The June numbers are in, and home prices in the London-St. Thomas region are cooling down.
According to a press release issued by the London and St. Thomas Association of Realtors (LSTAR) on Wednesday, 1,727 residential listings and 663 home sales were reported in the London-St. Thomas area in the month of June.
Meanwhile, the local housing supply increased from 1.7 months of inventory in May to 2.8 months of inventory in June.
Randy Pawlowski, LSTAR president said that while the number of new listings is the highest ever recorded by LSTAR in the month of June, the number of home sales is at its lowest point in the last 10 years.
“Our local market is cooling off rapidly, but home prices don’t follow suit as fast,” he said.
The average home price fell from $762,397 to $686,287 in June. But compared to the same period of time in 2021, that still represents an increase of 8.9 per cent.
A chart provided which illustrates the average benchmark price of a home throughout the London-St. Thomas area in the month of June. (Source: LSTAR)Pawlowski told CTV News London that this represents a “considerable drop” in such a short period of time, and that home price fluctuations have been “drastic” since the beginning of 2022.
According to Pawlowski, this decrease is in part due to rising interest rates.
“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.”
He noted however that despite the rise in housing inventory, the current level is not enough. In a balanced market, housing inventory should sit at 3.5 or 4 months.
“To add to that we’ve we’ve added almost a month’s worth of active inventory in that timeframe. so I think there’s a number of factors affecting the markets right now. There’s lots of turbulence out there. there’s it’s a very complex time,” Pawlowski added.
The favorite type of residence for local home buyers continues to be the single-family home, as out of the 663 units sold last month, 493 were single-family homes.
In June, the average price for a single-family home in LSTAR’s jurisdiction was $736,158, the average price for a condo was $583,321, and for an apartment, the average price was $413,576.
“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 said.
The benchmark price of a home in Canada is $809,700.
— With files from CTV News London’s Carlyle Fiset