July MLS® Sales Drop 33%

 The frenzied real estate market we experienced back in the spring with multiple offers and properties selling for well over their respective asking prices has come to a screeching halt.
  Following a softening of MLS® sales in June which saw an 18% drop in MLS® unit sales, sales activity in July decreased by almost double that amount.  MLS® unit sales reported by the Southern Georgian Bay Association of REALTORS® totalled  177 properties in July down 33% from the 263 sales in July 2016.  MLS® dollar volume in July decreased by a more modest 18% and totalled $80.9 million down from $98.3 million one year ago.  This marked the first time in 40 months (March 2014) where monthly MLS® sales failed to exceed those of the previous year.
 Despite all the hype about how strong the market has been, due to a shortage of listings and a slowing of activity in June and July, year-to-date MLS® unit sales are now below where we were at this time last year.  Year-to-date sales total 1,564 properties compared to 1,641 for the first seven months of 2016, a drop of 5%.
  As stated in prior posts, our market has seen an unprecedented demand for higher priced properties this year which continues to drive increases in the total value of MLS® sales despite the reduction in unit sales.  For the first seven months of 2017 we have seen 82 sales over $1 million versus just 30 in 2016.  Year-to-date dollar volume now stands at $713.6 million compared to $598.2 million last year, an increase of 19%.  Baring a prolonged downturn in the market we are still well on the way to once again exceed $1 billion in MLS® sales in our area for 2017.  Add to this the sales being done of new homes and condominiums outside of the MLS® system and the demand for area properties still remains very strong regardless of the decline in sales over the past two months.
  A large part of the weakened sales picture remains the lack of inventory for sale.  Other markets across Canada particular in the Greater Toronto Area  have seen a significant increase in the number of new MLS® listings coming to market whereas we have not.  Year-to-date new MLS® listings through July are down 14% from one year ago.  Myself and many of my colleagues have buyer clients that are eager to purchase but we lack suitable properties for them to purchase.
  MLS® single family home sales are down 10% for the year while condominium sales are down just 4% from one year ago.  The Blue Mountains is the only area municipality to date that has seen an increase in single family property sales year-to-date with 133 MLS® sales representing an 18% increase while MLS® single family sales in Grey Highlands are unchanged from one year ago.  Single family home sales in other area municipalities are down year over year from between 8% to 23% as shown in the accompanying chart.
  What's surprising is the strength of vacant land sales.  Through July there have been 229 MLS® vacant land sales which marks a 63% increase over the number of lot sales last year.  There are perhaps several factors attributing to this strong demand for vacant lots.  First, buyers unable to find a suitable home or chalet to buy have elected to build.  Secondly, unlike the low inventory levels of single family homes and condominiums there has in recent years been a glut of vacant lots for sale.  Lastly the strong demand for homes in the upper price ranges has also played a part in the sales of lots particularly near the ski slopes where sales on lots in areas such as Nipissing Ridge 3 have been brisk with a lot of new builds underway most of which would be $750,000 projects and higher.  Personally, I sold one such lot on three separate occasions over a two year period.  Initially priced at $359,000 I resold it for my clients at $405,000 then several months later I resold it again for the second buyer for $445,000.
  No one knows for sure what the balance of the year is going to bring, sales thus far through August are tracking well below last year.  As long as our MLS® inventory level stays low, it will remain somewhat of a seller's market but we are certainly trending in the direction of a more balanced market which is good for both buyers and sellers.  The naysayers that continue to forecast a doom and gloom for the Canadian real estate market as a whole will no doubt be proven wrong.  Problems no doubt exist in specific markets like Toronto and Vancouver which were grossly "overheated," have cooled substantially and where there has also been a sharp increase in new listings thus quelling the multiple offer fires with properties selling way over their asking price.  These same conditions do not exist here in the southern Georgian Bay region where demand especially from retirees remains high while inventory levels are low.  One or two months does not signify a trend and I suspect we will see sales rebound through the fall especially in the recreational segment with another ski season fast approaching.
  For further in-depth details about our market please visit my website and see my latest monthly market report or Contact me for a confidential no obligation consultations about your specific buying or selling objectives.