How's The Market Part 2

To the end of September, MLS® single family home sales have increased 14% whereas area condominium sales are up by just 4%. Vacant land/lot sales have declined by 8% and thjis is no doubt reflective of the fact that with a significant inventory of single family homes losted for sale, Buyer are electing to buy rather than build.
Sales in most price segments of the market are performing consistent with 2011 with the exception of the extreme upper end. MLS®  sales above $1.5 million are 50% of what there were in the first nine months of 2011 with 3 properties soild versus 6 last year. As of this posting there are 89 properties listed for sale over $1 million.  At the current rate of sales, this translates into over 42 months worth of inventory above $1 million.

Through the first nine months of 2012, most area municipalities are showing an increase in unit MLS® sales activity with the only exception being Clearview Township.

  Following a year of double digit sales decreases in 2011, the municipalities of Grey Highlands and Meaford have shown a complete turnaround in 2012 with year-to-date MLS® unit sales through the end of September up 50% and 25% respectively. There is no doubt in my mind that the closure of Talisman resort in the Beaver Valley has had some impact on Grey Highlands’ sales in the Kimberley area. After a lengthy listing process, no immediate buyers have come forth for Talisman and as a result the way has been cleared for a “fire” sale that

will see Grey Highlands recoup $2 million in past due tax revenue.

  MLS® unit sales in the Blue Mountains reflect a 19% gain over 2011 for the first nine months of this year and this has come entirely from single family chalet and home sales. Condominium sales in this municipality are down 18% year-to-date while vacant lot & land sales have decreased 13%. Sales in Wasaga Beach have posted a 16% increase in unit sales year-to-date while sales in Collingwood are up 14%. Unlike the Blue Mountains, condominium sales in Collingwood are essentially equal to 2011 which is quite remarkable given the fact that several new condominium projects are underway and selling quite well which could have a negative impact on the resale market but seemingly hasn’t. One exception where new condo sales have declined is The Shipyards. Sales have stalled and the developer has closed their sales office and placed the remaining vacant lands up for sale.

  Lastly, Clearview Township has seen a slight decrease in sales year-to-date with MLS® unit sales down 5%, 110 sales this year compared to 116 in 2012. This is not a significant drop but at the end of the 1st quarter unit MLS® sales in Clearview were up 28%. It is interesting to note that despite a decrease in sales activity overall, sales of higher priced properties in Clearview have held up exceptionally well in 2012.

  As you can see, sales by area, type and price are up or down to varying degrees around our area. Consequently there is no quick and easy answer to the question "how's the market?"

How's The Market

  As a REALTOR® the most commonly asked question I get in the grocery store, on the street and elsewhere is “how’s the market?” That is a difficult question to answer with a simple broad brush statement given the fact that even locally, our market is made up of so many different segments all of which play an integral role in the overall scheme of things. In my next several posts I will endeavour to provide an update with what is happening throughout our area.
 
  First a general overview. Through the first 9 months of 2012, unit MLS® sales across the region as reported by the Georgian Triangle Association of REALTORS® (GTAR) were up 8% with 1,520 sales through the 3rd quarter this year compared to 1,410 in 2011. MLS® dollar revenue through the 3rd quarter totals $443.1 million versus $417.8 million last year, an increase of 6%. The dollar revenue increase is lagging behind units sold due to the fact that we have and continue to see a softening of sales at the upper end of the market. Example: To date, there have been 3 sales over $1.5 million reported through our MLS® system, last year there were 6.

  As illustrated in the accompanying graphs, MLS® sales through the first 5 months of the year outpaced the level of sales in 2011 both in terms of units and dollars sold. This would lead one to believe that we have turned the corner, the latest recession is behind us and the world is once again a wonderful place. Given the lingering uncertainties in the global economy, and a profusion of somewhat negative media reports about Canadian real estate in general, property demand in recent months has become somewhat erratic and these are not merely seasonal swings. Sales in units dropped 15% in June. July and August sales unit MLS® sales increased 8% and 17% respectively. In September, sales were down 10% compared to September 2011. Anyone one in business will tell you that one month or one quarter doesn’t make or break your year. The yellow “trendline” I have overlayed on the attached graphs reflects that 2012 sales are on the increase overall but I feel it is safe to say there is still a fair amount on uncertainty in our market given the monthly ups and downs.

  In my next posting I will examine sales by area and by price. For anyone contemplating a real estate transaction especially in an area such as ours, it has become increasingly important to obtain detailed information about your specific area, property type and or price range. We have several "micro-markets" in the area some of which are performing well, while others are not. Both Buyers and Sellers need to know the relative state-of-market for their specific circumstances in order to make informed decisions and providing that is one of our key roles as REALTORS®.

Blowing In The Wind Part 2

  Further to my last post, the issue of wind farms continues to blow increasingly across our region with seemingly more opponents to this form of energy than fans. Just this past week, while showing rural property, more than once I was asked, "...where or are there any wind farms proposed for the area.?" This speaks not so much to the pricing of properties in close proximity to wind turbine installations but more so to the very desirability or salability of such properties.
  Understandably many potential buyers for a rural property are expecting just that. A pastoral, "rural" view absent of any man-made, industrial pieces of equipment on an otherwise pristine landscape. In addition and thanks to their opponents, many consumers are becoming increasingly concerned about alleged health risks living so close to wind farm installations. Once published, the completion of a study by Health Canada will hopefully shed some light on this matter one way or another.
  Given the impact on real estate values and the very salability of a property located next or in close to a wind farm either currently in place or proposed, the Ontario Real estate Association has drafted a clause regarding this contentious subject. This clause when inserted into an Agreement of Purchase and Sale by a REALTOR® acting on behalf of a Buyer(s) is meant to protect a Buyer(s) from unknowingly purchasing a property that could be impacted by a proposed wind farm application and reads as follows:
"The Seller represents and warrants to the Buyer that to the best of the Seller's knowledge and belief there are no wind turbine(s) installed or proposed to be installed within _______of the boundaries of the subject property. The parties agree that this representation and warranty shall survive and not merge on completion of this transaction."

  Obviously this clause is intended to shift the issue of disclosure pertaining to a proposed wind farm onto the Seller. The Seller(s) may elect to delete such as clause from the Agreement or may simply claim ignorance to the matter. Either way, the Buyer is not protected. Personally, if I was acting for a Buyer(s) client I would go one step further and insert a condition into the Agreement of Purchase and Sale making the offer conditional upon the Buyer determining for themselves as to whether there are any wind farms existing or otherwise proposed within a specific distance to the subject property as specified by the Buyer. The Buyer and their respective REALTOR® can then perform their own due diligence with respect to the matter of any wind farm installations in the area resulting in the best possible protection for the Buyer’s interests.
  If you have any questions with respect to the issue of wind farms and real estate or would like an opinion on similar issues affecting a property purchase or ownership, please feel free to Contact Me.