Weekly Wrap Up...Will the selection for buyers continue to dry up as we approach the holidays?
Happy Friday and welcome back to another episode of Selling the Rock, your local real estate podcast! Today we have David Kurt and Chad Moore on the mic to chat about the week!
We are less than one month to Christmas; it's always been one of my favourite times of the year. Usually it's at this time where we can slow down the pace of work and life, spend more time with the family and sip on morning coffees with baileys, another holiday perk! We are only a few short days from ‘Elf on a Shelf’ making an appearance and filling you facebook news feeds; and if the hallmark movie marathons haven’t started at your house, I’m sure it's only a matter of time. We had an interesting week especially in Southern Ontario where they have shut down many small businesses while keeping larger box stores open. I know this has caused a lot of extreme frustration and we even saw a blatant disregard for the local authority with Adamson Barbecue a local restaurant staying open despite all the warnings from by-law and police. The result is a highly publicized shut down of the restaurant and massive fines. The story doesn’t end there though, a Go-Fund Me page has been set up to support the local restaurant's fight and as of this morning they are almost at 140k of funds raised to support their legal defence.
On a local level, we saw how tight-knit the community really is with the rally around Marc Hovingh’s death; when the body was delivered from Southern Ontario back to Manitoulin Island people came out in droves to show their appreciation and respect for the fallen OPP officer. There is another Go Fund Me page for raising money for his family; and although its great that they have been able to raise just over 80k so far, its disappointing to see the Adamson BBQ restaurant out pace the family with donations by almost double.
From a real estate perspective, listings were beyond low this week with a mere 27 new homes hitting the market. While sales stayed strong in the low 40’s meaning that the market is not showing signs of softening at least in the short term.
Number of Sales
Nov. 20th - Nov. 26th
Conditional/ Pending Deals
Nov. 20th - Nov. 26th
Nov. 20th - Nov. 26th
Nov. 20th - Nov. 26th
My 5 takeaways this week are:
- I keep talking about how the drop off of listings and sales is so predictable for this time of the year. But wow… Just wow… In just one week we went from 43 new listings which was already near the weekly lows for all of 2020; and this week we only were able to manage 27 new homes that became available. This is 1/3rd the number of a busy week in the summer (and even during these busy weeks the buyers were complaining about the lack of available homes). Just one week ago, I sat behind a keyboard and predicted that the new low for listings would be in the low 40s; clearly that’s not the case going forward.
- With the drop in listings; the interesting thing is that sales stayed consistent. This week we saw 43 sales with the weekly average being 44, so right on par with what we would expect. Sales nearly doubled the new listings this week! This is a leading indicator that available selection for buyers will continue to dry up; and if this trend continues, buyers will not appreciate the availability of homes continuing to decrease.
- The multiple offers this week are pretty surprising as well. With almost 60% of the deals happening in multiple offers it feels like the active market may never end. My overall feeling for the last few months is that there are not as many first time buyers that are starting to look for homes in our marketplace. In addition to that, the number of buyers who are escaping Southern Ontario seem to have slowed down; especially for those looking for a principal ‘work-from home’ place. We have seen a strong amount of out of town investor buyers who are targeting Sudbury; but we are seeing strength in the Single Family housing market in addition to the multi-family marketplace.
- Speaking of the multi-family marketplace; wow, things have been on fire with investment properties lately. This is where we have seen a lot of out of town buyers coming in droves to look at Sudbury as a viable option; compared to the prices they are seeing in Ottawa and the Golden Horseshoe markets down South. Price per units and capitalization rates, two criteria investors use to evaluate properties seem expensive to local investors; compared to what you could get a year ago, but compared to other marketplaces, Sudbury looks like it's on sale. I believe in Sudbury in the long term especially, with multiple post-secondary institutions, NO School of Medicine, and the Research jobs that are here; Sudbury is not an old school mining town any longer.
- For the last few months I kept making predictions that he market was slowing; thinking that as we head into the winter market, the buyers would choose to put their search on hold while those sellers that felt motivated would be forced to list and keep their home on the market in the holiday season. This has been partially true; the drop in listings reflects motivated sellers who will list, while others are holding off until after the holidays or the spring market. The anomaly that I struggle to wrap my head around is the number of sales that continues to be so strong. If these numbers continue, it almost feels like we are headed to a further price increase; something I didn't think we were going to see until mid-way through next year.
As we count down the days to Christmas, it is clear that this holiday will be one unlike any in recent memory. The family around the table will be much smaller in numbers, but ideally that’s what’s going to be required to get back to some version of normal in 2021. I remember almost a year ago at the on-set of the COVID shutdown projecting out how long this would last, thinking it was days or weeks and things would be back to normal. We are approaching a year, and there is a faint hope that 2021 may bring more optimism with a 3rd vaccine being discovered; but it still will remain some interesting times as we try to roll back to some version of the ‘olden days’ pre masks and social distancing.
Until next week, hope you are staying safe and we’ll chat next Friday!