Sunday, November 11, 2018

Area Real Estate Sales Continue to Remain Soft in 2018

  I am going to start this post off with a somewhat different flavour.  I admit to being a bit of a statistics junkie especially when it comes to real estate and other matters involving the need to make qualified, informed decisions.  There is an old saying that "figures lie and liars figure" which makes having accurate information and data all that more important.  For me this is especially true when serving my real estate clients and helping them make qualified and important selling or buying decisions.  Sharing relevant information and data is therefore in my opinion a key priority in my role as a "consultant" so-to-speak to real estate buyers and sellers.
  There is no denying that most real estate markets across Canada have experienced a much softer year in 2018 than in 2016/2017 and the southern Georgian Bay area is no exception.  Following record breaking sales in 2016 and 2017 where MLS® sales reported by the Southern Georgian Bay Association of REALTORS (SGBAR) exceeded $1 billion, we are going to fall well short of that historic sales volume for 2018.  I am happy to report however that sales through our Brokerage, Royal LePAGE Locations North have remained strong this year especially over the past couple of months.  Kudos to our sales staff and the administrative assistants in our five area offices for their efforts in serving the needs of our valued clients.
  Through the end of October, year-to-date MLS® sales in our area total $803.9 million, 15% below the $950.9 million worth of  properties sold in the first 10 months of last year.  MLS® year-to-date unit sales in our market through October are down 376 properties or 19% from one year ago.  The biggest question we need to ask ourselves for this slowdown in area real estate activity is why, what if anything has changed?
  First, the southern Georgina Bay area has become and remains a prime area that attracts buyers.  Arguably whether it is a place for part-time weekend enjoyment, a location for your family's primary residence or for retirement purposes, we have a lifestyle that is second to none.  People have been increasingly coming to this area for years and that trend is not likely to change any time soon unless economic or other circumstances come into play that will affect that.
  One of those circumstances is affordability.  Everyone is aware that interest rates have crept up in recent months.  This combined with the fact that lending rules have been tightened with respect to attaining a mortgage has had some downward pressure on many buyers ability or willingness to make the plunge into home ownership.  In my management role I have signing authority for the Brokerage and in recent months I have signed several Mutual Release documents cancelling sales where Buyers we unable to get the required financing to complete their purchase.  This does necessarily mean the Buyer's credit rating was at fault.  In some cases the lenders may as the result of inflated prices, not seen the value in the home or condo the Buyers was willing to pay or the property did not get the appropriate "realistic" appraised value to secure financing.  This trend is not likely to change any time soon.
  Canadian real estate prices have on average tripled from 2000 to 2017 which explains to a large degree the rampant growth in both prices and real estate activity overall.  Much of this has been the result of low interest rates/credit which is a polite way of saying "debt."  An article in the Financial Post back in September titled "Canadians household debt is creeping back again"  speaks to this issue and personally I believe this poses a potential threat to the strength of both our real estate market over the next 2 to four years and perhaps the economy as a whole.  Am I being a pessimist?  Some may think so but it's more a matter of being realistic and again looking at the data.  More on this in upcoming posts.

Monday, October 29, 2018

How's The Real Estate Market

  Real estate sales activity in many markets across Canada continues to remain significantly below the frantic level of sales that we experienced in 2016 and during the first 4 to 5 months of 2017.  I don't profess to be the smartest guy but in order to counsel my buyer and seller clients I make a concentrated effort to be informed and to stay abreast of what's happening and I follow market activity in our market and others closely.  Whether I am grocery shopping or just bump into people on the street, the most common question I get is "how's the real estate market?"

  My initial response this year is that we are down in terms of MLS dollar and unit sales from last year.  People are generally surprised as for the most part, the media tends to provide less coverage of real estate sales activity when the market weakens than they do when the market is booming.  In the past couple of years print, online and radio/television media touted how robust the market was.  Often you heard about the property that drew 20 or 30 offers and sold for $100,000, $200,000 or more over list price.  When have we ever heard about the home that languished on the market for a year or two and finally sold for 25%, 30% or more below the original asking price?

