Home Buyers and Sellers Face Changing Market Dynamics

13-10-2016 System Administrator October 2016 0 Comments

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The real estate market continued its hot trend with a noticeable growth in prices in Ontario Greater Toronto Area (GTA) while it is moving towards a decline in most other areas in the country. The new tax on foreign buyers embossed recently on sales in British Colombia had shown its toll resulting in lower sales numbers compared to September last year.

Ontario – Sales growth continues in September

Toronto, October 5, 2016 – Toronto Real Estate Board (TREB) President Larry Cerqua announced that Greater Toronto Area REALTORS® reported 9,902 sales through TREB's Multiple Listing System® (MLS®) System in September 2016. This result was up by 21.5% compared to September 2015.

For the region as a whole, strong annual rates of sales growth were experienced for all major home types. The pace of detached sales growth was slower in the City of Toronto and the number of semi-detached sales was down compared to last year. In both cases, the year-over-year dip in new listings was likely the issue.

"We continued to see strong demand for ownership housing up against a short supply of listings in the Greater Toronto Area in September. The sustained lack of inventory in many neighbourhoods across the GTA continued to underpin high rates of price growth for all home types," said Mr. Cerqua.

Both the MLS® Home Price Index (HPI) Composite Benchmark and the average selling price for all home types combined were up strongly on a year-over-year basis in September. The MLS® HPI Composite Benchmark grew by 18% compared to September 2015. The average selling price was up by 20.4% to $755,755. It is important to remember that the MLS® HPI provides a price growth measure for a benchmark home, thereby allowing for an apples-to-apples comparison from one year to the next. The average selling price can be influenced by changes in both market conditions and the mix of homes sold.

"The Toronto Real Estate Board will be closely monitoring how the recent changes to Federal mortgage lending guidelines and capital gains tax exemption rules impact the housing market in the Greater Toronto Area. While these changes are pointed at the demand for ownership housing, it is important to note that much of the upward pressure on home prices in the GTA has been based on the declining inventory of homes available for sale," said Jason Mercer, TREB's Director of Market Analysis.

OTTAWA, October 5, 2016 – Members of the Ottawa Real Estate Board (OREB) sold 1,371 residential properties in September through the Board’s MLS® System, compared with 1,241 in September 2015, an increase of 10.5%. The five-year average for September sales is 1,171.

“Again this month, we have broken the record for residential and condominium units sold, with 200 more units sold than the five-year average for September sales,” says Shane Silva, President of the OREB. “With average sale prices remaining virtually unchanged since the beginning of the year, this could be an indication that prices have adjusted to market expectations and sales have rebounded as a result.”
 
September’s sales included 269 in the condominium property class, and 1,102 in the residential property class. The condominium property class includes any property, regardless of style (i.e., detached, semi-detached, apartment, townhouse, etc.), which is registered as a condominium, as well as properties which are co-operatives, life leases, and timeshares. The residential property class includes all other residential properties.
 
“Units listed in both residential and condominium property classes continue to decline,” indicates Silva. “From 2,076 listed in September 2015 to 1,822 listed in September 2016 for residential properties, and from 637 listed in September 2015 to 588 listed in September 2016 for condominium sales. With fewer listings coming on to the market, combined with recent higher unit sales, overall inventory is declining. The basic economics of supply and demand at play will continue to have an impact on the Ottawa resale market.”
 
The average sale price of a residential-class property sold in September in the Ottawa area was $383,793 a decrease of 0.1% over September 2015. The average sale price for a condominium-class property was $252,136, a decrease of 2.0% over September 2015. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.
 
“The hottest segments in our market for September continue to be two-storey and bungalow residential homes in the $300,000 to $400,000 price range, followed by one-level and two-storey condos in the $200,000 to $300,000 and the $100,000 to $200,000 price range,” says Silva. “In addition to residential and condominium sales, OREB Members have assisted clients with renting almost 2,500 properties since the beginning of the year.”

British Columbia – Home buyers and sellers face changing market dynamics

Tuesday, October 4, 2016 – Metro Vancouver home sales totalled 2,253 in September 2016, a decrease of 32.6% from the 3,345 sales recorded in September 2015 and a decrease of 9.5% compared to August 2016 when 2,489 homes sold.
Last month’s sales were 9.6% below the 10-year sales average for the month.

