Ontarians Optimistic About Real Estate Market in 2014

The Ontario Real Estate Association (OREA) has just released the results of a survey summarizing the feelings those living in Ontario have towards the real estate outlook within the Province.  The results of that survey are as follows:

  Ontarians seem hopeful about the provincial real estate market, according to new research conducted by Ipsos Reid on behalf of the Ontario Real Estate Association (OREA). A third of Ontarians say the market will strengthen rather than weaken (21%) in 2014. Looking even further ahead – ten-year‟s time – significantly more Ontarians believe the Ontario real estate market will strengthen (50%) rather than worsen (20%), speaking to the long-term investment value of owning a home.

"The research comes on the heels of an optimistic forecast by the Canadian Real Estate Association,” says Sean Simpson, vice president, Ipsos Public Affairs. “Consumers seem to be echoing a similar sentiment for the 2014 real estate market. Prospective buyers and sellers in particular are also more likely to believe the overall economy is strong, which may be why they‟re considering buying or selling their home in the next two years.”

  Two in three (65%) Ontarians who are at least somewhat likely to buy a home in the next two years believe the economy is in good shape, compared to just 53% of Ontarians overall who think the economy is „good‟. Six in ten (59%) Ontarians looking to sell in the next two years believe the economy is „good‟.
The study, the first of its kind for OREA, examined public opinion in Ontario on a variety of matters pertaining to consumer sentiment of the Ontario real estate market. The findings include:

• Six in ten (59%) Ontarians believe the current real estate market in Ontario is „favourable‟. Two in ten (18%) Ontarians believe the market is „not favourable‟.
• Two thirds (67%) of homeowners believe the market is „favourable‟, compared to 47% who currently don‟t own a home. Ontarians who said they are somewhat likely to buy or sell a home in the next two years are even more likely to believe the market is favourable (70% and 77%, respectively).
• Homeowners are more likely to believe the market has improved in the last year (31% stronger vs. 21% weaker), looking ahead to the next year (34% stronger vs. 16% weaker), and in the next ten years (55% stronger vs. 18% weaker). Prospective buyers and sellers are most optimistic with a majority saying the market will be stronger in the next year (54% and 50%).

Regional Survey Highlights

• Residents in the 905 area of the GTA are most likely to say their market is favourable (71%), followed by those living in Toronto proper (61%), Eastern (58%), Southwestern (54%), Northern (47%) and Central (45%) Ontario.
• When looking at local economies, the GTA (63%) and Eastern Ontario (54%) have the most positive outlooks, while Central (37%) and Northern Ontarians (42%) are most pessimistic.
• GTA residents are most „likely‟ to buy (16%) and sell (17%) a home in the next two years. Residents in Northern Ontario are least likely (4%) to buy a home in the next two years, while Central Ontarians are least likely to sell (5%) a home in the next two years.

New Changes Announced Affecting Real Estate Commissions

In recent years, real estate commissions have become a topic of frequent discussion with many consumers of the opinion that commissions charged are too high or perhaps it’s a matter that the perceived value they received from their REALTOR® was not commensurate with the commission or fee charged.

  Contrary to what consumers may have been lead to believe, real estate commissions are and always have been negotiable.  The only real restriction that has been placed on commissions is not the amount that can or cannot be charged but rather the format of how commissions are calculated but that is about to change.

 The real estate profession is governed by Provincial law, specifically the Real Estate and Business Brokers Act (REBBA 2002) Previously as per REBBA 2002; a real estate brokerage could charge either a flat fee to list and sell a property or a percentage of the sale price, but not a combination of the two.  Recent amendments to REBBA 2002 have removed this restriction, allowing brokerages to have the option of developing fee or commission structures that may include a combination of a flat fee and a percentage of the sale price.

  This now gives brokerages the additional flexibility in how they structure pricing to suit their business needs and desires of their specific clients.  Personally I view this as a win win situation for REALTORS® as well as consumers.  Every property and every selling circumstance is different and this change as to how real estate fees/commissions are derived provides greater freedom to address each situation in a manner that will garner the best results for everyone involved.

  Ultimately, market forces will determine which fee structures are attractive to consumers. It is more important than ever for consumers to understand what services their REALTOR® will provide and how or who will pay for those services.

 If you are contemplating the sale of your property and are not certain as to how the new rules affect you, please feel free to contact me and without obligation I would be happy to discuss and clarify the issue for you.

Area Real Estate Sales Destined For Record Year in 2013

Following slightly weaker sales activity in October compared to the prior year, area real estate sales in November regained the momentum we experienced in through much of the late spring and summer.

  

Area real estate sales reported through the MLS® system of the Southern Georgian Bay Association of REALTORS® reflected a 9% increase in unit sales during November with a total of 147 properties being sold.  Dollar volume for the month totaled $44.0 million, up 11% from $39.5 million sold in November 2012.  The higher increase in dollar volume is due to the fact that several high-end sales took place during November.  I will point out that two sales which combined totaled just over $3 million were for properties outside of our market area and I have subtracted these to arrive at the net sale number above.

  Year-to-date MLS® sales now total 2,009 properties up 7.5% from the 1,869 individual sales reported in the first 11 months of 2012.  This marks the first time since 2007 that MLS® sales in our area have surpassed 2,000 units sold in annual sales.  Year-to-date dollar volume of $594.9 million (which excludes the two out of area sales mentioned above) is up 8.4% from 2012 so we will for the first time crack the $600 million dollar barrier for annual sales volume in 2013. 

  The following is a summary of the key price ranges where most of the sales activity is taking place in 2013.  Year-to-date sales under $200,000 are up 9.8%, sales between $350,000 to $500,000 are up 18.1% while sales in the $800,000 to $1 million and over $1 million price ranges are up 20.0% and 11.5% respectively.

  The municipalities of Clearview and Meaford continue to outpace all other area municipalities in terms of MLS® sales.  Sales in Clearview Township are up 15.7% in terms of units sold while the Municipality of Meaford is up 26.4%.  Year-to-date MLS® sales in the Town of Collingwood are essentially equal to last year while MLS® sales in Wasaga Beach and the Blue Mountains are up 2.2% and 5.2% respectively.  The Municipality of Grey Highlands shows a 15.3% decrease is residential sales during 2012 and I maintain that the closure of Talisman Resort has had some impact on the demand for real estate in that area. 

  Single family home sales through the end of November total 1,306 homes sold, an increase of 3.6% over last year.  Meanwhile condominium sales are up 8.5% with 358 units sold year-to-date through the local MLS®  system.  Vacant land sales have also rebounded in 2013 from prior years with 140 vacant lots or land parcels sold though the end of November, an increase of 20.7% from this time last year. 

 

  While sales in 2013 have been very strong and the available housing inventory remains high, we continue to see a reduction both new and expired listings.  Year-to-date the number of new MLS® listings that have come to market in 2013 reflects a 2.0% decrease totaling 6,109 properties.  Through the end of November effectively 1 in every 3.0 listings sells whereas by comparison, at the end of the 1^st quarter of this year the listing-to-sales ratio had just 1 in every 3.8 properties listed for sale selling.

  As the market starts to wind down with the approaching holidays, MLS® sales and listing activity will taper off only to regain momentum in January.  We will certainly set a new level for MLS® dollar volume in 2013 and all indications are pointing to a continued strong demand for area real estate in 2014