Winnipeg REALTORS® Know Their Market – Do You?
Winnipeg REALTORS® Know Their Market – Do You?

Every market is different

By Peter Squire – Winnipeg REALTORS®

One thing that you hear echoed frequently, and for good reason, is that real estate is local. Even within a local market such as Winnipeg and the surrounding rural municipalities, there can still be a fair degree of variation within different property types and MLS® areas. While at times it may seem self-serving and even trite to repeat market news releases, you need to be working with your REALTOR® – a local market expert. They know the market better than anyone else because they live and breathe it every day. They follow the ebbs and flows of market activity and keep on top of the latest sales, new listings, expired listings, and price adjustments to listings.

They are often in conversation with other local market experts to discuss how things are unfolding and what pricing on a specific property in a select neighborhood should likely be, given all of the current and historical data they are analyzing and trying to make sense of at any given point in time.

This is not to say more national impacts such as bank rate movements, mortgage insurance requirement, and tax changes or job-related news are not all part of the equation when determining the consumer’s willingness to step up and buy a home.  At what price is a buyer prepared to make an offer on a property after seeking out advice from a REALTOR®? On the listing side, how should the vendor position themselves in marketing their property?  What is a pricing strategy they should employ?

While comparable market analysis or CMA’s still remain a very effective tool to help REALTORS® determine pricing for a home, there are some excellent stats they can peruse to supplement their analysis and become better informed.

Without naming all of them, there is the average number of days on market it takes to sell a home on MLS® in a particular neighborhood. While the overall average days on market for home sales in April 2010 was only three weeks, some neighborhoods such as Whyte Ridge, St. Boniface, and Old Transcona were only 9 days. Old Kildonan was only a week.

The percentage of sales to listings statistic shows how many listings are being converted every month. This varies quite substantially with some neighborhoods as high as the low 80’s, while others are under 50 percent. Old Kildonan was another real exception with a 97 percent conversion.

Another good tracking stat on a monthly, year-to-date, and yearly comparison basis is the average sale price for a neighborhood. While it is not always helpful depending on how diverse the homes are in the neighborhood MLS® area you are looking at, it still provides a useful indication of price movement and can help substantiate a CMA for a home in that area.

A final thing to note is gauging how long homes within certain price ranges are sitting on the market before selling. It is true – the most active price ranges tend to have the least number of days on market. This also helps explain why some neighborhoods, where many houses fall within these active price ranges, are experiencing faster turnaround. For example: all of the house sales falling between $150,000 to $299,999 were below 21 days in April. They include three price ranges with the $200,000 to $249,999 being the most active range. Whereas, for the lowest price range of $0 to $99,999 and the highest at $500,000 and above, average days on market for sales were 37 and 32 respectively. The next highest number of days on market next to these two ranges was the $450,000 to $499,999 at 4 weeks.

There is a lot to consider even within a local market, so you can appreciate how difficult it is to analyze a national market, as CREA’s chief economist Gregory Klump does throughout the year. Like the weather, the most recent CREA national market release shows how varied our national market is, and why you need to go well beyond the headlines to discern accurately what your own situation is within your local MLS® market.

Canada’s hot resale housing market starting to cool

(OTTAWA – May 17, 2010) Home sales activity in Canada came up short of the record for the month of April and new listings continued to climb, according to statistics released by The Canadian Real Estate Association (CREA).

Residential sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards numbered 52,042 units in April 2010. This is less than one per cent short of the record for national sales activity during the month of April, which was set in 2007. Compared to April 2009, national activity was up 20 per cent.

Seasonally adjusted national home sales activity slipped 2.6 per cent from the previous month, and now stands 6.8 per cent below the peak reached in December 2009. More than half of the decline in activity over the first four months of 2010 resulted from fewer sales in British Columbia, while activity in Ontario and Quebec remains at or near record levels.

“The easing trend in national sales activity masks a rising trend in a number of major markets,” said CREA President Georges Pahud. “Real estate is local, so buyers and sellers should engage the services of a REALTOR® for knowledge about housing market trends in their market.”

Some 99,901 homes were newly listed for sale on Canadian MLS® Systems in April 2010, surpassing the previous record for the month of April set in 2008 by six-tenths of one per cent. A total of 236,397 residential properties were listed for sale on Boards’ MLS® Systems at the end of April 2010, down 1.9 per cent from levels one year earlier.

As for the national average price of homes sold via Canadian MLS® Systems, that figure rose 12.2 per cent over this time last year. This is a smaller increase compared to those recorded over the past eight months. Bucking the national trend, price gains continue to increase in a number of major markets in Alberta, Ontario and Quebec.

With last year’s string of downwardly skewed average price values having now mostly passed, and with activity in British Columbia’s lower mainland having settled down, year-over-year national average price comparisons are coming back into line with changes in the national weighted average price.

The weighted average price compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It climbed 11.3 per cent on a year-over-year basis in April 2010. Similarly, the residential average price in Canada’s major markets climbed 12.9 per cent year-over-year in April, while the weighted major market average price rose 12.1 per cent.

The actual (not seasonally adjusted) number of months of inventory stood at 4.5 months in April 2010. This is down from levels one year ago (5.6 months) and April 2008 (4.7 months), but up compared to April levels from 2004 through 2007. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

On a seasonally adjusted basis, months of inventory stood at 5.3 months in April, the highest level since last May.

“Next month will mark the passage of one year since the national average price rebounded from the recessionary trough to return to the pre-recession peak, so the rise in the national average price is expected to be more subdued next month, ” said CREA Chief Economist Gregory Klump. “The national average price could potentially be skewed higher over the next couple of months if buyers of higher priced homes in Ontario and British Columbia move their purchase decision forward to beat the introduction of the HST in July.”

PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month. The Canadian Real Estate Association has previously released these separately.

 

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

Winnipeg REALTORS® Know Their Market – Do You? was last modified: July 9th, 2010 by admin
 

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