How did the Milton Real Estate market perform in April? Pretty much exactly the same as it did in March! This April, 189 homes were sold compared to 190 in March. The average combined home price for all home styles was down by .1 percent compared to the previous month and the breakdown of home sales by type were also very similar. This holding pattern is neither good or bad, it just is and I think that we will see it continue over the next few months.
Average home prices in Milton were down approximately 31 percent compared to April 2017, which is quite similar to what other communities in the GTA experienced. According to TREB’s April 2018 Market Watch Report:
On a year-over-year basis, sales were down by 32.1 per cent and the average selling price was down by 12.4 per cent.
The year-over-year change in the overall average selling price has been impacted by both changes in market conditions as well as changes in the type and price point of homes being purchased. This is especially clear at the higher end of the market. Detached home sales for $2 million or more accounted for 5.5 per cent of total detached sales in April 2018, versus 10 per cent in April 2017. The MLS® Home Price Index strips out the impact of changes in the mix of home sales from one year to the next. This is why the MLS® HPI Composite Benchmark was down by only 5.2 per cent year-over-year versus 12.4 per cent for the average price.
“While average selling prices have not climbed back to last year’s record peak, April’s price level represents a substantial gain over the past decade. Recent polling conducted for TREB by Ipsos tells us that the great majority of buyers are purchasing a home within which to live. This means these buyers are treating home ownership as a long-term investment. A strong and diverse labour market and continued population growth based on immigration should continue to underpin long-term home price appreciation,” said Mr. Syrianos.
“The comparison of this year’s sales and price figures to last year’s record peak masks the fact that market conditions should support moderate increases in home prices as we move through the second half of the year, particularly for condominium apartments and higher density low-rise home types. Once we are past the current policy-based volatility, home owners should expect to see the resumption of a moderate and sustained pace of price growth in line with a strong local economy and steady population growth,” said Jason Mercer, TREB’s Director of Market Analysis.
Much of the same can be said for the Milton real estate market. While the current year over year average price comparison sounds alarming, if you look at the last 4 years, you will see that the average home price in Milton is up by almost 44 percent!
Percentage of home types sold relative to the total number of homes sold in April 2018 compared to April 2017 are almost identical, with approximated 47 percent of sold homes were detached, 10 percent semi’s, 30 percent townhomes, 3 percent condo townhomes and finally 8 percent condo apartments. We did see a significant decrease in total homes sold in April 2018 with 189 homes sold compared to 287 in April 2017. I believe that this trend will continue throughout the year.
Currently, in Milton, there are 406 homes on the market, giving us approximately 2.1 months of available inventory. Our marke is healthy, although it is quite a contrast from the first quarter of 2017 when inventory levels were as low as .7 months. Milton’s inventory is still at a low level compared to many other communities in the GTA, where homes are selling at a slower pace. Currently, Burlington has about 2.4 months, Oakville 3.4 months and Halton Hills has about 1.7 months of inventory. Considering all areas covered by the Toronto Real Estate Board, the highest inventory levels are in York Region and Simcoe County.
While having this much inventory on hand is uncharted territory for Milton, we are still seeing homes selling in a healthy amount of time. TREB is reporting that the average days on the market for April 2018 was around 18 in Milton. While this average does not include time lost on homes listed multiple times (see my article on The Problem With Real Estate Statistics) it is a fairly accurate reflection of the market as a whole. We are finally seeing fewer homes being listed multiple times, which means that more often than not, homeowners are being realistic about the value of their homes and are pricing them appropriately, the first time!
This year continues to be a great time for move-up buyers. People living in condos and townhomes looking to move up to a semi-detached or detached home will find this to be a great time to move, assuming they have enough equity in their home to qualify for the type of home that they desire. We will also continue to see city families head out to the suburbs to enjoy more space, a larger home and the relaxed family atmosphere that Milton has to offer.
The massive announcement about Wilfred Laurier University and Conestoga Colleges STEAM-focused Milton Campus will certainly spur even more interest and investment in our beautiful community, as industry joins forces with educational institutions at Milton’s Education Village Campus. The next several years will be filled with change as the community grows in new ways.
What else is going to impact homeownership this year? Mortgage rates. According to a recent article released by CTV News, almost half of all Canadian mortgages will be up for renewal in 2018. The article explores the fact that many uninsured mortgagors WILL NOT have the luxury of shopping around, because doing so would cause them to have to qualify under the new stress test criteria introduced at the beginning of 2018. Many homeowners will not be able to pass the stress test and therefore are unlikely to qualify for a new mortgage with a different lender. This will force many homeowners to simply sign the renewals sent out by their existing lenders and commit to them for another term but at a higher rate than they are currently paying. This is enabling lenders to be much less competitive with their rates than they have been over the last several years, leaving many heavily indebted Canadians with few options and mounting debt servicing costs.
Milton’s Real Estate market is continuing to evolve and there are many things on the horizon that will help us to continue to thrive!
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