Then there were three. . . That’s all that remain
of the buoyant housing markets in Canada
where prices and sales are both still increasing.
Winnipeg is one of them, and Regina and
Saskatoon are the other two.
There is no sign the good times will stop rolling
here any time soon, but all things must end. And
when they do, people are invariably caught by surprise.
So it’s instructive to look at what is happening
in other major western markets.
For instance, who would have predicted a year
ago that it would now be tough to sell a home in
those hot-beds of conspicuous consumption,
Edmonton and Calgary. While somewhat cooler,
the Alberta economy remains decidedly on the hot
side. So prices are still rising, but grudgingly.
However, inventories of unsold homes are ballooning.
ComFree Edmonton alone has more than
3,400 homes currently listed for sale. And homes
are remaining on the market for weeks longer.
It’s a matter of affordability. Prices went up so far
so fast a correction is inevitable. Many buyers in
those markets are now frozen out, reducing the
pool for homes coming on the market now.
This is especially evident in B.C.’s Lower
Mainland, where the sold-success rate for homes
on the Greater Vancouver and Fraser Valley boards’
Multiple Listing Service has dropped below 50%.
That means that more home listings fail to sell on
the MLS than sell. While the pollyanna realtors are
still hailing Vancouver as a strong market and
prices have risen about 6% this year, that’s cold
comfort for the majority of vendors whose sales
fail on the MLS.
They’ve failed because their home is priced too
high for those who still wish to buy but can’t afford
the price tag of entering Vancouver’s over-bloated
housing market. The sold failure rate will only
come down when sellers start to drop their price,
but the realtors aren’t telling them that.
RECENTLY SOLD WITH COMFREE
Barriwood Cove, Linden Woods
List Price: $319,000
Sold For: $325,000
Saving in GST
& commission: $20,475
(6% comm./GST)
There is always this disconnect for six to nine
months between market reality and sellers’ expectations.
Sellers will blame ineffective agents for the
MLS’s failure to deliver until the realization finally
sinks in, and they must absolutely sell, that their
price must come down. It’s a bitter pill, but what
goes up must come down.
It happened here in the early ’90s. Home prices
plunged after the excesses of the late ’80s and then
took nearly 10 years to fully recover. Sometime in
the next year, prices will moderate here, but no one
is predicting an absolute decline, at least not now.
But watch for inventories to start rising.
In the meantime, all remains sweetness and light.
ComFree homes continue to sell well, with 42%
receiving more than their list price. The average
sale price of a ComFree home rose to $222,000 in
May, compared with $194,000 in May 2007, an
increase of 14.4%.
And, best of all, our clients have already saved
$4.5 million in agents’ commissions this year, for
an average of more than $13,000. What could you
do with an extra $13,000?
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