1st Quarter 2019 Southern Georgian Bay MLS® Market Report -

  Real estate activity for the 1st quarter of 2019 across the Southern Georgian Bay region has shown some improvement from the slowdown we experienced in the second half of 2018 with stronger sales in specific portions of the market particularly in the higher price segments.

  MLS® dollar sales in both January and February were at increased levels from the same time last year but softened slightly in March with sales for the month of $87.6 million down 5.2% from March 2018.  Despite softer sales in March, total 1st quarter residential dollar sales through the MLS® system of the Southern Georgian Bay Association of REALTORS® (SGBAR) totalled $201.9 million, an increase of $12.9 million or 6.8% more than the 1st quarter of 2018.  Once again it is worth noting that these results are for residential MLS® sales only including single family homes, condominiums and vacant lots.  Commercial properties, farms etc. are excluded as are sales of new homes made directly by developers outside of the local MLS®

system.

  While year-to-date MLS® dollar sales have increased over the first three months of 2018, unit sales in 2019 through the end of March are below last year.  MLS® unit sales in the 1st quarter totalled 386 properties, down 10.2% from the 430 units sold in the 1st quarter of 2018.  Sales start to ramp up in January following the end of the holiday season and typically peak April through June when properties start to look their best during the spring and early summer.  Inventory levels of properties listed for sale on the MLS® system also ramp up during this period, potential buyers have more to choose from come spring but competition among sellers is also stronger.  We have experienced a relatively harsh winter which has made for less than ideal driving conditions, this combined with cold temperatures has hampered property showings which is at least partially responsible for the slow start to this year.

  Year-to-date MLS® single family home sales across our market total 279 units a decrease of 5 homes or 1.7% less than the first three months of 2018.  At the same time we are seeing stronger single family home sales in some area municipalities around the region which are reflected on the accompanying chart.  MLS® home sales in Collingwood total 66 properties up 34.6% while sales in the Blue Mountains of 48 homes is up a modest 6.6% from one year ago.  All other area municipalities have year-to-date single family home sales that are close to or slightly below the 1st quarter of 2018.

  While overall year-to-date MLS® dollar volume through the end of March is ahead of last year and unit sales are down, certain price levels are showing some significant gains from one year ago particularly in the upper price segments of the market.  Sales in these upper price ranges is what is driving total MLS® dollar sales making up for the shortfall in unit sales.  Sales in the $500,000 to $799,999 range total 108 properties up 28.5% from one year ago.  Sales from $1 to $1.499 million are up slightly with 13 sales this year compared to 12 in the 1st quarter of 2018.  Sales between $1.5 to $1.999 million total 8 units which is four times greater than the sale of 2 properties sold in the first three months of last years.  Similarly sales over $2 million have doubled this yearwith 4 MLS® sales reported versus just 2 sold at this time last year.  These numbers  clearly reflect that our market continues to move more upscale especially in the Blue Mountains where almost 50% of sales above $750,000 in our market area take place.  Sales in the lower price segments of our market continue to remain weaker than last year particularly in the $100,000 to $500,000 price ranges.  First it is important to note that properties priced under the $300,000 mark are getting harder and harder to find unless they are perhaps a smaller and older entry level home or condominium.  Sales under $100,000 in the 1st quarter of 2018 totalled 32 units whereas this year there we only 13 sales.  During the first three months of 2018 there were 181 MLS® sales in the $300,000 to $500,000 price category this year the number has dropped 12% to a total of 159 properties sold.  Properties in these price ranges represent a prime segment of our market where demand is strong but the inventory of available properties listed for sale is low and we suspect this trend may continue throughout 2019.

  Overall we continue to experience a general shortfall of inventory listed for sale on our local MLS® system.  Year-to-date, the number of new listings for residential properties totals 674 units which is a modest 3% increase above the number of new residential listing that came to market in the 1st quarter of 2018.  While demand still exceeds supply, properties listed for sale are lingering on the market longer before selling.  For the 1st quarter of 2018 the average time-on-market before selling was 47 days, for the first three months of 2019 that average number has increased to 56 days.  The only exception to the inventory shortage is in the upper price ranges of the market.  Overall our MLS® system has 4.6 months of available inventory listed for

sale.  For residential properties priced in the $1 to $1.5 million range there is 8.5 months of available inventory while above $1.5 million there is 26.6 months of inventory listed for sale.  For buyers looking to purchase an upper end luxury home or ski chalet in the area there is an abundance of properties to choose from making this a good time to buy the property that meets your needs and budget.  The level of MLS® listed inventory overall however is showing signs of trending upwards which is encouraging for those looking to buy especially in the lower price segments.  Listing activity in both January and March was above last year’s level in these two

months.

