More evidence of real estate markets performing according to local conditions was apparent in an August 14 Canadian Real Estate Association (CREA) news release.
Vancouver’s market saw its July MLS® sales up a whopping 90 per cent from July 2008, Fraser Valley skyrocketed by 62 per cent, Victoria rose a remarkable 51 per cent, and Edmonton jumped by 28 per cent, according to the release.
Other Canadian markets, such as Winnipeg’s, had far more modest gains or even slight decreases. Does this mean Winnipeg did not have a good July? Far from it! July 2008 was WinnipegREALTORS® best July ever and the real estate organization knew it would be a hard act to follow. Yet, Winnipeg set a new dollar volume record in 2009 and was only two per cent off the best July on record for MLS® sales.
You have to keep in mind that many markets in the West were down considerably in sales activity at the same time last year, while Winnipeg chugged along oblivious to what was happening across the country. In Winnipeg, it was steady as she goes and to a large extent that’s still the case.
Some of the pent-up demand has been met in active markets over the previous few years. This is most obvious in the lower price ranges where first-time buyers are a major factor. Pent-up demand has also occurred in the more expensive or luxury home market. Nevertheless, Winnipeg this year has put together back-to-back solid months of MLS® sales activity in June and July, and year-to-date is down less than 10 per cent in comparison to a record dollar volume year in 2008.
“The only reason we are now not talking about big percentage increases in sales similar to other Canadian markets is that we never experienced the same significant sales declines a year ago,” explained WinnipegREALTORS® president Deborah Goodfellow. “Manitoba has been very resilient throughout this period and withstood any serious impact from an economic downturn.”
When talking about the national real estate market, it is important to note an overall major rebound is in the works, as July 2009 was the best July on record with over 50,000 homes traded on MLS®.
CREA’s chief economist Gregory Klump attributes this impressive turnaround to low interest rates, prices being as affordable in the midst of the recession — prices are starting to increase again — and gainfully-employed people feeling certain the worst is now behind them.
CREA reported in its August news release six consecutive month-over-month seasonally adjusted increases. The July 2009 number is only 1.4 per cent below the all-time peak set in May 2007.
Increasingly, reports signal the recession is over or the downturn has bottomed out. Most recently, the International Monetary Fund declared the global recession over. This does not mean there will be normal growth or a return to business as usual, since employment is still lagging and major government deficits remain to be confronted.
Still, a return to consumer confidence is reflected in a new Canadian Press Harris-Decima poll, which revealed six-in-10 Canadians believe the economy will come back at twice the rate of the United States’ economic growth.
Another noticeable difference in markets across the country is the actual make-up of the various MLS® property types and their share of total sales. Vancouver is a case in point. In July this year, there were more condo sales than residential-detached, representing 41 per cent and 39 per cent of total MLS® sales, respectively. In comparison, Winnipeg’s residential-detached property type made up 76 per cent of total MLS® sales, while condos only captured 11 per cent.
Winnipeg’s 2008 year-end MLS® property type breakdown for sales shows quite similar results. Residential-detached finished at 75 per cent, while condominiums accounted for 10 per cent of total sales. After that, sales dropped off dramatically with vacant lots and single-attached properties both at four per cent.
In July, Victoria’s residential-detached or single-family home sales represented 55 per cent of the total activity, while condominiums were at 27 per cent. Victoria’s townhouse, or single-attached market, had an 11 per cent share of the market. In contrast, during July in Winnipeg, this property type only made up three per cent of the market.
Calgary, known as a market with many single-family homes in outlying suburbs, still had condominium sales in July representing 25 per cent of total MLS® sales. Residential-detached sales were over twice that at 55 per cent.
All markets are local. Even within the Winnipeg market variations do occur, which can include the types of housing stock available, pronounced activity within specific price ranges or within property location, whether inside or outside the city.
When buying or selling, the best advice is call an expert — a REALTOR®, who is well versed on the current market conditions. Your REALTOR® will be able to explain why some properties may be attracting multiple offers while others are not. Their knowledge allows them to understand how long it may take to sell an MLS® listing in a particular area.
Relative to some other major markets across Canada, Winnipeg has a particularly good record for quicker home sales. Vancouver had its best July ever this year and was pleased to bring its average days on market to sell a home to under 50 days, while Winnipeg homes, despite being off last year’s very quick pace, averaged just 30 days on market.