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2017 Q4 Data Report Review

With 2017 turning out to be one of the craziest years the Guelph real estate market has ever seen, it’s time for us to have a look at just what happened in the last quarter of this unforgettable year.

Here are the highlights:

1. Median Detached Sale Price up 13.8% year over year.

With all of the strong winds and turbulence in the first quarter of 2017, and with prices literally skyrocketing by several percentages not just every month, but sometimes with every single sale – which kept happening right up until mid-April when the market started to taper off – it’s amazing the Guelph real estate market was still able to increase by nearly two times what a typical annual Median Detached Sale Price increase has been for roughly the last 20 years in Guelph, but somehow we still managed to come out on top.

Although we did see many of the high-water marks set in the spring make a gradual roll-back to where prices previously had been, it seems as though those waters would only recess so far and still left us with a healthy year overall.

2. Sales to new listing ratio down 11% year over year.

At first glance, you could read this and think the Guelph real estate market is now in trouble, but believe it or not, this is actually a good thing!

In the 4th quarter of 2016 the sales to new listing ratio reached a heart-stopping 1.0, something I’m not sure has ever been previously recorded in the history of the Guelph real estate market. This meant for every single new listing that came on the market in that 4th quarter, one property listed for sale in that quarter was sold. This does not necessarily mean that every home listed in that quarter was sold in that quarter, as you can and will have leftover inventory from previous quarters make up those sales and some homes listed in that quarter carry over to the next one, but let’s just say that the vast majority of everything listed in Q4 of 2016 was sold and that the Sellers were definitely sitting in the driver’s seat when it came to any kind of negotiations regarding the sale of their homes.

Having this number drop down 11% to 0.89 exactly 1 year later tells me the Guelph market is becoming much more calm and balanced than it previously had been, but let’s face it; a sales to new listing ratio of 0.89 is still quite high and definitely no where even remotely close to being considered a “buyer’s market”.

3. 13% quarter-to-quarter decrease in East end Median Sale Price

In the first part of 2017 the East end of Guelph was absolutely busting at the seams. There is no doubt the major driving force behind the entire Guelph real estate market at that time was the influence of the GTA buyer and no area of Guelph felt it more during that time than the East end of Guelph.

For the GTA buyer still working in Toronto and looking to commute, the two best areas for people to live in Guelph with the closest distance to Toronto are the East and South ends. Both are about the same distance to Toronto and, in fact, many people prefer to avoid the 401 as much as possible so living in the East end allows them to take the advantage of those alternate routes.

With the East end of Guelph having less than 30% of the new listing inventory compared to the South end of Guelph during that time (Q1 2017), prices in the East end of Guelph took a sharp incline at the start of the year, with a small 1% dip in Q2 but then continued to rise in the 3rd quarter of 2017 to a phenomenal $500,000 Median Sale Price mark despite the Ontario Government’s Fair Housing Plan being launched in April in an attempt to cool down the over-heated real estate markets.

With the East end of Guelph taking a hard dip of just under 13% back down to a $437,500 Median Sale Price in 2017’s 4th quarter (from $500,000 in Q3), it will be interesting to see how the East end of Guelph’s Median Sale Price performs over these next few months of 2018.

4. 68% quarter-to-quarter increase in South Guelph sales to new listing ratio

With a sales to new listing ratio of 0.59 in South Guelph in Q3 of 2017, the lowest this area of the city has seen for quite some time, new listing inventory was approximately 50% higher than it had been in the same quarter the year before, and with the Ontario Fair Housing Plan having just been released one quarter before in April of 2017, buyer’s were a bit shell-shocked and not as quick to pull the trigger on their real estate deals as they previously had been just 2 quarters prior. I also believe there were a surge of new listings in South Guelph’s 3rd quarter of 2017 as sellers were anxiously trying to put their homes on the market for big numbers as they watched their neighbours homes sell for unprecedented prices, but by the time Q3 came around, for some it was too late and the sale prices they were expecting to attain were just not achievable.

With higher than normal inventory levels in Q3 and a less-than-confident buyer pool, a sales to new listing ratio of right around 0.6 resulted. Unfortunately, that did not last for long as inventory in Q4 dried up quickly, shrinking by nearly 100 homes compared to the previous quarter, buyer confidence started to come back in the market place as people realized the effects of the Ontario Fair Housing Plan were not as dramatic as some sceptics thought they could be, and South-end sellers started to adjust their expectations on sale price considerably as the Median List Price dropped from $551,000 in Q3 to $489,900 in Q4 representing approximately a 12% decrease in Median List Price. With less inventory, more buyer confidence, and much more realistic asking prices, the sales to new listing ratio in South Guelph in Q4 shot back up to a solid 0.99 to end off 2017 quite strong.

5. 3% quarter-to-quarter Median Sale Price increase in West Guelph.

Okay, so this might not be that big of a deal to some people. I mean, it’s only 3% – I get it, but the West end of Guelph was the only area in the city of Guelph in Q4 that did not have a Median Sale Price decrease from Q3!

With the rest of Guelph adjusting downward from the previous quarter, West Guelph still managed to increase just over 3% on it’s Median Sale Price and, not only that, it also had the highest year-over-year Median Sale Price increase in the city at an astonishing 17%!

So you know what? That actually is a big deal!

I’m not the least bit ashamed to admit that, as a West-ender myself, there is the tiniest twinkle of a prideful tear in my eye as I write this. It certainly doesn’t pain me to watch the neighbourhood I know and love continue to appreciate despite a slight downward trend everywhere else in the city, but I firmly believe the West end of Guelph has been under-appreciated and under-valued for far too long and that people are finally starting to see the true value the West end has to offer, by locals and out-of-towners alike, and that these continued price increases in the West end of Guelph while the rest of the cities Median Sale Price was falling are only a true reflection of where prices in West Guelph should be.

All in all, the Guelph real estate market still finished strong in the 4th quarter of 2017 and, despite a few ups and downs and some definite nail-biting, edge-of-your-seat-sitting drama along the way, our Median Sale Price still managed to be up nearly 14% compared to 2016’s 4th quarter and with some more balance, stability, and most important – sanity, I think buyers are going to be able to make much more confident decisions moving forward in 2018 and that Sellers are still going to be able to make a pretty-penny on most of the homes that sell in our city.

Until next time, Happy Investing!