Price Range   Current # of Active Listings  Months of Inventory

Under $300,000                                  55                                                  2.0

$300,000 to $499,999                                                             191                                                 2.7

$500,000 to $799,999                       220                                                 5.7

$800,000 to $999,999                         60                                                 7.8

$1.000 to $1.499 Million                      57                                               11.4

$1.500 to $1.999 Million                      33                                               32.6

$ 2 Million +2218.3

  MLS® condominium sales during the 1st quarter total 68 units, a decrease of 23% from the first three months of 2018 when 89 condominium units were sold.  Some of this decrease stems from a significant number of new condominium units being built and sold in the area by developers which are not sold through the local MLS® system.  A number of condominium properties are also rented out for the ski season and as the season winds down with spring now here some of these condominium properties will undoubtedly get listed in the coming months.

  In summary, overall we have experienced a slight shift in the market.  Sales are softer yet prices thus far have remained relatively stable.  Buyers some of whom must meet tighten mortgage rules and lenders are both being cautious.  With the odd exception, the days of multiple offers with properties regularly selling for well over their asking price are substantially diminished.  To restore buyer confidence as well as to help them meet the tighter lending rules two things need to happen.  First we need to see an upturn in the number of properties listed for sale and the arrival of spring will no doubt bring that about as it typically does.  Cautious buyers and those that require mortgage financing need more choices of what is available to purchase.  Further, both buyers and sellers may need to adjust their expectations in terms of what they as buyers can afford to pay whereas sellers may need to accept more list at more realistic asking prices that are consistent with today’s current market conditions.  With the heated market conditions we experienced in 2016 through to and including early 2018, many buyers got caught up in the multiple offer melee.  More inventory listed for sale will further serve to balance the market levelling the playing field for both buyers and sellers alike.

  As we head into the spring market it will be interesting to see how the overall level of real estate activity unfolds through the balance of 2019.  If you are considering buying or selling in the months ahead I would be delighted to discuss your particular needs and what would be the best strategy in helping you meet you goals and objectives relative to real estate in the Southern Georgian Bay area.  

  Please feel free to Contact Me of you have any questions or to discuss you specific real estate needs and or goals in 2019 or beyond.

   

Finding Your Piece of Paradise On The Water

  We have had a long cold winter and while I like many enjoy skiing, snowshoeing and other outdoor activities this time of year, I am now looking forward and I am ready for the warmer weather and especially the start of another cottage season.

  Waterfront properties in the southern Georgian Bay area make up a significant part of our real estate market.  In 2018 the sale of waterfront homes and condominium properties in Collingwood and surrounding municipalities totalled 111 properties with a combined value of just over $85 million.  These sales ranged anywhere from modest cabins priced in the low $200,000 range to luxury high end homes over $2 million.

  Growing up as a kid I was introduced to the cottage lifestyle on Manitoulin Island where my mother was born.  My grandfather, a farmer on Manitoulin built a small cottage on the water and every Saturday after the farm chores were done we would make the three mile or so drive to the cottage to spend the balance of the weekend swimming and fishing with evening campfires.  Not everyone is attracted to those activities but many are and owing a waterfront property is a dream for countless Canadians especially for those living in urban centres like Toronto that long for a cottage property to escape to.

  As stated above, owning a waterfront property is not for everyone nor can a real estate transaction involving the purchase or sale of a vacant waterfront lot, a modest seasonal dwelling or a full time home or cottage on the water be treated the same as buying a residential home in a typical urban subdivision.   Having owned my own cottage for over 45 years I am well versed in what owning a waterfront property entails including added operating expenses and maintenance above your full time residence.  Is it worth it?  In my opinion absolutely.  In addition I have listed and sold many waterfront properties in our market area several of which we well over $1 million.  This is one segment of the real estate market when the value of waterfront properties has increased significantly over the years.  As the saying goes when it comes to waterfront, "they are not making any more" so that along with the increased demand of consumers looking for their piece of paradise has and will no doubt continue to drive up prices higher.

  Thinking about where we want to be five to ten years from now, my wife and I started to look two years ago at waterfront homes that were for sale on Mantoulin Island.  My cottage is just that, a cottage (Bottom photo) versus a full time home and it will be left to my kids.  Having not seen an existing property for sale that we liked, we started top contemplate building from scratch.  Last summer we found the perfect property listed for sale which was an estate sale.  A 1.5 acre waterfront lot nicely treed situated on the largest lake on Manitoulin, Lake Manitou and just 20 minutes from the cottage and other amenities.   Not only was the property exactly what we wanted but it had some added benefits.  The driveway and hydro was already installed along with a large 24' X 32' garage all of which would be $100,000 or more to replace. See accompanying photos.

  As a REALTOR® I quickly did my own due diligence with the municipality and others which allowed us to go in with a cash offer, no conditions and a short closing date.  The offer was accepted so we now own not one but two piece of waterfront real estate on Manitoulin Island.

  This coming weekend March 21st to 24th is the Cottage Life Show in Toronto.  My wife and I will be attending both days and have lined up a number of exhibitors we want to meet with to gather information on building.  In my next post I will share the details that you need to be aware of when buying waterfront property.  In the meantime take a lot at Royal LePAGE'S Annual Recreational Property Report for a breakdown of the recreational property market across Canada.

