Here we are in the first week of September looking back on the first 8 months of 2020 and it’s tough to put into words.
Well, not really but you get the point ;)
Imagine a year where sales can drop by over 60% in one of the heaviest spring months of the year, only to have sales volume recover back into the black within 4 months for the annual numbers.
A year in which the number of new listings on the market dropped by half in April which was only weeks after the market set all-time records in February for number of sales and the average sale price. February 2020 had the 2nd highest sales for the month behind the biggest year in Niagara real estate history (2016). February 2020 also set a record for THE highest monthly sale price average of all time at $501,000.
A year where the high-end grew to sales volume levels that Niagara has never known. As of writing, there have been 233 sales over $1 Million in Niagara. That is more than 2010 – 2016 combined.
2020 is another year in which affordability and gaining entry in the market has become even more difficult for many. The average asking price so far in 2020 is $609,000. That is nearly double what it was in 2014 when the average was a modest $307,000.
Further to the topic of affordability in Niagara, there have been 523 sales under $300,000 so far in 2020. That is 1/10th the number we saw a decade ago when 5,254 homes sold under $300,000.
COVD stopped the market in its tracks which created a massive head of steam as buyers and sellers waiting for the slightest hint of a market green light. How massive?
The previous record for the number of sales in a month for Niagara was May and June 2016. If you don’t recall, that was the spring market that changed everything in Niagara. It was when multiple offers and delayed presentation became the norm rather than a strange, “you’re not going to believe this” anecdote.
In May and June 2016, there were 1,001 and 1,009 sales respectively.
In July and August 2020, there were 1,075 and 1,029 sales respectively.
And that is with the largest volume producer of the region (St.Catharines) still catching its wind. An odd fact is that St.Catharines is the only city in the Niagara Region that hasn’t regained traction and had an increase in sales in 2020 v 2019 (with 1 exception)
Some samples of the % change in sales volume for 2020 v 2019:
Port Colborne is up 1.6%
Niagara Falls is up 3.5%
Fort Erie is up 7.9%
Thorold is up 14.3%
Fonthill is up 17.9%
Niagara on the Lake is up 45.3% (yes, forty five point three)
Meanwhile, St.Catharines is actually down 10.1% sales so far this year (1,394 in 2020 v 1,551 in 2019).
Why?
There are theories floating around. Some would suggest that the aging demographic is less excited about inviting strangers into their home. I’m not sure…I’d love to hear direct feedback on that.
Looking at St.Catharines, prior to 2020, the highest monthly average sale price was $453,861 which was in September 2019.
After setting a new record in February 2020 ($466,001), sale prices took a step back during COVID, largely due to the number of homes trading in the $700k+ bracket essentially coming to a halt.
Looking at June – August as the post-COVID recovery months, the average sale prices were:
$477,000 (June)
$493,000 (July)
$513,000 (August)
St.Catharines had an historic home sell that you could consider an outlier. August without that sale still had an average sale price of $491,000.
So, what happens next?
That is and always has been the big question. And if there was ever a dangerous time to predict, it is now.
So, here goes our predictions in a segment we like to call:
THEbTEAM Makes 6 Market Predictions That Could Quite Possibly Be Wrong
#1 The monthly average sale price numbers will settle down a bit across the region as the higher-end of the market finds satisfies it’s hunger and levels off.
#2 Regardless, 2020 will destroy all previous average sale price records with Niagara averaging in the range of $530,000 for 2020 for an increase of 9%. That will be the first time in history that the annual average cracked the half a million mark.
#3 Sellers will remain cautious in St.Catharines. As a result, listing inventory will continue to be tight which will allow this heated market, especially for detached homes, to continue.
#4 The demand for new construction from out-of-market buyers (investors and owner occupied) will continue its relentless pace with no end in sight.
#5 The market will slow down once we get into runny nose season as friends, family, grand kids, co-workers and other associated humans are sent home to isolate and get tested. That caution will leech into the real estate market. And life in general.
#6 Niagara is still Niagara and people want to live here. Whether it is locals shuffling around, investors looking to park money or out-of-towners looking for the Niagara life, the river will continue to flow this way. That will feed the demand end of our scales and maintain this activity we’re experiencing on the macro level for the foreseeable future.
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Thank-you for visiting.
...and thank-you to Davisco for the captivating orange photo.