This report summarizes the monthly statistics for the Western Region of the Southern Georgian Bay Association of REALTORS® (SGBAR). The SGBAR trading area also includes the Eastern Region of Southern Georgian Bay due to an amalgamation of the Midland Real Estate Board and the Georgian Triangle Real Estate Board in 2014. However, this report is restricted to the Western Region, formerly known as the Georgian Triangle Association of REALTORS®.
The remarkable ongoing shortage of listings continued with 240 new listings reported for the month of February 2017 vs 274 in February 2016, marking a 12% decrease year over year and with 317 new listings reported in February 2015, it appears that Sellers are still in the driver’s seat! Year To Date (YTD), 408 new listings were reported vs 522 new listings reported February 2016 YTD, marking a 22% decrease.
Sales were down 4% with 174 sales reported in February 2017 vs 181 sales in February 2016. This slight decline could quite possibly be attributed to the shortage of inventory in specific price points, where Buyer demand is stronger but affordable homes are not available. YTD, sales were essentially equal year over year with 285 reported this February compared to 286 February 2016.
The lack of supply means that Sellers continue to be well positioned in a very heated Seller’s market, often selling their homes quickly, with higher sale prices and experiencing multiple offers in many cases. Total Dollar Volume for the month showed a strong 11% gain over February 2016. The total Dollar Volume YTD is up a substantial 23% over February 2016.
Of the 174 sales reported in February 2017, properties of all types priced from $350,000 to $899,999 sold in greater numbers than the previous year, accounting for 50% of the sales. The profound lack of inventory is certainly having an impact on housing prices. Further to that, with fewer homes for sale in the lower price ranges, Buyers are forced to contend with higher priced properties and hope they qualify for a higher mortgage if they don’t have cash to purchase their chosen property.
Consistent with the foregoing, properties of all types priced from $150,000 to $349,999 are down 55% over the same period last year.
The amount of time it would take to sell all current listings at the current sales pace if no new listings became available is known as Months of Inventory. Four to five months of supply is average. If the number is smaller, market conditions are tight with demand exceeding supply. If the number is greater, it reflects the opposite.
There were 1.8 months of inventory at the end of February 2017, down from 2.7 months recorded February 2016, on a seasonally adjusted basis.
It is quite reasonable to expect prices to continue increasing, however other factors may intervene to counteract and moderate this trend. For instance, Buyer’s may be reluctant to participate in multiple offers because they don’t want to be caught in a bidding war. Also, Buyer’s tolerance for ever escalating prices may be limited and qualifying for a mortgage based on a more expensive price point may knock a portion of Buyers out of the market, or shift them to areas or housing types that aren’t in such high demand. Finally, an influx of new listings may go some way in reducing the inventory shortage therefore alleviating some of the pressure in the system. Only time will tell.
Prepared by: Diana Lea Berdini, Broker/Office Manager Collingwood/Owen Sound Chestnut Park Real Estate Limited, Brokerage