While it may not exactly have felt like spring, the spring market in real estate is almost coming to an end. With next weekend marking the official start to summer -- which I hope DOES come along -- just how has the real estate market fared during the traditionally busiest season for selling houses?
According to WinnipegREALTORS, sales in May were "more restrained" than in the last few years. For example, last year, 57 per cent of residential detached properties sold for above the list price. A year later, only 37 per cent of listings sold for over the list price. Above-list-price sales for condominiums were also down. And the number of days that houses are on the market have increased. In 2008, the average home was listed for under three weeks. In 2009, that number has edged up to 27 days.
The real estate market has certainly tempered from 2008 to 2009. That's evidenced by the fact that 80 per cent of listings were sold last May, compared to only 53 per cent in May 2009. Housing unit sales were down 13 per cent from last year and dollar volume also declined 13 per cent compared to May 2008. Interestingly, the number of MLS listings has increased by three per cent, which is proof that the market has become more balanced over the last year.
WinnipegREALTORS president Deborah Goodfellow says these spring results are nothing to be discouraged about, but are indicative of the type of market we are now experiencing.
"Sellers have to be more realistic about their price expectations, while buyers are less inclined to jump at the first available opportunity to place an offer on a property," said Goodfellow. "It is also a market that is quite varied in demand depending on the neighbourhood and price range of the homes you are in."
Many realtors are looking at the changed market as a positive. Rachel Gendron, of Century 21 Jefferson & Associates, says buyers can afford to be discerning again. She says there is more inventory to choose from and buyers are savvy again, being able to take time to make the right decision when it comes to buying a home.
"For sellers and buyers, equilibrium is in vogue again," she says. "A home priced properly and marketed properly is selling."
The fact that the frenetic pace of the market has somewhat subsided is welcome news to buyers, Gendron notes. She says the biggest proportion of people buying a home today are those in the entry-level range looking for houses up to about $215,000. They are still taking advantage of the relatively low interest rates. For those entry level buyers, not having to compete in a multiple-offer setting is a welcome change.
"It is the largest purchase most of us will make, and should be done with planning, and time to have at least one sleep on the decision," says Gendron. "There has even been time for a home inspection now and then!"
While some houses are selling for over the list price, Gendron is quick to point out that is not the norm anymore. As the WinnipegREALTORS figures show, only 37 per cent of the houses on the market in May sold for over the list price. That's far from the many multiple offers we used to hear about with houses selling for far more than the asking price.
"The buyer who is really smitten will offer over asking," she says. "Having multiple offers to chose from is not the norm or the multiples may only be two to three rather than 10 to 14."
Fellow realtor Karolyn Ryback of Royal LePage Dynamic Real Estate says it's important for buyers to understand that the market has calmed down a bit.
"Thirty-seven per cent are selling over list, but the bottom-line is that 63 per cent aren't," says Ryback. "It's basically one in three now."
She says the market has tempered a bit and even with some multiple offers, the market isn't going as crazy as it was. But she says the danger is that some people still think it's a crazy seller's market and they are reluctant to put in an offer, thinking they will get into a bidding war. Just a few weeks ago, Ryback had a house listed that several different parties were interested in. But she said they assumed the house would sell for well over the asking price, so no one put in an offer. The end result was that the house, which was well priced and in excellent condition, went unsold.
"People are not bidding because of the perception that it's a crazy market," says Ryback. "People are walking away from houses they might be able to afford for fear of multiple offers."
Ryback stresses that not every house is selling for over the list price and that houses with major problems are not selling at all now, where they might have sold last year. While there are still lots of buyers out there, she says the market is not as frenetic as it was a few years ago.
"The sky isn't falling, but buyers are bit more tempered now," she points out. "We're not seeing the line ups we used to."
