Kingston is now entering its fourth year of rising listings, and this is hugely influencing the local market. The numbers of homes for sale is becoming a flood with a record 1900 listings on MLS as of the end of February. This is equivalent to 11 months of sales inventory, and signals that Kingston is tipping into a buyers' market this year. Listings at the end of February are already 33 per cent higher than this time last year, and 57 per cent higher than two years ago. This deluge is part demographics, as older people move on to assisted living, partly a larger pull back in the provincial and national markets, and partly a backlog of re-lists as sellers have trouble adjusting their price expectations for a leaner market.
(Please note: The statistics in this article are residential figures based on the City of Kingston plus Amherstview, and as such will differ from regional statistics published by the Kingston and Area Real Estate Association.)
Last year, with 30 per cent more residential listings last year than in 2011, only 43 per cent of sellers managed to find buyers. (Five years ago, that percentage was over 60 per cent). And in each of the past two years, sales have dropped about six per cent.
In 2014, for the first time in several years, average Kingston home prices failed to increase. It’s a sluggish performance compared to the 3 to 4 per cent annual increases common just a few years ago. But things aren't going to change any time soon so be careful what you pay for a home!
The trend toward stagnant prices and numerous listings is continuing so far this year. There was decent sales activity in January and February (slightly up from last year, but less than 2013). But for the most part, it’s up in neighborhoods (see micro-market breakdown below) where lower average sales prices show buyers are picking up bargains from among stale listings and anxious sellers.
Sellers have to be realistic, price fairly and carefully, and enhance their properties as much as possible through staging, cleaning, and maintenance. It takes hard work to stand out from the crowd but it is possible!
Sellers should be aware that residential listings in Kingston that fail to sell, on average, are priced about 12 per cent higher than successful listing prices. Last year that gap widened to just under 15 per cent, as many out-of-touch sellers remain behind the curve of the market slowdown. These unsuccessful listings however, are skewed by many unmotivated sellers testing the market, and large, higher-end custom properties that tend to significantly overprice for an aging, downsizing market.
Most properties are over-priced by just a few percentage points, but buyers are extremely price sensitive. Whatever you decide to price your house at, lowering that initial figure by just two to three per cent - such as $6000-$9000 on a $300,000 home – can create much more buyer interest in a new listing and likely result in a quicker sale, closer to asking price. Conversely, overpricing by just five per cent ($15,000 on a $300,000) home, is enough to turn off buyers, especially when there are so many properties to choose from.
On average Kingston sellers get 97 to 97.5 per cent of final listing price. So remember this if you really want to sell!
MICRO MARKETS – Jan/Feb 2015 compared to same months in 2013 & 2014
East Kingston (neighborhoods flanking Highway 15) – This area is greatly influenced by military posting activity and this year is much tougher compared to this period in the past two years. Word has it postings are coming in later than past years. Listings are way up and lower average prices show buyers are choosing late-winter bargains. A good time to buy. This area can also heat up quickly.
South of Johnson – The prime area around Queen’s often sees investor activity early in the year as high-priced student rentals change hands, but it’s especially busy so far this year with both sales and prices up. Things will likely settle as the months progress, and this area can be volatile. Last year, average prices in this neighborhood dropped five per cent.
Polson Park-Calvin Park-Mowat Woods-Portsmouth
Sales are holding steady here but average price has fallen, signalling the activity of late-winter, bargain-hunters. Prices are likely to rise as the year progresses and more variety hits the market. This area had one of the best price appreciations in the city in last year’s tough market at over five per cent.
Prices fell slightly in this downtown neighborhood last year, and are starting off the year even lower than last year at this time. That is keeping sales up. And if you can find something you like among this quaint and quirky housing stock, it can be a good buy that steadily rises in value due to central and walkable location. Some major student housing projects planned along Princess Street may lower investor demand for rentals in the Williamsville-Inner Harbour area north of Princess.
Strathcona Park – Until recently turnover tended to be low in this pleasant central neighborhood, but listings have been rising for two years now as older homeowners move on. Sales good so far, and listings rising. Well-kept homes bring a premium here, but the complete makeovers needed by many of these homes scare off many buyers, making it a great neighborhood for professional flippers.
Southwest (South of Bath, west of Days Rd.) – quieter here compared to a year ago. Listings down, sales numbers average. Significantly lower average price would reflect more basic homes on offer thus far.
East of Gardiners south of Princess (Waterloo Village-Bexley Gate-Meadowbrook-Arbour Ridge) – Sales down noticeably and listing numbers average. Prices only slightly lower but list to sale price ratio shows sellers willing to bargain more than previous years.
West of Gardiners, South of Taylor-Kidd – A great neighborhood with reasonable prices. Listings up, sales steady, and prices up somewhat as well. But average price still below $230,000. Always worth considering.
West of Gardiners, North of Taylor-Kidd – Larger homes and proximity to choice schools means generally higher prices in this neighborhood. But lots of listings and sellers willing to bargain down prices has greatly increased sales here so far this year. Good buyers’ market.
Northwest, West of Sydenham Rd., North of Princess – This area is heavily influenced by new builds and newer homes, which keeps average prices up. The more central portion between Sydenham and Centennial is especially in demand. Sales and listings are on par with past two years, but average prices continue to creep up even in a down market.
Be advised that if you are looking to buy a new build here, especially in the $400,000 plus range, that you will be paying premium prices in a down market. Labor and materials costs are steady and rising and builders need to pass that burden on to buyers, regardless of market conditions. If you want to buy new and sell in a few years, don’t expect much appreciation. Some sellers of higher-end homes less than five-years-old have been losing money recently on resale. Unless you have solid reasons for preferring a brand new home, compare new with newer resale options before buying.
Divide builder prices by the square footage and compare carefully before deciding. And I highly advise you work with an agent to compare various builder offerings, (and I'd be happy to volunteer) Losing money on your house a few years later hurts!
Amherstview – a very pleasant community where average prices run about eight per cent less than Kingston. Numerous listings and a slight dip in prices have encouraged steady sales. Keep in mind the price dip mainly reflects prices of resale homes. Builders are tightly wedded to their cost-balance sheets and don’t leave much room to negotiate. And don’t think you will get a cheaper new home or more home for the money out here. You will pay likely pay just as much as in Kingston. What you do get is a larger lot – 40 feet of frontage is pretty standard in the new sub-divisions, compared to the 30-32-foot standard in Kingston, where a 40-foot lot carries a premium.