5 Things to Know About Homes for Sale in St. John's Housing Market 2020
A great turnout by members of the Mount Pearl - Paradise Chamber of Commerce who met with Chris Janes, CMHC to discuss the 2020 housing market and the overall economy. Many were interested in learning how 2019 compared to previous years, and how economic factors such as population, employment, wage growth GDP affected the markets.
So what are the 5 key points about the St. John's Housing Market in 2020?
- New home builds are continuing to fall since their peak in 2012.
- The average price of resale homes down over 10% from the 2014 peak.
- Demand has risen since last year.
- Inventory of homes for sale in St. John's has fallen.
- St. John's is the 2nd most affordable home market in Canada.
During the presentation by Chris Janes, Senior Analyst, Economics at CHMC, Chamber members learned about the local real estate market and economic outlook for 2020.
Sponsored by Brad Bragg, Realtor® Royal LePage Vision, the session, based on solid analysis and industry knowledge helped explain the condition of local real estate markets.
- Construction of new homes for sale is continuing to fall since their peak in 2012. In previous years, new home builders were holding large amounts of unsold newly finished homes. This amount of inventory has been slowly selling, and new home builds are beginning to change, to satisfy the current market demands. In large part due to new homes for sale are smaller sizes, with a lower selling price. While most homes are standard three-bedrooms, more new homes for sale are being built with two-bedrooms and a builder has attempted to sell a one-bedroom home model. As new home builders continue to adjust to lower average home prices, new construction is hoped to 'turn a corner' with more new homes for sale.
- The average price of resale homes down over 10% from the 2014 peak. While in 2019, average home prices were down -2% from the previous year, they are still far from their previous peak. This is mainly due to more sales being at lower price points < $300,000 with an average price of $289,651. The Greater St. John's Area markets continue to be at attractive values compared to the rest of Canada.
- Demand has risen since last year. Three key economic factors were all positive in 2019, with Employment + 4.2%, Working Age Population +0.3% and Average Weekly Earnings +2.5%. While over 10,000 jobs were lost since the peak in 2015 to the low in Q1 of 2018, almost half that number were added since 2018. The working-age population continues to grow slowly, to 186,100. With average weekly earnings of $1,029 within all industries in the St. John's area, the strong rise has continued since 2016. These three pieces combined have a large impact on the local housing markets.
- Inventory of homes for sale in St. John's has fallen since 2018. The number of resale homes sold in 2019 rose 11% since the past year. Most of the homes sold were at lower prices which means more people made the choice to purchase a home. This indicator may point to the market turning a corner. While still high, listings dropped -5% year-over-year. The time for sellers to be testing the market has long ended, with fewer homes priced too high to reflect their current market value. Homeowners are more likely to sell if they accurately price their homes to match the expectations of buyers in 2020.
- St. John's is the 2nd most affordable home market in Canada. With only Moncton, NB ahead, the St. John's market has proven itself to be of great value to today's home buyers. Measured as a ratio of home price to income, St. John's is far more affordable compared to many other cities in Canada which may have higher incomes, yet house prices are disproportionately higher. While Toronto and Vancouver markets continue to be dangerously unaffordable, many other cities such as Ottawa, Montreal, and Calgary are reaching stressful levels. The nearest major market, Halifax is at the tip of the yellow warning indicator for affordability.
So what does this all mean for the local homes for sale in St. John's market? Perhaps 2020 will be a year when, as Chris Janes stated "Despite price action, the market looks to be improving based on 2019 data and has likely turned the “Corner” ". Check out some more info about the Speaker, Host and Venue. While prices are indeed well off their previous highs from years ago, recent economic growth, albeit small may improve demand, which will help slow or reverse price declines. Regardless, with an ample supply of homes yet to come on the market in 2020, the market will continue to favour buyers at all price points.
Interested in more data about homes for sale in St. John's? Learn about the Royal LePage House Price Survey for Q4 2019, which also compares prices in St. John's to the rest of Canada.
Sources: CREA, APCIQ, CBOC, Statistics Canada, CMHC calculations.