When price trends in the Real Estate Market are discussed using MLS data, many critics dismiss the information. One of the biggest flaws pointed out is that wealthy buyers are driving prices on the high end of the Real Estate Market, which increases the median price. However, this does not reflect how the average resale Real Estate Market is really performing.
In the Waterloo Region, the resale Real Estate Market has shown signs of revival in the past few weeks. A definitive increase in median price for free hold residential sales is evident in the past month. The median price for free hold residential properties was 486,000 in March 2017 and is 492,000 in March 2018. This price decreased all the way to 427,000 in August 2017 before it began climbing again.
The median price is just one indicator and cannot solely assess the overall Real Estate Market. However, I was curious to find out how these numbers change when applied to properties that are below the average price. Do the numbers, when applied to properties in the 300k to 500k range, show a similar trend?
Every Realtor working in the Waterloo Region is aware that the market segment of prices between 300,000 and 500,000 is selling the fastest, many times with multiple offers. And houses in the more expensive range are staying on the market longer.
The median sale price for free hold properties listed for a price between 300,000 and 500,000 was 415,000 in March 2017 and has increased to 435,750 in March 2018. Mid range priced houses are not only following the general trend, but could be the driving force for this increase in price.
Another way to look at this is to compare units sold in two different price segments.
Total Free hold units sold in March 2017 were 806, and 569 in March 2018, a 29% decrease
Free hold units priced 300k-500k sold in March 2017 were 416, and 315 in March 2018, a 24% decrease
Free hold units priced 600k-800k sold in March 2018 were 168, and 103 in March 2018, a 38% decrease.
The number of units sold are substantially less this year, but the prices are almost back to the same level. Also, mid-range houses have seen a smaller decrease in number of units sold compared to those priced higher than 600,000.
Not only does this data dispel the myth that only rich buyers are driving the market, it also serves as an indicator to those sellers and buyers who are planning to participate in the 300k to 500k segment. The Real Estate Market for houses in this price range is doing very well. Depending on the location, some houses are being sold with multiple offers. Therefore, buyers need to act with caution and sellers have an advantage. This part of the market is returning to become a seller’s market.
Have you recently been involved in a transaction in the 300,000 to 500,000 range? Please share your experience in the comments section.