Growing Demand and Low Inventory Fuel Home Price Gains
In April 2023, 964 new properties came on the market and 723 homes exchanged hands via the MLS® System of the London and St. Thomas Association of REALTORS® (LSTAR).
“Since the beginning of 2023 we’ve been noticing steady month-over-month increases in the number of home sales and prices, which indicate that the property demand and the housing supply issue are still there. Both of these are also demonstrated by the sales-to-new-listings ratio, which sky-rocketed in April, and by the dwindling housing inventory,” said 2023 LSTAR President Adam Miller.
The overall sales-to-new listings ratio for the entire London-St. Thomas area climbed from 63.5% in March to 75% in April, while the inventory plunged from 2 months in March to only 1.8 in April.
“Out of the five main regions of LSTAR, the city of St. Thomas was the one with the lowest number of properties available for sale, with only one month of housing inventory in April,” Miller emphasized.
“In their turn, the low inventory and the growing housing demand are putting upward pressure on the local average and MLS® HPI Benchmark Prices,” Miller added.
In April 2023, in the jurisdiction of LSTAR, the average home price and the composite MLS® Home Price Index (HPI) Benchmark Price were lower compared to the same month in the previous year, by 13.6% and 17.1% respectively. However, both these figures were higher than those seen in the previous months. The average home price for LSTAR in April 2023 was $664,149, while the composite MLS® HPI Benchmark Price was $607,200.
The following table shows how home sales and prices evolved in the first quarter of this year in LSTAR’s jurisdiction.
|January 2023||February 2023||March 2023||April
|LSTAR Home Sales||344||436||685||723|
|LSTAR’s Overall Average Price||$585,252||$621,912||$653,611||$664,149|
|LSTAR’s Composite MLS� HPI Benchmark Price||$568,300||$583,500||$592,600||$607,200|
“After the Bank of Canada pressed the pause button on interest rate hikes, single-family homes saw month-over-month gains in their MLS® HPI Benchmark prices. In April 2023, LSTAR’s overall MLS® HPI Benchmark Price for single-family homes stood at $654,100,” observed Miller.
The following table shows the April 2023 benchmark prices for all housing types in LSTAR’s jurisdiction and how they compare with the values from 2022.
|BENCHMARK TYPE||APRIL 2023||CHANGE OVER APRIL 2022|
|LSTAR One Storey||$583,400||↓18.7%|
|LSTAR Two Storey||$703,100||↓15.1%|