London was considered by many to be Ontario’s best-kept secret. It was a city with everything you would want: affordable housing, jobs and even lauded as the brain capital of province. With more people desiring to escape the big city and find refuge in an urban locale with a small-town charm, London’s popularity is skyrocketing. This is great news for the London real estate market.
Recent data point to an incredible recovery in the housing industry in the wake of the COVID-19 public health crisis. With tight supply and growing demand, the Canadian real estate market is enjoying record-setting numbers in every possible category. All the early forecasts suggest that London can sustain this trend to finish the year and head into 2021.
Although the coronavirus pandemic continues to threaten the broader national recovery, accommodative monetary policy and pent-up demand are driving the country’s real estate industry. So, what is going on in London, Ontario?
Why the London, ON Real Estate Market Continues to Thrive
London is witnessing some strong Fall market activity as the city basks in the afterglow of the best performance for the month of August in more than 40 years, followed by a record-breaking September. According to the London and St Thomas Association of REALTORS® (LSTAR), 960 homes were sold in September, the best September since 1978! Local headlines also spotlighted that the average home sales price reached $521,883, up a whopping 98 per cent compared to the same time five years ago.
Industry observers also point out that homes are being exchanged at a faster pace. In London, the median number of days that a home sat on the market fell from 12.5 in July 2020 to just 10 days in August and a mere eight days in September.
Demand is gaining steam, with interest booming in the market for condominiums, single-detached homes and everything in between. This has sparked interested prospects to submit bids over the asking price, and this could continue to be the norm if demand remains strong and inventories remain low.
“The strong momentum experienced during the summer months continued through September,” said 2020 LSTAR President Blair Campbell. “Similar to many other housing markets across Canada, many are still playing catch up from the COVID-19 lockdown we had during the spring.”
Campbell noted that “Each of the five major areas in LSTAR’s jurisdiction posted gains, led by Middlesex with average sales price of $575,785. Again, it’s important to note this figure encompasses all housing types, from a two-storey single-detached home to a high-rise apartment condominium.”
Campbell said in a recent interview with CTV News, that nobody is really surprised by the developments. Instead, real estate agents and the broader market are surprised by how quickly it occurred. But what is driving this surge in London real estate?
What is Driving London’s Real Estate Market?
After experiencing a brief “pandemic pause” at the height of the coronavirus outbreak in March, the wait-and-see approach was abandoned, and now the pent-up demand is stimulating London’s housing market. Like other cities across Canada, buyers and sellers have returned from the sidelines to take advantage of current conditions and trends.
Since Queen’s Park reopened the province, buyer confidence has swelled, which has been reflected in the latest housing data. Of course, real estate agents are still diligently adhering to public health guidelines. This includes social distancing, wearing face masks, showcasing listing via virtual open houses and facilitating digital paperwork completely online by means of technology.
That said, the second wave is already prompting some local governments to reimpose COVID-19 restrictions, and industry experts say that people on both sides of real estate transactions are looking to get some deals done before any drastic measures transpire. Plus, as market observers understand, cool temperatures and the flu season can impact real estate. With so much uncertainly on the horizon, the market remains hot as buyers and sellers fight to “get in while they can.”
London, like other smaller towns across the province, is witnessing an influx of buyers from the Greater Toronto Area. Although London area home prices have gone up, they remain more affordable than what you can purchase within downtown Toronto, or even other municipalities within the Greater Toronto Area.
Homebuyers are ostensibly using the work-from-home trend to their advantage, no longer tied to live close to their workplace. Plus, with greater investment in public transit within cities province-wide, if professionals needed to travel into the nearest urban centre, there are a greater number of transportation options at their disposal.
Moreover, since more people are spending significantly more time at home amid social distancing measures and remote working environments, a lot of buyers are reconsidering their living space. For example, some seek to upsize to properties that have room for an office, a learning centre for kids, and other features that may not have been important even just a year ago.
As the list of priorities for homebuyers changes, real estate trends are shifting across the country and municipalities like London, Ontario are projected to continue this trend of strong housing demand, tight supply, and swelling real estate prices into 2021!