GROWTH CONTINUES!
A neighbour of mine has been retired for several years... that is, he has reached that magic age of 65. However, the company he worked for has kept him "employed" during his retirement, because they can't find enough qualified people. He drives a redi-mix concrete truck for a major supplier to the housing industry, and he is affectionately known as "Pops". His work days, these days, start at about 5:30 am and he arrives back home by about 7:00 pm, six days a week. His role for the past five to six months has been the pouring of concrete basements for residential dwellings. As he observes, if there is a housing crisis, it's only in the minds of the media. But what does he know? He just participates in the construction of pre-sold homes... Thousands of them! So the next time you hear a newscaster talking about the "doom and gloom" of the housing market in Canada, think about "Pops". You see, those newscasters just read teleprompters, they don't pour concrete, and they don't work six days a week for twelve hours.
The political and financial uncertainties in the U.S. and to a lesser extent abroad, have certainly caused buyers to take a second breath before jumping into any major purchase. However, notwithstanding the recent actions of the Canadian government to provide more liquidity to the Canadian banking system, it must be remembered that here in Canada, our economy is still growing, our banks have been making record profits (and are therefore stable), the sub-prime mortgage industry is for all intents and purposes a non-entity, inflation is not a problem, mortgage interest rates have not experienced any significant change in several years, the country experienced net job growth in September, and our political climate is stable; the Conservatives having just been returned to power with a minority government, which many say is far better than a majority for any party. In Barrie, one only needs to travel any one of the major thoroughfares to experience construction in process... another sign that money is flowing and people are working. Life in this Canada of ours is good!
September 30th, 2008 Market Position
.The number of residential properties sold during the first nine months of this year has shown a decline of about 15% from the same period in 2007, and are currently at about the same levels as 2006. The fact that the year 2007 was a "Record Setting Period", to meet or surpass those results would be a challenge at the best of times. While unit volume is down, Residential prices have continued to increase, albeit at a moderate rate of about 2.3 % (year over year) to a current value of approximately $265,000. There certainly are indications that the previous steam in the housing industry has abated, and we are in a period of coasting to the next destination, rather than travelling at breakneck speed!
As a result of the lower unit sales volume, inventory levels are running about 25% above the same point one year ago, and selection in most price points is favourable. The average time on the market from list to sell, has decreased to 52 days versus the prior year at 55. Approximately 57% of the total sales volume in the market occurred in the range from $200,000 to $300,000, with the balance spread over price points on either side of this range.
My Forward Predictions for the Barrie Area Market
As we move into the balance of 2008, the continuing short supply of serviced land, increased costs in labour, building materials and municipal development charges will continue to put upward price pressure on new home construction. This will in turn, assist in maintaining current price levels in the re-sale market, in spite of the reduced demand. Properties which are priced reasonably and present themselves well, will sell better than those which are simply relying on low prices to attract a buyer. Recreational and Specialty Properties will continue to be in demand, since they have a limited supply. The introduction of the GO Service to Barrie, the general affordability of the Barrie area, and the imposition of a double land transfer tax system in the Greater Toronto Market will continue to fuel unit growth in the longer term. Prices will continue to escalate at a rate of about two to four Percent over the next twelve months, and mortgage rates will most likely continue at their historically low rates throughout the balance of the year and into 2009.
The City of Barrie has been designated by the Province of Ontario as a Growth Centre, and Buyers coming to the area can still expect to find a wide range of housing options at affordable prices With average prices at least $175,000 below comparable metropolitan Toronto values, buyers from the greater metro area will find a refreshing negotiating environment where reasonable offers are entertained by Sellers, multiple offers are the exception, and local REALTORS® work "around the clock" to bring the Agreement together.
The availability of rental housing has improved, but with mortgage interest rates at record low levels, and 100% financing available, the option to buy makes economic sense for everyone.
For further detailed information, contact Gary Grant, Sales Representative, CENTURY 21 B.J. Roth Realty Ltd., Brokerage (705) 721-9111 or email at ggrant@garygrant.ca.
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