Over the past year we have heard many people and experts talk about the real estate markets in these areas. We have heard how the market is great with prices going up every quarter. We have heard that we are in a bubble and it will burst at some point. I am here to disagree with the experts. Yes, we are seeing prices increase dramatically over the past years and yes we have seen these 2 neighbourhoods become much more difficult to buy in but this is due to a lack of inventory in the areas.
Let's begin in Bathurst Manor just a few years ago we could see up to 100 sales happen in this area over the period of a quarter. This past 4th quarter in 2016 we saw only 41 sales. This was due to a lack of inventory and no other reason. When you have that lack of inventory happen in a certain area you will see prices grow especially when interest rates continue to be low. We must ask ourselves why are we not seeing the re-sale market continue to be strong in this area? Well, one reason is we watched the neighbourhood change over the past 15 years from bungalow homes built in the 40's and 50's to new buyers coming in and tearing the homes down and building larger 2 storey houses. This changed the market in this area and just 15 years ago with the large lots Bathurst Manor was a great deal. Over time we have seen this area saturated with the change which of course slows at some point. I don't think we will ever see the pace of sales in Bathurst Manor as we did in the early 2000's.
Now we have seen a slower pace of houses coming onto the market what happens with prices? Bathurst Manor is still a very popular area that many buyers are waiting to get into. The large lots, beautiful tree lined streets, and close to all amenities makes Bathurst Manor a highly sought after neighbourhood. So it comes down to supply and demand. In the 4th quarter of 2017 we saw only 52 new listings come on the market and 17 were for condos. This left only 35 houses to be sold in this area almost 1/3 of what we have seen in the past. This of course did not meet the demand for buyers wanting to come into the area so we saw an increase in prices up by 25% to over $925,000 for a property here. Detached homes are now up to $1,346,000 this is a dramatic increase from this time just 2 years ago. In fact it was a 25% increase over the same period last year.
So what does all this mean? To begin we are not in a bubble we are in a inventory shortage and as long as demand outweighs supply and interest rates remain low we will continue to see rising prices. Do I believe we will see a time that prices drop dramatically? No. I don't we will see the prices level off and possibly drop 5% but I don't see a dramatic drop over the near future. I do believe we are hitting the peak of this market and if you are debating on selling now is the time. For buyers it's tough to say when we will see the leveling off but if you do buy I don't see you losing money over the long run. Even if we see a small dip prices historically come back. In the 90's everyone said we had peaked and would ever see those prices again. Well in those days you could get a bungalow for less than $300,000.