Home sales in the London-area were at a decade-low in December as the 2022 real estate market came to a close.
Just 299 homes exchanged hands last month, making it the December with the lowest number of homes sold within the London St. Thomas Association of Realtors' (LSTAR) jurisdiction in the last decade.
"Overall, 2022 saw the second lowest number of home sales since 2012," said 2022 LSTAR President Randy Pawlowski. "No one could have predicted that at the beginning of the year when the local housing market peaked, fueled by the lingering pandemic and its socio-economic effects."
Pawlowski noted that once the economy started to right itself and the Bank of Canada increased its benchmark rate, the dynamics of the local market changed drastically. A total of 7,639 homes sold through the LSTAR's Multiple Listing Service (MLS) System in 2022, compared to 10,964 in 2021.
"2022 came in as a roaring lion and went out like a lamb," said Pawlowski.
Despite the pair of lows reported in December, the number of new listings in 2022 climbed to 14,126, the second-highest yearly total recorded during the same time frame. LSTAR said this brought local inventory levels up to 3.8 months worth as of New Year's Eve.
While the real estate market settled down quite a bit last year, Pawlowski said the numbers still show that the demand remains high in the area. He explained on the plus side, increased inventory levels give buyers more choices and time to shop, however the considerable loss of affordability due to interest rate hikes poses a challenge to many.
"On the supply side, many homeowners are reluctant to list their properties, given the recent drops in average and HPI (Home Price Index) benchmark prices," said Pawlowski.
The average price of a home sold locally in December was $612,770. That's only about a $2,500 decrease from November 2022 and a 14 per cent decrease from December 2021.
January 2022’s market came in hot with homes selling for an average price tag of $793,222. While prices in the area are trending downwards, they still remain about 10.5 per cent higher than in December 2020.
Looking ahead at what 2023 could look like for those hoping to get into the real estate market, Pawlowski said it's too early to tell.
"As realtors we don't have a crystal ball. We cannot accurately predict what will happen this year in the local housing market," he said. "However, we do have the expertise, experience and, more importantly, the data to help potential home buyers and sellers make the best decisions."