November real estate sales results in Pelham reflected an interesting dichotomy. Niagara Association of Realtors MLS statistics reported a sale of a $1,050,000 estate property, a $365,000 luxury townhome and $258,000 for future development land. All other sales in Pelham were below the $250,000 price point. If you read between the lines a quiet story is unfolding.
Who’s buying now? Investors and buyers with deep pockets. In the words of one of my collegues in the local real estate market the rest of the buyers seem to have “gone to sleep”. My observation is that it seems to be more of a planned coma with most waiting for that magical time in the Spring when house sellers are suddenly going to start offering up their homes at 20% below market value.
It is no secret that the real estate market has entered into a period of economic slowdown. The Canadian Real Estate Association (CREA) already reported back in June that Canadian home prices had fallen for the first time since January, 1999. In fact, the average year to date unit sales in Pelham has been on the decline since April 2008.While the Pelham real estate market generally follows the trends of the GTA market it is not subject to the same extremes of peaks and valleys. In October, Canwest News Service reported that Toronto home resale prices “plunged” 13 per cent from a year earlier. In contrast, Pelham the average price of re-sale homes in Pelham fell by 2.2% during that same period.
So we are entering into the slowdown side of the business cycle – this is nothing new in the history of economic fluctuations. However, the word on the street seems to be that this one is worse than anything that we have faced in our lifetime. I guess this depends on how old you are, how good your memory is and how much you read the Toronto media. In the meantime smart money is buying now before everyone else wakes up.