Welcome to Southern Georgian Bay Carriage Trade Properties
The southern Georgian Bay region is renowned for its natural beauty, the Niagara Escarpment, crystal clear blue water, the world’s longest freshwater beach and unparalleled recreational amenities from boating to private ski clubs and world class golf courses. The regions has been recognized as one of Canada’s premier four season recreational playgrounds offering the coveted lifestyle sought by many luxury home buyers seeking the relaxed sophistication reflected in the ultimate recreational property or full time retirement residence.
Real estate Broker Rick Crouch with Royal LePAGE Locations North (Brokerage) represents discriminating buyers and sellers in their quest to buy or sell the area's premium properties in Collingwood, Wasaga Beach, the Blue Mountains, Grey Highlands and Clearview.
Friday, November 23, 2018
Southern Georgian Bay Luxury Home & Condo Sales Soften in 2018
Once again to clarify what constituents the upper price segments of our market, we consider anything over $750,000 to be the luxury home and or condo segment of our market as typically this represents approximately the upper 10% of unit sales through the MLS® system of the Southern Georgian Bay Association of REALTORS®.
MLS® sales over $750,000 for the first 10 months of 2018 total $206.3 million compared to $229.3 million in the same period last year. That represents a 10% decrease in dollar sales year over year. Similarly, MLS® unit sales of 189 properties priced $750,000 and higher this year are down 12% from the same time in 2017.
The two price segments that are impacted the most are those properties priced between $850,000 to $999,999 and those in the $1.5 to $2 million category where year-to-date unit sales are down 10% and 42% respectively from the first 10 months of 2017. Two areas that are not reflecting this slowdown in market activity are Collingwood and the Blue Mountains. MLS® sales above $750,000 in Collingwood are running at the same pace as in 2017 with 44 sales reported through the end of October. Sales above $750,000 in the Blue Mountains are actually ahead by two units with 88 sales in 2018 versus 86 last year. The demand for luxury properties in the Blue Mountains remains the highest in our area with most affluent buyers preferring a property that is in close proximity to the area's private ski and golf clubs. Of the 189 upper end sales reported through the first 10 months of 2018, 46.6% are in the Blue Mountains and this area is also home to the highest average sale value an average year-to-date price of $1.190 million compared to the Township of Clearview which has an average sale price of $1.145 million or roughly 4% less. Average upper end sale prices in the remaining area municipalities are as follows: Collingwood $1.013 million, Grey Highlands $1.003 million, Wasaga Beach $958,000 and the Municipality of Meaford $927,000.
It is no surprise that with the highest percentage of upper end sales in the area located in the Blue Mountains, that municipality has the highest average sale price $1.190 million for properties over $750,000. Cleaview Township is a close second at $1.146 million while
The upper end of our market is one area where the inventory of available properties for sale is not in short supply as is the case overall. As of this post there are 184 properties listed for sale over $750,000. Based on the current rate of sales this represents almost 10 months of inventory which is a significant amount when the overall average days-on-market for sold properties is running 47 days. Inventory levels are particularly high above the $1.5 million threshold (see chart). October year-to-date there have been 22 sales above $1.5 million. With 67 active listings and MLS® sales running at just over 2 units per month, there is in excess of 30 months worth of inventory above $1.5 million to be absorbed and I do not see this happening any time soon.
So what does all this mean to potential buyers and sellers of luxury home and condominiums in our area moving forward? First I am not a pessimist nor is the information herein to be taken as being negative. As a licensed real estate Broker for the past 18 years I have always studied the data available to us. That information is key to helping us provide my real estate clients with the information they need to make qualified and informed decisions. Starting in May 2017, the local real estate market here in southern Georgian Bay and elsewhere has clearly shifted. With the odd exception, gone are the crazy bidding wars resulting in over inflated sale prices. Total MLS® sales dollar volume and unit sales in our area for 2018 will finish 15% to 20% below the levels we experienced in prior years. Canada Mortgage and Housing forecasts weaker sales across Canada through 2019 and 2020 in addition to fewer new home starts. In my opinion this will create a more balanced market for both sellers and buyers.
Perhaps the bigger question will be what happens with interest rates. Mortgage lending rules have crept up as have interest rates and this has clearly put the brakes on some buyers ability or willingness to purchase property at this time. Clearly the buyers of homes and condos priced above $1 million have already taken this stand reflecting fewer sales in our local market for 2018 coupled with a sharp increase in inventory. Luxury home sales in Toronto are down 35% this year and what happens in the GTA always impacts our market here as well.
In keeping with this trend three high end property sales examples come to mind:
Property 1 - Listed originally at $3.65 million the price was reduced to $2.95 million and sold for $2.65 million, a full $1 million (27%) below the original asking price after 293 days on market.
Property 2 - Listed at $4.2 million with several price adjustments (up and down) it sold for $3.25 million, $950,000 (23%) below asking after 1,057 days on market.
Property 3 - Listed at $989,000, the price was reduced under power of sale and sold for $851,000, $138,000 (14%) below asking 181 days on market.
These examples illustrate that there are still some good values to be had by waiting. Don't get caught up in the frenzy of multiple offers, waiting to make an offer on the right property at the right time can pay off, as they say "patience is a virtue."
Click on each chart to enlarge or click Southern Georgian Bay Carriage Trade Homes to download or view a full copy of my latest luxury home marketing report.
In my next post I will speak further to the importance of sellers pricing their home or condo correctly to sell and what buyers need to be a ware of when purchasing. In the meantime for further information or questions on any real estate related topics please feel free to Contact Me.