  If buying a waterfront or other recreational property is on you wish list, please feel free to Contact Me and I will be delighted to share my experience as a cottage owner and real estate Broker to help you find you piece of paradise in southern Georgian Bay.

Southern Georgian Bay Real Estate Market Report - February 2019

  Real estate activity for the first two months of 2019 across the Southern Georgina Bay region has shown an improvement from one year ago with stronger sales in specific segments of the market.

  Total year-to-date MLS® dollar sales as reported by the Southern Georgian Bay Association of REALTORS® (SGBAR) through the end of February totals $110.3 million, an increase of $20.2 million or 22% from the $90.1 million in sales for first two months of 2018.  While on the surface this number shows a more robust real estate market in our area from a year ago, year-to-date sales are $14.0 million or 11% below the level of MLS® sales for the two first months of 2017.  Once again it is worth noting that these results are for residential MLS® sales only including single family homes, condominiums and vacant lots.  Commercial properties, farms etc. are excluded. 

  

  While year-to-date MLS® dollar sales have increased significantly (22%) over the first two months of 2018, unit sales remain relatively weak.  Through the end of February MLS® unit sales total 208 individual properties, 10 units more or just 5% above last year.  The chart belowshows year-to-date 2019 versus 2018 sales across the various price segments of the market with increases in the upper price ranges most notably $500,000 to $799,999 and from $1.5 million and higher.  The key segment of the market wherein there is the greatest demand is down 11% from one year ago with 85 sales so far in 2019 compared to 96 last year.

  Some of the current weakness in sales is seasonal in nature.  Sales start to ramp up in January following the end of the holiday season and typically peak April through June when properties start to look their best during the spring and early summer weather.  Inventory levels of properties listed for sale on the MLS® system also ramp up during this period, potential buyers have more to choose from but competition among sellers is also stronger.  Overall we experienced a general shortfall of inventory listed for sale on our local MLS®  in 2016 through to early 2018 at which time the market started to show signs of slowing down.  

  

  While that situation exists in some price segments of the market today, it is not universal across the region.  As of this report, the amount of inventory listed for sale in the various price segments varies greatly.  The following is a summary of residential properties listed for sale by price range and the "months of inventory" shown is based on the current rate of sales that we have experienced in these price segments over the past year.

Price Range                            Current # of Active Listings                Months of Inventory

Under $300,000                                        48                                                  1.8

$300,000 to $499,999                             152                                                  2.1

$500,000 to $799,999                             182                                                  4.8

$800,000 to $999,999                               54                                                  7.0

$1.000 to $1.499 Million                            48                                                  8.7

$1.500 to $1.999 Million                            32                                                29.9

$2 Million +                                                29                                                25.0      

  What does this mean to sellers and buyers?  While year-to-date residential sales between $500,000 to $799,999 are up 68% from a year ago, there is currently well over 4 months worth of inventory listed for sale to choose from.  Similarly, sales in the $1.5 to $1.9 million dollar range are 10 times greater than in the first two months of 2018 yet with 32 active MLS® listings that is almost 30 months worth of inventory while properties listed for sale priced above $2 million represents 25 months of inventory.

  The level of MLS® listed inventory overall however is showing signs of trending upwards which is encouraging for those looking to buy especially in the lower price segments.  New MLS® residential listings in January were up 8.6% from one year ago and totalled 190 units.   New listing activity then slipped in February totalling 192 properties down 10.7% from 215 new listings that came to market in February of last year.  There is no question that we have had a harsh winter with adverse snowfalls and bad driving conditions, hardly ideal conditions for buyers to view properties for sale and many sellers have held off listing their home until conditions improve with the arrival of spring.  Many sellers may also be fearful that they have perhaps missed the window of opportunity to maximize the sale price of their home or condominium.  I have in fact had clients of my own who live in the Greater Toronto Area state that selling their home now will net them a lower price than 12 months ago.

  Year-to-date MLS® single family home sales across our market total 90 units an increase of 29 properties or 48% more than the first two months of 2018.  Again this is primarily driven by strong sales in the $500,000 to $799,999 price range as well as the strength of the upper end market $1.5 million and higher.  The Blue Mountains and Wasaga Beach are the only municipalities in the region with single family home sales equal to or greater than last year, all others ie: Cleaview, Collingwood, the Municipality of Meaford and Grey Highlands are all down anywhere from 25% to over 60% in home sales year-to-date.  Yes the number of units is small and the winter has made property showings difficult but we are not the only area where sales are down and it's not all due to "new" home sales as some would claim. 

