We All Know Pricing Shifts Year to Year! How Do You Truly Understand It?

Posted on Posted in Burlington, Hamilton-Wentworth, Market Activity, Oakville, Uncategorized, YTD

We all know the prices have gone up year over year… Even with the crazy 2017 we had, where the spring market ballooned beyond the normal expected increases to falling below expectation after rule changes by the Provincial Government, we’re still in a position of higher average prices from last year.

But while average prices have risen, have they risen predictably, or have some properties increased more than others?

And what about units sold at those prices?  How many are being sold at various price ranges?

I do monthly analysis of what’s going on, down to specific neighbourhoods.  Yes the Real Estate boards publish various data on this, but how do you decode the numbers?

A Visual Representation of the Sales Pricing of an Area

Well let’s look at pricing a little differently, and see how it looks.  The following graph for Oakville, shows plots of units sold vs. sold prices.  Predictably, we can see from 2014 to 2015 a shift to the right as values increase.  But in 2016 we see quite a shift to the right and a spreading out of the values.  So in dollars, more expensive properties took a larger jump in value.

How about 2017?  Well this has been a rocky year, and the graph includes all sales to date.  Crazy spring pricing, and fall pricing that is more in line with a normal incremental increase from last year, but the unit sales are spread and overall, compared to 2016, you can see unit sales has fallen.

What does this mean for Oakville?  From what I’ve seen it took a few months for Sellers to adjust pricing to the new market values.  And Buyers held back to see if things are going to fall more.

What other data plots show me is there is a bit of a tip up in pricing again, but we need to see if this, and how this, is impacted by the new mortgage rules.

So while we still need to see what is going to happen next, we can see how the pricing has spread, number of sales is down, but sales prices have still slightly increased in Oakville.

So what about Burlington?  Burlington has been more predictable without the large number of investment style sales found in Oakville.   Generally prices have increased and spread a bit, as Oakville did, but we don’t see the density of sales in 2016 at the peak.   A reflection of Burlington being more of a place to buy a home to live, not as much investment buying.

Up next? Hamilton.  Long thought a good place to find a home for good value in a City with incredible history in architecture due to it’s age, history and size.  Long ignored, Hamilton has gone through a solid repeatable year after year growth. Even the least expensive home prices have shifted up in price in the last four years.  You can see a bit of peak in 2015 around the $200,000 mark, which has been pushed higher and flattened out in 2016 as many buyers clued in to the many improvements the City has experienced.

For 2017, again the market prices have been spread out more, partly due to some investment changes, but I believe mainly due to the market saturation of market flippers buying properties in Hamilton to clean up and put back on market.  It’s tougher to get a really good deal on a property as you can see the rising edge of the 2017 curve is now up in the $200K range…

Hamilton’s done well.  Predictable stable growth.

Oakville and Burlington homeowners that have had their investment a long time, really started looking at options, to cash out on their properties and move further out.  Be it Grimsby, or Niagara-on-the-Lake, Homeowners selling in Halton Region and moving to the other side of Lake Ontario have been significant enough that the locals in the Niagara Region have felt the impact, both in population and pricing.

With fairly stable pricing growth from 2014 through 2016, we saw quite the shift up in pricing to 2017.  Many new home builds have happened in Niagara Region near highly accessible highways, and beautiful wine country, has been a real draw for GTA homeowners to buy in to for their retirement. While the Niagara Region has slowly grown, it’s become attractive to the GTA sellers and the rising entry prices in Hamilton have driven more people to St. Catherine’s pushing the entry price for a home significantly further up.

So what does all this ultimately mean?  In spite of market shifts, longer days to sell a property, it’s clear there’s still pressure on the market to continue the pricing increases.  I expect we’re going to see more for 2018 as the regional demands for the large population drives long term values much more than government actions to attempt to slow it.

With Real Estate value, the queston is, what speed WILL they occur, not IF they will occur.

I spoke earlier about doing a detailed analysis of specific areas…    I do this so I have excellent knowledge what various markets are doing.  But I’m happy to share and explain with my clients what’s going on in their neighbourhood specifically, as well as where they may be looking to move to.

The following are example areas.  Contact me for yours, I’d be happy to help!

– James