The start of the 2023 real estate market in the London-area was pretty calm, with the lowest number of home sales seen since the late aughts.
The latest data from the London St. Thomas Association of Realtors (LSTAR) shows 344 homes exchanged hands locally In January. That's up by a difference of 45 from December 2022, but down significantly when compared to January 2022, which saw 529 home sales. This makes last month the January with the lowest number of home sales seen by LSTAR since 2009.
At the same time however, 823 new property listings came on the market, bringing the number of active listings at month’s end to 1,261, or 3.7 months worth of inventory.
"At a first glance, all these figures seem to indicate a cooling market, with a healthier housing supply," said 2023 LSTAR President Adam Miller. "However, when taking into consideration the surging borrowing costs, it's easy to understand why many buyers are hesitating to get into this market."
Miller added consecutive rate increases made by the Bank of Canada last year, and another hike last week to a benchmark rate of 4.5 per cent, has weighed down the spending power of prospective buyers and overall housing affordability.
The average price of a home sold last month dipped to $585,252, a nearly five per cent drop from sale prices recorded in December 2022.
While prices continue to trend downwards, Miller explained they are still considerably higher than figures seen less than five years ago. He noted that London-area home values remain relatively affordable when looking at listings both provincially and nationally.
"With the local communities being some of the fastest growing in the country, the housing demand in our area is not waning," said Millar. "Whether this demand will translate into more home renters or more homeowners in the next couple of years depends mainly on how fast the Bank of Canada reins in inflation and starts reducing borrowing costs."
The following table shows the January 2023 benchmark prices for all housing types in LSTAR’s jurisdiction and how they compare with the values from 2022 and 2020. Table via LSTAR.