The average sale price for a home in the London and St. Thomas real estate market climbed to just under $800,000 in January, a near $90,000 increase from the month before, the London St. Thomas Association of Realtors (LSTAR) reported Thursday.
The average home price in the region rose to $793,222 for the month of January, a 30 per cent increase compared with the same time a year ago, and an 81 per cent increase compared with January 2020, LSTAR figures show.
In comparison, the average price of a home in the region was $707,219 in December 2021, an increase of $34,891 from November.
“I’m not sure why … 30 days, 45 days later from December into January the jump was so high,” said LSTAR president Randy Pawlowski. “I don’t know that we’ve seen quite that much over the course of the last year or even longer.
“Perhaps there’s been some pent-up demand. Buyers anxious to get into the marketplace before interest rates maybe start pushing up a little bit. I think this is a trend we’re going to continue to see through the remainder of this year.”
LSTAR figures show Middlesex Centre, made up Arva, Delaware, Ilderton, Komoka and other small communities, remains the most expensive area in the region with an average sale price in January of $1,042,114, a slight decrease from $1,058,299 in December.
London North, Central Elgin and London South were second, third and fourth, respectively, when it comes to the highest average prices in January, at $897,449, $856,954 and $818,517, respectively.
The composite benchmark price for the region, which LSTAR says is more accurate than average prices, rose 6.1 per cent in January to $697,700 — an increase of roughly 96 per cent from three years ago, the organization says.
The benchmark price for Middlesex Centre stood at $1,016,500 in January, up from $977,300 in December.
In London North, Central Elgin and South London, benchmark figures stood at $823,600, $754,900 and $692,500, respectively — increases of $47,200, $62,800 and $38,100, respectively, over the month before.
A severe lack of supply in the face of significant demand remains a major issue in the London and St. Thomas market, and in markets across Ontario.
LSTAR figures show there were only two weeks worth of housing inventory on the market by the end of January, a slight improvement from December.
LSTAR recorded 529 home sales during the month of January, marking the association’s second-best January for sales since it began collecting data in 1978. The bulk of sales involved single-family homes, condo townhouses and apartments.
In January, 669 new listings were posted, of which 286 were active at the end of the month.
Roughly one-third of sales in LSTAR’s jurisdiction appear to be coming from realtors outside of the area, including from the GTA, Pawlowski said, something that is putting pressure on local inventory and on local realtors.
“It’s great from a seller’s perspective, but at the end of the day, they’re not adding any inventory to our stock,” he said.
“Folks who live in London who buy in London or around London, they typically would have a house to sell, and that would help with the inventory. We’re missing out on some of that, and just the demand is so strong.”
Pawlowski says many members of his immediate family, including his mother, father, ex-wife and fiancé, are in the real estate business and have been for decades, and none of them have seen anything quite like what the local market is currently facing.
“As we sit around the kitchen table … it’s hard to really get a handle on why,” he said.
“We know that the prices are climbing, we know that there’s not much to choose from. It’s just a real tough time in this business, not just for buyers trying to make a move, but for the 2,200 realtor members in our association. There’s just not enough to go around.”
Though the region’s average price will soon surpass $800,000 for the first time, LSTAR says the local market remains “more affordable” than several other markets across Canada.
As of Jan. 1, the Oakville-Milton region had the highest benchmark price with $1.65 million, compared with $1.25 million in Mississauga and Greater Toronto, $1.23 million in B.C.’s Fraser Valley, and $1.05 million in Hamilton-Burlington, according to data from the Canadian Real Estate Association.
The national benchmark price stands at $825,800.
Pawlowski said he was hopeful that local demand pressures may ease slightly heading into the spring, and that the region could see more inventory come online as the weather changes.
“The lack of inventory across the board is a conversation that’s being had everywhere, at all levels of government and all kinds of groups,” he said.
“Even from our perspective, within our association, you know, the lack of inventory, what can we do to help? What can we do to encourage more supply? Part of the challenge is just that it’s such a huge issue. There’s not any one quick fix that will help.”