Guelph’s real estate market on the rise

GUELPH — Early indications suggest Guelph’s 2012 housing market will be very strong for sellers.

Less than two months into the year, demand for homes in the sub-$400,000 price range is up sharply, as historically low interest rates continue to spur home buying locally. Prospective buyers are finding that homes are going relatively quickly, and spring is still a few weeks away.

Jeff Matteis, president of the Guelph and District Association of Realtors, says other factors – Toronto’s forbidding real estate scene and delays in new home construction locally - are also influencing Guelph’s strong re-sale market conditions.

So far this year there have been 226 sales of homes of all sorts in the city, 162 of those sales in January. That is a 13 per cent increase over the same period last year. And the average sale price of a home is also trending upward – a three per cent increase from the same period in 2011, to $296,884 from $287,239. There is room for further increases in home values here, Matteis said.

“It’s been an active start of the year,” he said. “We have a lot of buyers because of the historically low interest rates. What is out there is selling pretty quickly.”

Matteis explained there are a healthy number of homes on the market, but in the under-$400,000 price range there are more buyers than sellers right now. Houses are going fast, with homes spending an average of just 28 days on the market, and 77 per cent selling within a month.

“There have been some delays with a lot of the developers and builders in bringing on new lots and new product, so that is also influencing people looking at the re-sale market,” Matteis added, explaining that the city’s planning process has resulted in those delays.

Ed Heese, senior market analyst with Canada Mortgage and Housing Corporation, said there was strong growth in employment in Guelph in 2011. And while that growth has leveled out, the city enjoys a relatively good job market.

The housing market, he added, has been “trending upward” in recent months, with sales and prices rising. And while sales have eased off slightly more recently, he said the overall picture for Guelph’s housing market is a “relatively positive situation.”

South end Guelph remains “very attractive” for buyers, with the slightly softer pricing of homes in the east side making that area of the city attractive as well, Matteis said.

With the average price of a home in Toronto recently nudging over the $500,000 mark, it appears more people from Canada’s largest city are looking outside the GTA for a home. And they are looking at Guelph, Matteis said.

“We certainly seem to get more interest from the GTA as each year goes by,” Matteis said. “We do represent more value. They can buy more property here with the same dollar. If someone is in a position where they can commute, they are willing to look outside of GTA and they just keep heading west until they find the right deal for themselves.”

The first-time homebuyer market is very strong in Guelph, and that is expected to continue given ongoing low interest rates. The student rental market is also very active at this time of the year, as parents seek to buy homes for their children entering the University of Guelph, Matteis said. Many of those buyers are from out-of-town.

“As long as the interest rates stay as low as they are, you are bringing a lot of people into the market, and into the move up market,” Matteis said, indicating that local realtors are seeing some homes going over the asking price, and many homes being the subject of competing bids.

“I think there is room for homes to continue to appreciate,” he said. “Certainly right now the activity is there to support the current values.”

Source: http://www.guelphmercury.com/news/local/article/677677--guelph-s-real-estate-market-on-the-rise