Although everyone predicted a "soft landing" and somewhat slower pace for 2007, the year ended with record sales numbers across the country including in our South Georgian Bay market. In addition to resale figures, there have been a large number of new home sales in our region and the trend would appear to be far from over. According to numbers recently supplied by local Town planners, there are applications in place for hundreds of developments representing close to 18,000 new units! It appears that about 70% of these are for condominiums and 30% for single family homes. That is an astounding number.
Please note that all of the following data comes from the Multiple Listing Service (MLS®) of the Georgian Triangle Real Estate Board which generally reflects resale values and statistics. Most of the larger new home developments are not listed in our system.
After residential unit sales declined in 2006, they reversed and surged ahead last year by 13.7%. This was led by Meaford and Wasaga Beach where the number of residential sales increased by about 21% each. The number of units sold in Collingwood and Clearview were up by about 3.6%. The average sale price of a residential property in our area also climbed by 6.96% over the previous year and currently sits at $289,388.00 and there were a total of 1475 residential unit sales reported in our system last year.
The number of expired (unsold) listings rose by only 3% last year and, I've noticed that there appears to have been an increase in the length of time it took for properties to sell. The number of listings was up by 7% with a total of about 3200 residential listings last year. With respect to properties sold in 2007, the most active price band was from 180K to 240K with 576 sales; up 12% over 2006 levels. The number of sales from 120K to 180K was down just over 10% likely due to the lack of inventory available in that range. Activity in all other price bands over this level was up. Sales from 350K to 500K were up 9.4% with 232 sales and, sales of properties priced at over half a million dollars were up over 20% with 160 sales in the area. Again, the number of homes sold for over a million dollar set a new annual record with 23 such sales last year.
One of the key indicators to watch is the sales to listings ratio; that is the percentage of properties listed that sell. When the ratio sits above 50% (over 50% of listed properties sold), then we consider it to be a Sellers market. Under 40% would be considered a Buyers market while 40-50% is balanced. At the end of 2007, our over-all sales to listing ratio for the Georgian Triangle sat at about 46%, up from 42.6% a year ago. This would suggest we continue to have fairly balanced market conditions. A couple of notable exceptions are in the Towns of Meaford and Wasaga Beach where the ratios continue to be in the Sellers market range at 57% and 53%. In the Town of Blue Mountains, the ratio continues to be in the Buyer's market category at just 32% while Clearview sits at 41% and Collingwood at 50%.
Despite having the lowest sales to listing ratio, the highest over-all gain in average sale price has been in the Town of the Blue Mountains where the average sale price climbed 13.3% to $460,200. Again defying economic models, Meaford, despite having the strongest ratio had the lowest price increase of just under 1% to $248,700. At year-end, the average residential sale price in Clearview was $310,500, $247,500 in Wasaga Beach and it was lowest in Collingwood at $243,400 up 4.1% over 2006.
So where are we headed? If you really want my opinion in full, please visit my post of this very topic here.
As I point out there, the consumer is surely confused by the many mixed messages. But on the whole, I do believe 2008 will be another solid year in our real estate market for reasons to follow.
We do not seem to have reached a peak in affordability based on household incomes. We are very competitive globally. Our economy is strong and while we face some inevitable risks, we appear well poised to weather small storms. Interest rates should remain low or even head lower. Our lending policies and reserves will prevent a melt-down in the mortgage markets and, lenders and governments continue to offer greater opportunities for home ownership through new mortgage products, terms, financial incentives and rebates. Demographically, Canada presently has an ideal blend of first time buyers, new immigrants and boomers to drive all market segments.
If you consider all of these factors, I think that in 2008 we will continue to see price increases in property values in most markets. We may see eased demand due to the increased prices impacting on affordability and also, because of consumer jitters. We'll likely see modest price appreciation of 3-4% in most Ontario markets with a lower sales to listing ratio.
When reviewing statistics, it is important to remember that there are a huge number of new home sales not captured in these statistics. They would typically have significantly higher average sale prices and would more accurately reflect the very large influx of new residents migrating into our communities.
The continued strength of the real estate market in the South Georgian Bay area is no surprise given the dramatic growth seen all over the region. The face of the Georgian Triangle continues to change at a fast pace as new businesses and new developments spring up throughout the region. For more detailed information on the communities of the Georgian Triangle, please visit my website at www.collingwood-bluemountain.com.
In addition to attractive low mortgage rates and strong consumer confidence, the activity in the Georgian Triangle real estate market is attributed to several factors including an influx of young retirees, week-end warriors and new residents capitalizing on the growth that recognizes the desirability of this amazing area.
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