Puslinch Market Update October 2017

While most of Ontario seems poised to recover from the summer real estate slow-down it looks like business as usual for Puslinch real estate. I’m sure you’ll remember April when Ontario Premier Kathleen Wynne announced changes designed to cool down the red-hot housing market. “Something had to be done” and surprisingly, the announcement did have a cooling affect on Ontario’s housing market especially in the GTA where the market instantly turned ice cold and prices took a nose dive. In nearby Guelph the affect was not so dramatic and the market experienced what I would call a mental health day or as it turned out, a few mental health months. Sale prices did decrease, about 15% on average, and Realtors experienced a return to the pre-insanity markets of old where you could buy a property without competing with other buyers and your offer wasn’t unconditional, cash, but actually contained conditions for things like financing and home inspection.

But why was real estate market in Puslinch unaffected for the most part? One reason could be that it didn’t experience as much hysteria as the urban markets to begin with. Country properties tend to be pricier than those in the city and higher priced properties attract fewer buyers. Fewer buyers means there’s less possibility of attracting multiple offers. Plus, country buyers usually insist on conditions for things like wells and septic systems which can remove cash buyers from the equation. Also, it can take a while to find the right country property. In some cases, a year or even two! Country buyers are in it for the long haul and when markets slow down and then recover in a matter of a few months, it can have little affect on a rural market.

Puslinch is a relatively small market containing four distinct sub markets of Aberfoyle, Morriston, Rural Puslinch East and Rural Puslinch West. Each sub market may only have a few sales per month. This lack of comparable sales can make pricing tricky and Realtors may have to look back a year or more for good comparables. The same comps can be used over and over again to price multiple other properties. This can have a stabilizing affect of the market.

Puslinch Township saw 6 sales in September and although that number is down 62% from last year at this time, the year-to-date total of 76 is actually up 6% from 2016. The year-to-date sales to listings ratio stands at 61% which means that 61 percent of properties listed this year have sold. There are currently 30 active listings in Puslinch which represents 5 months worth of inventory. The average sale price for September’s 6 sales was $1,064,333 which is an increase of 5% from September 2016. 2 of the 6 sales or 33% sold for full price. This usually indicates that there were multiple offers however none of the sales were over asking price.

Buyers: This is the best time to buy Puslinch real estate in years! There’s 5 months worth of inventory so you should find a good selection of homes on the market to choose from and you may not have to compete with other buyers. If you find yourself in competition, chances are the property will sell close to asking price instead of $100,000 over.

Sellers: 33% of homes sold in September went for full price! These homes were well priced and well presented. Taking the time to prepare your home for sale will pay off! October and November should be very active and goods months for selling before the December holiday slow down. Despite the amount of inventory this is still a seller’s market!

For a free custom market update for your Puslinch neighbourhood, email Dean Manton at dean@mantonteam.com

Dean Manton is Puslinch’s real estate expert. Now in his 20th year! Buying or selling, put Dean’s experience to work for you! #experiencecounts #upgradeyouragent #my20thyear!

Market Update October 2017

After cooling off for most of the summer Guelph’s real estate recovery was under way in September. I’m sure you’ll remember April when Ontario Premier Kathleen Wynne announced changes designed to cool down the red-hot housing market. Prior to the announcement most Guelph and area homes were attracting multiple offers and seller’s receiving 50- $100,000 over asking price was common place. “Something had to be done” and surprisingly, the announcement did have a cooling affect on Ontario’s housing market especially in the GTA where the market instantly turned ice cold and prices took a nose dive. In Guelph the affect was not so dramatic and our market experienced what I would call a mental health day or as it turned out, a few mental health months. Sale prices did decrease, about 15% on average, and Realtors experienced a return to the pre-insanity markets of old where you could buy a property without competing with other buyers and your offer wasn’t unconditional, cash, but actually contained conditions for things like financing and home inspection.

