For good reason, it is often reported that real estate is a local affair. And even within a local market, such as Winnipeg and its surrounding rural municipalities, there can be a fair degree of variation within different property types and MLS® areas.
REALTORS® are the local market experts who know its nuances. They follow the ebb and flow of market activity and keep on top of the latest sales, new listings, expired listings and price adjustments to those listings.
They are often in conversation with other local REALTORS® to discuss how the market is unfolding and what price should be placed on a specific property in a select neighbourhood, the results of their detailed analysis of current and historical data.
Still, national conditions, such as bank rate movements, the mortgage insurance requirement and tax changes or the current job market, do have an impact on the local market and are all part of the equation a consumer should consider when buying a home.
Comparable market analysis, or CMA. is a very effective tool REALTORS® use to determine pricing for a home. The CMA taks into account the average number of days it takes to sell a home on MLS® in a particular neighbourhood. While the overall average days on the market for home sales in April 2010 was only three weeks, the average in some neighbourhoods, such as Whyte Ridge, St. Boniface and Old Transcona, was only nine days. Old Kildonan was just a week.
The percentage of sales-to-listings shows how many listings are being converted every month. This data also varies quite substantially — some neighbourhoods are in the low 80 per cent, while others are under 50 per cent. Old Kildonan was another exception with a 97-per-cent conversion rate.
Another good statistic REALTORS® use on a monthly, year-to-date and yearly comparison basis is the average sale price for a neighbourhood. While it is not always that helpful, as a result of the diversity of homes in a given MLS® area, it still provides a useful indication of price movement and can help substantiate a CMA for a home entering the market.
A final statistic to note is how long homes within certain price ranges are sitting on the market before selling. Most active price ranges tend to remain the least number of average days on market. This also helps explain why some neighbourhoods — where many houses fall within these active price ranges — are experiencing a faster turnaround. For example, all of the house sales falling between $150,000 to $299,999 were below 21 days in April, with the three price ranges between $200,000 and $249,999 being the most active range. On the other hand, the lowest price range of $0 to $99,999 and the highest of $500,000 and above, spent an average of 37 and 32 days, respectively, on the market. The price range between $450,000 and $499,999 remained anaaverage of four weeks on the market.
Like the weather, the most recent CREA national market release below shows how varied our national market is and why you need to go well beyond the headlines to accurately discern your own situation within your local MLS® market.
Canada’s hot resale housing
market starting to cool
(OTTAWA — May 17, 2010) Home sales activity in Canada came up short of the record for the month of April and new listings continued to climb, according to statistics released by the Canadian Real Estate Association (CREA).
Residential sales activity via the Multiple Listing Service® (MLS®) systems of Canadian real estate boards numbered 52,042 units in April 2010. This is less than one per cent short of the record for national sales activity during the month of April which was set in 2007. Compared to April 2009, national activity was up 20 per cent.
Seasonally-adjusted national home sales activity slipped 2.6 per cent from the previous month, and now stands 6.8 per cent below the peak reached in December 2009. More than half of the decline in activity over the first four months of 2010 resulted from fewer sales in British Columbia, while activity in Ontario and Québec remains at or near record levels.
“The easing trend in national sales activity masks a rising trend in a number of major markets,” said CREA president Georges Pahud. “Real estate is local, so buyers and sellers should engage the services of a REALTOR® for knowledge about housing market trends in their market.”
Some 99,901 homes were newly listed for sale on Canadian MLS® Systems in April 2010, surpassing the previous record for the month of April set in 2008 by six-10ths of one per cent. A total of 236,397 residential properties were listed for sale on boards’ MLS® systems at the end of April 2010, down 1.9 per cent from levels one year earlier.
As for the national average price of homes sold via Canadian MLS® systems, that figure rose 12.2 per cent over this time last year. This is a smaller increase compared to those recorded over the past eight months. Bucking the national trend, price gains continue to increase in a number of major markets in Alberta, Ontario and Québec.
With last year’s string of downwardly skewed average price values having now mostly passed, and with activity in British Columbia’s lower mainland having settled down, year-over-year national average price comparisons are coming back into line with changes in the national weighted average price.
On a seasonally-adjusted basis, months of inventory stood at 5.3 months in April, the highest level since last May.
“Next month will mark the passage of one year since the national average price rebounded from the recessionary trough to return to the pre-recession peak, so the rise in the national average price is expected to be more subdued next month, ” said CREA chief economist Gregory Klump. “The national average price could potentially be skewed higher over the next couple of months if buyers of higher-priced homes in Ontario and British Columbia move their purchase decision forward to beat the introduction of the HST in July.”
Note: CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.