   With respect to the local condominium market, year-to-date sales of 23 units is down a modest 3 properties or 11% from a year ago.  The demand for condominiums in our area continues to grow and this is not unique to southern Georgian Bay.  A report just released by "Teranet" who is a leading provider of land registry services and real estate data insights across Canada found that in 2017 over 25% of residential real estate transactions across the country were for condominium properties.  Condominium ownership is popular with both baby boomers looking to downsize with a less maintenance intensive lifestyle as well as for first time home buyers that are finding themselves priced out of single family home ownership.  After looking at the residential sales data for our market in 2018 I found that MLS® condominium re-sales in our market accounted for 24% of the 1,800 plus MLS® residential sales in our region last year.  Year-to-date sales reflect that for the first two months of 2019, condo sales have dipped to 20% of all residential sales in the area but this is likely to change in the months ahead as a significant number of area condos get leased our for the ski season and with that season winding down we are seeing more condo units come onto the market for sale.  As of this report there are 110 active MLS® condo listed for sale which represents three months of inventory.  As previously mentioned, several new condominium projects in the area are adding additional new condominium units into the market primarily in Collingwood, the Blue Mountains and Wasaga Beach and the sale of these newly constructed units generally do not flow through the local MLS® system.  For further information on the area's condo market visit my website www.rickcrouch.realtor for a copy of my latest "Condo Communique´" newsletter detailing the 2018 Southern Georgian Bay Condominium Market. 

Summary

  As reported in my last newsletter , the market has shifted, buyers and mortgage lenders are both being cautious.  With the odd exception, the days of multiple offers and properties selling for well over their asking price are gone.  To restore buyer confidence as well as to help them meet the tighter lending rules two things need to happen.  First we need to see an upturn in the number of properties listed for sale and the arrival of spring will no doubt bring that about as it typically does.  Cautious buyers and those that require mortgage financing need more choices of what is available to purchase.  With the heated market conditions we experienced in 2016 through to early 2018, too many buyers got caught up in the multiple offer melee and in many cases I personally feel they over paid.  Banks are fearful of buyers over extending themselves and on occasion financing is not approved if the appraisal comes in less than what the buyer is willing to pay.  More inventory will further serve to balance the market evening the playing field for both buyers and sellers.  Lastly, sellers and to some degree the real estate community needs to accept the fact that the market has changed and listing a property for sale with an asking price that is significantly above fair market value is unlikely to attract a willing buyer(s) nor will it help that buyer(s) to secure mortgage financing if they need it.

  As with other facets of our profession I watch our MLS® system activity closely on a daily basis and I will continue to report on meaningful data that is applicable to the real estate market in our area throughout the year.  In the meantime if you have any questions please feel free to contact me at any time.  A Free PDF copy of this Market Report and others is available on my website at: www.rickcrouch.realtor.

The Changing Retail Landscape

  People often say to me "you are really smart" and I beg to differ.  As a kid I was an average student and I have never been afraid or embarrassed to share the fact that I repeated grade 3.  At some point however things changed and I became almost obsessed with learning and being "informed" about what goes on in the world especially business and while I am flattered by comments where people say I am smart, there is a difference between exceptionally intelligence and being knowledgeable through information gathering. 

  Early in my career I spent several years in and working up through the retail sector including close to 10 years with Canadian Tire.  It was a great experience, I learned a lot and over the years it has served me well as I advanced through several executive management positions in both Canada and the U.S.  mostly in the manufacturing sector before entering the real estate profession.  Even today I am a voracious reader and ever day I awake thinking "what can I learn today?"  I have also tried to impart this attitude in my kids.

  As a REALTOR® I follow what's happening in the market very closely and not just in the residential but also in the commercial real estate sector as well, particularly retail. Retail like many other segments of the economy such as manufacturing has gone through wide scale change and recent announcements would indicate it is far from over.  Think of the many long standing retailers we have seen disappear, Eatons, Simpsons, Sears, Woolworths, Woolco, Towers, K-Mart, Zeller's and let's not forget about Target's disastrous and short lived expansion into Canada.

  The next casualty I have been expecting to fall is Hudson's Bay.  Their stores are for the most part dated, poorly merchandised with products that in my opinion are over priced and offer poor value for consumers.  In late February Hudson's Bay announced they were closing their Home Outfitters stores and some Saks Off Fifth locations claiming that it will allow them to "further streamline their retail portfolio....."  This could prove to be too little too late.

  Information just released indicates that clothing retailer Gap is closing 230 stores in Canada and the U.S. and at the same time as Hudson's Bay announced the Home Outfitters closing Payless Shoes was doing likewise for their retail outlets across Canada.

 Online shopping through the likes of Amazon is taking a lot of heat for the demise of many bricks and mortar retail outlets but I am not convinced that they alone are entirely to blame.  Let's face it, we are an aging population and personally as I get older I find that I need less.  We instructed our  kids not to buy us Christmas gifts as we need nothing.  Even when I am in need of or in the market form something I expect value whether it's for cloths or a car.  A dress shirt at the Hudson's Bay for $130 is not in my opinion good value no matter how nice it may be.  In addition I no longer find traipsing around a huge mall fun.  Yesterday while in Barrie for a medical appointment I did visit Georgian Mall.  The first thing that jumped out at me was that there is still a Sears sign on the exterior of mall surrounded by peeling paint.  It's been over a year since Sears announced they were shutting down their Canadian stores.  I am surprised that this sign hasn't been taken down and the building freshened up a bit to help attract shoppers at a time when there are other options.

