LSTAR starts 2023 with lowest number of January home sales since 2009

The London and St. Thomas Association of Realtors (LSTAR) said January marked the lowest number of homes sales seen in the first month of the year since 2009.

Only 344 residential transactions were recorded last month, slightly up from 299 in December.

A total of 823 new listings came on the market, bringing the number of active listings at month’s end to 1,261.

“At a first glance, all these figures seem to indicate a cooling market, with a healthier housing supply,” said Adam Miller, 2023 LSTAR president. “With 3.7 months of inventory, decreasing house prices, and a sales-to-new-listings ratio under 50 per cent, home buyers could appear as favoured.

“However, when taking into consideration the surging borrowing costs, it’s easy to understand why many buyers are hesitating to get into this market,” he continued. “After last year’s consecutive rate increases, on January 25th, 2023, the Bank of Canada increased its benchmark rate again to 4.5 per cent, further weighing down on people’s spending power and housing affordability.”

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Compared with January 2022, both the average home price and the composite HPI Benchmark Price are substantially lower – by 25.6 per cent and 22.2 per cent. Despite that, the association says both of them are considerably higher than figures seen in 2020 and before.

Last month, LSTAR’s overall average home price was $585,252, down from $612,770 in December as well as the 2022 average price of $724,583.

In January, LSTAR reported that a single-family home remained the most “sought-after house type” with 249 such homes sold, followed by the condo townhouse, with 44 units exchanging hands. The apartment ranked third, with only 38 units sold.

“Out of all house types, condos saw the lowest year-over-year decline in average price,” Miller said. “Last month, their average price was 21.2 per cent, lower than in January 2022, but 45.4 per cent higher than in the first month of 2020.

“When compared to other values recorded provincially and nationally, homes in our area continue to remain relatively affordable.”

LSTAR reported that a total of “$73,250 in ancillary expenditures is generated by the average housing transaction in Ontario over a period of three years from the date of purchase.”

According to Miller, “that means that the home sales recorded by LSTAR in the first month of 2023 could potentially bring over 25 million in spin-off spending to our local economy by 2026.”

“With the local communities being some of the fastest growing in the country, the housing demand in our area is not waning,” he said. “Whether this demand will translate into more home renters or more homeowners in the next couple of years depends mainly on how fast the Bank of Canada reins in inflation and starts reducing borrowing costs.”