Photo: James Bombales
Nothing sounds worse to a prospective home buyer than two ominous words: sellers’ market.
The term — used to describe a housing market where the ratio of homes sales-to-new listings is higher than 60 percent — often leads buyers to imagine ballooning home prices and wild bidding wars.
But, according to a new report from real estate website Zoocasa, that’s not always the case.
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The report analyzed the sales-to-new-listings ratio of housing markets across Ontario, and some of what it found was surprising.
Some of the province’s biggest sellers’ markets are also home to its lowest home prices. Ten of the 12 markets considered sellers’ markets had homes that sold for an average of less than $500,000. Thunder Bay, for instance, has a ratio of 90 percent, but an average home price of just $225,945.
“It’s a pretty common misconception, that when you hear ‘sellers’ market’ you automatically picture steep prices,” Penelope Graham, managing editor of Zoocasa, tells Livabl. “Really it’s just a question of how long it takes for homes that go on the market to sell. In northern communities, there’s often fewer homes on the market, so they sell quickly.”
That’s the case in North Bay, which has a ratio of 88 percent, but an average home price of just $258,597. Similarly, Sault Ste. Marie has a ratio of 86 percent and an average price of $184,028.
But while the sales-to-new listings ratio may not be a good reflection of how affordable a market is, Graham says it is an important metric for both buyers and sellers to consider.
“It provides insights into how a market has changed over the past several months, and about whether it’s the right time to buy or to list, or what your offer strategy should look like,” she explains.
For a closer look into which Ontario markets are most advantageous for sellers’ (and which buyers should keep an eye on), check out Zoocasa’s infographic below.