Across Canada July month end results reflected the third month in a row that monthly unit sales were below 2009 levels. The weaker than anticipated sales activity recently prompted the Canadian Real Estate Association (CREA) to lower its national home sales forecast.
Sales activity in our local marketplace followed this same national pattern. In Pelham, May, June, and July totals declined 29%, 20% and 18% respectively and in Welland the monthy comparison figures were down 9% in May, 24% in June and 28% in July.
Total year to date sales continue to be ahead of last year. Welland’s year-to-date total of 460 units remains 4.5 % ahead of the 441 reports at this point last year and Pelham current year-to-date total of 130 units is 4.8% above the July 2009 figure of 124 sales.
According to industry analysts the pent-up demand caused by the number of purchases that had been deferred during the economic recession is now exhausted. From personal observation, it is not surprising that we are experiencing a sales lull given that many buyers pushed forward the timing of their purchases into early 2010 in order to avoid the increased costs associated with the implementation of the Harmonized Sales Tax.
As the slower sales trend continues through the summer months, it is likely that our local year to date sales figures will be below 2009 levels by the end of the third quarter of this year.
The revised Canadian Real estate Association projections are as follows: 2010 will end with an annual decline of 1.2 per cent and weaker economic growth and consumer spending next year will contribute to a decline in national sales activity of 7.3 per cent in 2011.
There is definitely one silver linking in the current market situation. Average selling prices have risen significantly. The Welland 12 month average selling price of $178, 279 is 4.3 % above last year’s level and the Pelham 12 month average of $327, 856 is 9% higher than the July 2009 figure of $300,854.
Expect the pace of these increases to slow down as market supply begins to adjust to lower demand. Inventory levels are already beginning to expand and average selling times are lengthening. All in all -very predictable real estate market dynamics.
July Comparison Chart – Welland
July Comparison Chart – Pelham
Categories: Real Estate Market Update