Market cools off in June

London, ON – 1,727 new residential listings and 663 home sales were recorded in June 2022 in the London-St. Thomas area via the MLS® System of the London and St. Thomas Association of REALTORS® (LSTAR).  The local housing supply increased from only 1.7 months of inventory in May to 2.8 months of inventory in June.

“While the number of new listings is the highest ever recorded by LSTAR in the month of June, the number of June home sales is at its lowest point in the last ten years,” said Randy Pawlowski, 2022 LSTAR President. “Our local market is cooling off rapidly, but home prices don’t follow suit as fast,” he added.

LSTAR’s composite MLS® Home Price Index Benchmark Price was down 7.8% from May, decreasing from $703,300 in May to $648,500 last month. However, this value is still 10.1% greater than the figure recorded in June 2021. Similarly, LSTAR’s overall average home price fell from $762,397 in May to $686,287 in June. Compared to the same period last year, this figure is still 8.9% higher.

“While the three consecutive interest rate hikes by the Bank of Canada succeeded to put some downward pressure on the home prices, the low housing supply is what keeps them relatively elevated. Even if the number of months of inventory increased to almost three, this value is still lower than normal. In a balanced market, the inventory should sit at 3.5 or 4 months,” Pawlowski said.

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

“The favourite dwelling type of the local home buyers remains the single-family home: out of the 663 units sold last month, 493 were single-family homes,” Pawlowski explained. “The rest of the June transactions were comprised of 82 condo sales and 58 apartment sales,” he added.

In June, the average price for a single-family home in LSTAR’s jurisdiction stood at $736,158, that of a condo – at $583,321, and the overall average price for an apartment – at $413,576.

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

“Even if it’s higher than in many cities from other Canadian provinces, LSTAR’s composite HPI benchmark price places our area among the most affordable in Ontario,” Pawlowski observed. The following table is based on data provided by the Canadian Real Estate Association (CREA) for June 1st, 2022.

According to a research report[1] 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. "This means that our June home sales could bring over $48 million in spin-off spending to the local economy over the next three years,” Pawlowski concluded.

The London and St. Thomas Association of REALTORS® (LSTAR) exists to provide its REALTOR® Members with the support and tools they need to succeed in their profession. As one of Canada's largest real estate associations, LSTAR  serves and represents over 2,250 REALTORS® who are working in Middlesex and Elgin Counties, a trading area of more than 500,000 residents. LSTAR adheres to a Quality of Life philosophy, supporting growth that fosters economic vitality, and is a proud participant in the REALTORS Care Foundation's Every REALTOR™ Campaign. LSTAR provides housing opportunities, respects the environment, and builds good communities and safe neighbourhoods. 

[1]Economic Impacts of MLS® Systems Home Sales and Purchases in Canada and the Provinces, Altus Group, 2019

CHAD LOVELL, CRAE (He/Him)
VP, Public Affairs and Diversity

London and St. Thomas Association of REALTORS® (LSTAR)
www.lstar.ca
Phone: 519.641.1400 ext. 222
342 Commissioners Rd W, London ON N6J 1Y3