August 4, 2017 | Guelph Real Estate Market

Guelph Market Update For July

Below you will find our real estate market Guelph market update for July report which will provide you with information on the local real estate market and recent sales activity in your specific area. Don’t hesitate to contact us if you have any questions or if you are ready to move forward with the next step!

Guelph Market Update For July

So what is going on with the CRAZY market?? Well here are the July numbers! 

There were 170 sales in July which are down 30% from June and 26% down from July 2016. Interestingly enough inventory in Guelph has decreased from 370 in June to 299 active listings on the market. This is likely due to some unmotivated sellers pulling their houses off the market. Even though the number of active listings has decreased the absorption rate (months of inventory) has increased to 2.6 months. This is because the number of sales has dropped.

Houses are selling on average within 25 days and for 99% of asking which is still great! However there is a caveat, only 40% of the houses on the market right now are selling. This means that out of 10 houses listed only 4 are actually selling. During the peak of the market in April over 90% of the houses were selling. It is now more important than ever that you select an experienced and full-service realtor to sell your home!

The average sale price in Guelph did drop again in July – down to $494,418 which is down 5.9% from June. This is the 3rd consecutive month that prices have dropped. In total, the average sale price in Guelph has dropped 11.78% since the peak of our market. However, we are still up 16% from this time last year!

So what has caused this huge shift in the market? 

In April, the Ontario government implemented rules intended to dampen Southern Ontario’s over heated real estate market. These rules included a 15% tax on foreign buyers in the Greater Golden Horseshoe region, expanded rent controls and legislation allowing Toronto and other cities to tax vacant homes. Within the same week, Home Capital Group which funds over 7 billion dollars a year in alternative mortgages in Canada announced that they had to take a 2 billion dollar line of credit to prevent them from going bankrupt. These two events happening at the same time caused buyers to pull back with the fear that the bubble was starting to burst and all sellers who were thinking about selling rushed to put their houses on the market with the same fear. In reality, none of these changes should have had close to as much of an impact that they have on our market. The main factor for the decline in our market has been buyers sitting on the fence waiting to see if prices continue to go down. Once buyers step back into the market we believe that sales will start to increase, prices will gradually start to rise but at a modest rate. BMO chief’s economist Douglas Porter said “Toronto’s market will likely follow the Vancouver playbook: a sharp drop in sales and big upward spike in listings, with a moderate cool-down in prices followed by more subdued appreciation compared with the pre-tax mania,”

Some things that have recently happened in the market: 

The Bank of Canada raised their rates for the first time in years! It was a small increase of 25 basis points which does not have a significant impact on what buyers will qualify for. In fact, a 25 basis point increase will only decrease what a buyer can qualify for by 3%. The concern is that this is the first rise of several and if the Bank of Canada continues to do quarterly increases this could eventually have an impact on prices.

However, we think what is going to have a larger impact for buyers is the proposed stress testing for everyone. Back in the fall of 2016, the government made it mandatory for all buyers who required mortgage insurance (down payment less than 20%) had to qualify at an interest rate that was approximately 2% higher than their actual offered rate. They are now looking at implementing this for all buyers meaning even if you are putting 20% or more down you will have to go through stress testing which will drastically decrease the size of mortgage that you qualify for.  This has not been passed yet but the word on the street is that it will likely go through and come into effect. Although this does impact what buyers qualify for it is good that the government is trying to prevent people from over extending themselves. Especially with interest rates starting to rise.

So if you are thinking of selling, we are still in a seller market meaning it is still a good time to sell.  However, sellers have to be realistic that they aren’t going to get the same price as homes selling in the April peak and that it may take 21 to 30 days to sell. For buyers, get off the fence, now is a great time to buy, prices are down and inventory is up, don’t be saying in October “I should have bought it August”.

Neighborhood Statistics

Below you will find a real estate market update report which will provide you with information on the Guelph Market Update For November and recent sales activity in your specific area. Don’t hesitate to contact us if you have any questions or if you are ready to move forward with the next step!

Central

Downtown, Exhibition Park, General Hospital, St. George, St. Patrick’s Ward, Dovercliff Park/Old University

Guelph Market Update For November

Click here for Active/Solds In This Area

West

Onward Willow, Willow West/Sugarbush

Click here for Active/Solds In This Area

North

Riverside Park, Victoria, Victoria North

Click here for Active/Solds In This Area

East

Grange Road, St.Gregory’s/Tait, St.Andrew/Southwood, York/Watson Industrial

virtual-tour-183831-01

Click here for Active/Solds In This Area

Kortright

Kortright East & West, Westview, Kortright Hills

virtual-tour-223125-01

Click here for Active/Solds In This Area

South

Clairfields/Hanlon Bussiness Park, Pineridge/Westminster

Click here for Active/Solds In This Area

Village By The Arboretum

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Click here for Active/Sold In This Area

Guelph’s Surrounding Area

Guelph-Eramosa, Elora, Rural Puslinch, Aberfoyle, Morriston, Rural Centre Wellington, Fergus

Click here for Active/Sold In This Area

If you have any questions about the Guelph Market Update For July feel free to contact  The GoWylde Team.

If you would like a free online home evaluation  click here

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