When prices climb, first-time buyers flock to surrounding areas so get their feet in the door of the real estate market, like London, Ontario. But now, amid the COVID-19 global pandemic, first-time buyers are being priced-out as prices soar past $500,000. In September, the average price of a home hit over the $581,000 mark, up by 28 per cent since last September, according to the London and St. Thomas Association of REALTORSⓇ (LSTAR). Over all, within the last five years, this is a 98 per cent increase.
Their report also stated that the average listing price for a home in the City of London came to $527,414, up by 30.1 per cent since last September, and the average listing price for a home in St. Thomas was $433,504, up 26.7 per cent since last September. Multiple offers over-list asking became the new standard. These numbers include all housing types – detached homes, townhomes, and high-rise condos.
Blair Campbell, president of LSTAR, said that no one is really surprised these numbers increased, but they are surprised as to how quickly it happened. It’s also no surprise that these trends are happening due to people being able to work from home (some even indefinitely), and people retiring and taking advantage of low prices outside of the city they previously lived and worked in.
The London area is now the seventh market in Canada to surpass the half a million dollar mark.
“The record sales for September translates into more than $64 million going back into the local economy within the next few years,” Campbell said to the Canadian Real Estate Association (CREA) “As we all manage through the COVID-19 pandemic, real estate is the locomotive that can put Ontario’s economy on the track to recovery.”
While these trends are certainly impressive and will continue to boost the economy amid the global pandemic, unfortunately, it’s been tough for first-timers and may continue to go that way until things settle down.
Jeremy Odland, who is a sales representative with the Odland and Blair Real Estate Group, which operates under Royal LePage Triland Realty, said that September was definitely one of the busiest months he experienced.
“We actually took offers for a property that is ideal for first-time buyers (on Monday) listed at $375,000. We ended up with 21 offers and it sold for $90,000 over asking,” said Odland to Global News. “Unfortunately, that leaves 20 first-time buyers who are now very disappointed and still out there looking for that perfect home. It’s kind of causing a little bit of panic for some buyers. The most that I’ve had one particular client lose out on was 17 offers before they finally got a home.”
It’s suspected that the average price of a home could rise by another seven by 2021, which could be, in part, due to stress selling by homeowners not able to stay afloat, as stated in the Economic Analysis of Ontario.
