Competition to buy a house in Kingston continues to ramp up
Kingston’s Real Estate market continued to aggressively favour sellers in the final months of 2020.
According to an analysis published in December 2020 by the real estate brokerage Zoocasa, Kingston had an 87 per cent Sales-to-New-Listings ratio (SNLR) in October of last year. That’s up from 68 per cent in October 2019.
Zoocasa said they calculate the SNLR by dividing the total number of sales by the number of new listings in a particular region at a point in time. “The SNLR is used to illustrate demand and supply dynamics in a given area, and can help identify the degree of competition faced by local buyers in relation to supply,” they said.
The stiff competition for buyers is a trend President of the Kingston Real Estate Association (KAREA) Mat Clancy said has been observed for the better part of three years.
“When I first started [selling real estate in Kingston] seven years ago it was a buyer’s market,” Clancy explained on Monday, Jan. 4, 2020. “A house generally took a lot longer to sell. You’d take a buyer out to look at eight houses in one day, they’d decide if they wanted to try to buy one of them, then you’d have a conditional period, and then you’d decide if you were going to buy that house after you worked through your conditions.”
Now, he said, a desirable home can be listed at 9 a.m. and sold by early afternoon, with no conditions on the offer. “There are more buyers than sellers.”
Interest rates down, home prices up
Clancy said that low interest rates on mortgages are part of the reason the market has heated up. “Low interest rates are really getting people going. Houses that maybe were not affordable in the past are affordable now,” he said.
Low interest rates are also contributing to the increase in home prices. According to Zoocasea, the average sale price for a home in Kingston was up to $482,294 in the month of October, an increase of 25 per cent over the previous year. That places Kingston as the ninth most expensive real estate market in Ontario outside of the GTA in their analysis, just ahead of St. Catharines, Niagara Falls and North Bay.
Clancy said looking at the annual data paints a better picture. Based on MLS statistics home prices were up 13.2 per cent for 2020 overall in Kingston, he said, and the average sale price for the year was $472,000.
“The good houses that are listed at a good price are generally going for over asking,” Clancy noted. “They’re generally getting multiple offers, and getting people to fight over them. But I would also argue that the houses that are listed over market value are sitting.”
The average time to sell a house is 22 days, he added, whereas five years ago it was over 60.
“It’s not like Kingston is crazy, where you can list a house at any price and it’s going to sell,” he added. “The common misconception is that houses are selling for crazy amounts more than what they’re worth and that’s not the case whatsoever.”
Clancy said he thinks the increased sale price of homes is aligning Kingston’s market with other Ontario cities. “A few years ago our real estate was undervalued. Now it’s a little more in line with the rest of the province.”
While the favourable seller’s market might tempt some people into listing their homes, Clancy said they shouldn’t do so without a plan. “I know a lot of friends who would like to move or sell their house. But if they sell their house right now, where would they go?”
Managing a hot market through the pandemic
Clancy said the shift in the market means real estate agents need to pay close attention to their buyers, and make sure they’re ready to move quickly. This means pre-arranging their financing and perhaps paying for a shortened, preliminary home inspection prior to making an offer.
He said many selling agents are “holding offers” until a certain date and time to allow everyone who wants to see the house a few days to get in, and then submit their offer on a deadline.
This does create an added sense of pressure and competition for buyers, knowing their offers will be tabled and compared with several others, with the best or most flexible offer winning. However, ultimately Clancy said it allows for more viewings.
“If they aren’t holding offers, you might have to get out the door and see a house in two hours, and it’s not easy to get people out the door in a pandemic,” he said. “I personally don’t want to have to cram into a house and have five other agents in there with their clients at the same time.”
Under the new restrictions of the Pronvincewide Shutdown, imposed on Saturday, Dec. 26, 2020, this wouldn’t even be possible, with group gatherings restricted to ten people, outdoors. During the lockdown period, open houses are not permitted but showings by appointment are.
“As agents, we have to be very careful about how many people are in a house and how we conduct our business,” he said.
Despite the pandemic completely shutting down the real estate industry for a few months in the spring, Clancy said it rebounded hard over the summer with everyone trying to make up for lost time. The value of home sales in Kingston in 2020 exceeded the previous year by over 13 per cent, he said, despite the temporary shut down.
The market is expected to remain strong for the next year, he added, noting that no one has a crystal ball.
Despite the added pressure on buyers he said it is still possible to find and win a home in Kingston. “Coming up with a really soundproof strategy is the most important part,” he said.