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Let’s shift our focus away from the NFL playoffs, just a second, and chalk talk London real estate. I promise this won’t give you concussion-like symptoms and it’ll only take a moment. Afterwards, we can get back to dreaming about the Detroit Lions pulverizing the Tampa Bay Buccaneers this Sunday.
Stand and cheer the brave as we tackle three common questions:
1) Is the Market Crashing?
2) 2024 London Market Prediction?
3) Should I Buy Now or Wait?
Q1) IS THE MARKET CRASHING?
Believe it or not, the answer is NO… despite all the armchair quarterbacks promulgating a one-way trip to the Crash Bowl LVII via a fourth quarter Hail Mary.
First, let’s replay-review a few statistics provided by our real estate board. Based on this stat-nopsis, London is hardly experiencing crash-like setbacks (unlike Matthew Stafford and the LA Rams last week).
Homes Sold: Overall activity is only down 12% from 2022
• 10,964 (2021)
• 7,639 (2022)
• 6,717 (2023)
Average Home Price: 2023 is higher than those “CRAZY” days of 2021
• $639,745(2021)
• $724,583 (2022)
• $647,190 (2023)
Median Days on the Market: The median home still only takes 16 days to sell
• 7 DOM (2021)
• 9 DOM (2022)
• 16 DOM (2023)
Second, as someone who plays on the real estate gridiron, I can tell you that home values are still strong, they’re just currently being blitzed by interest rates… much like the blitzing Baker Mayfield will experience this Sunday when Aiden Hutchison bites off his kneecaps (Rah, Rah, Rah!).
To calm your pregame jitters, let’s compare the purchase price info between February 2022 (the height of the market) to December 2023. This data will be based on a 60-month fixed interest rate and a 25-year amortization period (Source: Mortgage Agent Adam Porteous).
February 2022
Average Price: $825,221
Interest Rate: 3.04%
Min. Down Payment (6.97%): $57,520
Land Transfer Tax: $12,979.42
Monthly Cost: $4,476
December 2023
Average price: $628,047
Interest rate: 5.24%
Min. Down Payment: (6.02%) $37,805
Land Transfer Tax: $9,035.94
Monthly Cost: $4,334
After a blue and silver data analyzation, you’ll notice three things:
1) The average home price has decreased.
2) The interest rate has increased.
3) Monthly payments have stayed relatively the same.
So, would it be safe to say that if interest rates snapped back to 3%, home prices would spike again?
Q2) 2024 LONDON MARKET PREDICTION?
Go hard, win the game… here are my 2024 market predictions:
1) If interest rates are contained, the market will settle into predictable formations… much like the predictable formations of Todd Bowles and the Tampa Bay Buccaneers. January will have the lowest average sale price and spring will have the highest sale price, (increasing by 5%).
2) If interest rates play an audible and decrease (mortgage specialists claim interest rates may decline later this year), then you can expect home prices to keep rising into the 2024 NFL preseason. Depending on how far interest rates drop, home prices could increase by 10% from current prices.
Q3) SHOULD I BUY NOW OR WAIT?
With honour you will keep your fame… you should buy now.
Ignore the miserabilists, investing long-term in London real estate is almost as smart as becoming a Detroit Lion season ticket holder, and here’s why:
1) London is one of the fastest-growing cities in Ontario and is projected to grow from 420,000 to 650,000 residents by 2051.
2) London has an unemployment rate of only 6% (which is lower than Toronto) and is projected to increase from 197,300 to 317,500 jobs by 2051.
3) Housing supply cannot keep up with demand, which will keep home values strong. London is struggling to keep up with its ten-year provincial target of 47,000 new units. This is due to high interest rates slowing down builders.
4) As we discussed before, when interest rates begin to decrease, home values will increase. Also, buying before the interest rate drop will save you thousands in Land Transfer Tax and downpayments.
A LION’S VICTORY
If Detroit Lion fans can wait thirty-two years for a home playoff game win, then Londoners can wait out a several-year lull in home prices. When you’re in the real estate redzone and need someone to help lead you in for a home buying touchdown, you know whom to call!
Now, where were we? Oh yeah… GO LIONS!
Johnny ‘Chew’erdine | Real Estate Beaver of Record
https://www.johnnyhewerdine.com
