Luxury Home Sales Rebound Over The Summer

  As previously mentioned, real estate sales across southern Georgian Bay through July and August posted solid gains above sales last summer based on statistics produced by the Georgian Triangle Association of REALTORS® (GTAR).

  An increase of 10% in year-to-date MLS® unit sales through the first 8 months of 2012 continues to demonstrate the strong demand for area properties. With the exception of Clearview Township where year-to-date MLS® sales are down a total of just 4 units (4.7%), all other area municipalities that make up our market are showing strong gains in unit year-to-date sales activity. Grey Highlands which in August 2011 had a 23% decrease in year-to-date sales from the prior year is showing a 58% increase in sales for 2012 with 82 properties sold year-to-date compared to just 52 this time last year. As per the attached graph, other area municipalities are also reflecting double digit gains in year-to-date MLS® sales.

 

   The months of July and August have also brought renewed activity with respect to sales in the upper price segments of our market. Year-to-date MLS® sales between $500,000 to $800,000 total 97 properties, 28 of which (29%) sold in July and August. Similarly, in the $800,000 to $1 million segment, 8 of the 13 sales year-to-date (61%) and 5 or 24% of year-to-date sales above $1 million took place over the summer.

 

  It should be kept in mind that for the most part, MLS® sales reported by GTAR are typically “resale” properties and for the most part, do not include the sale of new homes and condominiums made by developers. With these additional “new” sales factored in, it is very evident that demand for area properties has rebounded significantly from the sharp decline we experienced during the market downturn of 2008.

No Summer Slowdown In Area Real Estate

  Despite the continuing great summer weather people have been enjoying, area real estate sales did not take a holiday either in July or August.

MLS® unit sales reported by the Georgian Triangle Association of REALTORS® (GTAR) in August was 17% higher than in August 2011 with a total of 200 properties sold. Dollar revenue for the month was up 25% totaling $60.1 million compared to $48.0 million last year stemming from increased sales activity in the upper price

ranges during the month.

 

  MLS® unit sales for the year through the end of August totals 1,352 properties, up 10% from the 1,234 properties that sold in the first 8 months of 2011. Dollar revenue for the year is $397.2 million, a 9% increase from one year ago.

  In June we experienced a 20% drop in MLS® dollar volume from a year earlier leading to speculation about the market moving forward. Often, real estate activity softens in the summer months with buyers preoccupied with family vacations and other activities. Such has not been the case as combined sales revenue for July and August this year is up 22% from 2011. One month does not make for a “trend” although swings such as this does perhaps indicate how fickle and or unpredictable business can be in these uncertain economic times.

 

  The number of new MLS® listings posted in August dropped 5% from one year ago. Year-to-date there have been 4,787 new MLS® listings in 2012 versus 2011 resulting in a modest year-over-year increase of just 4% compared to the 10% increase in unit sales. This is very much in keeping with the widespread prediction that market conditions will remain stable moving forward as we continue to move towards a more balanced ratio of available housing inventory versus sales.

  In my next posting I will review sales activity in the various municipalities that make up our market area.

Short-Term Rental Controls

Besides the obvious "lifestyle" advantages to be enjoyed via property ownership in the southern Georgian Bay area, local property owners often engage in some form of rental activity to help defray their ownership costs.  Rental opportunites in the area include formal rental programs available throught the likes of Blue Mountain Resorts and the Village at Blue, renting a property out for the entire ski season typically December through April for those that may head south for the winter and lastly short-term rentals ie: a week or weekend here and there.
  Often when speaking with potential buyers for the first time, they will mention the possible intent of renting their chalet, condo or other property out when not being utilized personally, not realizing that some stipulations may exist that could impact their ability to do so.  Some condominium corporations in the area have rental limitations in their rules and regulations for example and more recently, the Municipality of the Blue Mountains annouced plans to implement a potential licensing process to manage short-term rentals throughout the municipality.
  What is a short-term rental?  Typically these are rental periods for less than 30 consecutive days.  For example, a party may rent a chalet or condo for a weekend, then the following week another tenant(s) arrives for a 5 or 6 days.  In many instances these types of rentals have become problematic in certain neighoburhoods with reports of excessive noise and drinking, improper parking, garbage being strewn about and so on.  Obviously such behaviour from short-term tenants affects residents that live full time or vacation at their properties and this in turn can impact property values.
  Both the Ontario Municipal Board as well a recent court ruling have cleared the way for the Blue Mountains to draft a bylaw that would govern short-term rental housing thoughout the municipality.
  For those persons considering the purchase of a property regardless of the location and renting the property out to offset your ownwership costs is part of the plan, make sure that you and or your REALTOR® conduct the proper due diligence either prior to submitting an offer or as one of your conditions before firming up your purchase. For further information please do not hesitate to "contact me."