Home sales in the Sarnia area rebounded “a little bit” in October, says the president of the Sarnia-Lambton Real Estate Board.
President Rob Longo, releasing the latest monthly residential real estate market activity report, said the local market saw a 10-year “record low” in the number of properties sold in September.
“I think September was kind of a perfect storm” with “a lot of people putting the brakes on” both buying and selling homes because of rising interest rates, Longo said. “That has a huge impact on people’s buying power.”
But October saw 110 properties change hands in the Sarnia area, compared to 98 the previous month.
“It has been nice to see that pick up again,” Longo said. “We’re expecting that trend to continue the rest of the year” following the Bank of Canada’s decision in late October to not increase the interest rate above the current level of 5 per cent, the highest it has been since 1996.
Over the past 19 months, the bank increased the rate from 0.25 per cent in its fight to bring down inflation.
“It sounds like there’s some confidence now they’re going to continue to hold” the interest rate “through the spring,” Longo said. “I think that’s helping to bolster consumer confidence.”
The year-to-date median home price in the Sarnia area was $487,0000 in October, down slightly from about $490,000 the previous two months, Longo said.
“It has been holding pretty steady” around about $490,000 this year, “which is right where we expect to see it,” he said. “We think that’s a good price point to keep things reasonable and competitive with the other centres around us, like Strathroy, London and Windsor.”
Home prices in those neighbouring communities are 20 to 30 per cent higher, Longo said.
The Sarnia-area market continued to see a good supply of inventory in October, with nearly 260 new listings and growth in active listings.
Year-to-date active listings sat at 373 locally last month, which matches what the Sarnia-area market experienced in 2016 and 2017, Longo said.
“We’re still in what we would call a neutral market, a balanced market,” he said. “If we continue to see that climb, we may start to trend into a buyer’s market.”
Homes were typically on the market for 22 days in October and generally sold for 98 per cent of their asking price.
“I think that’s representative of a larger shift in overall real estate transactions,” Longo said about how close listing and selling prices have been in recent times.
Buyers have become accustomed to paying near asking prices, which is something sellers need to be aware of when they list a home, Longo said.
“It’s very different than what we would have seen 10 or 20 years ago when people would typically price their homes higher on purpose, with room to negotiate down,” he said.
These days, an over-priced home can end up sitting on the market longer before it sells, he said.
With files from the Financial Post