Let’s talk about Gary the Golfer.
Think of Gary and his golf game when comparing the last few years in Niagara real estate.
Gary has shot in the 90 – 100 range for most of his golfing life. One day he goes out and everything goes perfect. The wind is always at his back, the greens are soft and his putter is dialed in like never before.
Gary shoots a 76!
Guess what happens the next time he plays. Clubs will be flying almost as fast as the expletives as Gary’s golf rage grows. His frustration is understandable though if he is only comparing his game to that 76, aka “his greatest round ever”.
Looking at Niagara real estate, 2016-2017 was our version of a 76. So, our report below is looking back at previous years, quite often back over the last decade. Not just that fateful day when we shot a 76.
TREND #1 – The Total # of Sales and “The Upside-Down Spoon”
Think of an upside down spoon. The handle has a gentle slope and then a fairly quick rise at the bowl and finally it tapers off as it reaches the tip.
This same shape has defined several aspects of the Niagara real estate market over the last 5 or 6 years.
For example, have a look at the total number of sales in St.Catharines and Niagara Falls going back to 2009 (and keep in mind the 2018 number doesn’t include Nov & Dec sales so the tip of that spoon will come up a bit still):
St.Catharines – Total # of Sales
Niagara Falls – Total # of Sales
Yes, sales are pulling back but what we’re seeing month-to-month and year-to-date are total sales numbers that are more in line with what we typically experienced prior to 2015.
TREND #2 – Average Asking Price vs Average Sale Price
Another trend to keep an eye on is the differential between the average asking price (AAP) and the average sale price (ASP). There is some talk out there that the market is weak or it is soft. As impressive as the climb in sale prices has been, the increase in asking price is even greater which is having a spin-off effect.
In St.Catharines for example, the ASP for 2018 so far this year is $389,042 while the average asking price is $451,378 which is the largest % gap going back 10 years.
St.Catharines – Average Asking Price (green) & Average Sale Price (blue)
Niagara Falls gap is even greater with 2018 numbers of $389,884 for ASP while AAP is at $478,810, a gap of over 22%.
Niagara Falls – Average Asking Price (green) & Average Sale Price (blue)
So, the result is:
AAP/ASP gap increases = less sales = days on market increase = more supply = less competition
So, that begs the question:
Is the market soft or are sellers being unrealistic in terms of asking price? Remember, the selling prices are still at record highs so even a reduction in asking price will still result in higher prices than may be expected.
TREND #3 – Days on the Market (DOM)
Otherwise known as the time it’s takes to sell, this is the stat that determines how long until those For Sale signs change to Sold signs.
Similar to the spoon concept of Trend #1, DOM across Niagara is a right-side up spoon, albeit some of the spoons have a bent handle!
A few examples:
St.Catharines – Days on the Market
Niagara Falls – Days on the Market
Niagara on the Lake – Days on the Market
Fonthill & Pelham – Days on the Market
Thorold – Days on the Market
So, is the market slow? In comparison to the recent decade, 2018 is shaping up to be the 3rd or 4th fastest market on record.
Hopefully this info helps. You can keep scrolling from here to see our reports for Niagara Municipalities looking at September 1 – October 31st.
Any questions on this at all, feel free to reach out to us. We love chatting Niagara real estate!