Property Values are Hyper-Local

 

-Local Matters-

I love getting questions & comments! And in the past month I've gotten a number of questions that follow the same theme...and that is, how does the selling price for a home in one area impact the value of a home in another area? Some of the homes in question are more than a hundred kilometers away from each other!

And the answer is that most likely it doesn't! It's not a relevant comparison because each area has it's own little eco-system when it comes to things like supply & demand, property values & more!

I'm sharing 1 comment & 1 question in today's post, one is more from the seller perspective & the other from the buyer's - & it's cut & paste directly from my email for the win!

The first one, a comment, came after updating someone on the selling price for a home in Wilmot Creek in Newcastle. I had noted how long it had taken to sell & the fact that the selling price was 86% of what they were hoping to get (given their original asking price). The response to this was:

Wow! I guess that will be impacting our sale too!

And my answer was as follows: 

As for the impacts of the Birch Tree Lane sale, very important to remember that real estate is hyper-local & you have to look at it on an individualized basis. What’s happening in Wilmot Creek will be completely different from where you currently live because 1. The location is different &  2. Unless you’re currently living in a land lease community (like Wilmot Creek), your home’s value will be completely different because it’s a different segment of the market.

So how DO you figure out what impacts you & what doesn't? What's relevant to your current situation & what isn't? Besides asking me, of course, lol...I went on to write the following:

What could be helpful for you is to log onto my site & set up a new search for SOLD properties that are like yours, in your area. That will give you a sense of what your current home would sell for in the current market. You can set that up to get a daily or weekly email with all the sold properties in your area that are like your current home so that you can compare. Go to any of my emails with listings in them & click the log in button to get started! If you have any trouble getting that set up, just send me the info & I’d be happy to do it for you!

In example #2 I was once again updating someone on a selling price - this time for a townhouse in the new waterfront development in Bowmanville. As in the first example, I had noted how long it had taken to sell & the fact that the selling price was 90% of what they were hoping to get - $799k to $720k. The response to this was:

I wonder if other towns would sell for 720 if they were originally listed at 799

 

I responded with a list of selling prices since the beginning of the year for a 3bed/3bath townhouse in that development showing the downward trajectory from $915k in January (height of the market) to $720k in October & concluded by saying:

Each sale sets a new price standard, so other 3bed/3bath townhouses in the development that are comparable (same finishes, same view etc) are going to be impacted.

The follow up question asked was:

Would it be the same in Brooklin?

And I responded with:

You can’t really compare Bowmanville to Brooklin. Historically Whitby & Brooklin real estate has commanded a “premium” & homes cost more in those areas.

Also, the sales I listed in my last email were related to 1 particular development in Bowmanville, so we’re looking at the ACTUAL selling prices for 5 sales since the beginning of the year.

There are many developments in Brooklin, so we would be looking at the MEDIAN selling price of the 22 sales that have occurred since the beginning of the year…

Here’s an example using the median selling price of a 3bed/3bath/single car garage townhouse in Brooklin so far this year:

January - $1.030M (1 sale – actual price)

February - $1.010M (4 sales - median price)

March - $999,999 (5 sales - median price)

April - $920,000 (1 sale – actual price)

May - $851,450 (6 sales – median price)

June – No Sales

July - $850,000 (3 sales – median price)

August – No Sales

September – No Sales

October - $822,500 (2 sales – median price)

November (to-date) – No Sales

So the median price from January compared to October in Brooklin is down 20.15% & in that specific development in Bowmanville it’s down 21.31% - which is a very similar decrease in value…BUT a 3bed/3bath townhouse in Brooklin was still $100k more expensive than in that specific Bowmanville development in the month of October.

Interesting to note, when looking at 3bed/3bath townhomes with a single car garage in ALL of Bowmanville, the median price in January was $986k & in October it was $760k - which outperformed the waterfront development values - but it also shows a greater drop in the MEDIAN value - down 22.92% vs 21.31% & vs 20.15% in Brooklin. Still outperforming I guess, lol...

The bottom line is you need to compare "like" with "like" because different locations command different prices & different types of homes also command different prices. Digging further for context to go along with the raw numbers, is what gives a more complete picture, & hopefully a better understanding of f what the market is doing specific responded 

If you're ready for more context, there are several resources you can take advantage of:

StreetMatch - keep up with real estate directly in your neighbourhood - or any neighbourhood

Sold Listings - set up the criteria for what type of sold listings you're interested in & how often you'd like to receive them

Monthly Housing Report -  this is a personalized report created to your specifications that compares your real estate wish list across different cities/towns/communities in Durham & the surrounding areas - super helpful to see where you'll get the biggest bang for your buck! Example is linked.  Get that set up HERE

Book a Discovery Call with Kelly - Sometimes a call is just easier...

Until next time...keep those questions & comments coming!