We have closed the books on 2013 and the numbers are in. We have recently updated all neighborhood data over at my web site — www.stevebaarda.com — so you can find out how your own London Ontario area did over the last year. London Ontario has seen modest 2.67% growth in the average price for the entire city. Prices for all residential properties rose from $240,332 in 2012 to %246,750 in 2013. Detached homes price growth was more modest than the average, rising 2.31% from $264,742 to $270,859. Condo prices went from $170,493 to $176,490, a 3.52% increase. That is better than the 0.94% inflation rate.
In many ways, stable but modest growth is the best situation for both buyers and sellers. Keeping pace with inflation is good. Keeping prices affordable is also good as it keep the market active over the long term. When prices rise too quickly and affordability diminishes, especially for first time buyers, this is when we risk seeing a burst bubble. We did see a 1.63% drop in the volume of sales which confirms that we are in a healthy stable market here in London.
Looking ahead, unless there are real shocks to the market that come from economic conditions, significant job losses or government tinkering, we can expect more of the same for 2014. The biggest threat to the housing market on the horizon is the potential for rising interest rates as economic conditions improve for the country as a whole. The key is when and how quickly they will rise. If rate increases are delayed, we should see much the same market in 2014 as we did in 2013.
The north of London tracked pretty much with the averages of the city as a whole with an 2.01% growth in average prices to $296,614. As with the city as a whole, condo prices increased more than the average for the north region to $215,707, a 2.83% increase. Detached homes in the north of London rose a modest 1.59% to $323,522.
After a strong 2012, the east of London saw prices slip back ever so slightly to $191,983, a drop of 0.88%. Detached homes prices were off 1.08% down to $202,704. As with the trend we saw in the north of the city, condo prices were the bright spot in the east of London, seeing prices rise to $153,812 a growth of 3.79%.
South London was the big winner last year, experiencing a price growth rate of 5.59% up to $246,166. Every neighborhood but one in the south of the city saw an increase in prices, some with double digit percentage increases. Detached homes were slightly stronger in the south, with a 4.66% growth in prices to $282,318. Condo prices in the south of the city increased 4.33% to $160,527.
The biggest surprise this year, though, was not the strength of the southern part of London, Ontario, but the relative softness at the top of the market. Four of the top five neighborhoods in 2012, as measured by the average price of homes, all saw prices fall, a couple of them by double digit percentages. The worst hit were Sunningdale (-4.23% overall, but a 9.04% drop in detached homes down to an average of $492,959, an almost $50,000 drop), Richmond Hill (-10.81% overall, and a 12.12% drop in detached homes to $446,119, a $60,000 drop in the average), Reservoir Park Estates (-12.83% to $364,981), and Hunt Club (-5.85% to $412,183). The only neighborhood in the top five to escape the carnage was Riverbend which actually saw prices rise 9.46% to $497,496 .