exhibition Park, and St Georges Park.

Part of the desire is walkability. Major downtown attractions include the Guelph Museum, Guelph Library and River Run Centre and Sleeman Centre.

As a result, averaging a sale price that is 100.7% of the original asking price. Because there is limited land to build on and short supply of houses available, demand is far outpacing supply.

For longer term potential, data is showing strength in the Willow West/ Sugarbush/ West Acres area at 100.4% of asking in 2018. With many side split and back split layouts selling well over asking.

Many of these homes were built in the 1970’s and 1980’s and have mature trees, family oriented neighbourhoods and standard city sized lots.

Opportunity areas for buyers

Three areas of Guelph that could outpace City growth in the coming year include fneighbourhoods outside of the downtown core: Riverside Park, General Hospital and Onward Willow. These areas offer a discount compared to downtown neighbourhoods and many of the same housing styles including the desirable and versatile post war bungalow, as 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 Guelph

Regardless of where you live in Guelph, if you’re considering selling you’ll need a Realtor® with a marketing and negotiation strategy to ensure your home stands out from the rest to maximize your sale price. 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 to ensure they find the best house at the best price for you.

Have any questions? Get in touch with Beth and Ryan directly, they’re happy to help!