In mid-summer, real estate traditionally slows down. During July and August, many buyers and sellers go on day trips, summer vacation and take a breather from buying and selling a house.
But this year is different.
Many people won’t be going on those summer vacations as they had planned. People are spending more time doing things locally, and a result, it appears that more people are expressing interest in buying Guelph real estate.
Year-to-date through June 2020, Guelph had sold 10% (100) fewer homes than the same period in 2019. But if you add up all the sales of homes this year, it’s actually unchanged from last year. Why? Because the average price of a home in Guelph has increased by almost 10% this year. And as of mid-July, Guelph real estate is still very strong. Despite a global pandemic, higher unemployment rates and tightened CMHC lending guidelines, the Guelph real estate market in Guelph is still hot. But where are these buyers coming from?
It’s impossible to say exactly where a buyer is moving to Guelph from, but research shows that about 30% of the Guelph real estate buyers per month come from an out of town buyer. However, in recent months, it’s become obvious to any Guelph REALTOR® that this number has increased significantly and recent data estimates that almost 50% of sales are now from buyers outside of Guelph, mostly the GTA. But why?
Many sellers are finding that moving an extra 30 minutes west is saving them a lot of money and perhaps even improving their lifestyle.
Just over a year ago, Beth and Ryan Waller discussed the “401 effect”, where homeowners are selling in more expensive markets and buying a home in less expensive markets, pocketing the difference. Many sellers in Toronto, Mississauga, Milton and Brampton are finding that moving an extra 30 minutes west is saving them a lot of money and perhaps even improving their lifestyle. Sellers in Guelph are moving to less expensive markets, such as west and north of Guelph, or even out of province.
With COVID-19, this migration appears to have intensified, as many companies change the way they do business. Allowing people to work from home, employers are realizing the benefits and cost savings of working remotely. In turn, employees no longer need to live as close to work as they once did and are choosing to live in communities further from the GTA, including Guelph.
On top of that, there are potentially many people living the high-rise life in GTA condo towers, who have just experienced a significant time of isolation. This could be the catalyst for selling their condo for the same price they can purchase a detached house or townhome in Guelph.
“We’re fielding calls from GTA buyers daily right now,” says Ryan Waller, Sales Representative at Home Group Realty in Guelph. “Many of them are coming from Brampton, Mississauga and the City of Toronto and say that they hear great things about Guelph”.
And the numbers show that these out of town buyers also seem to be propping up the higher-end segment of the market as well: homes above $750,000 have been consistently gaining share from homes under $750,000 this year, reaching 25% of total sales in mid-June. This is also the main reason that we continue to see a rising average price in Guelph.
Unfortunately for those buying in Guelph right now, it’s back to a situation where demand is outpacing supply, which inevitably leads to multiple offers. In fact, over the past month, over 40% of homes listed in Guelph have sold over the original asking price. If you live in Guelph and are considering selling, now may be the right time as there is a lack of inventory particularly if you live in a “commuter-friendly” area of east or south Guelph.
If you’re looking for more data and insights on the market, be sure to check out the WallerReport, a free monthly feature by Beth and Ryan Waller.
Source: 2019/ 2020 GDAR data, City of Guelph single family residential home sales. Out of town buyer data is a conservative estimate using buying agent representation as a % of total sales.