In June, house prices in Cobourg stayed close to their record highs – despite talk of a housing price bubble which would suggest a drop. According to the Northumberland Hills Association of Realtors, the average sale price of a house in the area in June was $849,437. (Note that Northumberland Hills includes Port Hope, Hamilton and Cramahe as well as Cobourg). Only 130 units were sold in the area, down 14.5% from June 2020 although this volume is 12.1% above the five-year average. Year to date, home sales totaled a record 749 units – this is up by 36.4% from the same period in 2020. The graph below compares the trend with prices in the GTA and it’s clear that Cobourg is following the same trend.
Of course, the average hides differences between types of homes – e.g. “single family homes” (detached) versus Townhomes. MLS also uses other bench mark indicators such as the MLS Home Price Index. This is not well defined – at least not publicly – but although it’s a lower number, it’s supposed to allow for more accurate comparisons between neighbourhoods. Anyway, based on this figure,
The benchmark price for single-family homes was $656,800, an advance of 38.6% on a year-over-year basis in June. By comparison, the benchmark price for townhouse/row units was $473,500, up sharply by 43% compared to a year earlier.
So Townhome prices are going up faster than single-family homes.
Another distortion in prices can come if the mix of sales does not reflect what exists in the market. For example, if there are a lot of high-end houses sold, that would skew the average higher.
Susan Hull, President of the Northumberland Hills Association of Realtors said:
“Like many other markets in Ontario, home sales have started to cool off from their unprecedented levels. However, sales activity remains above average levels for this time of year.”
I’ve heard realtors blame a lack of supply for the high prices but that’s hard to judge. This is apparently an ongoing problem and is blamed by some on planning red-tape and delays. But right now, fewer people are listing. The number of new listings in June 2021 was 6.9% lower than June 2020. There were 190 new residential listings in June 2021. This is 3.7% below the five-year average for the month of June. Coupled with the number of sales, this resulted in there being only 130 active residential listings on the market at the end of June, down sharply by 35.3% from the end of June 2020. “Active listings haven’t been this low in the month of June in more than three decades.” The result is that there is only a one month inventory level – that is, it would take only one month to sell current inventories at the current rate of sales activity.
Some will be happy with the price increase – paper net worth would be higher. Anyone wanting to buy would be unhappy. Some will imagine that this will drive taxes up but that is simply not true – your taxes only go up because of a valuation change if your valuation went up more than the average. See the link below for more.
- Northumberland Hills Association of Realtors report for June – Source information
- Definition of MLS Home Price Index.
- Taxes in Cobourg explained