By: Mike Breault

Kingston Real Estate Report - 2015 Year End Review

Tags: Kingston real estate market, 2015 Kingston Home Sales,

 

 



Kingston - 2015 was a very active and good year for the Kingston real estate market. The Kingston Area Real Estate Association (KAREA) is reporting a 6% increase in residential unit sales in 2015, with 3,741 homes sold. The average price for a Kingston home (all types) increased from $285,846 in 2014 to $298,283, a 4.3% increase. Certainly a good return these days and particularly after reviewing my 2015 RRSP account statement the other day!! 

Segment Performance - While overall sales volume increased by 6% in 2015, breaking down home sales into price segments reveals further detail about performance of the Kingston real estate market.

               Price Segment                                            2015 Volume             2015 Growth                                                    
               Under $30,000 ~ $119,900                                  280                           -9%
               $120,000 ~ $199,900                                           633                           -5.2%
               $200,000 ~ $259,900                                          890                         +11.5%
               $260,000 ~ $349,900                                          1030                        +4.2%
               $350,000 ~ $499,900                                           595                         +8.4%
               $500,000 ~ $749,900                                           247                          +4.3%
               $750,000 ~ $999,900                                            41                              0.0%
               $1,000,000+                                                          25                          +78.5%

The decline in sales of homes/properties priced below $200,000 has been impacted by recent tightening of the mortgage market. Major lenders in Canada and the CMHC (primary underwriter of mortgages) became more particular in the new business they took on. This has impacted the ability of some first time buyers and buyers with blemished credit history to secure mortgages. As well, lenders and the CMHC have become more critical of properties being purchased and have refused to finance some properties for various reasons.

The core of Kingston's real estate market ($200,000 to $499,900 segments) represented over 67% of unit sales and continued to perform well in 2015. Sales of entry level homes, those priced between $200,000 to $259,900, were strong with 11.5% growth. Sales performance of entry homes is very important as it acts like a funnel for the entire market, taking in new home buyers and pushing up those Sellers to "step-up homes" (larger homes in the $260,000 to $349,900 segment) and stimulating sales at higher price points. 

Like other markets in Canada, the sale of luxury homes in Kingston soared in 2015 with 78.5% growth. As a leading retirement community with fabulous waterfront properties, Kingston's luxury home market continued to attract buyers from across Canada and abroad. Compared with major markets, Kingston's luxury market delivers outstanding value and variety of property types. Demand for luxury homes in Kingston is expected to continue upwards with the ongoing retirement of baby-boomers, local ammentities, Kingston lifestyle and strong value proposition of Kingston luxury properties.    
     
                     
Geographic Analysis - KAREA categorizes sales data into geographic areas called "Districts" - super neighbourhoods in urban areas and larger tracts in rural areas. Comparing sales/listing ratios (total sales/total listings) is a measure of sell-through of inventory and sales performance of geographic areas across the trade area, where a higher ratio equals more homes sold versus total listings on the MLS system. Like any market, performance varies across Kingston and 2015 results are conistent with the past in terms of the best performing districts. In 2015, the top 5 districts in the Kingston real estate market were:

District                                                                                 Sales/Listing Ratio

City South West (Reddendale/Henderson Place/West Park)                              53%
South of Taylor-Kidd Blvd (Bayridge/Lawrence Park/Elmwood)                         51%
North of Taylor-Kidd Blvd (Sutton Mills/Lancaster/Westwoods)                         50%
City Central West (Calvin Park/Polson Park/Portsmouth)                                   49%
City Central East (Alwington/Queen's/Sydenham Ward)                                    46%


Inventory - On the supply side, 2015 was a busy year with KAREA reporting the number of total listings increased 6% and expired listings up 9% over 2014. Anecdotally speaking, I believe increased supply in 2015 was partially a result of Sellers delaying plans in 2014. Provincial and Federal elections of the past have impacted the Kingston real estate market as  uncertainty about the immediate future comes into play. Kingston is a government town with it's economic bedrock being Provincial and Federal jobs. 2014 featured the Provincial election in June and there was a certain political party with an austerity component in their platform. This party was threatening "a 100,000 job cuts" from the Provincial labour force but did not provide details about how or who these cuts would impact. I think this uncertainty freightened many folks here and they put major household plans on hold until after the election. Then, with the election at the end of June and the summer market slowdown into effect, many of these folks just decided to wait for 2015 to sell. I expect 2016 will be a more normal year on the supply side.

I invite you to sign-up to receive my monthly Kingston Real Estate Market Report for all the latest on Kingston home sales and market trends. And don't hesitate with any questions about the housing market or if you'd like to know the value of your home today.