As Winnipeggers, we're used to taking a beating from our fellow Canadians about where we live. Long, cold winters and mosquito-infested summers are just some of the things we are criticized for. (OK, I'll admit that after the weather this past week, even I wonder why we live here!)
But as the rest of the country deals with the impacts of the recession in most sectors, including the real estate market, Winnipeg has one shining light that puts us ahead of most Canadian cities: the local real estate market is holding its own and not taking the hit that many other markets have experienced.
In most other centres, housing prices have taken a sharp fall as the economy has come falling down. According to Adrienne Warren, a senior economist with Scotiabank in Toronto, most real estate markets in Canada have shifted to become buyers' markets, where supply is exceeding demand. She says that's a strong shift from what we've seen in recent years.
"There is a slowdown in the market as there is quite a bit of concern out there among consumers," says Warren, who specializes in the real estate market and produces a quarterly market report. "Demand for houses has softened as the economy has turned down in all parts of the country."
That is, except for Winnipeg. It's become a bit of an iceberg, standing on its own in the real estate world. As other cities' real estate markets have plummeted, housing prices in Winnipeg are still up year over year.
Take a look at the average home price in Winnipeg compared to the rest of the country. The national average price for a home was $281,971 in February 2009, a drop from $310,379 at the same time last year. On the flip side, the average sale price of a home in Winnipeg increased to $188,795 in February 2009 as compared to $173,809 in February 2008.
"Most places have seen a real deterioration in affordability," notes Warren. "But prices are still fairly affordable in Winnipeg and lower than most other markets."
The Canadian Real Estate Association says sales of existing homes fell by 17.1 per cent across Canada in 2008 and is predicting another drop of 16.9 per cent in 2009. Home prices fell on average by 9.6 per cent across the country from February 2008 to February 2009.
For Manitoba, however, the Canadian Real Estate Association says the province will get off much better in the housing downturn. CREA is forecasting only modest declines in home sale prices in 2009. While that is a contrast from the six per cent increase it originally forecast, it's still much better than many other places.
So there you go. We may have relentless cold and a never-ending winter, but we still have a very warm housing market. And, for people like my close friend who is being outbid on houses in River Heights after putting in many offers well over the list price, you might even call parts of our real estate market "hot."
Stay tuned for more on that story next week.
