Last week the Canadian Real Estate Association (CREA) announced that it was lowering its forecast for home sales activity via the Multiple Listing Service® (MLS®)Systems of Canadian real estate Boards and Associations for 2010 and 2011.
Sales activity in the third quarter of 2010 was weaker than expected causing the Association to revise its 2010 annual projection to 442,200 units, representing an annual decline of 4.9 per cent over 2009 results. This projection continues to be 1.7 higher than the total of 434,477 units achieved in 2008 but 15.6% below the level of 523,855 units recorded during the market peak year of 2007.
Housing statistics in our local marketplace are reflecting the same National trends. As of the end of October, year to date sales totaled 181 units compared to 189 in 2009 – representing a 4.4% decline over the previous year. However, this level is 9.7% above the 2008 level of 165 and just 10.8% below the 2007 high of 203 units.
Niagara as a region appears to be faring much better than the National average. The October month end year-to-date sales figure of 4589 continues to be 3.5% ahead of last year’s total of 4432. However, it should also be noted that Niagara’s 2009 result was the lowest year in recent record.
It is important to take a long-term perspective when reviewing year over year comparisons. Levels of sales activity have swung widely between quarters and annual time frames during the past three years.
According to the recent CREA media release, “Despite this volatility, movements in sales activity and new listings have remained in synch and have kept the resale housing market balanced since early 2010. The overall supply of homes for sale has also been trending lower in recent months. The resale housing market has remained balanced on a national basis and in most provinces, resulting in stable average price trends.”
Welcome to the new normal. Expect lower unit sales, reduced inventory levels, more cautious buyers, longer market time frames and slower avarage price increases.
As we begin to look towards 2011, CREA’s revised projection for 2011 is predicting that annual unit sales in Ontario will drop 10% below 2009. If this forecast is accurate, sales activity in Pelham will be roughly equvalent to 2006 levels – and that certainly was good year – or perhaps not? Depends on your perspective.
Cathy Berkhout-Bosse, H.B.A. is a real estate broker and writer living in Pelham. You may read past columns at www.niagararealtysource.com