The headlines are positive, citing job growth, immigration, consumer confidence, new home construction, historically low interest rates and inflation under control.
And with all the positives and stability in every sector of Manitoba’s economic, social and political spheres, the resale market continues at a record pace.
In 2003, the Winnipeg Real Estate Board’s Multiple Listing Service® had a record year. The MLS® is a fully-integrated marketing system that focuses on exposure and co-operation and includes everything from the Winnipeg Real Estate News and mls.ca, to lockboxes and a network of 75,000 REALTORS® coast to coast.
In 2003, the REALTOR®-operated, co-operative marketing system processed over 13,400 property listings and 10,770 sales worth a record dollar value in excess of $1.151 billion!
This year, sales through MLS® broke the $1billion mark on September 14. By the end of October, dollar volume was over $1.183 billion, an increase of 2.7 per cent over the total dollar volume for all of last year.
Listings are up almost eight per cent over last year’s year-to-date total (13,141 vs. 12,209) and sales are up six per cent (10,124 vs. 9,556).
The highest priced sale through MLS® in October was $750,000. The lowest priced sale was $11,000. The average number of days on the market was 26 vs. 49 days in October of last year.
Records are meant to be broken and record years are meant to be surpassed, and REALTORS® and the MLS® are showing real estate records are no exception.
But, Winnipeg still has the enviable reputation of having affordable housing. If you chart the percentage of sales under $100,000 — many cities don’t even record this category — you find that in October, 266 properties sold which represents 39 per cent of the market. And, 43 per cent of the active residential detached listings on the system are under $100,000.
It’s that time of year when we’ll start to see lots of prognostications and forecasts. Pundits will wax eloquently about the past and calculate projections that will never be tested to see if they come true or not.
In real estate, crystal-ball gazers often base their projections on just one element of the puzzle — interest rates. If they think interest rates are going up, it’s doom and gloom. If they think rates will be stable or go down, it’s sweetness and light.
As said in a previous column, sometimes too much weight can be credited to interest rates.
The real estate board does not get into predictions, but as a business entity we do guesstimate what is going to happen in the coming year for everything from budgeting to strategic planning. Board committee members read all the other prognosticators (the banks, CMHC, Clayton, et al), look at all the leading indicators such as jobs, consumer confidence, inflation, immigration, etc., and then the board makes some sweeping generalizations of its own.
In 2005, we see more listings surfacing than this year. This will bring the three-year-old sellers’ market a bit more into balance. We see the length of time to sell increasing marginally — less pressure on buyers, more time to think.
In addition, sales should stay in and around the 10,500 to 11,000 unit mark.
But next year’s story should still be in dollar volume and average sale price. Builders can’t build new stock fast enough.
Rent controls in Manitoba artificially skew the market because one element of the “shelter equation” present in all other provinces is sadly missing in Winnipeg — new apartment construction.
But, we foresee a more balanced market for 2005, which is good news for consumers and good news for REALTORS®, as well as lenders, appraisers, home inspectors, etc.