  I will confess that I do some shopping online including Amazon which is typically not for cloths especially for shirts, pants, and shoes etc. that you really needs to try on.  While Costco has a good prices on clothing, the lack of dressing rooms makes size selection a bit awkward.

  Overall I believe the real issue at hand is that we are simply "over retailed" relative to demand.  Some retailers have expanded too aggressively through store expansion and acquisition much of it resulting in huge debt loads that they now find they cannot afford.  I also believe that in recent years retailers have benefited from increased consumer spending driven by low interest mortgages, home equity loads, credit cards and other sources of money.  Many real estate markets across Canada slowed in 2018 and this trend is expected to continued for the next year or two.  If home price appreciation slows or worse drop even slightly, this will certainly have an impact on consumer spending so to place all of the blame on online shopping is neither a fair or accurate analysis of what might really be going on with retail.

  As it has been said many times, we are in the "information age" and I am a great believer that acquiring accurate and timely information is knowledge which is why I endeavour to absorb as much knowledge as I can.  It's not about having a negative attitude it's about been informed so I can be a better person and in the case of real estate so I can provide in depth, accurate and relevant information in order to best serve my own needs and those of my valued real estate clients.

  What are your thoughts?

Consumers Want & Are Entitled To More Real Estate Data

  Over the past few years it seems that real estate has become one of the if not the hottest topics out there.  I get stopped on the street and in the grocery store by people (some of whom I do not know) asking me "how's the market or "what's going on with real estate?"  Not only is real estate of interest from an investment standpoint but judging by the myriad of home improvement shows on TV, home decorating, renovating, buying a second property for vacation purposes and or just moving up to something larger place are all playing a role in our fascination with real estate.

  Lately there has been an added emphasis both inside and outside the real estate community about a number of so-called "disruptive" new players entering the Canadian real estate market some of which are coming from the U.S.  Many have new "business models" removing the buying and particularly the selling process away from REALTORS® putting it into the hands of consumers alleging that there are considerable savings to be had in the form of not paying commission to a real estate salesperson and their brokerage.  A recent story with CBC about this trend asked "Is it the early days of a real estate revolution?"  It may not be a revolution but yes things are changing.

  Technology has played a huge role in our daily lives and real estate is no exception.  When I entered the real estate profession back in 2001 it was the almost the pre-Internet era and we still had MLS® catalogues that were printed by weekly.  By the time the catalogue was received many of the properties were already sold.  When the first "online" MLS ® systems started to appear we could load photos of homes online albeit about three.  Photo capacity was increased so as to permit nine, then thirty.  Now the number of photos we can upload is almost unlimited in addition to floor plans, virtual tours etc.

  Amongst the new players entering the Canadian real estate market are Zillow, Redin and an  Purplebricks who are based in Britain.  Whether these so called disruptors "revolutionize" our market remains to be seem but there is no question the real estate ;landscape is changing.  Some of these companies (and others) have raised tens if not hundreds of millions of dollars in investor financing yet they have yet to make any profit.

  Consumers want, need and in my opinion are entitled to more information that will assist them with their real estate buying and selling decisions.  As real estate professionals it is our responsibility to help them every step of the way  with their real estate buying and selling needs and along with the changes that have already taken place along with those yet to come, we need to adjust our roles in order to provide greater consumer value to the real estate buying/selling transaction.   As professional REALTORS® we need to be the providers of relevant and helpful consumer centric information rather than the self imposed "gatekeepers" of said information.

  On the the things consumer want is better access to data particularly for properties that have "SOLD."  Last year the Toronto Real Estate Board (TREB) lost a long standing case with the Competition Bureau claiming that releasing sold information etc. posed a threat to privacy issues.  As a result of the courts ruling, consumers can expect to see sometime in the near future more information available to the public.  Typically our practice is not to release MLS® "sold" information on a property until the sale has closed.  Sales sometime do fall apart and don't close be it for financing or other reasons. As a consumer, you would be both unhappy and disadvantaged if the sale price of your property was freely given out, the sale was not completed and the property have to be put back on the market for sale.  Would you want the world to know what you accepted or are prepared to take for your home?  I suspect not.

  I will report further on this subject in future posts, in the meantime I would love to hear your comments or feel free to Contact me if you have any questions or concerns as it relates to your particular real estate situation rickcrouch@propertycollingwood.com.

Real Estate Mistakes Happen.....That Shouldn't!

  An interesting article is circulating online about the unfortunate situation that a couple in the U.S. found themselves in regarding property they own.  See  "Local family calls out Zillow over real estate mistake."

