WATERLOO REGION — The red-hot local real estate market marches on, with another record-setting month of residential sales in Kitchener and Waterloo.

The Kitchener-Waterloo Association of Realtors sold 729 properties through its multiple listing system last month in Kitchener, Waterloo and Woolwich, Wellesley and Wilmot townships.

That's the most properties ever sold in March — and the first time sales have even approached the 700 mark so early in the year.

Prices are skyrocketing, too, with the average sale price for all properties jumping more than $120,000 year-over-year to $493,226. The median price was $451,515. Detached homes sold for an average of $583,144.

"It just speaks to the demand in the market right now," said association president James Craig.

Sales by volume were up more than 24 per cent over March, 2016, with the average price climbing by 32.3 per cent. The association has only sold more than 700 units in a single month three other times — in May, 2007, and last May and June.

It's a similar story in Cambridge, where that city's association of realtors also experienced a significant increase in both sales numbers and price.

The association reported that 241 single-family residential units were sold in March, up nearly 27 per cent over March, 2016. The average sale price for single-family freehold home was $509,163, up 37.4 per cent over last March, while the average price for a single-family detached residential home rose 36.1 per cent year-over-year to $538,431.

"Not surprisingly, the current imbalance of supply and demand led to another very large year-over-year increase in the average sale price in the region," Cambridge association president Jim Robinson said in a news release.

Exceptional demand and extremely limited supply has defined the local market for more than a year now, leading to bidding wars and above-asking offers.

The Kitchener-Waterloo association processed 844 new listings last month, above the previous five-year March average of 807. But high demand meant there were just 434 active listings on the market by month's end, far below the five-year March average of 1,508.

"There's a long way to go," Craig noted. "We're encouraged to see there are more listings, but we need more."

Homes are selling quickly, too, with properties remaining on the market for an average of 14 days, compared to 35 days just a year ago.

Craig said the association anticipates that the arrival of spring — traditionally a busy real estate market — will bring with it an increase in available inventory. But the market remains a catch-22 for many prospective sellers.

"Without a place to move to, it's still really difficult to contemplate putting your home on the market."

Provincial Finance Minister Charles Sousa has said the coming spring budget will include measures to address affordability in the real estate market. Craig said he hopes the government "is looking at long-term solutions and not short-term Band-Aids."

The association would like the government to allow greater density on some residential lands, Craig said, and not as many single-family units.

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He said the association also has concerns about a proposed private members' bill that would no longer exempt buildings constructed after 1991 from annual rent-control guidelines.

If developers are less-inclined to continue constructing rental buildings, it could put more pressure on the housing market and further impact affordability, Craig said.

"I think that could have some negative effects on the market," he said. "The rental market provides a stable solution."