While my focus is on the financing side of a home purchase, it is interesting to note the challenges that prospective homebuyers are currently facing in the hot Kingston market. For the past few months, we have seen houses selling within a day, houses being sold far over the asking price, and multiple offers on many homes. Kingston is, without a doubt, a seller’s market at the moment. Some sellers are even holding off potential offers until a later date in order to allow more people to view their home and increase the amount of offers they have to choose from.
The seller’s market is largely due to an influx of people from the Toronto area moving east, in search of cheaper real estate (for investment and principal residence). We have seen this shift coming, as markets like Belleville and Peterborough have been exploding over the past couple years.
The challenge that this type of market creates for potential buyers is that it is very hard to buy a home, specifically in the $250K – $400K price range (typically the most competitive price range). People are being outbid by higher offers or offers that have less conditions. For people who currently own a home and are looking to move, they are afraid to list their home, as they know it will sell immediately but they will have nowhere to move to given the ultra competitive market. This ultimately creates a market with less inventory, which only worsens the problem. The number of active listings in Kingston at the end of March was 973, down 30.1% from the same time last year. This is the only time in history that active listing was this low this time of year in Kingston.
The average sale price so far in 2018 is $360,348, up 9.9% from the same time period in 2017. I expect that this trend will continue for the rest of the year.
From a financing perspective, the only advice I can offer to potential buyers is to ensure that you have your financing in order prior to starting your house shopping. Since the market is so competitive, when you do find the right house, things will move fast. If you have done the necessary work in advance with your mortgage broker, you will be in good shape when it comes time to obtain an approval for your mortgage.