“How’s The Market?” That surely has to be the most common question real estate agents are asked. I think what people really want to know is, is it a good time to buy or sell or, what is their home worth. Or maybe, they are just making polite small talk or are looking for some trivia. Regardless, I have some answers for you today.
I’m relieved to report that my predictions for the 2013 market were correct. (Hey, maybe I’m psychic or something!) I’ve gazed into my crystal ball again this year which you will see at the end of this post.
Once again, the real estate market in Collingwood, Blue Mountain, Wasaga Beach and surrounding areas is alive and well. The year started out relatively strong and ended with the number of sales in the region up by 7.6% over the previous year with dollar volumes up by 9.3%. The number of new listings declined by 2.5% and all in all, we are seeing a return to more balanced market conditions.
Although we saw a rise in the number of very high end sales, 82.6% of all sales in the area were still under $400,000 with just over a third being priced from $200,000 to $300,000. Bear in mind, this includes vacant land and condominiums so, residential, single family homes may fall into a higher price band.
Nationally, continued growth in the economy, employment and slower growth in consumer debt all spoke to a stable economic environment in Canada. Canada’s fundamentals continued to attract foreign wealth and, interest rates did not climb as predicted. Locally, we saw strong sales in both the resale and new home markets with two subdivisions in the area completing their construction phases. We continued to see migration from the GTA, from the U.K. and, the early influence of echo boomers making their first home purchases.
There were a total of 2099 sales of all types in all areas reported on the Southern Georgian Bay Association of REALTORS® (SGBAR) MLS® system last year. In addition to approximately 1355 single family home resales, there were also 374 condo sales, 147 vacant land sales and 32 sales/32 leases of industrial or commercial land and buildings.
Of the 1953 total sales:
448 were under $200,000
937 sales were between $200-$349,999
303 sales were priced between $350-$499,999
Almost 75% of all sales were below $350,000
218 were over $500,000 representing the top 10% of sales in the Southern Georgian Bay/Georgian Triangle marketplace. There were 31 sales over the one million dollar mark including 10 over 1.5 million.
There were 6363 new listings in 2013 and, as of the end of December, there were 1658 properties still listed for sale; down 2.5% from the same period last year. After adjusting for the carry-over into the new year, it should be noted that still, only about 1 in 3 properties for sale sells.
The year ended with a sales-to-listing ratio of 33% compared to 29.94% 28.81% at the end of 2012. This means that it is still a buyer’s market in most areas however, we have micro markets in the Georgian Triangle and it is very important to consider your own market individually. For example, the year-end, residential sales to listing ratios in Collingwood and Clearview are over 40% and in stable market territory; neither a buyers nor sellers market whereas the Town of Blue Mountains at a 30% ratio is still solidly in buyer’s market conditions.
The real estate board reporting area includes several communities that overlap with other reporting areas such as Essa, Tiny, Mulmur, Springwater and areas basically outside of our traditional trading area but are all included in the statistics yet may not present an accurate view of those communities.
Below is a breakdown of sales data for the six KEY traditional trading areas including Collingwood, Blue Mountain, Wasaga Beach, Meaford, Clearview and Grey Highlands.
Condominiums represent a large part of the market – especially in Collingwood and Blue Mountain where over 90% of all area condo sales take place. Condominiums represented 40% of all dwelling units sold in Collingwood in 2013 and 42% of dwelling unit sales in the Town of Blue Mountains. Here are charts with a breakdown of sales and average sale prices, by month, in the two areas:
Comments: The average sale prices of condominiums in Collingwood and the Town of Blue Mountains ($230,349 in 2013) went down over the previous year however, it should be noted that in the previous year, the final release and sales of The Shipyards condominiums were included in the totals and therefore the averages were inflated.
Predictions: We are entering into 2014 with solid employment numbers, projected economic growth in Canada and rising consumer confidence. If you look at the forecasts put out by RE/MAX, CMHC and the Canadian Real Estate Association, predictions are that the number of sales in 2014 will rise by anywhere from 2 to 2.5% with prices climbing from 1.6% to 3%.
My guess is that these are conservative estimates. Echo boomers are now 20-36 and starting to enter their home buying years which we are now starting to witness. We are seeing an increase in the number of sales with a decrease in the number of listing suggesting a tightening supply of both new and resale inventory. There is a slowing in consumer debt.
My optimism is only limited by two factors and that is the very real possibility of a further tightening in mortgage lending rules which, depending on what the changes are, could certainly dampen the market and, rising rates but I suspect we won’t see too much rise in those until the end of 2014.
Bottom Line: By the final quarter of 2014, I’m betting that the Canadian dollar is likely to decline against growth in the U.S. economy which leads to increased exports and potential inflation and then, we’ll see a moderate increase in interest rates of around 50 basis points. I also think that the deep freeze we are experiencing means that we will have a strong spring market with pent up demand from these early months. My guess is that locally, we’ll see an increase in the number of sales this year of at least 5% with prices climbing for traditional, in-town single family homes and remaining flat in condominiums and older recreational properties.