Happy New Year Everyone! We sure hope that your Holiday season was full of joy and time spent with those you cherish most.
We thought we’d get 2018 started with a recap of some of highlights from the last year of real estate in Kingston,
followed up with a forecast for this coming year, and some thoughts on how this information can guide you moving forward.
2017 Market Recap
To say that 2017 was a little different than the past few years would be a monumental understatement. If you’ve lived in Kingston for some time you’ve likely gotten used to our clockwork-like annual market increases of 1-3% (with a dip of minus one or two percent thrown in once a decade or so). To coincide with our relatively stable market increases we also typically experience what would be considered a fairly balanced market. Which is to say that the number of sellers and the number of buyers tend to match up fairly evenly.
So, what happened to our stable market? The entire year changed in late winter when several large investors (who had been working their way eastward from Toronto) finally arrived in Kingston. The result? Approximately 400 new builds slated for completion in the next 3 years were bought up in a matter of weeks. Inventory that historically had sold over the course of several years was literally gone in an instant. This lack of new build inventory had two immediate effects – first, builders started raising their prices to match demand, and second, buyers had to look elsewhere for a home. The initial market reaction for resales was a noticeable increase in the amount of multiple offers and a shorter time on market. Over the long-term both of these trends continued but another trend began to take hold by late spring and continued on through to the end of 2017…a lack of resale inventory. Though we can’t point to one thing that specifically led to the decrease in resale inventory we do know that there were at least two significant factors at play. First, the military decreased the number of moves form the previous year by approx 30% (with perhaps another decrease to come in 2018). Second, the number of homeowners making lateral moves or moving up within Kingston decreased significantly. Why? Kingston residents were afraid to put their home up for sale knowing they’d sell it but not knowing whether there’d be another home to buy. Once this mentality/fear takes hold it becomes a self fulfilling prophecy.
What else happened in 2017? Rates started to go up for the first time in years. The stress test got…more stressful. Though these changes undoubtedly had an effect on the market they weren’t really the dominant story the way they often can be.
A few numbers to consider:
Total Home Sales
# of Ends 2016: 8,324
# of Ends 2017: 8,882
+ Increase of 6.3%
(Does not include exclusive new home sales)
Listings – INVENTORY
# of Listings 2016: 7,045
# of Listings 2017: 5,608
– Decrease of over 20%
(Currently only 560 residential listings available)
Average House Prices
Average House Price 2016: 309,273
Average House Price 2017: 333,284
+Increase of 7.2%
Royal Lepage is predicting an approximately 3% decrease in total home sales this year with a 2-3% increase in average house prices.
Higher interest rates, the new stress tests for mortgages, and low inventory levels will likely be contributing factors.
What’s it all mean?
Well, first it’s important to point out that a forecast is just that. No unlike the weather, economic forecasts change over time. As the market receives new information, whether it’s government intervention, Toronto investors, or any other unforeseen event, the expected outcomes also change. Still, decisions have to be made, and it’s usually best that they be based on the most relevant and up to date information.
What to do if you’re selling-
If you’re selling your Kingston home and leaving Kingston, you’re in luck. Though it’s true that not all areas in Kingston experienced the same gains, it’s also true that if you’re selling your home in the coming months you’re likely in a better spot than you would would have been 2 to 3 years ago. Let’s not get lazy though – overpriced homes, homes that don’t present well, homes with glaring structural issues, etc… can still sit languish on the market. We can help you prepare your home for the best possible outcome to help you avoid this outcome, sell your home for more, and in less time.
If you’re selling your home and staying in Kingston. This is where we really earn our keep. We’ve advised many clients on several different strategies over the past year and each strategy is unique to our clients’ specific needs. If this is you, get in touch with us and we can discuss options moving forward.
What to do if you’re buying-
First and foremost, sit down with your mortgage agent. If you don’t have one, just give us a ring – we’d be happy to share a list of names of some of what our past clients have told us are the best mortgage specialists in town. New rules, climbing interest rates, low inventory, all this points to the need for knowing where you stand financially. Second, stay focused. We can help with this, but we need/want your involvement too. We want you to love where you live and most often the good ones go quickly. The more in tune with the market our buyers (that’s you) are the better we can help.