What Happened to Housing Prices in May?!?!

There is a lot of hysteria right now in the real estate market.  If you want to cut through all the opinions and see some hard data on what is happening, this post is for you.  Below are 5 graphs which help illustrate how the local Oakville market has been changing both by month, year and neighbourhood.  The data below shows a trend in the past two months of lower prices, lower sales volumes and higher inventory however if you compare this against data over a longer period of time, you will see that prices and sales volumes are still higher than they were just a few months ago and inventory levels (months of inventory) aren't hugely out of line with historic levels.  There is no question the market has softened since it's peak in March.  How long it will take to stabilize and get stronger remains to be seen however the trends of the past 2 months show that while things are slower, they are no where near the catastrophe some believe it to be. 

Average Annual Sales Values

The average price of an Oakville home is sitting around $1,265,000 in May 2017 (just shy of $1,300,000 YTD).  What is most prevalent is the steep uptick in prices since 2015. 

Monthly Price Changes

If you have been a homeowner for years then congratulations!  If not, then this graph shows just how much prices have increased over the past 10 years.  The sharp uptick in prices from January 2016 onwards is certainly not following the trendline.  While the market may seem drastic, there is still a significant difference between sales values in May 2017 versus sales values of even fall 2016.

Neighbourhood Sales Volumes

This graph highlights the average sale volumes by Oakville neighbourhood.  Keep in mind that volumes are down almost across the board however some areas have been hit harder than others.  Some areas have relatively small sales volumes which can swing the percentage amount significantly.  If you want to look for buying opportunities, this graph is better looked at over a longer period of time. 

YTD Sales Volumes

Overall, most of Oakville is still seeing high levels of sales volumes versus the first 5 months of 2016.  The impact of May 2017 may be partially offset by buyers who bought earlier in the year, worried about prices going further out of reach.

Months of Inventory

This graph takes the number of active listings in each area divided by the number of sales to see how quickly homes are selling.  Generally speaking, experts will classify anything between 0-4 months inventory as a "Sellers market", 4-5 months of inventory as a "Balanced Market" and 6+ months as a "Buyers Market".  Glenorchy, the area north of Dundas street is currently being hit particularly hard with sell through rates which may in part be due to the level of investment activity in the neighbourhood (investors looking to cash out in light of market predictions and/or new market regulations).  We have been in a "Sellers Market" for most of the past decade so while things feel very slow right now, the reality is that homes priced right for the current market, are still selling fairly quickly.

Historical Months of Inventory

This graph gives a historical look at months of inventory.  Note that the more expensive neighbourhoods of Morrison, Southwest and Old Oakville have historically had longer than average months of inventory.