It’s that special time of year again, home shoppers have plenty to chose from and as a result are putting pressure on local home prices. Penticton however is a little piece of paradise holding its own as we crunch the local numbers. HST is now in place and new construction starts are at an all time low. Historically July and August shows a slowdown in the real estate market compared the the previous few months. The British Columbia Real Estate Association’s June 2010 Housing Forecaststates “the average MLS residential price in the province is forecast to increase a further 6.2% this year before remaining relatively unchanged.” Their reasons: stronger economic and employment growth.
According to the South Okanagan Real Estate Board for the month of May 2010 there were
- 155 new active listings (224 this time last year) Statistics released by Canadian Real Estate Association (CREA) show that homes sales activity and new listings in Canada declined in May right accross the board
- 89 units sold (85 last year)
- Homeowners will like this one……average sales price this year $344,894 compared to last years’ $318,301 this is an 8% increase over last year*
- Days on market has shortened to 88, when last year it was 111
*Although the average sales price is up, I feel that with the million dollar home market being hit the hardest these numbers are skewed by lack of activity in the higher end home markets.
According toOzzie Jurock “Seasonally adjusted home sales activity declined nationally by 9.5 per cent in May from the previous month. Activity declined in more than 70 per cent of local markets, the largest declines coming in Toronto, Vancouver and Ottawa. In a departure from the normal seasonal pattern, national activity levels in May were also down from April levels. This suggests that the combination of changes to mortgage regulations and rising mortgage rates pulled forward a number of sales into April that would have otherwise taken place at a later date.”
An interesting stat was talked about at this weeks staff meeting of Royal LePage REALTORS gathered at the yacht club. If not one more home was listed how many months of inventory would we have?
Well that depends on which segment of the market you are analyzing….
The strongest sector of the market are single family homes priced between $200,000 and $300,000. With current inventory levels to date we have 7 months of inventory!!! First time buyers, the new first time home buyer, downsize-rs, and investors have been picking up homes in this price point. In fact I have sold several of these to very savvy buyers. Deal of the month was 799 Torontowhich I helped a reapeat client of mine obtain for a mere $200,000. I had one brand new construction 1/2 duplex sell just under the nasty HST deadline. Sold for $280,000 buyers paid the 5% GST and saved $12,000 by closing prior to July 1st.
The next sector being homes priced $300,000 to $400,000 there are 4.5 months of inventory.
$400,000 to $500,000 the inventory levels jump to 14 months supply.
$500,000-$600,000 a scary jump to just over 18 months of inventory.
As we jump in hundreds to the million dollar mark we are seeing a trend of increasing inventory levels.
$600,000-$700,000 shows 19 months of inventory
$700,000-$800,000 a whopping 33 months of inventory.
$800,000-$900,000 shows 41 months of inventory
$900,000- a million 47 months of inventory
and 1 million to 1.5 million 57 months of inventory.
Million plus sector is primarily driven by the stock market, which is vitually dead unless very sharply priced. Where one could consider a $50,000 price reduction “measly.”