|Another year has come to a close, and I'd like to take a moment to shed some light on what happened to the Woodstock Ontario Real Estate Market, throughout the previous year.
We have seen a continuation of trends from previous years, although a bit more muted than recent memory. More details below.
For your information, this data is compiled by me, Ben Sage, using CREA monthly statistics reporting, and data on the Woodstock/Ingersoll district Multiple Listing Service (MLS®). If this data looks different than you've seen posted elsewhere, please note that I am looking at only Woodstock. Many of the local board and other agents' reports focus on the entire board area (which includes Woodstock, Ingersoll, Thamesford, Embro, Innerkip, Sweaburg, Hickson, etc).
On to the report!
The Woodstock Real estate market put up some healthy growth numbers in 2019. Starting with the big one, Average sale price.
In 2019, the average residential property sold for $398,517. This includes all non-commercial transactions taking place within the city of Woodstock, and logged on the WIDREB MLS. The average price increased 7.7% over 2018.
In terms of how this price increase relates to recent years, it is only slightly above the 10 year average (which is 6.9%). Consider the chart below for an idea of how average prices have increased over the past eight years. Bars represent percentage increases, and the line graph shows the average sale price.
There were 808 of these transactions on the Woodstock Ingersoll District Real Estate Board MLS system in 2019. This was up 8% over the number of sales last year.
In terms of detached homes (non-condo's with no common shared walls, floors, or ceilings), the average price for this type of home increased 7.3%, up to $430,860.
Semi Detached non condo homes were a definite leader in market appreciation, up a staggering 16.1%, to an average sale price of $348,577.
The big story of the past several years, and what has caused the incredible appreciation, is the relationship between supply and demand. The number of active inventory at the end of December was 119. This is DOWN 13% from the same point last year, and this trend has been the dominant factor in the overall market trend for the past several years.
Curiously, one would expect the "average days on market" to be dropping, if supply remains low, and demand grows, yet this year we actually saw average days on market increase from 35 days, to 37 days. These numbers are historically low, and the increase is likely due to many sellers "holding offers" and artificially increasing the amount of time on the market, as a way to ensure sufficient exposure to the market, and a maximum sale price.
Finally, the true measure of the "heat" of the market lies in how supply relates to demand. I have charted this particular metric for the past 9 years. It has shown a measurable trend of supply dropping versus demand. If you consider the graph below, you can clearly see that beginning in 2011, tracking absorption rate through every month between January 2011 and December 2019, the trend is clear. Less supply, more demand, intensifying in the past 48 months, with even seasonally "slow times" showing absorption rates of less than 3 months.
So, we know where we've been, but where are we headed?
In terms of predicting the future, it's honestly anyone's guess. I could find you a dozen articles claiming a correction in real estate prices is imminent, and a dozen articles claiming inflation-based appreciation, and a dozen articles claiming that real estate in Woodstock Ontario is vastly underpriced and primed for heavy increases.
So what's the reality?
- Woodstock's population is expected to skyrocket. According to an Oxford County Report, the population is expected to grow by 50% by 2046, up to a forecasted 65,950 people!
- Interest Rates are likely to stay historically low. As expected, some pundits predict a slight increase, and some predict a reduction.
- Recession not expected in 2020 (Source:https://www.ctvnews.ca/business/canadian-recession-not-expected-in-2020-despite-uncertainties-economist-1.4754589)
- Liberal minority Government continues to push for higher immigration numbers, many of whom will settle in GTA, pushing up prices there, and shifting that wealth outwards concentrically. (Source:https://www.cicnews.com/2019/12/liberals-outline-canadas-immigration-priorities-in-new-mandate-letter-1213350.html#gs.s8mpx9)
Here are predictions from my esteemed broker-of-record, John Wolfe:
If you’re thinking of buying or selling a home next year, you’re likely wondering what’s expected to happen in the housing market. Here are a few trends that our team at RE/MAX a-b Realty expects to impact the market in 2020.
Resolution of uncertainty in the world economy could affect interest rates. Interest rates have been at historic lows the past few years largely due to investors flocking to the Bond Markets and rates are likely to remain low next year. However, should more stability in the world economy evolve via resolutions of the trade disputes and/or Brexit, mortgage rates may rise in response as money is moved out of the bond market.
Consumer confidence will remain strong. Consumer confidence is one of the most important leading indicators for the housing market since it requires optimism to make a long-term commitment to a house. Employment rates are still very strong which only strengthens consumer confidence.
Inventory issues will continue to affect buyers looking for low- to mid-priced homes. The lack of listings has been severe for mid- and lower-priced homes, where demand outpaces supply, while the luxury market has plenty of inventory to meet demand.
New construction, especially of starter homes, may slow. While demand remains for new homes, the cost of land and materials, the shortage of skilled labor and overall regulatory environment are making it expensive to build. There are several exciting projects in the area that we are representing in 2020. If this is an area of interest for you please let me know and I will get you some details.
Price appreciation will remain healthy. A modest rise of about 2% to 4% is expected in 2020, which is a solid gain—but not an indication of a bubble.
Home sales will be brisk, particularly for low- to mid-priced homes. The number of home sales should continue strong in 2020. It’ll remain a seller’s market for mid- to low-priced homes, while buyers will have more options in the mid- to upper-price ranges.
Thank you for taking the time to read this report!
As always, if you have questions about the real estate market, and how this information pertains to you and your plans, please give us a shout! We'd be overjoyed to hear from you!