A real estate rebound
Welcome to the Forest City, London Ontario. The London & St Thomas Association of Realtors report an uptick in sales. The increase in sales for November is a great indicator that the London & Area Real Estate Market is strong and providing great value for Buyers. If you are looking to move give The Grants a call at 519-667-1800 or email firstname.lastname@example.org.
HOUSING HOPE: After a tough, four-month losing streak, London-area home sales jump 6.2% in November from last year
Last Updated: December 2, 2010 7:14am
The London area has snapped its long losing streak in housing, with a 6.2% spike in sales last month.
November's numbers -- 620 homes moved -- were this year's first monthly increase in sales, compared to last years, since June.
Every month in between, sales plunged by double-digit levels.
It's a sign the real-estate market is stabilizing and, if anything, coming around faster than expected, one analyst says.
The local real-estate industry's point man echoes that.
"I think we are in a balanced market -- we should see a decent spring," said Richard Thyssen, president of the London St. Thomas Association of Realtors.
David Lan of Canada Mortgage and Housing Corp. said he didn't expect to see a sales recovery until early next year, so the latest numbers are a pleasant surprise.
He's forecast a modest recovery in the market next year, saying London-St. Thomas should see about 8,100 sales in 2011.
While that's down from a peak of nearly 9,400 sales in 2007, before the brutal recession hit the area's manufacturing backbone, it's still considered respectable.
"The overall number will not be that high, but it will be a stable year," said Lan.
November's figures show the market is evening out and shaking off the effects of the Harmonized Sales Tax (HST), which took effect July 1, said Thyssen.
"It was nice to see things come back after the HST and the downturn that was expected in the summer," he said.
The bright local economic twist came together with a national one Wednesday, with a big-bank study saying household debt in Canada may not be as bad as the headlines suggest and consumers aren't likely to slam the brakes on spending next year.
Focusing only on rising debt, now worth nearly one-and-a-half-times household income, overlooks that family wealth has also risen, the BMO Capital Markets study said. Household net worth is now about six times disposable income, helped by rebounding stock markets and a better savings rate, it said.
After setting a record in May, real-estate sales in the London area waned through summer and fall, falling 15 to 21% from the same period in 2009.
While the 13% HST doesn't apply directly to homes, it affects buyers' other costs -- such as real-estate commissions, moving and legal fees.
There was a strong surge in demand in the London-area market in the first five months of this year, largely driven by fears mortgage rates would rise, Lan said.
That depleted the pool of potential buyers for months. But Lan said mortgage rates have been stable, even dropping, and buyers are starting to drift back.
Prices have held up well in the London-St. Thomas market, despite the recent downturn, Thyssen noted.
The average price of homes sold in November was $223,096, up 3.6% from the same month last year.