Average Sale Price:

Average Sale prices slipped significantly in July, compared to the prior month, down by 3.95%. 

Contrary to some media reports, they have not fallen off a cliff in any way, but sales prices are definitely taking a hit.  As I mentioned in my opening, they are back to levels seen originally in September / October of 2021.  I am cautiously optimistic that price declines are stabilizing, but I don't think we have shed all of the value just yet.  I predict another couple months of declines before hopefully leveling out.  The bank of Canada's next rate decision takes place on September 7, 2022, and what they choose to do will go a long way to predict what the fall market will look like.  

In July 2022, the average residential property purchase price in Woodstock (including all residential property sales reported on the Woodstock-Ingersoll District Real Estate Board MLS system) pulled back to $643,115. This is a drop of 3.95% from last month's average sale price of $669,595, and a drop of 23.7% from the February Peak. For the "average" homeowner, this represents a value destruction of close to $200,000.  





This chart shows a 20 year history of annual average sale price (Red line) and annual increase (percentage over prior year, grey bars).  I'm anxious to see what happens to this chart at the end of 2022!!  

Average Sale Price (Detached)

After an increase in average sale price in June, the "detached" home average plummeted this month, down 7.8% month over month.  It ended July at $685,054.  FYI, February's high was a staggering $928,212. 


 

Number of Sales

Pricing has been the first indicator of a declining market, but until last month's 25% drop, we hadn't seen actual sales numbers changing much at all when compared to 2021. Now, in July, the volume of transactions continues to drop, with just 46 sales on the WIDREB MLS system.  

The slowdown in volume increased in July, with the number of sales WAY down to just 46 homes changing hands.  This is a decrease of 33.3% from June, and represents the lowest number of sales in July recorded on our board in the past decade. The next worst July was in 2012, with 57 sales. 



 

Average Days on Market

As you have probably noticed while driving around Woodstock, we are definitely seeing a continued increase in the amount of time homes spend on the market.  With all of the trickery going on with holding offers, cancelling-and-relisting, etc., the DOM has remained below 10-11 for 2 + years. 

As seen here, DOM ticked up again (27%) from 26, to 33.




A note about this metric.  Although I call it "DOM," the stat I report is known internally as CDOM.  The "C" stands for Cumulative. This stat tracks the amount of time a house has spent on the market in it's current listing cycle. So if the home came off the market for a few days in order to repair something, adjust pricing, stage, etc., but was promptly re-listed within a short period of time, the DOM metric resets, but the CDOM metric continues to count from the original listing. 

Number of Active Listings

With the low sales numbers in July, you'd have expected the number of listings available to jump through the roof.  But that isn't entirely the case.  

I am hearing throughout my network of real estate brokers, and seeing In my own business, many buyers and sellers are choosing a "wait and see" approach to their plans.  I think, if that reflects the broader sentiment, that partially explains why we aren't seeing a huge uptick in available homes to buy.  What we are mostly seeing are those who need to make a move, for whatever reason. 

Make no mistake, inventory is up.  We have to go all the way back to April of 2016 to find a month-end with over 170 homes for sale.  The amount of available inventory did increase in July 2022, however at a slower pace than prior months.  (March=58, April=112, May=131, June=161, July=177).  

This could absolutely get worse, and it could happen FAST.  A glut of inventory on the market right now would be a HUGE dagger to sale values, as stingy (actual) new inventory is definitely buoying sales prices. 

The number of homes for sale at the end of July 2022 was up 9.9%, to 177.




So after an incredible run of extremely low inventory, the uptick is nice to see, however, it is really just returning to a little bit more normal market conditions. 

Here's how the inventory levels look, since 2011:

Supply vs. Demand

Finally, the true measure of the trajectory of the market lies in how supply relates to demand.  I have charted this particular metric for the past 10 years.  As you saw earlier in this report, supply has ticked up measurably over the past few months. But, how does the demand stack up?  Have a look.  Keep in mind, the lower the line, the less supply exists relative to demand. 

July is showing a huge increase in available inventory relative to demand, up to 3.85 months of inventory. This is the highest I've seen in YEARS. Since about January 2016. 

