Sales volumes were down substantially from year ago levels, though prices have held reasonably well in most area's. Sadly I have been reading many doom and gloom predictions for the market this fall, predictions I simply don't believe are likely to come true. Take comfort our Real Estate market is just fine and I believe very strongly it will continue to be.
It's a sure bet to predict this fall will see fewer resale homes sell than this past fall and of course this past spring, but to any informed person who watches the market this should come as no surprise. Sales volumes were not sustainable, nor do they need to remain at those levels to have a healthy market. In fact I would suggest those volumes are unhealthy for the market if they were to continue for too long.
So what was going on? With fear of increasing interest rates, panic over implementation of the HST, worries about changes to mortgage rules and of course a greater confidence in a recovering economy a lot of buyers rushed into the market late fall 2009, & winter/spring 2010, leading to record sales volumes and a strong rebound in average prices from a substantial drop during the recession. As a result some activity that may normally have occured this fall or was perhaps delayed due to the recession was effectively pulled forward, which will reduce volumes this fall. At the same time as the market got hot and the news got better a flood of listings came on the market in the spring 2010 taking the steam out of what was otherwise a very hot market.
With a strong increase in inventories as the spring market matured, combined with a slow down in summer sales volumes I would suggest that this is the healthiest development the market could experience. The sellers market has disappeared, as a result bidding wars are few and far between, and as a result prices have not been increasing as they were this past year. I don't subscribe to the idea we are in a bubble now, however another 12 months of a sellers market and 10% - 15% increase in prices and I'd be very concerned.
The numbers currently suggest we are generally in a balanced market which means moderate to no upward pressure on prices and properties will take longer to sell. Ask anyone who was trying to buy in the sellers market - sounds like heaven for buyers. At the same time sellers who prepare their property properly, select a competent hard working real estate agent and that price their property based on realistic market values will have no difficulty selling. They may not get 5 offers and sell for 10% over list, but they will sell, likely withing 30 days and for a good price. The properties that won't sell are the ones that don't show well, have poor marketing programs or are overpriced. It's times like these that a good realtor is worth their weight in gold.
Generally I am optimistic for the fall market. It is possible we will see some price pull back, and prices have come off the March/ April peak already, but I suspect it will be modest and short lived. So if you have been thinking of buying, this fall may present a great opportunity to avoid competition and get good value for your money. If you are up sizing, down sizing or are ready to sell the sky is NOT falling and with the guidance of a competent professional working in your best interests you will sell and for a good price.
To close I was pleased to read the Conference Board of Canada's commentary on the real estate market released September 7th entitled "Is this the beginning of a Free Fall for the Housing Market", I won't rewrite the article here as you can click on the link and check it out yourself, rather let me just say it was nice to read something that offers a bigger picture perspective and had some balance to it. Perhaps I am biased to agree with the author as their position is and has been my own for some time. My experience on the ground very much supports their broader perspective. Just 2 weeks ago I listed a million dollar plus home and had 8 offers on it after 2 days on the market - this is not indicative of a falling market.
As a final caution be mindful that real estate is a very local market place that is very dynamic. If you are considering buying or selling consult with a competent and knowledgeable professional to understand what is happening in you area in the hear and now.
