Coronavirus and the London Market after Three Months
Usually, by this time in the yearly cycle of real estate sales, the spring market has almost exhausted its energy and the summer slow-down is right around the corner. 2020 has not been an ordinary year. January-March saw the average home price in London suddenly spike just over 20% in the short period of a few weeks. We were all wondering at that time if anything would slow down the growth in home prices in our city. Then came the Coronavirus and the lockdown. That was almost three months ago. Now that three months of the lockdowns are behind us and things are starting to open up again, what is the state of the real estate market in London, Ontario? Since it was instituted in the beginning of March, the lockdown has had an effect, but not in the way people think. Many buyer clients were nervous about buying, thinking that they would see the value of their house plummet right after buying. That did not happen. The market did shrink dramatically in terms of volume, that is, the number of homes changing hands was down in May 2020 by almost 45% when compared to May 2019. Prices did slip some from their peak in February, but year over year, when you compare May 2019 (when the market is usually reaching its highest average price for the year) to May 2020, the average home has increased in value by 10.75%. The average price (detached and condos together) is now $465,672 in May 2020, up from $420,460 in May 2019. We are still in a seller’s market. It is just a smaller seller’s market than a year ago. The market has a lot of energy right now and shows no signs of slowing down.
Price increases have been balanced across the different regions of the city. North London is up 7.77% to $529,179. South London is up 9.38% to $472,821. And East London is up 10.82% to $365,096. The average detached home in the city is now $498,419, up 8.13%. The condo market continues to be the most active segment these days with a price growth of 12.43%, an average of $344,170.