  The incident in question involved the owners home on Lake Geneva which is located near the Illinois/Wisconsin border north of Chicago.  I lived in Chicago for four years and I am very familiar with Lake Geneva as I boated there.  It has a history as being the summer playground of Chicago's who's who including the Wrigley gum and Schwinn bicycle family's plus it was the location of the first Playboy Resort Hotel in the U.S. which opened in 1968.  

  The property in question was apparently listed for sale on Zillow a large online real estate portal in the U.S. and they are now in Canada and was stated as being in foreclosure when in realty it wasn't. The owners owned outright with no mortgage and it was not even for sale.  Zillow was apparently quick to realize the mistake and withdrew the listing.  The question to ask is how did this happen in the first place?

  Consumers often question the value that we as REALTORS® bring to the real estate transaction.  As I have stated in the past and for those that may be unfamiliar with our profession, in Ontario as in most parts of Canada, we operate under law which in Ontario is the Real Estate and Business Brokers Act.  Both the "Act" and the Canadian Real Estate Association (CREA) have strict Code of Ethics guidelines that those of us licensed top practice real estate must adhere to.  Mistakes like this shouldn't happen and as per Article 4 of the CREA Code "A REALTOR® has an obligation to discover facts pertaining to a property which a prudent REALTOR® would discover in order to avoid error or misrepresentation."

  Whether I am representing a Seller or a Buyer, I routinely verified everything regarding a property from room and lot sizes, to taxes, zoning and other matters.  I know first hand of a recent transaction outside of the local real estate market where the buyer of a $950,000 property sued the seller for $750,000 alleging misrepresentation.  The case dragged on for two years with the seller and the two REALTORS® via their insurance paying out over $130,000 just to make the matter go away.

  That is a lot of money in anyone's books, more importantly you can't put a value on the worry and stress that an ordeal like this has on you plus there is the added cost of legal fees.  Don't let this happen to you.  Whether you are buying or selling hire a REALTOR® that you feel confident with and don't be afraid to ask any questions regarding matters that are of importance to you.  It's all part of what we should know and the services we provide as real estate professionals.

  Zillow is now making inroads in Canada.  The U.S. real estate market is a very different from what we have in Canada.  There is no "national" MLS® system in the U.S. like we have in this country.  Like their banking industry the U.S. market in terms of MLS® coverage is very fragmented.  Only time will tell how successful Zillow becomes here, watch this blog for future posts and updates. 

2018 Year End Real Estate Market Review

  Following two years of record sales activity across the southern Georgian Bay area with MLS® dollar sales exceeding $1 billion, real estate activity slowed in 2018 as it did in many market across the country.  MLS® sales in our region for 2018 as reported through the Southern Georgian Bay Association of REALTORS® (SGBAR) totalled $956.2 million a decrease in dollar volume of 9% and 8% for 2017 and 2016 respectively.  Further, MLS® unit sales were down 22% in 2018 versus 2017 and totalled 2,083 properties, 24% fewer than the number sold in 2016.  These results include MLS® sales of all property types including residential, commercial and farms.  (Click on each graph to enlarge).

  Personally, I watch the real estate statistics in our area and elsewhere very closely.  Our role as REALTORS® is to assist our clients in making informed and knowledgeable decisions with respect to their real estate buying and selling needs.  We need to know the numbers to best inform our clients and that is especiallyimportant when the market has shifted to a slower pace as it now has.  With both MLS® unit and dollar sales in 2018 below the levels we saw in 2017 and 2016 the question everyone is asking is why?  After reviewing all of the data for last year as well as for 2016 and 2017, I have made several observations. 

  First, we have seen the tightening up of mortgage lending rules along with the implementation of mortgage stress tests.  These changes affect first time buyers, those looking to move up to a larger property (mortgage) or renewing an existing mortgage.  Note, if you are renewing a mortgage with your current lender a stress test is not required.  This combined with the modest increase in lending rates and the implementation of a foreign buyers tax in Ontario and British Columbia all played at least some role in slowing the market down.  These steps were brought forth by both the federal and provincial governments hoping to cool very over heated markets in many areas of the country most notably Toronto and Vancouver.

  Of even greater significance is the lack of available housing inventory we have seen listed for sale over the past two to three years in our local market and elsewhere.  It is this lack of inventory couple with a strong buyer demand and low mortgage rates that has helped lead to properties listed for sale getting multiple offers and selling for over list price that has driven MLS® dollar sales and pricing through the roof while unit sales declined.  Also worth noting is the number of new homes and condominiums that are being built and these have without a doubt impacted the resale market with buyers choosing to buy "new" versus settling on a property that was 20 or 30 years old and needs updating for which they may not have the funds to do so.

