Home Prices Jump in January 2022

The London and St Thomas Association of REALTORS® (LSTAR) recorded 529 home sales through its MLS® system in January 2022. That was the Association’s second best January for home sales on record.

The same month brought 669 new listings. 286 of those were still active at month end.

“Despite the fact that slightly more new listings came on the market, there were only 0.5 months of inventory available at the end of January,” said 2022 LSTAR President Randy Pawlowski.

“In other words, at the current pace of sales, the entire listing inventory of LSTAR could be liquidated in just two weeks, something that we have never seen before,” he explained.

Heavy buyer demand met a severe shortage of supply. That combination favoured sellers and pushed prices up.

“At the end of January, LSTAR’s overall sales-to-new-listings ratio was 79.1%, 5.9% lower than a year ago, but the LSTAR average home price climbed to $793,222 – almost $90,000 higher than in December 2021 and more than double the value recorded back in January 2019,” Pawlowski added.

The LSTAR composite MLS® Home Price Index Benchmark Price also jumped 6.1% last month, to $697,700. That is up 96.6% over three years ago.

“When looking at price trends, the MLS® Home Price Index (HPI) benchmark prices are more reliable than average prices. LSTAR’s HPI benchmark price represents the value of a ‘typical home’ as assigned by local buyers based on various housing features. Depending on how the home you want to buy matches these standards, the property’s value can be higher or lower than the benchmark price,” he said.

The following table shows how January’s average sales prices compare to the benchmark prices.

Most of last month’s sales were single-family homes. Condo townhouse and apartment sales kept rising.

“71 condo townhouses and 62 apartments were sold last month in our area. Both these house types saw significant price gains. In January, the average price for a condo in LSTAR’s jurisdiction was $643,951, while the overall average price for an apartment sat at $463,466.” Pawlowski added.

The following table shows the January benchmark prices for all housing types in LSTAR’s jurisdiction and how they stack up against the values from a year ago.

Despite these increases in the HPI benchmark prices and average sale prices, homes in LSTAR’s jurisdiction continue to remain more affordable than houses from many other Ontario and Canadian centres. The following table is based on data provided by the Canadian Real Estate Association (CREA) for January 1st, 2022.

A research report[1] puts ancillary spending at $73,250 per average housing transaction in Ontario. That is measured over three years from the date of purchase.

“This means that our January home sales could generate almost 39 million in spin-off spending over the next three years, which proves the essential role played by the real estate industry in the economic recovery of our region,” Pawlowski concluded.