London & St. Thomas Housing Market Hits a Plateau: Buyers Hold Back Amidst High Rates

Well, it seems like the housing market here in London and St. Thomas decided to just hit the brakes in November. If you were hoping for a big surge in home sales, you'd be disappointed – they pretty much flatlined, and all signs point to those pesky high interest rates being the main culprit. It's a classic case of 'wait and see' for many prospective buyers, and honestly, who can blame them?

The latest report from the London & St. Thomas Association of REALTORS (LSTAR) paints a rather clear picture. A mere 469 homes exchanged hands last month. Now, that's actually a tiny, tiny bump up of 0.5% compared to October – barely a blip, really. But when you look at it year-over-year, comparing it to November of 2022, sales were actually down by a significant 10.7%. It really shows that while things aren't necessarily plummeting, they're certainly not roaring back to life either.

So, what does this mean for prices? The average home in the region fetched about $600,094 in November. That’s a small dip of 3.4% from October's average, but interestingly, it's a 1.5% increase compared to November of last year. Then there’s the benchmark price, which some consider a more stable indicator – it sat at $564,600. That's down just under a percent from October, yet up a similar amount from the previous November. What this tells us is a market that’s really just treading water, trying to find its equilibrium.

One fascinating detail is the increase in inventory. New listings actually jumped by over 20% compared to November 2022, and the total number of active listings on the market saw a similar rise, up 18.2%. This means there are more homes for sale, which usually gives buyers a bit more power. We're now sitting at about 4.0 months of inventory, a noticeable increase from October's 3.0 months and even last year's 3.2 months. More choice, less frantic bidding – sounds like a relief for buyers, right?

But here's the catch: even with more homes available, buyers are still hesitant. The prevailing sentiment is that high interest rates are making homeownership feel just out of reach, or at least, too risky for many. The President of LSTAR, Adam Davies, put it quite well, noting that 'many potential buyers remain on the sidelines.' It's not a lack of desire, it's a matter of affordability and market confidence.

Looking ahead, it feels like we’re settling into a more balanced market – less of the frenetic pace we saw a couple of years ago. While we might not see dramatic price changes anytime soon, the current landscape offers a bit more breathing room for those who are ready to make a move. For now, however, the dominant theme remains caution, as everyone keeps a close eye on what the Bank of Canada decides to do next.