Are you looking to buy a new home in the current York Region Real Estate Market? Before beginning the home buying journey, Home Buyers need to make key decisions. It is best to make these decisions based on data, by looking at insights into the past as to what has happened in York Region Real Estate market.
I have listed two key questions below that every home buyer makes decisions on, these decisions can be personal or financial.
Is this the right neighbourhood for me and my family? What are the financial risks of buying a home in a particular neighbourhood? In 3 to 5 years what is the return on investment? Can I gain in $15,000 or $150,000? There is a big difference.
Where Should I Buy? What Should I Buy?
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YORK REGION REAL ESTATE MARKET INSIGHTS
Have you seen the movie "MONEYBALL"? Billy Beane (Brad Pitt), general manager of the Oakland A's who is the inspirational subject of Moneyball. He was faced with a tight budget, 3rd lowest payroll in MLB. The first team in 100 plus years of American League baseball to win 20 consecutive games and the winners of the western division championship.
This was the first known use of Analytics "Prioritization of statics and data" to make the player and personal decisions in professional sports. Today, every major professional sports team either has an analytics department or an analytics expert on staff. Any team that does not apply them to the fullest is at a competitive disadvantage.
What is Moneyball has to do with the York Region Real Estate you ask? Let me explain.
As a home buyer, it is important that you understand some key statistics about York Region Real Estate Market that will help you make informed decisions on your purchase. It is also imperative that your Real Estate Agent has a great understanding of the market and statistics at a neighbourhood level while his/her recommendation is supported by data.
Let's look at these key statistics and why they need to be part of your decisions making for your home buying journey. I have used published data from TREB (Toronto Real Estate Board) for the York Region Real Estate to analyze and illustrate these key statistics.
NUMBER OF SALES - YEAR TO DATE BY CITY
The pie chart above shows the number of sales for each city within York Region year to date for the year 2018. The number of sales statistics shows the demand for each city and looking at the pie chart you can see that the city of Markham - 26 % and Vaughan - 25% makes up for the 51 % of the York Region Real Estate market demand.
The cities such as Richmond Hill - 16 %, New Market - 9 %, Aurora - 8%, Georgina - 5 %, Whitchurch-Stouffville - 5 %, E. Gwillimbury - 4 % and King - 2 % of the York Region Real Estate market demand respectively.
By only looking at the number of sales statistics, the data shows that the real estate demand is high within the cities such as Markham, Vaughan and Richmond Hill as they make up for 67 % of the real estate Market demand within York Region.
The number of sales is a good statistics which shows the glims of the market size, however, it is recommended to look at the number of sales (Demand) and compare that to Active Listing (Supply).
NUMBER OF SALES "DEMAND" VS ACTIVE LISTINGS "SUPPLY"
The image above illustrates the real estate market demand and supply within the York Region in 2018 for each month. The number of sales represents the real estate market demand and Active listings represent the supply side of the equation for the York Region Real estate market.
Why do supply and demand matter? The supply and demand tell us the overall health of the York Region Real Estate Market, especially if you compare these key statistics (Number of Sales and Active Listings) to the previous years.
As an example, let's compare the number of sales from May 2018 to May 2017. In May 2017, York Region had 1,479 sales, at the same time in May 2018 York Region had 1135 sales. The Active listings within the York Region in May 2017 was 4,371 however, in May 2018 it was 5,704.
This means that the demand has decreased compared to the supply for the York Region Real Estate market. This was the expected due to the introduction of the Mortgage Stress Test and Greater Toronto Area Real Estate Bubble.
AVERAGE PRICE VS MEDIAN PRICE
I have compared average and median price for York Region Real Estate market in the image above for 2018. The average price represents the average of all houses sold for each month and the median price represents the average value of most houses sold in York Region for each month in 2018.
AVERAGE VS MEDIAN PRICE - YEAR TO DATE BY CITY
The clustered column chart above shows the average vs median price by each city within York Region year to date for the year 2018. The data also shows that the average and median price is highest for the King city which makes up 2 % of the York Region Real estate market.
How is this possible? The average and median statistics listed in the image above is for all home types, hence it is highly likely that most of these sold in king city may be detached home type which is higher in value compared to other types of homes.
The average and median price statistics are valuable insights, however, it is best to compare average and median statistics by home type which we will be discussed later in the article. As a home buyer, you may also want to look at these statistics trends over a 3 to 5 year period for a similar type of home including square feet and number of bedrooms for the neighbourhood you want to move into.
Number of Sales by Type of Home
The number of sales by type of home shown in the image above for the York Region in 2018 illustrates the demand for each type of property for each month in 2018. As you can see from the chart above, there is a lot of market demand for the detached homes compare to other types of home. Even for the detached home type, the market demand has decreased from 624 April 2018 to 600 May 2018.
Considering Real Estate is seasonal, may market usually significantly higher compared to April. I looked at the number of sales for detached homes in May 2017 where 842 homes were sold within York Region. This illustrates that the detached home market is an ideal buyers market as the demand have significantly decreased.
Based on the current market conditions, the home buyers affordability is impacted by many fronts, hence the demand has decreased. If you are a first time home buyer, make sure you understand your affordability first and understand what you need to do to get your mortgage approved before deciding on what type of home you want to buy.
Average Price by Type of Home
The average price by type of home needs to match your affordability and your affordability should be much higher than the average price of the type of home you want to buy. The image shown above illustrates the average price for each type of home within the York Region in 2018 for each month.
My recommendation is that you look at these statistics trends over a 3 to 5 year period for a similar type of property for the neighbourhood you want to move into as it will give you an even more accurate estimate for you to make a decision on your next neighbourhood and the type of property you looking to buy.
According to the report published by TREB (Toronto Real Estate Board), the average price and number of sales have significantly increased within the Greater Toronto Area over the last decade. In 2007, the average price of a house in the Greater Toronto area was $376,236 and in the year 2017, the average price of a house is $822,622.
The key is to understand the average price of each property type and for a specific neighbourhood as the average prices differ based on neighbourhood and property type.
If a home buyer is looking at a property in a specific neighbourhood and if the asking price is significantly higher than the average price, it is in the home buyers best interest to understand and question the asking price regardless of your affordability.
Median Price by Type of Home
Everyone likes a good deal, how do you measure if you got a great deal based on Real estate market conditions? The above image shows that the median price by type of home within York Region in 2018 for each month.
If the price of the property that you just purchased is closer to or less than the median price for the type of home within a specific neighbourhood then you got your self a good deal.
If you are interested in a property, the first thing that I would suggest that you do is to work with your real estate agent and understand the median price for the type of home within the same neighbourhood.
Once you identified the median price, this will ensure that you and your agent understand the value of the home and compare that to the asking price which will lead to a better outcome with your negotiation.
As a home buyer, there is a lot to consider when buying a new home. For most home buyers, buying a new home is one of the biggest financial investment in their lifetime. We empower home buyers by enabling them to make informed decisions using data.
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