Supply and demand is a fundamental concept of economics and the backbone of a market economy. When it comes to real estate, the more demand there is for homes, the higher prices go. And on the other hand, more supply to choose from means buyers can shop around for the best price.
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 to buy what’s available, often at 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.
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.
2018 Guelph real estate trends
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.
These neighbourhoods are facing challenges for sellers
In South Guelph, there continue to be challenges with excess supply and less demand, resulting in 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, but mainly it’s due to greater supply than demand in these neighbourhoods, putting 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 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: Where to get started
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.
Ryan Waller is a Sales Representative at Home Group Realty, a volunteer with Onward Willow Neighbourhood Group and a member of the Guelph Chamber of Commerce. If you would like further information or to discuss your home specifically, please call 519 546 3390 or email firstname.lastname@example.org. More information on Ryan can be found at http://www.ryanwaller.ca