Following a somewhat softer real estate market in the first five months of 2019, both sales and listing activity have rebounded significantly April through August as well as thus far into September. It is worth noting that unit MLS® sales in July and August were 31% and 18% higher than last year respectively. These robust increases fell in two months where we historically see a slowdown in market activity due to summer vacations. This begs the question, are we heading into another period one could describe as a real estate boom.
Through the end of August, MLS® sales volume in dollars across our southern Georgian Bay market area have increased 17% from one year ago to $737 million but remains roughly 4% below the record sales volume we experienced in 2017. Upon reviewing the 17% increase in dollar volume, (approximately $107 million) we have seen over last year, 50% or $54 million of this has came from significantly increased sales activity of upper end properties priced $1 million and higher. Obviously tighter mortgage and lending rules have not impacted these sales as many purchasers for properties of this value are cash buyers.
As per the adjacent graph, sales activity typically peaks mid year and trends downwards especially in November and December as we approach the holiday season, only to ramp up again starting January. As you can see below, July and August this year reflected a significantly different pattern from what we typically experience and it will be interesting to see of this trend continues as the month of September shapes up.
Overall, MLS® unit sales are up a respectable 6% year-over-year with single family home sales showing an 8% increase with 1,052 properties sold year-to-date in 2019 compared to 975 MLS® single family home sales reported in the first eight months of 2018. Resale condominium sales in the area through the local MLS® system essentially remain equal to one year ago up just 1% to 298 units sold versus 294 sales to the end of August last year.
Just as certain months of the year outperform other in sales and listing activity, segments of the marker can vary greater in terms of both unit and dollar sales. An example of how some segments of our market are outperforming others is as follows. As mentioned above, sales over $1 million have been very strong in 2019. Year-to-date MLS® sales, over $1 million totals 89 units, an increase of 81% over unit sales in the same period last year. Conversely, unit MLS® sales under the $1 million threshold are up a more modest 4% from one year ago.
Once again, please note that none of these results reflect sales of new homes, condominiums and or other properties made by builder/developers outside of the MLS® system.
As noted in the summary chart , sales between the various price segments in our market fluctuate rather dramatically. In recent years, it has become increasing difficult to purchase much of anything in our market for under $300,000. Sales in the $500,000 to $799,999 and $800,000 to $999,999 price ranges have increased rather significantly this year based on both steady demand as well as an increase in MLS® listed properties available for sale.
The chart below clearly demonstrates the increased MLS® listing activity that we have seen in 2019 versus 2018 which has helped to propel the rebound in sales we are experiencing this year. While there remains a somewhat weaker level of properties listed for sale in the lower price segments ie: under $800,000, the same cannot be said for properties priced from $800,000 and higher. While the average day-on-market in our area has increased to 52 days for the year overall, there is currently 12 to 25 months worth of inventory listed for sale above the $1 million threshold.
Price Range Current # of Active Listings Months of Inventory
Under $300,000 55 .8
$300,000 to $499,999 191 2.0
$500,000 to $799,999 220 4.8
$800,000 to $999,999 60 9.0
$1.000 to $1.499 Million 57 12.3
$1.500 to $1.999 Million 33 20.8
$ 2 Million + 22 25.0
Buyers looking for properties in the $1 million plus price brackets have a plethora of properties currently available to choose from. The question to ask is why are they taking so long to sell? My belief is it’s a matter of price with buyers reluctant at making offers on properties listed for sale that are not correctly priced to their current value and market conditions, The buying frenzy we experienced in 2016 and 2017 has tampered off dramatically and the data reflects that.
The Town of Collingwood is the only area municipality that is seeing a substantial increase (30%) of single family home sales in 2019 versus 2018. Further, Collingwood is also experiencing a sharp increase in new construction which is obviously not having an adverse impact on the MLS® re-sale market.
Local real estate market activity has shifted to what can best be described as a “balanced,” which serves to level the playing field somewhat for both sellers and buyers alike. Buyers that require financing must meet tighten mortgage rules and lenders are being very cautious not wanting to see buyers spend beyond their ability to service debt. For buyers who are unable to secure financing it is not always due to a poor credit rating. Often it can be a question of the buyer(s) willing to pay more for a property than the bank’s appraisal comes in at and I have seen numerous deals within our Brokerage fall apart because of that. With the odd exception, the days of multiple offers with properties regularly selling for well above the asking price are over.
Both buyers and sellers may need to adjust their expectations in terms of what they as buyers can afford to pay whereas sellers may need to accept more realistic asking prices that are consistent with today’s current market conditions.If you are considering buying or selling in the months ahead I would be delighted to discuss your particular needs and what would be the best strategy in helping you meet you goals and objectives relative to real estate in the Southern Georgian Bay area.