After a brief respite it seems like the market is bouncing back, albeit slowly and cautiously. Now buyers and sellers alike want to know if the market will return to the pre-April days of thunder and I have to say that it’s a little early to tell. It’s possible that the market could slowly heat up this fall and we could be right back in the frying pan by spring OR maybe the crazy market conditions of 2016-17 will never be seen again. I think it will be something between. My theory of mediocrity says that nothing will ever be as good or bad as you think. Either way, we’ll have to wait and see whether or not Kathleen’s 16 point plan will have a lasting effect on Ontario’s or Guelph’s real estate markets.

Guelph saw 141 MLS sales in September. This was down 18% compared with September 2016. By the end of the month there were 277 active listings which represents 2 months worth of inventory.  The average sale price for homes in the city of Guelph in September was $467,000 which was down from $485,000 in August but up 7% from a year ago. A whopping 40% of Guelph’s 141 sales in September went for full price or more which indicates that there’s still plenty of pent up demand in the market. The year to date sales total is currently at 1880 sales which is only down 5% from this time in 2016 so even with the market slow down, we’re still having a busy year. The amount of MLS listings year to date, 2606, is actually up 14% from last year, giving buyers more choice than they have been used to recently. The sales to listings ratio for 2017 stands at 72% which means that 72% of all homes listed so far this year, have sold. The sales to listings ratio for 2016 was much higher at 87%.

Buyers: This is the best time to buy Guelph real estate in years! You should find a good selection of homes on the market to choose from and you may not have to compete with other buyers. If you find yourself in competition, chances are the property will sell close to asking price instead of $100,000 over.

Sellers: 40% of homes are still fetching full price or more. You can bet that in most cases those homes are well presented, staged if necessary and priced correctly. Taking the time to prepare your home for sale will pay off! October and November should be very active and goods months for selling before the December holiday slow down. Despite the slow down this is still a seller’s market!

For a free custom market update for your Guelph neighbourhood, email Dean Manton at dean@mantonteam.com

Dean Manton is Guelph’s real estate expert. Now in his 20^th year! Buying or selling, put Dean’s experience to work for you! #experiencecounts #upgradeyouragent #my20thyear!

Real estate is always a hot topic. Speculation on potential housing bubbles and red hot housing markets are always good for an eye catching headline. Many people have asked me recently about my thoughts regarding two recent headlines, the Ontario government’s housing plan and the trouble at Home Capital Group. Will we see significant change in Guelph’s hot housing market as a result of these headlines?

The Ontario government’s answer to cooling a “runaway housing market” is to slap a 15-per-cent tax on foreign home buyers and cap rent increases across the province. The new foreign home-buyers’ tax is at the centre of Kathleen Wynne’s housing plan, which includes 15 additional measures aimed at easing the pressure on an increasingly unaffordable housing market

The new non-resident speculation tax, will be imposed on buyers in an area spanning from the Niagara region to Peterborough. The tax will need to be paid by non-residents and companies not based in Canada. The additional 15 measures will also change the Ontario’s rental housing market by imposing rent controls on all units. The new rule would cap rent increases at inflation, up to a maximum of 2.5 per cent annually. Among the other measures is the introduction of a new standard lease for tenants in Ontario, ending a practice in which many landlords ask for detailed personal information from prospective tenants.

Trying to improve Ms. Wynne’s dismal approval rating has likely more to do with this knee jerk reaction than actually making homes more affordable and will have little to no affect on a housing market that responds to the forces of supply and demand. This was simply a PR move for a government who wants to look like they are doing something constructive for it’s citizens. The percentage of Ontario homes that are purchased by foreign buyers is minimal and typical foreign buyers have deep enough pockets to not be bothered by a 15% tax anyway. Capping rents will just make the rental housing market less attractive to investors and therefore result in fewer rental units being available for tenants.

