May inventory levels rise but housing prices remain high: LSTAR

A home listed for sale in London, Ont. is seen on Wednesday, April 13, 2022. (Sean Irvine / CTV News)

The month of May saw an increase in housing inventory according to the London and St. Thomas Association of Realtors (LSTAR), but the average price of a home still remains elevated.

According to LSTAR, May saw more residential listings than any previous May in the association’s history. In April, there was 1.2 months worth of inventory, which increased to 1.7 months of inventory last month.

The month of May saw a total of 844 homes sold.

But while housing inventory increased last month, the average price of a home remained at elevated levels.

According to LSTAR, the average price of a home in the region fell from $771,682 in April to $762,397 in May — compared to this time of year in 2021, this represents an increase of 19.5 per cent.

“Even if in May the sales-to-new listings ratio dropped to 46 per cent, a figure that, typically, indicates a market that tends to favour home buyers, benchmark and average prices saw only modest month-over-month declines,” said Randy Pawlowski, LSTAR president.

Benchmark prices and average prices for homes for London and the surrounding region in May 2022. (Source: LSTAR)According to Pawlowski, one of the reasons why there is this level of stability involves the change in population from migration and immigration. In the fourth quarter of 2021, Ontario’s population saw a net increase of just over 34,000 people.

“Many of these new Ontarians are now looking to buy homes they can afford in regions with good schools and hospitals. And, as it happens, our area checks all these boxes,” he said.

Of the 844 properties sold last month, 635 were single-family homes, 105 were condo townhouses and 65 were apartments, with average prices of $818,977, $605,333 and $465,364 respectively.

But while the increase in May inventory is a positive, Pawlowski cautions that a healthy housing inventory should sit between three-and-a-half to four months, adding that the existing housing supply puts pressure on housing prices.

“Even if it’s higher than in many cities from other Canadian provinces, LSTAR’s composite HPI benchmark price places our area among the most affordable in Ontario,” Pawlowski said.

The average benchmark price of a home in Canada is $839,000.