FYI, The Blue line represents 2022 YTD, Red is 2021, and Yellow is the past 5 year average.

How to interpret this information? 

Traditionally, a supply of between 4-6 months of inventory means that sales prices are likely stable, not really increasing, or decreasing by any drastic amount.  A supply lower than 4 months indicates a seller's market, with pricing appreciating faster than inflation, and a supply over 6 months is a buyer's market, with prices dropping rapidly, and days on market growing.  

We are getting SUPER close to 4 months of inventory....




Sellers always wonder "What is the best time to sell my house?" They seem to want to attach timing to a calendar.  We have been trained, for whatever reason, to believe that spring is always the right time to sell.  But I firmly believe the best time to sell something is when supply of that thing is low, and demand is high.  This is a pretty rudimentary concept.  The reason I put so much stock into this metric is because it allows me to answer that question with complete confidence.  

If you look at 2021, statistically speaking, the best time to sell was in February/March, and November/December.  Counterintuitive, right? 

I've long predicted that January/February 2022 was probably the best time to sell a house, and so far that remains the case.  

 

Do you need to make a Move?

• Staging: Yes, I am still recommending staging. This is an extraordinary opportunity to capitalize on market trends. Yes, you will likely sell if you don't stage, but there is a measurable difference in price and terms when buyers are climbing all over each other to submit an offer on your home.  Why not take the time and make it look its absolute best before showcasing it to the market?
• Pictures. My residential sellers ALWAYS get professional photos. Highlight the best features of your home with professionally staged and captured photography! Additional bonus, a keepsake. Your home has probably never looked better.  Keep these professional photos for posterity!
• Virtual Tours. Essential in today's market. To limit in-person showings, and to embrace buyers who might be shopping from a couple of hours away, I always include a professional virtual tour.  Buyers can safely, and realistically tour your home from the comfort of their couch! 
• Video Tours. If a picture is worth a thousand words, a video is worth millions! Moving camera open house tours of your home, on youtube for everyone to enjoy. Why not cater to the video loving public? 
• Floor Plans. Not into pictures, virtual tours, or videos?  That's cool - buyers have the ability to print out my sellers' floor plans and determine "where the couch goes" or "will our king bed fit in this bedroom?" before darkening your doorstep! 
• Offer Handling. We will work together to create a plan that works for you and your circumstances.  There is no "one size fits all" strategy. Throughout this sellers market, I have continued to hone the craft of maximizing the opportunity that sellers have in this market, to get you the best possible price and terms on your sale!

• Appreciation. There's an old saying in the real estate world. "The best time to buy is 10 years ago.  The second best time is today."  I know prices seem to be adjusting downward, but we have no way of predicting how far down they might go, and if you can get in now, even if things take a bit of a dip in the short term, Real Estate is a long game anyway.  In a decade, a small blip won't make much difference to you. Buying today will get you:
  • Stability of Ownership. With trouble in the rental market (limited supply, landlord/tenant issues at an all time high, evictions happening like crazy), owning your own home, even if it's just a stepping stone towards your goal of ultimately buying your dream home, gives you the security that the landlord won't suddenly change their mind and sell the house, or require occupancy for themselves or a family member, or other issues associated with renting. 
  • An Iron in the Fire. Many home buyers over the years have had to make stepping stone purchases.  They buy something slightly less ideal than their dream home, with the hopes of improving it, and riding the wave of appreciation to their next home, eventually arriving at their dream home. It's unlikely you can save as much money as homes are going up in price currently, so one way to "hedge" against this inflation is to have an iron in the fire.
• Off Market Opportunities. My buyer clients receive the additional benefit of off market opportunities. By the time a home is listed on MLS® it is already a feeding frenzy, competing with other buyers.  Some sellers don't want that feeding frenzy in their home, and would be happy to sell it to someone through an off-market transaction. People who are CLIENTS of mine, get shortlisted for those opportunities as they come along. I have other marketing techniques to locate off market opportunities for my buyers as well.  Rest assured, I'm working to find you a home, if you hire me to help!

Closing