Friday, June 14, 2013

Upper End Residential Property Sales

Most of us would agree that the gap between the "haves" and the "have nots" is getting larger.  Wealth seems to be getting concentrated within a smaller segment of high net worth individuals yet at the same time that segment is increasing as the middle case seemingly gets smaller.

  This social transition obviously has a profound impact on a variety of things including real estate.  Here in the southern Georgian Bay region we have witnessed over the past several years, a steady increase in the number of upper end residential properties.  Not so many years ago, a sale over $1 million was a rarity in the area that happened a couple of times a year.  More recently, the annual number of sales above $1 million is two dozen or more. 

  ReMax Canada has recently published a report on upper tier residential sales across Canada.  As with any segment of the market, upper end home sales vary greater from one area of the country to another.  Taking some of the statistics published in the ReMax data, I have prepared the attached graph which shows 1st quarter 2013 luxury home sales in major markets across the country compared to the 1st quarter of 2012.  To this I added the 1st quarter upper end property sales for the Georgian Triangle in order to see how we stack up against the rest of the nation.  In most of these centres, $750,000 and higher is the financial threshold that constitutes an "upper end" residential property and these are often properties that fall within the top 10% of that particular market's price ranges. 

  As you will note, Oakville, Hamilton/Burlington and Calgary are the current hot markets for upper end residential properties with all of these cities having 1st quarter sales that are equal to or significantly higher this year versus the 1st quarter of 2012.  Here in the Georgian Triangle, sales above $750,000 in the 1st quarter were slightly ahead of 2012 with 14 this year compared to 13 in the first three months of 2012.  Conversely, upper end 2013 residential sales activity in Toronto, Vancouver and Montreal are well off the pace of 2012, at during the 1st quarter.

  As of this posting, there are 192 properties currently listed on the MLS®
system of the Georgian Triangle Association of REALTORS® for sale in our market priced $750,000 and higher.  That represents approximately 3.5 years of inventory.  Above $1 million there are currently 117 active MLS® listings which represents 4.8 years of housing inventory in this price range.

Personally I have listed and or sold numerous properties in the upper tier segment of our market.  This is clearly a different realm of real estate and in my next posting I will summarize what I have learned when dealing with both high net worth buyers and sellers.

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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.