What a 10-year high supply of houses in London's real estate market means for buyers and sellers

Ainsley Gordon has been selling real estate in London for more than 40 years.

Now for the first time since he started, London is moving into a true buyer's market with homes often sitting for weeks unsold and sellers left to face some hard realities when it comes to pricing.

"It's the first time it's been like this since maybe the 80s," said Gordon who's with the London Living Real estate brokerage. "It's maybe not quite as bad as that, but it's turning into a buyer's market for sure."

Numbers released by the London and St. Thomas Association of Realtors (LSTAR) this week show that the average sale price of a house was holding steady at about $624,000, essentially flat compared to a year ago.

However the ratio of sales to new listings dropped substantially in January, to 32.2. That's half the December number total of 71.6.

Put another way, the number of homes coming onto the market is increasing at a time when sales are increasingly sluggish.

The inventory (the number of homes on the market) is the highest it's been in 10 years, according to LSTAR stats.

It's good news for buyers looking to get into the market. In an era when many adults have only ever known bidding wars and steadily rising prices, buyers now have more choice. Gordon said they can shop around a bit and not feel so rushed to make a purchase.

However he said it's created a difficult reality for some sellers. He's had to have some difficult conversations with listing clients when it comes time to set the price.

"If they bought the house two or three years ago, then they might have a problem," he said. "If they bought many years ago, they're probably fine."

During the COVID-19 pandemic, rock-bottom interest rates drove prices up. Now some home owners who bought at that time are are dealing with the painful double whammy of higher interest rates come renewal time and a much softer market if they need to sell.

People who used cheap money to secure mortgages to buy second and third properties are particularly vulnerable.

"It's investors who really got caught in this," said Gordon. "When the rates were low, they went crazy and now it's adjustment time."

Robin Tiller is the chair of (LSTAR). She said right now, the average number of days a house sits on the market is 47. This season's steady supply of snow and steady sub-zero temperatures is making it worse.