The Quad Cities, Real Estate Update February 2021
Low inventory and high demand were the story for January’s real estate market. The number of new listings that hit the market was actually typical for January but when added to the already depleted inventory, there just wasn’t enough to satisfy demand. The demand however was anything but typical. The real estate market usually cools down in December when buyers and seller’s alike, take a break for the holidays and then gradually heats up in the first month or two of the new year. That didn’t happen in December 2020. The blistering hot market continued right through the holidays and when January arrived, we were already waist deep in a spring real estate market. Buyers competed fiercely for homes in January. Selling prices of $100k over asking price became an everyday occurrence and selling $200k over asking became a new benchmark for real estate in Southwestern Ontario.
The average days on market for the Quad Cities (Kitchener-Waterloo, Cambridge & Guelph) was 6. Yes, that’s right, I said 6! To put that in perspective, historically HOT seller’s markets have had average DOMs of around 30 days. The average sale price in The Quad was approximately $625,000 and the sale to list price ratio was 114%. This means that practically every home that sold in January went for full price or more. Remember the crazy hot markets of 2016/2017? At that time 50% of homes were selling for full price or more.
So, what’s driving this crazy market? A combination of factors has created a perfect storm of market conditions. Low interest rates, inventory down 40% from the previous year, millennials (27% of the population) entering the market and a covid-19 related migration to the suburbs as working from home becomes more popular/necessary.
Going into February, spring market conditions will continue. There are currently 400 active listings in the Quad Cities. That number is ridiculously low and represents less than a month’s worth of inventory. One month of inventory is an extreme seller’s market. A balanced market would have approximately 4 months of inventory and a buyer’s market, 6 months.
Buyers: This can be a difficult and frustrating market to buy in but stay patient. While most homes are selling at full price or more, not every home is selling $100k over asking.
Sellers: This is without a doubt the hottest seller’s market in Ontario EVER! How long it will last is anyone’s guess but now couldn’t be a better time to sell. If you’re planning to buy and sell, I suggest buying first. Selling will be the easy part.
Dean Manton is your real estate expert! Put RE/MAX, the most powerful real estate brand in the world and Dean’s 20+ years of experience to work for you!
Dean Manton Broker
RE/MAX Real Estate Centre Inc
519-716-4663
reasonstohiredean.com
