RE/MAX Real Estate Market Report

I haven’t been posting this week as my Mom is critically ill.  Thanks to those who’ve enquired and noticed I haven’t been my opinionated self of late.

I did want to pass on an email we got this week from Michael Polzler who is the Executive Vice President and Regional Director for RE/MAX Ontario-Atlantic Canada Inc.  Here’s what he has to say about the market:

Real Estate Board stats for October created some heated dialogue in the industry in recent weeks. While many believe that the dismal statistics reflect the recent volatility in financial markets, some are now asking if they also identify an emerging nationwide trend.

The simple answer is no. Although there are some serious negative factors influencing the marketplace, one month does not make a market. We need several consecutive months of momentum – one way or another – before we can really determine the direction of the market.

Make no mistake. 2008 has presented our industry with challenges across the board. Unit sales nationally are down 14 per cent from one year ago, hovering at approximately 397,000, while average price at $305,719 is up marginally over year-to-date figures for the same period in 2007.

Clearly, market conditions in most areas have shifted in favour of the buyer. There are more homes listed for sale than one year ago and houses are taking longer to sell. Our forecast for 2008 – released in October of 2007 – said as much.

Sellers are adjusting to new market realities – albeit reluctantly – while buyers are taking it all in. Some are sitting on the fence, waiting for housing values to fall further or interest rates to decline a percentage point or two more. The courageous are jumping into the market, taking advantage of lower prices, greater selection, and less competition.

For those that are trading in the same market, it’s all relative. Sellers may get less than they thought for their homes, but they’ll also pay less on the other side of the transaction. With market conditions stabilizing, first-time buyers now have the luxury of time in making their housing decisions. They also have greater purchasing power than they had one year ago – and their dollar will go much farther.

Unlike other investment vehicles, residential real estate serves two purposes. It’s still considered an investment, but it is also a roof over your head. We know from past experience that housing appreciates at a rate of five per cent annually. It’s cyclical, so it may rise and fall, but the risk involved will never be as steep or as serious as in the stock market, where the value of your portfolio can drop 30 per cent overnight and some of your stocks can fall to 0. You also can’t live in your mutual fund.

Real estate has faced many obstacles over the years – from man-made catastrophes like the high-tech crash, 9/11, and SARS to natural disasters like hurricanes, ice storms, and forest fires – but continued to experience steady growth. In 2009, there are some announcements that are expected to have a positive impact on the housing market and they are as follows:

1. The Bank of Canada has indicted that lending rates may fall further in 2009.
2. Federal government intervention in the form of a $75 billion mortgage purchase from the CMHC will free up additional credit.
3. Measures will be introduced by both the Federal and Provincial government to bolster the economy.
4. A lower Canadian dollar – hovering at 85 cents American – may provide a much-needed boost to manufacturing.
5. Job employment rates nationally continue to hold steady at about seven per cent.
6. Population continues to grow through immigration.

We may be in for some challenges over the next six to nine month period, but we should see clear signs of recovery by late 2009. The good news is that lifecycle events will continue to occur, whether real estate is experiencing a bull or bear market.

Related Posts:

Signs of the Real Estate Market Bottom 
South Georgian Bay Real Estate Market Report (for October 2008)

When it’s time to buy or sell real estate in the Collingwood, Blue Mountain or Georgian Triangle area, contact Marg, an experienced and competent Broker who’s ready whenever you are!


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About Marg

is an award-winning real estate Broker who has successfully been helping people move since 1989. When it’s time for a move in or out of a bigger, smaller, better, more expensive, less expensive, newer, older, house, condo, farm, investment property, vacant lot or business, talk to Marg.

This entry was posted by Marg on Saturday, November 22nd, 2008 at 8:05 am and is filed under Buying Real Estate, Market Conditions, Selling Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

3 Comments

  1. Lady Samm says:

    Hello Marg,

    Sad to hear your Mom is in ill health, enjoy the days you have with her, they are her gifts to you.

    I appreciate the update, grim as it is. We are sellers and fortunately still busy with approx 7 showings a week, despite the blip in this weeks news.

    We have certainly learned to be extremely patient and wish our builder was listening to the same news.

    However as you have shared many times, what goes down will come up.
    We will be basked in this message.

    Cause you matter
    samm and david

  2. Marg says:

    Thank-you Samm.
    Glad to hear you are keeping your chin up.

  3. Toronto says:

    Take care friend.. Hope that everything will become fine for you… At the same time the report you posted here is really nice.. Thanks for it.. Surely it will help others in real estate field..

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