When will the bubble burst?!
What is happening?
Starting in March 2020 (2 years ago now!) Ontario, and most of the world, started to lockdown to prevent the spread of Covid-19. Stock values fell and uncertainty in the real estate market was at a fever pitch. While most people assumed the already high home prices would begin to fall as so many people were out of work, the exact opposite started to happen. Prices started to skyrocket and they haven’t stopped yet.
While there are likely many extremely complicated causes for this, the largest is also the easiest to understand… supply and demand.
We continue to see droves of buyers looking at a limited number of homes available on the market and few new-build homes being added to the overall inventory. This is causing bidding wars that continue to push prices higher as buyers desperately try to beat out their competition.
Where are prices at today?
Here is a look at the numbers for Centre Wellington from February and how they compare to last year.
Average Sale price: $1,028,504 ($854,850 in February 2021) *This is the first time we have seen an average sale price over one million dollars.
Detached: $1,116,892 ($897,312 in February 2021)
Semidetached/Townhouse: $692,072 ($600,767 in February 2021)
Number of Sales: 40 (43 in February 2021)
As you can see the number of sales has remained steady when compared to the previous year but the average sale price has jumped by 20.3%.
When will it end?
A good way to visualize what is happening is by attaching prospective buyers to a specific type of home, for example, starter homes. We have seen local listings get over 100 showings with eager buyers, all clamouring to purchase a starter home of their own. Only one Buyer will be able to buy the home – which means that there are at least 99 more motivated Buyers looking for that a home in that price range.
If there were only 40 homes of all types and price ranges sold in February then it is easy to see how it will take months and months of new inventory to satisfy the current buyer demand.
There is certainly no end to this rush in sight, however, as we learned in March 2020, things can change quickly.
If you have a home to sell then there has never been a better time! Call us today to see how much the value on your home has gone up over the last 2 years.
Spring is just around the corner
With warmer weather on its way we have so much to look forward to!
Spring is always the busiest time of year for housing activity. This could bring good news for you if you are a stressed out and discouraged Buyer. More inventory spreads out the bidding wars and gives more opportunity to Buyers.
The warm weather also gives Sellers the opportunity to show off their beautiful gardens, lawns, fountains and ponds.
For those of you lucky enough to call Centre Wellington home, spring brings great opportunities to explore all the trails, parks, and downtown shops once again. We can’t wait to get out on Belwood Lake again, tube down the river, or go for a swim in the Elora Quarry.
If you’re new to the area or would like to call this area home and don’t know what we are talking about, give us a call and we can share with you why we love living in Centre Wellington!