LSTAR UPDATE: Market Shows Positive Growth in January

Sales Activity: A Temporary Dip

In January, we saw 370 transactions, which is a 20.3% decline compared to last year. However, this dip is not a cause for concern, as the average home price remained robust at $639,486, marking a 4.5% increase from January 2024.

Stable Prices and Rising Listings

The stability in pricing is a strong indicator that interest and demand in the market are still healthy. With the rise in new and active listings, we're optimistic that sales activity will gain momentum in the coming months.

Market Fundamentals Remain Strong

LSTAR Chair Dale Marsh commented, "The increase in new and active listings is a positive indicator of a robust market. With more properties available, buyers have greater choices, and the steady rise in average prices demonstrates the continued confidence in our market."

Interest Rates and Market Impact

The recent lowering of interest rates in Canada is starting to have a positive impact on the real estate market. Lower borrowing costs are making homeownership more accessible, encouraging more buyers to enter the market and further driving demand.

HPI Benchmark Prices: A Closer Look

The HPI benchmark price reflects the value of a "typical home" as assigned by buyers in a certain area based on various housing attributes. Here's a snapshot of January's benchmark prices for all housing types within LSTAR's jurisdiction:

- LSTAR Composite: $617,300 (up 1.2% from December 2024)

- LSTAR Single-Family: $665,000 (up 1.5% from December 2024)

- LSTAR One Storey: $598,200 (up 1.7% from December 2024)

- LSTAR Two Storey: $720,300 (up 1.0% from December 2024)

- LSTAR Townhouse: $492,200 (down 0.6% from December 2024)

- LSTAR Apartment: $410,900 (no change from December 2024)

The Ripple Effect of Home Sales

A recent study by Altus Group found that an average housing transaction in Ontario generated an average of $88,966 in spin-off spending per transaction from 2020 to 2022. This includes expenses like legal fees, appraisers, moving costs, new appliances, and home renovation expenses. Additionally, resale housing activity created an estimated 106,565 jobs annually in Ontario from 2020 to 2022.

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