Inventory Levels Rise, but Prices Remain Elevated

In May 2022, 1,835 new residential listings were posted on the MLS® System of the London and St Thomas Association of REALTORS® (LSTAR), more than in any previous May in the Association’s history. The local housing supply increased from only 1.2 months of inventory in April to 1.7 months of inventory in May.

Sales, on the other hand, were more on par with those from the former decade, with only 844 homes exchanging hands last month in LSTAR’s jurisdiction.

“Even if in May the sales-to-new listings ratio dropped to 46%, a figure that, typically, indicates a market that tends to favour home buyers, benchmark and average prices saw only modest month-over-month declines,” said Randy Pawlowski, 2022 LSTAR President. “Compared to last year’s figures, both of these values are substantially higher,” he added.

LSTAR’s composite MLS® Home Price Index Benchmark Price was down 4% over April, falling from $739,700 in April to $703,300 last month. However, this value is still 17.6% greater than the figure recorded in May 2021. Similarly, LSTAR’s overall average home price decreased from $771,682 in April to $762,397 in May. Compared to the same period last year, this figure is 19.5% higher.

“One of the reasons why we are witnessing this level of stability is the change in population from migration and immigration. Only in the fourth quarter of 2021, Ontario’s population saw a net increase of 34,074 people. Many of these new Ontarians are now looking to buy homes they can afford in regions with good schools and hospitals. And, as it happens, our area checks all these boxes.” Pawlowski explained.

“Aside from the growing population, the existing housing supply is another factor that puts upward pressure on the local home prices. While the months of inventory saw slight increases, they are still at lower-than-usual levels. Normally, a healthy inventory should sit at around 3.5 or 4 months,” Pawlowski said.

The following table shows how May’s average home sales prices in LSTAR’s main regions compare to the benchmark prices for the same areas.

Area May 2022 MLS® HPI Benchmark Price May 2022 Average Price
Central Elgin $718,000 $825,705
London East $570,800 $575,867
London North $840,800 $890,455
London South $699,500 $750,388
Middlesex Centre $990,300 $1,270,684
St. Thomas $597,800 $645,711
Strathroy-Caradoc $875,200 $779,431
LSTAR $703,300 $762,397

Out of the 844 units sold last month, 635 were single-family homes, 105 – condo townhouses, and 65 – apartments.

In May, the average price for a single-family home in LSTAR’s jurisdiction stood at $818,977, that of a condo – at $605,333, and the overall average price for an apartment – at $465,364.

The following table shows the May benchmark prices for all housing types in LSTAR’s jurisdiction and how they stack up against the values from a year ago.

MLS® Home Price Index Benchmark Prices
Benchmark Type May 2022 Change over May 2021
LSTAR Composite $703,300 ↑ 17.6%
LSTAR Single-Family $749,100 ↑ 17%
LSTAR One Storey $681,800 ↑ 17.6%
LSTAR Two Storey $795,300 ↑ 16.8%
LSTAR Townhouse $609,700 ↑ 22.5%
LSTAR Apartment $473,400 ↑ 19.4%

“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 observed. The following chart is based on data provided by the Canadian Real Estate Association (CREA) for May 1st, 2022.

MLS® Home Price Index Benchmark Prices in Canada - May 1, 2022

According to a research report[1] by Altus Group, 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. "This means that our May home sales could contribute over $61 million in spin-off spending to the local economy over the next three years,” Pawlowski concluded.


[1]Economic Impacts of MLS® Systems Home Sales and Purchases in Canada and the Provinces, Altus Group, 2019