It’s that time of year when the lake’s more appealing than the office, a wine on the deck is more appealing than a third coffee at a boardroom meeting and a hammock is more appealing than a seminar folding chair.
But the beat goes on in the real estate market ... at least in Winnipeg.
With all that we’re reading about real estate market collapses in the United States and what we hear about slow downs in other major markets in Canada, the Winnipeg market continues to establish new highs.
Incredibly, after five $1-billion years and one $2-billion year in succession, MLS® dollar volume for the first seven months of 2008 continues to press into the stratosphere. At the end of July, $1.6 billion in sales had already been recorded. In July, listings were up, sales were up and dollar
volume continued to increase exponentially.
Other indicators, such as days on the market, were also impressive. Condo listings on the MLS® in Winnipeg in July were only on the market an average of 19 days and houses only lasted an average of 25 days.
Other Canadian markets
Major centres in Canada outside Winnipeg haven’t been faring as well. The Canadian Real Estate Association’s national statistics do not paint the same picture experienced by Winnipeg’s real estate market.
CREA reported national MLS® sales activity in the first six months of 2008 dropped 13.1 per cent compared to record levels for the same period last year. Nationally, dollar volume peaked one year ago and have experienced the fourth quarterly decline in a row since that peak.
“Canada’s housing market has pulled back from the record setting pace set in 2007,” said Cal Lindberg, president of the CREA. “The increase in housing prices is also pulling back from the record setting pace of last year, but we still have yet to see any of the price contractions that have impacted the housing market in the United States.”
So by all indicators, Winnipeg is bucking the national trend and is still at a record-breaking clip.
U.S. real estate trends
We’ve all heard and read about the horror stories surrounding the U.S. real estate market resulting from the sub-prime mortgage market debacle. But is it a universal decline or just a correction (and we do mean a correction) in a few speculator-driven hot spots throughout the States?
The following are a few quotes from the August real estate marketing magazine, REM, a monthly publication out of Toronto, about a survey of U.S. consumers:
• “72 per cent of respondents believe their primary home value has remained constant or increased in value over the past 12 months.”
• “63 per cent report that current conditions have ‘no effect’ on their likelihood to sell their primary home.”
• “79 per cent believe the value of their primary home will continue to remain constant or increase in the coming year.”
• “71 per cent agree that over time, ‘nothing beats real estate for building one’s personal wealth.’”
The respondents feel the media plays a role in the perception of the current real estate market conditions. Half of the respondents think the media exaggerates conditions to make the market seem worse than it is.
These views are contrary to the stories in the popular press. But, we’re not about to suggest that things are rosy south of the border, although when people automatically think or suggest that we are in for a rough ride, it might not be as foreboding as all that.
Is Winnipeg immune?
We only know what we know. To think we are immune may be naïve. When the elephant sneezes, the mouse may get a cold!
The reality of the sub-prime mortgage debacle are an imminent — if not an
already — real recession, contraction and depression, and the potential impact of a change in direction as a result of a Presidential election, which are all problems south of the border that have an impact north of the 49th.
We need not be alarmists as there are already enough pack journalists to satisfy that demand.
But if the biggest and most influential economy in the world experiences a recession, we might suffer a little. Although not in parallel as our indicators and fundamentals are different — at least as a result of “cause-and-effect” common sense.
But that’s tomorrow’s story. With the numbers in for July as a stand-alone month and January to July, 2008 as a snapshot, the Winnipeg real estate market did just fine, thank you very much.
Now, back to that hammock.