“Supply and demand conditions differ today depending on property type,” Dan Morrison, Real Estate Board of Greater Vancouver (REBGV) President said. “We’re seeing more demand for condominiums and townhomes today than in the detached home market.”

New listings for detached, attached and apartment properties in Metro Vancouver totalled 4,799 in September 2016. This represents a decrease of 1.0% compared to the 4,846 units listed in September 2015 and an 11.8% increase compared to August 2016 when 4,293 properties were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,354, a 13.4% decline compared to September 2015 (10,805) and a 10% increase compared to August 2016 (8,506).

The sales-to-active listings ratio for September 2016 is 24.1%. This is the lowest this ratio has been since February 2015. Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12% mark for a sustained period, while home prices often experience upward pressure when it surpasses 20% over several months.

“Changing market conditions are easing upward pressure on home prices in our region,” Morrison said. “There’s uncertainty in the market at the moment and home buyers and sellers are having difficulty establishing price as a result. To help you understand the factors affecting prices, it’s important to talk with a REALTOR®.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $931,900. This represents a 28.9% increase compared to September 2015 and a 0.1% decline compared to August 2016.

Sales of detached properties in September 2016 reached 666, a decrease of 47.6% from the 1,272 detached sales recorded in September 2015. The benchmark price for detached properties is $1,579,400. This represents a 33.7% increase compared to September 2015 and a 0.1% increase compared to August 2016.

Sales of apartment properties reached 1,218 in September 2016, a decrease of 20.3% compared to the 1,529 sales in September 2015. The benchmark price of an apartment property is $511,800. This represents a 23.5% increase compared to September 2015 and a 0.5% decline compared to August 2016.

Attached property sales in September 2016 totalled 369, a decrease of 32.2% compared to the 544 sales in September 2015. The benchmark price of an attached unit is $677,000. This represents a 29.1% increase compared to September 2015 and a 0.1% decline compared to August 2016.


Alberta – Stable residential prices not affected by slower sales

Edmonton, October 4, 2016 – September’s all residential average sale price in the Edmonton Census Metropolitan Area (CMA) continues to remain strong both month-over-month (m/m) and year-over-year (y/y) up 1.1% and 1.5% respectively. The average price of single family homes remains consistent down less than 1.0% m/m and down 0.2% y/y to $430,461. Condos average prices also remained flat at $251,365 (-0.06% m/m,-0.45% y/y). Average prices for duplex and rowhouses stood firm, up 4.66% from August 2016 and down slightly year-over-year for the month of September.

“We are moving into the quieter real estate months with a healthy inventory, strong prices and slower listings and sales,” said Steve Sedgwick, Chair of the REALTORS® Association of Edmonton. “It continues to be a good time to buy. We usually see less inventory coming into winter months, so it is beneficial for buyers to have a respectable selection and reassuring for sellers to see continued stability in average sale prices.”

1,339 units reported sold in September 2016; all residential sales in the Edmonton CMA were down 6.56% m/m and down 8.41% y/y. 846 single family homes were reported sold, down 3.0% from the previous year.  Reported condo sales at 327 were down over 20% relative to September 2015. Duplex/rowhouse sales at 135 were down by only 1 unit from August but down 5.59% over last year. All residential listings were down slightly for September -0.29% m/m and -1.47% y/y.

“We expect to see listings and sales slow as winter approaches. We may begin to see the effects of slight downward pressure on prices, but do not expect to see any drastic movement as our market continues to remain stable,” said Sedgwick. “Sellers can expect to wait a little longer than previous years for their property to sell.”

The number of days the average residence in the Edmonton CMA took to sell in the month of September was 57. This is up two days from August 2016 and up three days from September 2015. On average, single family detached homes sold in 54 days in September, while condominiums sold in an average of 65 days and duplex/rowhouses sold in 60 days.

There were 7,857 residential properties available in the Edmonton CMA at the end of September, down less than 1.0% from 7,908 in August 2016, but up 10.54% from the 7,108 properties available on the MLS® System at the end of September 2015.

 




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