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2018: The Year in Review
Posted January 18th, 2019 under market updates.
After 2016 and 2017, when flips and bidding wars had become the norm, 2018 was supposed to bring the return of a more normal market. This did not quite happen, but there is some hope. Let’s look at some factors.
Total listings for the year were down almost 21% (from 18731 in 2017 to 14807 in 2018). However, sales were also down by 16% (from 9183 to 7725). As a result there was neither a shortage nor a glut of listings. The sales-to-listings ratio stayed in the low 50% range for most of the year, signalling a balanced buyer/seller market.
Prices were a mixed bag. Apartments rose more than anticipated, while townhouses rose a normal amount. Semis and detached homes saw both increases and decreases. It appears that the outrageously high prices of freeholds resulted in more demand for apartments and townhouses. (See “2018 Price Statistics” for details.)
I contend that flips once again played a big role in keeping prices higher than they should be. In 2018, flips represented almost 7% of sales, and the average price difference between buying and selling was $131,800. That implies that 7% of sales were over-valued by about $50,000-$80,000 (see “The Real Cost of a Flip”), pulling up the market price of all homes. (In 2018, flips were 8% of sales with a $141,500 before-after price difference.)
Bidding wars played a greatly reduced role in 2018, and are hopefully fading into the past. About 11% of homes were sold above asking price, but only 3% were sold for more than 105% of asking price, and only 1% were sold for more than 110% of asking price. These numbers are close to the historical ratio of 2-3% of homes being sold through bidding wars.
Want to know more about current market trends? Just ask me, I'll be happy to help.