   New MLS® listings in 2018 totalled 3,133 properties, a decrease of 4% from 2017 but a slight improvement from 2016 to 2017 when new listing activity fell by 5%.  Late in 2018 we saw the number of new listings coming to market increase slightly.  At the same time for sale signs lingered longer and price reductions started to emerge in our MLS® system more frequently. There were sellers who wanted to sell and buyers who wanted to buy but in many segments of the market there was still an insufficient amount of inventory to satisfy those needs.  At the same time and despite the strong market demand, the number of MLS® listings that expired increased 23% from 613 properties in 2017 to 752 in 2018.  In retrospect some sellers were perhaps too aggressive in their asking prices and their home or condo simply didn't sell as they stubbornly refused to a price reduction. 

  In May of last year we noticed the market had started to shift.  The number of multiple offers received on properties notably diminished as did the level of sales activity where homes were selling for well over their asking price.  The tighter lending rules no doubt caused some buyers to step back and I observed many deals in our Brokerage fall apart as the result of a buyer(s) being unable to get financing.  That is not to suggest that it was the buyer's credit rating that killed the deal.  With tighter lending rules banks and other lenders began taking a long look at the prices being paid by their buyer clients and in some cases the selling price was above the property's appraised value.  Regardless of what a buyer is willing to pay, if their bank doesn't see the same value then securing financing can become a real challenge.  Some buyers were also unwilling or simply couldn't afford to get into a bidding war and stepped away.

  MLS® single family homes sales in 2018 totalled 1,375 properties, down 19% from the

1,701 homes sold in 2017.  Every municipality in our area saw a decrease in the number of MLS® sales of single family homes, the reductions ranged from 11% to 23% from the number of homes sold in 2017 and are as follows:  Clearview Township and the Municipality of Meaford were both down -11%, the Blue Mountains saw a decrease in unit sales of 19% while Collingwood and Grey Highlands both showed decreased sales of 20% each.  Lastly single family home sales in Wasaga Beach were 23% less than the number sold in 2017.  Once again I will point out that these results do not include the sale of new or soon to be built homes made by developers which not go through the MLS® system.  A good example is the Indigo Estates subdivision in Collingwood where well over 100 homes were pre-sold before work on the subdivision's site even began.  

  Condominium sales in 2018 showed similar results with 434 units sold through MLS® compared to 523 sales in 2017, a decrease of 17%.  Of the total number of  MLS ® condo sales made in 2018, 51% were in Collingwood, 36% in the Blue Mountains, 8% in Wasaga Beach with the remaining 5% elsewhere in the area.  New condominium construction is one area of the market which remains very robust particularly in Collingwood and the Blue Mountains.  Many buyers from the Greater Toronto Area (GTA) are members of the area's ski and golf clubs and prefer a location close to those as well as to shopping and other area amenities.  Lastly, MLS® vacant land sales of 212 units were down 39% in 2018 versus the 349 vacant land units sold in 2017 largely due to the fact that several developments were sold out and inventory of vacant fully serviced lots available to purchase was extremely limited.  I sold the same lot in the new 3rd phase of Nipissing Ridge next to the Craigleith and Alpine ski clubs three times at ever increasing prices over an 18 month period which clearly reflects the demand we were seeing in 2016 and 2017.

  One area of the real estate market that I believe requires clarification concerns pricing.  When reporting on overall real estate activity and the state of the market, media reports often include a reference to "average" sale prices.  When the "average" sale price shifts up or down for any given municipality or the area in general, homeowners always draw the conclusion that their property has appreciated or depreciated in value accordingly and that is generally not the case.  According to the Canadian Real Estate Association, at the end of 2018 the 12 month average residential sale price for our area stood at $498,804 which represented a 4.7% increase over 2017.  As stated earlier herein, home sales in all area municipalities were down significantly in 2018 versus 2017 so without further investigation an "average" sale price increase of 4.7% year-over-year should be taken lightly until the cause for such an increase has been clearly determined.  The mix of properties that have sold in any period of time has a far greater impact on the average sale price than just increases or decreases in sale prices, shifts in the economy etc.  Case in point.  In 2008 there were just two MLS® home sales in Collingwood over $750,000.  In addition to these I sold a home for over $1 million which was not listed on the local MLS® system.  In 2018 MLS® residential sales over $750,000 in Collingwood totalled 49 properties, that is essentially 25 times the number of sales over $750,000 just ten years ago.  Whether you are buying or selling, pricing needs to be looked at carefully by area and property type.  This has never been more important than now.  The market has shifted, interest rates are expected to rise and both buyers and sellers need to be informed and prepared to make the right decisions.  This is a key element of the work and analysis that we as REALTORS® need to provide our clients.

  During 2018 we continued to see a strong demand for properties in specific price segments of the market.  Sales in the $300,000 to $499,999 price range is the "sweet spot" if you will of our market with sales in 2018 totalling 861 units.  This price range is the segment where inventory has been lacking as these sales were down 15% from the 1,018 MLS® sales reported in 2017.  It is becoming increasingly difficult to find much in our market area for less than $300,000.  Sales last year between $100,000 to $299,999 were down 39% with 318 sales for the year compared to 523 in 2017.  Sales in the $500,000 to $799,999 segment remained strong in 2018 down just 7% from one year ago with 465 MLS® sales in 2018 versus 498 in the prior year.

