Last month, 569 homes exchanged hands via the MLS® System of the London and St. Thomas Association of REALTORS® (LSTAR), 3.2% fewer than in August 2022. During the same period, 1,212 new listings came on the market, 13.2% more than in the eighth month of 2022. The local housing supply saw a slight increase from 2.9 months of inventory in July to 3.4 months in August.
“In August, the local real estate market experienced a lull, with home sales hitting their lowest point since 2014. Whether that was just a simple summer lull or a direct effect of the Bank of Canada's mid-July decision to raise interest rates and their messaging about the lingering above-target inflation, that remains to be determined by the real estate activity we’ll see in the next few months,” said 2023 LSTAR Chair Adam Miller.
With new listings outpacing sales, LSTAR’s overall sales-to-new listings ratio fell to 46.9% in August. “This gave buyers more options and slowed the rate of price growth in our area,” Miller added.
The following table shows the average and MLS® HPI Benchmark Prices recorded last month in LSTAR’s main regions.
August’s overall average home price sat at $663,663, slightly lower than in the previous month, but 4.2% higher than a year ago. LSTAR’s composite MLS® HPI Benchmark Price came in at $607,400, 0.9% down from July, but 1% over a year ago.
“The average sales price is determined by adding up the sale prices of all types of homes sold and dividing that total by the overall number of units sold. In contrast, the HPI benchmark price provides insight into the value of what's considered a ‘typical home’ according to local buyers, taking various housing characteristics into account. While averages can be influenced by a small number of high-end sales occurring within a single month, the HPI benchmark prices offer a more reliable means of identifying long-term price trends,” Miller explained.
The table below shows the August benchmark prices for all housing types within LSTAR’s jurisdiction, comparing changes from the previous month and six months ago.
|Benchmark Type||August 2023||Change Over July 2023||Change Over 6 Months Ago|
|LSTAR One Storey||$593,600||↓0.1%||↑6.0%|
|LSTAR Two Storey||$692,700||↓1.4%||↑2.6%|
The single-family home remains the favourite house type of local buyers, with 427 sales in August. Condominium townhouses rank second, with 86 units sold, followed by apartments, with 51 units exchanging hands.
In August, the average price of a single-family home located in LSTAR’s jurisdiction stood at $726,263, while that of a condo townhouse was $519,970. The average price of an apartment sat at $417,321.
“It’s interesting to note that condos, one-storey homes, and apartments saw the highest year-over-year price appreciation. That may be a reflection of the changing needs of an aging population,” Miller observed.
“Despite these price appreciations, homes in LSTAR's jurisdiction continue to maintain their affordability compared to other major Ontario and Canadian centers,” Miller said. The following chart shows the latest HPI benchmark prices, courtesy of CREA.
According to a research study1 conducted by Altus Group in 2019, the typical housing transaction in Ontario triggers around $77,420 in ancillary expenditures over a span of three years following the purchase. These encompass a broad spectrum of costs, such as legal fees, moving costs, furniture acquisitions, and costs related to home renovations, among others.
“In other words, the home sales recorded by LSTAR in August 2023 could potentially bring more than $44 million back to the local economy by 2026,” Miller concluded.
1Economic Impacts of MLS® Systems Home Sales and Purchases in Canada and the Provinces, Altus Group, 2019