Housing Prices Hold Steady in Kitchener-Waterloo
How our area is weathering the storm well.
It’s been one month now since we first gained an appreciable understanding of how COVID-19 and the resulting economic shutdown impacted the housing market here in Kitchener-Waterloo. The news then wasn’t exactly rosy, but it wasn’t unexpected either – or anywhere near the possible worst-case scenario.
The data at that time demonstrated that while average sale prices had sustained a minor dent over the short term (down by less than 3% compared to the pre-shutdown average in March 2020), prices had in fact remained on an upward trajectory when examined in terms of the broader 12-month window. You might recall me saying at the time that we’d have a much better idea of where the local real estate market is heading when the next report is issued in the first week of June – at a time when we’ve had nearly three full months to process this year’s crazy developments.
Now, here we are at the beginning of June, and KWAR has just released its data for May 2020. The numbers paint a picture of a market that’s weathered the storm with remarkable resiliency. Indicators of market activity have picked up significantly across the board since the beginning of last month, with total residential sales passing the 400 mark – an increase of 80% over the previous month. The total number of new listings was up sharply too, with 577 new residential listings hitting the market in this past month of May. While neither of these figures can compare to the activity levels of a normal spring market, the upward swing is good sign that a sense of normalcy is slowly returning.
But perhaps the most encouraging sign of all is that average sale prices across the board – for all property types – are holding firm month over month and have even increased by an average of 6.5% over this time last year. The average sale price of a residential property in Kitchener Waterloo now stands at $568,275 (and at $657,274 for a single detached home – an increase of 5.4% over this time last year for the segment).
Keep in mind that that these numbers reflect a market in full awareness of the strains of COVID and the economic shutdown – our province of Ontario has been in a state of emergency for a full 11 weeks now. These numbers also reflect a market aware of the recent CMHC release which projected an average decrease in Canadian home values of anywhere between 9-18% over the course of the coming year (a forecast I recently refuted in a blog post here). That information has been in the public domain and has been widely circulated by the news media over the past two weeks.
For the Kitchener-Waterloo market to absorb the dual shocks of COVID and a hysterical forecast from CMHC and show not only resiliency, but an actual increase in average values over this time last year is incredibly significant, I believe.
We know the road back for Canada will not be an easy one, but our region is among the very best equipped areas in the entire country to both hold strong in the short term, and to return to full strength at the head of the pack when the skies clear.