The average price of a home in the London and St. Thomas real estate market continued to fall in August while home sales rose compared to the month before, figures from the London and St. Thomas Association of Realtors (LSTAR) shows.
The average sale price of a home fell in London and St. Thomas to $648,036 in August, down nearly $20,000 compared to July’s average and down roughly $38,000 from June, according to LSTAR.
August’s average is the lowest to be reported by LSTAR since August of 2021 when the region’s average sale price stood at $620,000, a figure which continued to rise, hitting a record $825,221 in February.
At least 607 home sales were recorded in August by LSTAR, the organization said, 324 fewer than August 2021, but up 93 from July, or about 35 per cent, indicating a soft landing of the cooling local market, LSTAR said.
“The softness seen over the last few months in the local real estate market was, undoubtedly, caused by the continuous rise in the mortgage interest rates, which has translated into higher borrowing costs,” said Randy Pawlowski, LSTAR’s 2022 president, in a statement.
“However, the sales-to-new listings ratio, which reflects the share of new listings out of the total number of home sales, increased from 41.8% in July to 56.7% in August, moving our market into a more balanced territory,” an encouraging sign that could signal more support for home selling prices in coming months, he said.
Home prices and sales have cooled in recent months in response to climbing interest and mortgage rates.
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The Bank of Canada will make its latest interest rate announcement on Wednesday. Some of Canada’s major banks are forecasting the central bank will raise the key interest rate by three-quarters of a percentage point, bringing it to 3.25 per cent.
LSTAR reported 1,049 residential transactions in March — a record for the organization — a number which fell to 514 in July.
There were 1,636 active listings in August, a 300-per cent increase compared to February when local housing prices hit their peak, and a 174-per cent increase compared to the previous August.
There were 1,071 new listings in the region in August, down from 1,230 the previous month, and slightly higher than the 1,020 seen in August of 2021.
According to LSTAR, listings were on the market for a median of 22 days in August, up from seven in February and eight in August of 2021.
The region had 2.7 months of inventory in August, LSTAR says, up from half a month in February, and 0.6 months in August of 2021.
The LSTAR MLS benchmark price for the region stood at $599,500, down 27 per cent from February and up 0.5 per cent from August of 2021.
The region’s benchmark puts London and St. Thomas on the lower end of the pricing scale when it comes to other areas in Ontario and across Canada.
The three most expensive regions are Oakville-Milton, Greater Vancouver and Greater Toronto, with benchmark prices of $1.27 million, $1.18 million and $1.12 million, respectively.
Canada’s benchmark average stood at $760,400 in August, according to MLS.
— with files from The Canadian Press
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