Waterloo Region Real Estate Market Update – June Edition
Typically, spring is one of the busiest times of the year for the real estate industry. However, this year we saw a record low for April. This was due to the lockdown measures in place and because of this, finding or buying a home would be made a little more difficult. As time continued to pass, we would see the industry begin to adapt as measures were lifted and protocols were put in place.
Many initially feared the market would take a heavier hit. Interestingly, while sales have dropped compared to previous years, the average home prices remain stable, and in May, we saw some positive results.
The average days to sell in May was 20 days. 419 residential homes were sold through the Multiple Listing System (MLS® System) of the Kitchener-Waterloo Association of REALTORS® in May 2020, according to KWAR. Although it showed a 40.5% decrease from May 2019, this was an 80% increase compared to April 2020, showing strength in the market and promise for the coming Summer months.
- Detached homes: 255 sold – 41% decrease (from May 2019)
- Condominium Apartments: 42 sold – 42.5% decrease
- Semi-Detached Homes: 43 sold – 29.5% decrease
The Average Sale Price Of All Residential Properties Sold In May
“In May we saw the strong appetite for homes in the Kitchener-Waterloo area is still very much alive,” said Koehler. Covid-19 has had a definite impact on the market, but that does not mean home values have plummeted. In fact, we’re seeing an increase across the board in the average price of all residential properties sold in May.
- All residential properties: $568,275 – 6.5% increase (from May 2019)
- Detached homes: $657,274 – 5.4% increase
- Apartment-Style Condominiums: $330,336 – 0.6% increase
- Semi-detached Homes: $482,479 – 11.4% increase
- Townhomes: $454,197 – 13% increase
New Home Listings in May
Koehler notes that many would-be-sellers were reluctant to put their homes on the market due to the uncertainty surrounding the quarantine, although the buyers market is still showing signs of strength and growth.
- There were 577 new listings added to the MLS® System in KW and area last month, a decrease of 48.7% compared to May 2019, which saw 1,035 listings.
- The total number of homes available for sale inactive status at the end of May was 567, a decrease of 43.9%.
- The absorption rate remains low, at 1.3 months, a decrease of 38.1% compared to last year. (The previous 5-year average was 2.32 months.)
Is Now a Good Time to Buy?
The reality is, there is no “one size fits all” answer as to whether it’s a good time to buy or sell a home because everyone’s circumstances are unique. As Koehler states, the pandemic has forced even the most traditional Realtors to adopt digital and virtual technology to interact with their clients and advises buyers to speak with their Realtor about the digital tools they use to minimize the need for direct physical contact. We must ensure that all of Health Canada’s guidelines are in place to reduce the risk of transmission. As we have previously stated, we have been a digital-first Real Estate Brokerage from day one, with the tools and experience to help you.
- All of our listings include a full online 360-degree virtual tour, so you may continue enjoying browsing properties from the comfort of your home.
- Electronic signature support for all documents.
- Our online move-in support platform.
- A private property web portal for Buyers.
- Online and video conferencing tools to enable virtual meetings.
What’s Ahead for the Real Estate Market?
The Bank of Canada has slashed its benchmark interest rate, lowering it to 0.25%, in response to the economic slowdown – and these interest rates are likely to remain low for the foreseeable future, according to Bank of Canada Governor, Stephen Poloz.
This is great news for home buyers looking to take advantage of lower mortgage rates. Lower mortgage rates can bring down monthly payments or increase a buyer’s purchasing power, as well as making it easier to qualify for a loan. Poloz also predicts the damage to the economy won’t be as “dire” as some have speculated.