Tuesday, March 14, 2017

Lack of Inventory Threatens to Slow Area Real Estate Sales

About eighteen months ago I made the prediction that the only apparent threat to slow down sales in the local real estate market was inventory and that day now appears to be approaching.

Unit MLS® sales across southern Georgian Bay in February were down 4% with 174 properties sold versus 181 in February of last year.  MLS® dollar sales for the month posted an 11% gain as we continue to see robust sales activity in the upper price ranges.  Sales over $500,000 totalled 76 properties compared to 46 last year and that is what is really driving the stronger sales dollar volume.  MLS® dollar sales in February were $75.3 million compared to $67.7 million last year.  The trend of declining new MLS® listings continued in February as MLS® listings for the month were down 12% with 240 properties coming to market compared to 274 in February of last year.

  Year-to-date MLS® unit sales as reported by the Southern Georgian Bay Association of REALTORS  (SGBAR) to the end of February totals  285 properties, 1 less than during the same time last year.  MLS® dollar volume of $129.6 million is an increase of 23% over the $105.4 million in sales in February 2016.  This trend can not continue without a boost in available inventory for sale.  Year-to-date, new MLS® listings are down 22% from one year ago.  Through the end of February there have been 408 new listings come to market compared to 522 in the first two months of 2016.   The lack of MLS® listed properties compared to demand has created a seller's market unlike we have ever seen with multiple offers and properties selling above list now becoming quite commonplace.  A single family home in Collingwood priced at $399,900 drew approximately 14 offers and sold in 6 days for $517,500 or 29% over the asking price.

  To the end of February, single family home sales are down 10% with 168 homes sold in 2017 compared to 187 sales a year ago.  Collingwood is showing the largest year-over-year decrease in single family home sales.  A total of 23 homes have sold this year compared to 41 last year, a decline of 44%.  Wasaga Beach is seeing the same trend although not to the same extent as single family home sales are down just 12% for the first two months of this year.  Conversely, single family home sales in Grey Highlands are up 17% and Clearview is up 33% with 24 sales versus 18 last year.  MLS® single family home sales in Meaford have doubled year-to-date with 10 homes sold.  Sales activity for single family homes in the Blue Mountains on the other hand has remained very strong as year-to-date sales of 27 properties reflects a 35% increase over 2016.    

  MLS® condominium sales have remained consistent with last year, 63 units have sold in the first two months of 2017 compared to 62 last year.  Once again the lack on inventory is holding back sales in this segment of the market as well.  On the other hand, vacant land sales have taken a sharp turn for the better.  After a couple of weak years where residential lots were just languishing on the market, sales in 2017 of 43 properties is a 65% increase over 2016.  Almost 50% of the lots sold this year are in the Blue Mountains where there has been an abundance of lots available.  The absence of available housing to buy is no doubt forcing some to choose building their own home as a viable alternative.

  The remaining nine months of 2017 will no doubt prove to be interesting. Spring typically brings with it an upturn in MLS® listing activity and while this will no doubt come about over the next couple of months, I do not believe that we will the magnitude of listings needed to quench then insatiable thirst that appears to exist for southern Georgian Bay real estate.  I hope I am wrong.  The current market cannot sustain itself with the significant imbalance that now exists between demand and supply.  A day of reckoning will come, it always does and a soft landing is better than a crash.

 For a no obligation review of current market conditions as they relate to your home or area property please do not hesitate to Contact Me.

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Royal LePAGE Locations North (Brokerage)

330 First Street, Collingwood, ON L9Y 1B4


Direct: 705-443-1037

Office: 705-445-5520 ext 230


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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.