Beware the Monthly Report!
The monthly real estate market reports for 2021 should all come with a fair sized asterisk attached to them.
How can we compare a month in 2021 to any month in 2021 when we saw double digit swings in all directions? As well, compound the impact that supply and demand has had and you’re going to see numbers that will make you shake your head a little bit. Or a lot.
For example, as of today (January 31, 2021) the average sale prices for Niagara and various cities for January 2021 v January 2020 are:
Average Sale Price % change Jan 2020 - 2021
Niagara $661,000 up 37%
St.Catharines $594,000 up 31%
Niagara-on-the-Lake $1,073,000 up 22%
Niagara Falls $643,000 up 50%
Thorold $603,000 up 25%
Fonthill $871,000 down 2%
Fort Erie $599,000 up 41%
Welland $533,000 up 45%
* It’s worth noting that Fonthill had some serious swings in Average Sale Price last year but that isn’t common for the lower volume cities that also have a high price ceiling. Niagara-on-the-Lake falls into the same category.
So, what is driving those historic gains?
Flashback to high school economics. It is simply a case of imbalanced supply (number of new listings) and demand (number of sales).
The last 3 months has really shown increasing intensity as the available listings languished under the pressure of serious buyer demand.
That disparity was compounded by 3 things:
1. January is not typically a serious provider of new listing inventory.
2. COVID lockdown has people less than excited about buyer or selling.
3. For those who want to sell, they’re concerned about “where am I going to go?” if there is reduced inventory.
In any given year, the top 3 cities in terms of number of homes sold are consistently St.Catharines, Niagara Falls and Welland. So, let’s have a look at those 3 cities plus the Niagara Region in terms of the number of homes listed and number of sales.
Here are the numbers looking at the last 92 days (November 1, 2020 to January 31, 2021) in comparison to the same time period over the last decade:
Number of New listings: 3rd lowest in the last decade. The lowest years for new inventory were 2015 and 2016. It’s worth noting that those time periods prefaced what became the 2 highest years on record in terms of annual average sale price increases.
Number of Homes Sold: The last 92 days were the highest in the last decade with 1,867 sales. What’s more impressive is that 2nd place with the historic year 2016 when there were 1,624 sales. Furthermore, the 1,867 sales in 2020/21 was nearly 400 more sales than the same time period a year ago.
Number of New Listings: The previous 92 days produced the lowest number of new listings in the last decade. In fact, the 439 new listings were 100 less than the average for last decade
Number of Homes Sold: The last 92 days produced the 2nd highest number of homes sold in the last decade with 475 sales. The highest? You guessed it. 2016 still holds the record with 492 sales. That was the first (and only) time that St.Catharines cracked 2,500 sales in 1 year. Going back a decade, the average for November through January was 392 sales.
Number of New Listings: There were 362 new listings in the last decade, good for 2nd lowest in the last decade. No surprise that the lowest was the historic year 2016 with 324 new listings.
Number of Homes Sold: The last 92 days produced 375 sales which was the highest in the last decade. 2nd highest was 2015 (315 sales) and 2016 (313 sales) which both went on to produce massive gains in average sale price. Looking back historically for November through January, the 10 year avg was 269 so the past 92 days beat that by 39%.
New of New Listings: With 183 new listings in the last 92 days, that was good for 3rd lowest in the previous decade but also the Lowest in the last 5 years. The 183 new listings were about 10% under the 10 year average for Welland.
Number of Homes Sales: The last 92 days in Welland churned out 186 sales which was 2nd highest in the last decade. The highest was 197 in 2016. Looking back over the decade, the 10 year average was 153.
What does that all mean? It means that the inventory levels at this point are being negatively impacted by various factors which for some in the market is terrible timing considering the demand levels.
We will continue to track the market on an ongoing basis and watch as we expect to see inventory levels improve as we move through February into March. The big ‘x’ factor is how demand will track. For example, once things ease a little bit, will demand levels that are currently suppressed run in lock step with the inventory?
We shall see.
Stay tuned and feel free to reach out at anytime with questions. We’re happy to help.