The number of homes sold in the jurisdiction of the London and St. Thomas Association of REALTORS® (LSTAR) fell by 34.8% in August from the same month last year, but saw an increase over the previous month, which indicates a soft landing of the local real estate market. More specifically, 607 residential transactions were recorded last month by LSTAR’s MLS® System - 324 less than a year ago, but up by 93 units from July.

“The softness seen over the last few months in the local real estate market was, undoubtedly, caused by the continuous rise in the mortgage interest rates, which has translated into higher borrowing costs,” said 2022 LSTAR President Randy Pawlowski. “However, the sales-to-new listings ratio, which reflects the share of new listings out of the total number of home sales, increased from 41.8% in July to 56.7% in August, moving our market into a more balanced territory,” he added. “This is encouraging, as it could signal a bit more support for the home selling prices in the coming months.”

In August, LSTAR’s composite MLS® Home Price Index Benchmark Price was $599,500, down 4% from July. However, this value is still 0.5% higher than the figure recorded for August 2021. Similarly, LSTAR’s overall average home price dropped slightly from $667,323 in July to $648,036 in August. Compared to the same period last year, this figure is still 5.2% higher. This represents a trend the majority of local markets are experiencing across the country, according to the Canadian Real Estate Association (CREA).

“When looking to buy or sell a home, it’s essential to remember that each transaction is unique and does not always reflect the trends observed in the overall activity of the local marketplace,” Pawlowski said. “Especially in changing markets, the expertise and real-time data provided by your local REALTOR® can be invaluable resources.”

The following table shows how August’s average home sales prices in LSTAR’s main regions compared to the benchmark prices for the same areas.

Area

August 2022 MLS® HPI Benchmark Price

August 2022 Average Price

Central Elgin $609,700 $731,641
London East $488,900 $504,787
London North $714,600 $777,251
London South $594,200 $630,632
Middlesex Centre $851,000 $1,335,846
St. Thomas $520,600 $582,851
Strathroy-Caradoc $719,800 $570,692
LSTAR $599,500 $648,036

“The single-family home remained on top of the local home buyers’ preferences - with 473 units sold - but apartments saw the largest gain in average price, increasing 5.4% over the same time a year ago,” Pawlowski said.

The following table shows the August benchmark prices for all housing types in LSTAR’s jurisdiction and how they stack up against the values from the previous year.

MLS® Home Price Index Benchmark Prices

Benchmark Type

August 2022

Change over August 2021

LSTAR Composite $599,500 ↑ 0.5%
LSTAR Single-Family $637,600 ↑ 0.0%
LSTAR One Storey $576,100 ↑ 1.9%
LSTAR Two Storey $679,600 ↓ 0.9%
LSTAR Townhouse $511,700 ↑ 1.4%
LSTAR Apartment $421,600 ↑ 5.4%

“When compared to other values recorded provincially and nationally, homes in our area continue to remain relatively affordable,” Pawlowski said. The following table shows HPI benchmark prices for August, courtesy of the Canadian Real Estate Association (CREA).

According to a research report by Altus Group, a total of $73,250 in ancillary expenditures is generated by the average housing transaction in Ontario over a period of three years from the date of purchase.

“In other words, our August home sales could potentially bring more than $44 million in spin-off spending to our local economy over the next three years,” Pawlowski concluded.

Posted by Brian VanBart on
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