Real estate activity for the first two months of 2019 across the Southern Georgina Bay region has shown an improvement from one year ago with stronger sales in specific segments of the market.
Total year-to-date MLS® dollar sales as reported by the Southern Georgian Bay Association of REALTORS® (SGBAR) through the end of February totals $110.3 million, an increase of $20.2 million or 22% from the $90.1 million in sales for first two months of 2018. While on the surface this number shows a more robust real estate market in our area from a year ago, year-to-date sales are $14.0 million or 11% below the level of MLS® sales for the two first months of 2017. Once again it is worth noting that these results are for residential MLS® sales only including single family homes, condominiums and vacant lots. Commercial properties, farms etc. are excluded.
While year-to-date MLS® dollar sales have increased significantly (22%) over the first two months of 2018, unit sales remain relatively weak. Through the end of February MLS® unit sales total 208 individual properties, 10 units more or just 5% above last year. The chart belowshows year-to-date 2019 versus 2018 sales across the various price segments of the market with increases in the upper price ranges most notably $500,000 to $799,999 and from $1.5 million and higher. The key segment of the market wherein there is the greatest demand is down 11% from one year ago with 85 sales so far in 2019 compared to 96 last year.
Some of the current weakness in sales is seasonal in nature. Sales start to ramp up in January following the end of the holiday season and typically peak April through June when properties start to look their best during the spring and early summer weather. Inventory levels of properties listed for sale on the MLS® system also ramp up during this period, potential buyers have more to choose from but competition among sellers is also stronger. Overall we experienced a general shortfall of inventory listed for sale on our local MLS® in 2016 through to early 2018 at which time the market started to show signs of slowing down.
While that situation exists in some price segments of the market today, it is not universal across the region. As of this report, the amount of inventory listed for sale in the various price segments varies greatly. The following is a summary of residential properties listed for sale by price range and the “months of inventory” shown is based on the current rate of sales that we have experienced in these price segments over the past year.
Price Range Current # of Active Listings Months of Inventory
Under $300,000 48 1.8
$300,000 to $499,999 152 2.1
$500,000 to $799,999 182 4.8
$800,000 to $999,999 54 7.0
$1.000 to $1.499 Million 48 8.7
$1.500 to $1.999 Million 32 29.9
$2 Million + 29 25.0
What does this mean to sellers and buyers? While year-to-date residential sales between $500,000 to $799,999 are up 68% from a year ago, there is currently well over 4 months worth of inventory listed for sale to choose from. Similarly, sales in the $1.5 to $1.9 million dollar range are 10 times greater than in the first two months of 2018 yet with 32 active MLS® listings that is almost 30 months worth of inventory while properties listed for sale priced above $2 million represents 25 months of inventory.
The level of MLS® listed inventory overall however is showing signs of trending upwards which is encouraging for those looking to buy especially in the lower price segments. New MLS® residential listings in January were up 8.6% from one year ago and totalled 190 units. New listing activity then slipped in February totalling 192 properties down 10.7% from 215 new listings that came to market in February of last year. There is no question that we have had a harsh winter with adverse snowfalls and bad driving conditions, hardly ideal conditions for buyers to view properties for sale and many sellers have held off listing their home until conditions improve with the arrival of spring. Many sellers may also be fearful that they have perhaps missed the window of opportunity to maximize the sale price of their home or condominium. I have in fact had clients of my own who live in the Greater Toronto Area state that selling their home now will net them a lower price than 12 months ago.
Year-to-date MLS® single family home sales across our market total 90 units an increase of 29 properties or 48% more than the first two months of 2018. Again this is primarily driven by strong sales in the $500,000 to $799,999 price range as well as the strength of the upper end market $1.5 million and higher. The Blue Mountains and Wasaga Beach are the only municipalities in the region with single family home sales equal to or greater than last year, all others ie: Cleaview, Collingwood, the Municipality of Meaford and Grey Highlands are all down anywhere from 25% to over 60% in home sales year-to-date. Yes the number of units is small and the winter has made property showings difficult but we are not the only area where sales are down and it’s not all due to “new” home sales as some would claim.
With respect to the local condominium market, year-to-date sales of 23 units is down a modest 3 properties or 11% from a year ago. The demand for condominiums in our area continues to grow and this is not unique to southern Georgian Bay. A report just released by “Teranet”who is a leading provider of land registry services and real estate data insights across Canada found that in 2017 over 25% of residential real estate transactions across the country were for condominium properties. Condominium ownership is popular with both baby boomers looking to downsize with a less maintenance intensive lifestyle as well as for first time home buyers that are finding themselves priced out of single family home ownership. After looking at the residential sales data for our market in 2018 I found that MLS® condominium re-sales in our market accounted for 24% of the 1,800 plus MLS® residential sales in our region last year. Year-to-date sales reflect that for the first two months of 2019, condo sales have dipped to 20% of all residential sales in the area but this is likely to change in the months ahead as a significant number of area condos get leased our for the ski season and with that season winding down we are seeing more condo units come onto the market for sale. As of this report there are 110 active MLS® condo listed for sale which represents three months of inventory. As previously mentioned, several new condominium projects in the area are adding additional new condominium units into the market primarily in Collingwood, the Blue Mountains and Wasaga Beach and the sale of these newly constructed units generally do not flow through the local MLS® system. For further information on the area’s condo market visit my website www.rickcrouch.realtor for a copy of my latest “Condo Communique´” newsletter detailing the 2018 Southern Georgian Bay Condominium Market.
As reported in my last newsletter , the market has shifted, buyers and mortgage lenders are both being cautious. With the odd exception, the days of multiple offers and properties selling for well over their asking price are gone. To restore buyer confidence as well as to help them meet the tighter lending rules two things need to happen. First we need to see an upturn in the number of properties listed for sale and the arrival of spring will no doubt bring that about as it typically does. Cautious buyers and those that require mortgage financing need more choices of what is available to purchase. With the heated market conditions we experienced in 2016 through to early 2018, too many buyers got caught up in the multiple offer melee and in many cases I personally feel they over paid. Banks are fearful of buyers over extending themselves and on occasion financing is not approved if the appraisal comes in less than what the buyer is willing to pay. More inventory will further serve to balance the market evening the playing field for both buyers and sellers. Lastly, sellers and to some degree the real estate community needs to accept the fact that the market has changed and listing a property for sale with an asking price that is significantly above fair market value is unlikely to attract a willing buyer(s) nor will it help that buyer(s) to secure mortgage financing if they need it.
As with other facets of our profession I watch our MLS® system activity closely on a daily basis and I will continue to report on meaningful data that is applicable to the real estate market in our area throughout the year. In the meantime if you have any questions please feel free to contact me at any time. A Free PDF copy of this Market Report and others is available on my website at: www.rickcrouch.realtor.