  Where we continue to see growth in residential property sales is at the higher-end of the market, homes priced $750,000 and up.  A growing segment of the local real estate market is for luxury homes and condos.  While this part of the market softened somewhat in 2018, we still saw 189 MLS® sales reported over $750,000 in 2018, down 23% from 245 sales in this price range in 2017 but 170% more than just 82 sales over $750,000 back five years ago in 2014.  See my Luxury Home & Condominium Market Report on the Luxury Homes page of my personal real estate website for more details.                 

   

   As previously started we have seen an overall decrease in MLS® listing activity from 2016 through 2018.  Many sellers were prepared to sell as with a sharp increase in multiple offers, properties selling for over their listed prices and a shortage of properties for sale it was indeed a "seller's market."   The problem was finding a replacement home or condominium to purchase at a fair price was a tall order.  As such many sellers decided to stay put and wait until the market became less hectic.  At this time we have seen an up tick in the number of properties coming onto our MLS® system as overall activity moves towards a more balanced state, levelling the market somewhat for sellers and buyers alike.  As shown on the charts above, annual real estate activity starts to ramp up in January and typically peaks in May or June before beginning to trend downwards in early summer.  This includes both sales as well as listing activity.

Summary Conclusion

  As we head into 2019 there is every reason to remain optimistic about the demand for southern Georgian Bay area property.  We are still in the early stages of having people move to this area and there are three main reasons driving this migration.  First, the recreational amenities here has established the area as Ontario's true four season playground.  This is attracting retirees as well as full time residents looking for an alternative lifestyle where they can essentially work from home and commute to the Greater Toronto Area (GTA) a day or two a week or as needed.  For those looking for a recreational secondary property, the choices here are many and prices are significantly more affordable than places such as Muskoka.  Home prices in Toronto have escalated to the point where even a modest entry level home is approaching the $1 million mark which makes pricing in our area looks much more favourable.

  So what's the downside  First, sales in Toronto and other parts of the GTA have also softened no doubt for the same reason we have seen a market slow down here.  These are strong feeder markets for this area with many buyers coming from Toronto and or the surrounding area.  Interest rates have crept up and tighter lending rules have made securing financing increasingly difficult to obtain especially for first time buyers.  The good news is this has already served to slow down the crazy pace we experienced in 2016 and 2017 when multiple offers and skyrocketing sale prices were making it increasingly difficult for the average consumer to enter the market comfortably.

  Personally I remain optimistic about 2019 and beyond.  Buyers acquire property in this area because they "want" to not because they "have" to.  A slowdown in market activity can be a good thing for sellers and buyers alike.  The biggest threat perhaps looming which could impact real estate across the country is the level of debt being carried by many Canadian families.  From 2000 to  2017 real estate values across Canada have essentially tripled, far outpacing income growth.  While our economy has performed well, many economists attribute that to strong consumer spending.  Low interest (mortgage) rates have contributed to sharp increases in real estate sales and prices.  Add to this home renovation spending, the purchases of new furniture, appliances along with new vehicles etc. and the debt burden of many may have reached their limit.  Consumer debt in Canada is now said to be over $2.1 trillion.  Real estate sales in Alberta and Saskatchewan are feeling the impact of falling oil prices and General Motors decision to close their Oshawa Ontario assembly plant will affect not only GM workers but those of their various suppliers as well.    

  The fundamentals of the Canadian economy remain strong which bodes well for our real estate market moving forward.  A market correction such as what we have witnessed in 2018 can only serve to stabilize the dynamics of buying and selling real estate for consumers creating a level playing field between both buyers and sellers.  As both a REALTOR® and the owner of two properties myself I play close attention to what is going on as it is the best way for me to serve my valued clients.  I sold my own home in Collingwood last year as my significant other and I decided it was time to consolidate our real estate into one principal residence.......hers!  I already own a summer cottage and following the sale of my home we purchased together another waterfront property on which we hope to build a home in two or three years. 

  Despite a slowdown in market activity last year, I am happy to report that 2018 was a year of record sales for our Brokerage, Royal LePAGE Locations North.  Sales for our Brokerage totalled just over $288 million.  We have the highest market share in four of the five municipalities we serve, Clearview 26%, Collingwood 32%, Meaford 36%, the Blue Mountains 26% and as a relative newcomer to Wasaga Beach we have quickly become the 3rd busiest real estate office there.   

  If I can be of any help in assisting you with making your real estate buying and or selling decisions I would be delighted to share my experience and knowledge with you.  In the meantime best wishes for 2019 and I will continue to provide monthly reports on the status of real estate activity and other related matters in the months ahead.

  A full copy of my Georgian Triangle Real Estate Market Report 2018 Year In Review is available to download from my personal real estate website www.rickcrouch.realtor.