Back in early July, when the Ontario real estate market was already months into a pandemic recovery that saw pent-up demand push sales and prices to record highs, MoneySense released its ‘Where to buy real estate 2020′ report, and found that Guelph was the best place in the entire country to put your money into a home.
It seems like they were onto something.
Just this week, Zoocasa released a report highlighting the most (and least) competitive real estate markets across Ontario. Outside of the GTA, Guelph was the most competitive market with an average home price of $741,746 in October, up 17% from the same month last year.
According to husband and wife realtor team Beth and Ryan Waller of Home Group Realty, Guelph is now sitting at an all-time historic low for inventory with just 60 properties available in the City of Guelph proper as of December 10.
"I've been involved in bidding wars with 21, 19 and 13 and 8 offers in the past week," Ryan tells us. "The number of active listings this week last year -- December 12, 2019 -- was 148."
It's no secret that Toronto has seen a slight exodus of homebuyers since the pandemic hit, with many millennials in particular trading the city for the suburbs in an effort to buy ground-level homes. Of course, as the latest data from TRREB points out, the average price for a detached home in the '416' was nearly $1.5M in November -- so it shouldn't come as much of a surprise that when younger generations are searching for space, they need to leave the city to find it.
“We’ve been facing Toronto buyers for months and months,” Ryan says. "We’re seeing a mix of buyers; our client demo includes a lot of first-time buyers who live in Toronto and rent, can’t afford to buy in Toronto, and want to leave the city."
"Even first-time homebuyers are expecting to find a detached home in downtown Guelph for $600,000 and that’s just not happening. They need to be prepared to spend between $650,000 and $750,000 and even that might not be enough to land them the property they thought they'd be getting when coming here."
The picturesque university city has been gaining in popularity over the years, due in large part to its proximity to the GTA (it's less than 100 km from downtown Guelph to Toronto City Hall), but the surge in demand its currently experiencing has only been amplified by COVID and the work from home options (and mandates) the pandemic has forced into play. As a result, some buyers are still finding sticker-shock when they start searching for properties in Guelph.
"In the south part of Guelph, we've seen a 100% increase in homes sold over $1,000,000 this year," Ryan tells us, emphasizing just how much the market has exploded.
Just this past week, Beth and Ryan had a bid in for a client on a 2-bed bungalow that "had not been updated". The property was listed at $585,000 and received 19 offers. Beth and Ryan’s clients bid in excess of $700,000 — more than 115,000 over list — and wasn’t enough to secure the home for their client as the home sold for $721,000.
Historically, the Wallers say the average sales velocity in Guelph is roughly 200 sales per month. With just 60 currently available, it doesn't take much to imagine the level of competition involved in every sale.
Another major factor, according to the Wallers, in the driving up of prices and the creation of such a real-estate frenzy, is "people in Guelph just not selling.” Combine with that reality the fact that housing starts in the region are down some 60% year-over-year and the record-low inventory could, conceivably, get even worse through the holidays and into 2021.
As for what Ryan and Beth see in store for Guelph real estate in the coming year?
"Toronto tends to be a benchmark for Guelph. If people continue to leave Toronto, Guelph will benefit. Our anticipation is that Guelph will slightly outpace Toronto in 2021, seeing somewhere around 7% growth in average selling prices."
While it's certainly far too early to tell what the next 12 months hold in store for Toronto, Guelph, or, well, the rest of the world (vaccine, anyone?), one thing's for sure -- while the beautiful little city and its 135,000+ residents may be friendly and welcoming, one shouldn't expect to find its real estate market to be the same.