October Sales: How High Can We Go?

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The Westmount real estate market appears to be reaching “bubble” status but there is no indication yet that the bubble is getting ready to pop.

The average mark-up over valuation in 11 home sales soared to almost 43 percent in October, with one property going for more than double its municipal valuation — something which has happened only two other times in the past two years — while none sold for less than valuation. That sale price was $2,945,000, highest of the month and one of three sales which cleared the $2 million mark. The lowest home sale price, for an attached house on Somerville Ave., was $1,120,000. Volume is still slow, a factor which is more a result of the high prices than lack of demand. For the year, 123 Westmount home sales have been reported, the same number year-to-date as 2013 and one more than 2010, but otherwise the lowest 10-month volume since 1994, just before the second Quebec sovereignty referendum.

The 11 sales agreements in October had an average price of $1,853,636, but if you apply the (adjusted) average mark-up to the average house valuation in Westmount, it suggests that the “typical” Westmount house would now have a value of about $2,150,000, the sixth month in a row that that figure has surpassed $2 million.

Average time on the market leapt to 160 days from 44 days in September, mainly because a few houses which had been on the market as much as two years finally sold. Two of the 11 October sales went for more than the asking price, and five were “double-ended” by agents who found buyers for their own listings.

The same fervour did not extend to the condo market, however. Only three sales were posted, though it is worth noting that one high-rise penthouse went for $2,880,000, the third condo sale between $2.8 and $2.9 million this year. Another October condo sale went for 20 percent less than the municipal valuation, so with only three sales on the list the statistics become insignificant. Two other October sales were for co-op apartments, one at 300 Lansdowne Ave. and another for a share of a duplex on Wood Ave.

The adjacent-Westmount areas of Notre Dame de Grâce-Côte des Neiges showed strong interest, with eight sales ranging in price from $959,000 to $1,725,000, while only two home sales were reported east of Westmount, both in about the same price range. All of the adjacent-Westmount areas now have average sale prices this year over $1 million; in the case of the Trafalgar-Daulac area the average is over $2 million.

As of mid-November, the number of total house listings in Westmount actually increased by 3 compared with a month earlier, to exactly 100 listings of which only two were asking less than $1 million while 17 were asking $5 million or more — as high as $27,000,000 (so far this year we have heard of only one sale over $5 million). Houses for rent increased by five to 26 in mid-November, of which 6 are asking more than $10,000 per month, though of 41 houses rented this year, none have drawn rents higher than $9,000 per month.

Posted by andy Posted in: Monthly Analysis No Comments » October 2018