Area Real Estate Sales Strengthen in May

Following two months of significantly slower sales activity in March and April wherein sales were approximately 20% below the same months last year, area real estate sales made a stronger comeback May. 

Individual unit sales reported through the MLS® system of the Georgian Triangle Real Estate Board (GTREB) in May were down 5% versus May of 2010, totaling 183 sales compared to 193 sales last year.  Sales revenue for the month of $51.2 million was 4% below the $53.5 million worth of properties sold in May of last year.  Unlike prior months where higher-end sales drove sales revenue, May saw only one sale reported over $1 million versus 3 sales of $1+ million in May 2010. Nonetheless, sales over $1 million for the year are up 44% with a total of 13 sales in this price range to date.
  Following the stronger sales activity in May, the gap in year-to-date dollar sales has narrowed.  Sales revenue through the end of May totals $211.2 million compared to $219.4 million worth of properties sold in the first five months of 2010.  Unit sales year-to-date however remain well off last year's pace with 698 individual MLS® sales reported this year versus 788 through the end of May last year, a decrease in excess of 11%.
Other than Wasaga Beach where unit sales are up 3%, every other local municipality has seen a decrease in unit sales activity year-to-date.  Clearview Township -4%, Collingwood -3%, Grey Highlands -10%, Municipality Meaford -37%, The Blue Mountains -14%.
  Overall the year appears to be shaping up much like 2009 which saw softer sales activity in the first six months of the year with very robust sales activity through the summer and fall.  The latter half of 2010 saw much weaker sales and this has obviously spilled over into 2011.

Economic Resets

  I am just finishing reading a new book available from Collingwood's library titled The Great Reset written by Richard Florida, a leading author, economist and recognized intellectual.  The book summarizes the numerous economic downturns that have taken place during the past 100+ years and the economic "resets" that take place after each one.

  Florida regards recessions a periods of "creative destruction" which in turn serve to create periods of innovation, invention and economic risk taking that propels economies into new periods of growth and prosperity.  Amongst his many assertions, Florida claims that America's love affair with the automobile are over, with an increasing number of people choosing to live closer to where they work thus enabling them to walk, bike or take public transit to their place of employment.  Further, technology and an increased number of people seeking self employment etc. will no doubt have people working increasingly fropm home.  Florida asserts that charging people to use roads is the only way die hard car advocates with give up their vehicle in favour or alternate forms of transportation.  This sounds familiar with the City of Toronto recently talking about toll roads an idea that Mayor Rob Ford calls "nonsense."   

  The Great Reset is a good read for anyone interested in obtaining insight into the causes of our past economic downturns while examining the trends that will come about as the result of our most recent recession.  The U.S. economy continues to struggle and will for some time.  It was an economy built on over-leveraged real estate and as Florida points out, after the depression of the 1920's and 30's,  it took almost 25 years for the U.S. real estate market to return to a pre-depression level of activity.  Anyone thinking about buying U.S. real estate on the pretence that it about to go up in value better think again.  With a lagging economy and tens of thousands of foreclosed properties on the market, except for a few select markets, value appreciation  in U.S. real estate isn't likely to happen anytime soon.