  Year-to-date MLS real estate sales as reported by the Southern Georgian Bay Association of REALTORS to the end of September are down 17% in terms of dollars sold.  MLS dollar volume for the first three quarters of 2017 totalled $859.7 million whereas for 2018 sales are $714.8 million.  As was the case in 2016 we ended 2017 with MLS sales over the $1 billion mark at just under $1.1 billion and th4ese sales did not include sales of new homes and or condominiums by developers.  Given the fact we are well off that pace through September  I forecast total MLS sales for 2018 will be in the $925 to $950 million range roughly 15% to 18% below 2017.

  Year-to-date MLS unit sales through the end of September total 1,460 properties which is 20% fewer sales than in the same period last year.  New listing activity has increased in recent months but the number of new listings this year is still running 6% less than the same time frame in 2017.  The average number of days-on-market has crept up this year to 47 compared to 40 last year and I believe we will see this number increase.

  Sales in virtually every price segment of the market are below 2017 especially at the upper end where year-to-date sales between $1.5 and $2 million are 56% below last year.  Sales in our area under the $300,000 mark are down 41% while sales between $300,000 and $500,000 are down 15% from last year.  In my next post I will summarise market activity across the various municipalities in our region but the results are similar, unit sales are down 14% to as much as 25% from one year ago in every municipality that makes up our market area.

  So collectively what does all this information tell us? With sales down both in terms of dollars and the number of properties sold along with an increase in the number of days it takes to sell a property, we have clearly entered a new era one where buyers, the banks and other lenders are getting increasingly cautious. 

  Our market like many across Canada is or has shifted to one that is balanced more evenly between sellers and buyers and I see this trend continuing.  Buyers who are willing to wait will no doubt benefit with more properties coming to market and lower prices. In future posts I will explain why.

  In the meantime please do not hesitate to Contact Me if you have questions or to have a no obligation consultation regarding your personal real estate needs and or goals.

Friday, October 19, 2018

It's Municipal Election Time - Have You Voted?

  Great article on the democratic election process by Ian Adams and well worth the read.

  I ran in the last municipal election for Collingwood Council and I am not afraid to admit that the 38 vote shortfall Ian mentions in this article between getting elected and not was me.  While I was disappointed at the time I took pride in my campaign efforts and the contribution I made in bringing forth change to the town's municipal government.

  People that supported my efforts last time have asked why I did not run in this election.  The simple reason is having sold my home earlier this year I no longer live or own property in Collingwood and now reside in Clarksburg.  Nonetheless my interest in this community, province and country have not diminished and I have actively but quietly followed the current election process.  My children were both born in Collingwood.. My son and his girlfriend have just moved back to Collingwood so like everyone I have a vested interest in the well being and future of the communities I am affiliated with. 

  I have cast my vote in both the Blue Mountains as well as on Manitoulin Island where I own properties.  I did my research of the candidates which isn't hard and asked questions when needed.

  On Monday it will be interesting to see if my choices made a difference in helping those I voted for get elected.  More importantly it will be interesting to follow the process to see if those elected to their Council positions serve their respective communities in the best interest of the public at large during the next four years.

Contact Me

Royal LePAGE Locations North (Brokerage)

330 First Street, Collingwood, ON L9Y 1B4


Direct: 705-443-1037

Office: 705-445-5520 ext 230


My Profile

Rick relocated to Collingwood from Toronto in 1985 through a transfer with Goodyear Canada. In 1987 Rick was recruited by a major client of Goodyear’s, managing their Canadian business based in Barrie before moving to Chicago in 1992 as Vice President of Sales & Marketing. Upon returning to Canada in 1996, Rick ran an industrial products manufacturing company in Stratford, Ontario. In 1998 Rick returned to Collingwood with his two children. Rick is a licensed real estate Broker with Royal LePAGE Locations North in Collingwood and holds his MVA designation (Market Value Appraiser-Residential). He is an active volunteer in the community serving several years on the Board of Directors with the Collingwood Chamber of Commerce as Treasurer, 6 years on the Board of Directors for the Southern Georgian Bay Association of REALTORS® of which he is the Past President (2008) and currently serves on a committee with the Ontario Real Estate Association. Rick is a diverse executive manager with extensive experience in strategic planning, manufacturing, finance, human resources and quality assurance management.