October Sales: Nothing Under $2m

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The Westmount real estate market appears to be rounding the bend, to the delight of optimistic homeowners who might be willing to wait a month or two before putting their house on the market. The typical pattern of local real estate prices is to show some hesitation in the end-of-year period, generally between November and February. This may be moved forward or backward by other economic and political forces or — in 2020 — the initial crash caused by the pandemic and new rules for showing houses.

Five houses sold in Westmount in December, rounding out the year with 114 sales, the lowest volume for any year since 1994, just before the second provincial referendum. This time, though politics (Bills 21 and 96) may be playing a part in the decline, more of it can be explained by the climbing interest rates and something of a post-pandemic return to the office, which is making Westmount’s large houses slightly less important than they had been, say, a year ago.

December included one $4,100,000 sale and three of the four other sales brought less than $2 million each, for an average $2,301,900, but in fact the average mark-up over valuation climbed to 42.2 percent, up from 32.5 percent in November, which allowed for the adjusted average to climb slightly. Latecomers were added to the October and November sales lists, changing those numbers slightly (October still has the distinction of posting no sale under $2 million) but indicating there had been relatively little market movement through the late autumn months.

Various clients took their houses off the market over the holidays and have yet to re-list them, so there are only 83 houses on the market in mid-January compared to 99 listed a month earlier. One house now is listed under $1 million, the first since one was briefly put on the market in September and then taken off without a sale. No houses sold in 2022 for less than $1 million; in fact the last time a price was posted below $1 million was jn January, 2021.

Volume remained strong in Westmount’s condominium market in the last quarter of 2022, when nine sales were posted (four of those in December), indicating an average price of $878,167 and an average mark-up over valuation of 18.5 percent. The raw average sale price is the first time since the first quarter of 2020 that the average is less than $1 million; only two of the sales in the fourth quarter were for prices over $1 milion, and one other was a bachelor apartment which sold for only $280,000, whereas the entire year’s next-lowest sale price was $657,000. All of the condos sold in the fourth quarter were in apartment buildings, none were converted duplexes or triplexes.

House rental listings dropped from 33 to 27, though three new rental contracts were negotiated in December, an indication that market might be picking up steam early in the year. Among house rentals, the range for 2022 was between $3,210 and $14,000 per month, and those now on the market are asking between $4,200 and $15,000 per month.

Volume tailed off again in Westmount real estate in October, but the most exciting news is the that none of the five sales negotiated that month was for less than $2,000,000. This is something of a record, the first time in Westmount’s history there have been no sales under $2 million.

Despite that, the adjusted average price of the standard Westmount house has been dropping almost steadily, from a record-high above $2.8 million to the $2.4 million mark, but the serious problem is lack of volume: While the first four months of 2022 produced an average of 15 sales each, that average in the last six months is 6.7, and the highest monthly number of sales is eight, in August.

One Westmount house sold in October for $7,250,000, the third-highest price this year, for a stately mansion in the east-central part of the city. The lowest price, exactly $2,000,000, went for a semi-detached house on Sunnyside Ave. west of Lexington Ave. And while 23 houses were asking less than $2 million on the market in mid-October, only a few had been on the market more than 90 days. Thus, we are moving very slowly from a seller’s to a buyer’s market, but the demand at the top appears to be holding steady.

Only one month so far this year has not had a price agreement of less than $5 million. There have been three house sales over $7 million and another three over $6 million. While such houses as the one built by Hon. Leo Kolber were negotiated in late 2020, only three sales over $6 million were posted by agents in all of 2021.

One late-September sale of a condominium at Château Westmount Square, 4175 St. Catherine St., was posted in October, representing both the highest price for a condo ($2,715,000) in the third quarter of the year and the highest mark-up over valuation (61 percent). No other condo sales were posted for October, thus there is nothing to report yet for the fourth quarter of 2022.

As of mid-October, there were 100 houses on the market in Westmount, up three from a month earlier but up a whopping 19 from the same period a year ago. Of the current 100 listings, 28 are asking between $1,000,000 and $2,000,000, up 10 from a year ago, while 37 are in the 2 million bracket, up only four from a year earlier.
This is another indication that the $2 million bracket is becoming the norm in Westmount, and buyers who have $1+ million available are just starting to look outside the city limits, mostly in the “Golden Square Mile,” where three houses sold between $1,800,000 and $2,200,000 in October. The other adjacent-Westmount areas have only seen shares of duplexes or condo apartments sold. We expect to see a shift of interest to this area over the holiday season while we wait to find out what next spring has in store for Westmount.

Posted by andy Posted in: Monthly Analysis No Comments » October 2022