If you have been looking for a townhome, a new development design to watch coming in 2023 is the half-duplex-style townhome which means one shared wall, and more natural light among other benefits. 747 Patterson Ave will be completed in 2023, reach out for more information.
Last year I reported on how much additional demand was there for homes with a suite. With such a rapid increase in prices, buyers had to get creative and either look at getting homes with a suite to make things work, or else make a sacrifice especially while competing with a lot of out of town buyers. The value increase of having a suite in your home was around an additional value of $40,000 to $50,000 in sale price.
The market this year has been.....different, have the tables turned to people looking for homes to have to themselves? or has the increase in costs of borrowing moved people to continue to rely on the suite? Last year, at this time, there were 1.74 months of inventory for homes that had a suite and 1.87 months for homes without a suite. A slight difference but nothing earth-shattering.
This year looking at the months of inventory, as an indication of whether it is a buyer's or a seller's market, homes without a suite currently have 8.05 months of inventory and 9.74 months for homes with a suite. It looks like the tables have turned more than a bit. A few thoughts in the change in months of inventory for homes with a suite now sitting 1.69 months longer than homes without a suite. Is that home prices have increased drastically this past year and if these homes have tenants in there, there is a good chance the new costs of borrowing are not making financial sense for investors. It has never been tougher to get tenants out, and landlords are constrained with how much they can increase the monthly rent, making existing homes with suites and tenants less marketable. Looking at the total amount of sales with homes that do not have a suite, the total amount of 1596 so far in 2022 and 2651 last year, it looks like this year there will be 60% of the total sales we saw last year. Homes with a suite have accounted for 653 total sales this year compared to 2022 sales of 1154, which is around 56%, of where things were last year.
Looking at the inventory side of the equation below, is the 5-year average of 3,286 new listings that come on the market each year, however, so far in 2021, we are only at 1,156 which is down substantially from how much demand appears to be out there. Last year there were 3,398 new listings with a suite.
Sales with a suite over the last 10 years
So far in 2022, the average sale price for homes with a suite was $1,248,671 in comparison to $1,060,000 in 2021 and 845,210 in 2020. When looking at homes without a suite the average sale price has been $1,212,798 in 2022, a difference of $35,873. Does that mean a suite can add $35,000 in additional value with all things considered equal?
Average Home prices with a suite over the last 10 years.
A few thoughts, regarding that question, is it depends. A few questions to ask. 1. Are there any existing tenancies? we have seen home prices and costs of home ownership drastically increase, but if there are tenancy agreements in place, unless the buyer is looking to occupy the home as their primary residence, it is tough to get the tenants out, and maybe the tenants are on below market rents which makes it tougher for investors to buy a home that has a suite. 2. What is the condition of the home? is it run down, and beat up by tenants or does it look like it's being loved and cared for well? 3. What is the location of your home? location, location, location. Suites typically are more valuable in central locations. You can ask for higher rents, and more people looking in that area are looking for a suite than is more prominent family neighbourhoods. 4. If your home does not have a suite, is there a chance to easily add one? with the potential to add a suite you can get more people looking at yours. Completing some quick renderings of unfinished areas can showcase the potential for buyers that might not be afraid to do the work . Please feel free to reach out with any questions or if you are in need of contacts of rendering companies, we offer renderings as part of our listings agreements as well to showcase the highest and best use.
Have a great week and feel free to reach out if there is ever anything I can do for you!
-Mark
Mark Coons
Personal Real Estate Corporation
Mobile: 250-801-0361
Email: markcoonsrealty@gmail.com