By Keith McDonald, Real Estate Expert
KAWARTHA LAKES-As a local Realtor, the top two questions I regularly experience are, “When will the market cool down?” and “Will the market crash?”. While there is no crystal ball, we can try our best to predict what will happen. To do that, I believe we need to examine the data.
Before diving into the numbers, we need to break it down. I’m going to break it down into 2 categories – waterfront and non-waterfront. Why? In the last three months, excluding waterfront properties, $213M was sold. Waterfront properties came in just over half that – $123.6M. Ok, what’s the big deal you say? The number of non-waterfront properties outsold waterfront properties nearly 3 to 1, meaning nearly a third of units sold accounted for more than half of the dollars sold. Combining non-waterfront and waterfront is going to skew our numbers when reporting average sale price, units sold and total volume sold.
Waterfront – Since the pandemic started, waterfront properties in the Kawartha Lakes have hit the stratosphere. Over the past 16 months, from March 2020 to June 2021, waterfront properties have total $374.7M. To put that in perspective, that is more than 2017, 2018 & 2019 combined ($361.8M). Yeah, it’s a lot. But what has happened to waterfront properties over this past quarter? The average selling price this quarter came in at a whopping $982,098, although ever so slightly down from the past quarter at $985,744. Interesting, however, we saw the lowest average monthly selling price since the beginning of the year, this past month, at $905,091. Turning our attention to the number of units sold, this past quarter saw 125 units change hands compared to 58 last quarter. An increase in units sold from the first quarter to the second is common compared to previous years. What is not common is the sheer volume of units being sold. The number of units sold is up over 92% compared to the same time period over the last 3 years. This past month we also saw the lowest number of units sold at 33 compared to the previous two months. Finally, let’s examine the volume of dollars sold. Relative to units sold, we saw the lowest dollars sold at $29.8M this past month compared to $43.3M in April & $50.4M in May. To summarize, these figures are still much higher than years past, but compared to the past 6 months, they are slowly declining.
Non-waterfront – While the average selling price has been steadily increasing since 2017, it nearly doubled last years average and just about tripled 2019. Yikes! This past quarter it rang in at about $616,734 for a residential non-waterfront property in the Kawartha Lakes. Compare this to $409,125 in 2019, and you can see why so many Sellers have taken advantage of the market. While this may be up 29% over last year (just over 50% from 2019), it is actually down just about $7,000 or 1% from the first quarter. Looking at units sold, this past April saw a staggering 255% more units sold than last year with May beating its previous number by 57%. June was a surprise, falling short just 1 unit over last year and coming close to 2019 with 106 units sold vs 102. June was also the lowest number of units sold in the last 4 months. Finally, year-to-date dollars sold hit $385.7M. To put that in perspective, it only took half a year to beat each of the last three years pre-pandemic. The second quarter of this year eclipsed the first quarter by more than 23% or $41.2M which is not surprising given the increase in units sold. What is interesting to see, is the slow decline in volume sold from $80M, $67.2M to $66.1M over the past three months.
So what does this all mean? Let me finally weigh in on the two most popular questions.
Will the market crash? While we are noticing a decline in the average sale price and units sold, the decline is not drastic. It seems to be slow and steady. If the market was to crash, it doesn’t seem like it will anytime soon.
Is the market cooling down? The data is saying yes. What isn’t reported on any housing reports, but is something Realtors like myself are experiencing, is the re-emergence of conditional offers. This is a sure sign that the multiple, over-asking, non-condition offer days are soon to be behind us.
Data compiled from Kawartha Lakes Real Estate Board MATRIX System.