Alternative mortgage lender Home Capital Group Inc’s shares fell over 60% in a single day’s trading recently. Investors were wondering about the greater implications for Canadian homeowners. Claims alleging that mortgage brokers working with Home Capital Group had falsified information on loan documents, and that the company did not take sufficient action to remedy the problem were the cause of the panic. Spooked deposit holders of Home Capital Group were concerned that the bank had made irresponsible loans and feared they would not get their money back.

Home Capital Group is a marginal lender, offering mortgages to Canadians that aren’t able to obtain financing through traditional means. If Home Capital Group ceases to exist, it means there will be one less agent acting to prop up Canada’s housing market. So, what does it mean? The good news for Canadians is that Home Capital Group only accounts for less than 1% of the residential mortgage market, and among the company’s existing book of mortgages, less than 0.3% are delinquent. This means that there is no evidence of a pending real estate correction.

For Guelph and surrounding area, the busy spring real estate market continues. As you would expect, many homes are attracting multiple offers and selling way over asking price. Gone are the days when a home selling $100k or more over asking price was a rare occurrence in Guelph. It now seems to happen a daily basis. Sellers should not take the busy market for granted however. Not every home is selling in a week and for well over asking price. It’s still important to make repairs and properly stage your home if you want buyers lining up to buy it.

Dean Manton is your Guelph and area real estate expert!

According to statistics recently released by The Canadian Real Estate Association (CREA), national home sales were up in February 2017. While February sales were up from the previous month in about 70% of all local markets in Canada, the national increase was overwhelmingly driven by the Greater Toronto Area (GTA) causing a Guelph home shortage. “In and around Toronto, many potential move-up buyers find themselves outbid in multiple-offer situations amid a short supply of listings,” said Gregory Klump, CREA’s Chief Economist. “As a result, they aren’t putting their current home on the market. It’s something of a vicious circle from the standpoint of a supply shortage and a challenge for first-time and move-up home buyers alike. By contrast, housing markets in urban markets elsewhere in Canada are either balanced or are amply supplied. Because housing market conditions vary by region, further tightening of mortgage regulations aimed at cooling the housing market in one region may destabilize it elsewhere.” The number of newly listed homes rose 4.8% in February 2017, led by the GTA and nearby markets following a sharp drop in January.

Months of Inventory

The number of months of inventory is another important measure of the balance between housing supply and demand. It represents how long it would take to completely liquidate current inventories at the current rate of sales activity. There were 4.2 months of inventory on a national basis at the end of February 2017, down from 4.5 months in January and the lowest level for this measure in almost a decade. The imbalance between limited housing supply and robust demand in Ontario’s Greater Golden Horseshoe region is without precedent (the region includes the GTA, Hamilton-Burlington, Oakville-Milton, Guelph, Kitchener-Waterloo, Cambridge, Brantford, the Niagara Region, Barrie and nearby cottage country). The number of months of inventory in February 2017 stood below one month in the GTA, Hamilton-Burlington, Oakville-Milton, Kitchener-Waterloo, Cambridge, Brantford, Guelph, Barrie & District and the Kawartha Lakes region.

This shortage of Guelph homes for sale has buyers lining up to bid on the homes that are hitting the market. When a home sells, only one buyer is removed from the pool of buyers in that price range. The remaining buyers move on to compete for the next similar home that becomes available. This activity is putting unprecedented pressure on home prices as frustrated buyers offer more and more until they’re successful. Many Guelph homes, as a result, are selling well over asking price.

Guelph and area home buyers are well advised to base their offers not on the asking price of a property but what amount they feel comfortable paying. Researching what similar properties are selling for is always a good idea. Selling prices seem to increase based on how many offers there are for a certain property. If there are only two or three, prices offered may be relatively close to asking. If there are six, ten or even more offers, chances are that at least one of those buyers will make a big offer.

Spring market conditions should continue until the end of June when the market usually cools slightly for the summer months. However, buyers who were unsuccessful in purchasing in April, May and June may keep the market cooking for the foreseeable future.