London is no longer one of Ontario’s best kept secret housing markets. With the average home price in Canada being over $460,000 and climbing, London has been for years an undervalued market for real estate. Consider London’s geographic position midway between Toronto and Detroit, on the 401 and that it has a greater area population of over 450,000 people. That alone makes it’s average house price of $300,000 extremely attractive. Add to that 2 major post secondary institutions, and the investment market also gets a large boost.
London Buyers Miss Out
More and more home buyers from London, are going to miss out in multiple offer situations. The London real estate market has been a balanced market (predominantly) with short swing periods of seller or buyer markets, and Londoner’s are more comfortable with a slower rate of pace for home sales. The prolonged sellers real estate market is going to cause homes to sell more quickly, and multiple offers on homes for sale will become the norm for a while. Buyers coming from the GTA or other hot markets are more prepared for this, since it’s been a decade of this type of real estate market, as well as prices going for well over asking at times. The supply of great properties is also lower in comparison to the overall market, which makes them a bit of a feeding frenzy. It seems the modern buyer would rather pay a premium for a home with little or no work to do, than to make changes themselves. When a Londoner has decided to submit an offer on a property, and they find out it has 6 offers in, and are told it will probably sell for $30,000 over asking, they are having a hard time pulling the trigger, and being beaten out. This will add more time and frustration to the home search for most buyers.
Not Only London Buyers Missing Out
It won’t only be the home buyers in London missing out. I also see real estate sales representatives having a hard time reacting to the market, and wanting to stick to their guns on their valuations when advising their clients using comparable sales data. If your sales representative isn’t also taking into account the activity in the market, the number of submitted offers on a home etc, buyers will be missing out on advice from their agent as well, and will need to keep looking a lot longer.
London’s new build sector will also be impacted seeing not only a shortage of building starts, also with the price for the lots. We’ll talk about that in Part 4.