2018 Year End Carriage Trade Homes Market Review

  As reported in the 2018 Year End Real Estate Market Review post of my Live Play - Georgian Bay blog, sales activity across the southern Georgian Bay area softened in 2018 and this also included the high end luxury home segment of our market. (Click on graphs to enlarge).

  After running a number of statistical reports for last year, MLS® sales of homes and condominiums  priced above $750,000 totalled  222 properties, 23 or 9% less than in 2017.  Given the fact that MLS® unit sales in the area overall declined 24% last year, the upper end performed quite well.  During the past five years sales of higher priced properties in our market have grown significantly from 82 units in 2014 to well over 200 sales in both 2017 and 2018.  Even with the 9% reduction in MLS® unit sales last year, sales of properties priced above $750,000 were up 170% from just five years ago.

  MLS® dollar volume in this segment of our market in 2018 totalled $245.2 million and while that was roughly 10% less than the level of sales in 2017, this amount represents over 25% of total MLS® sales in our area as reported by the Southern Georgian Bay Association of REALTORS®.  The lower MLS® sales results for higher price homes in the area was also impacted  in 2018 by the significant number of new builds particularly in developments such as Lora Bay and Trailwoods both just west of Thornbury, in the third phase of Nipissing Ridge and others situated close to the base of Blue Mountain. 

 As shown in the accompanying chart, the reduction in higher end sales during 2018 versus 2017 was experienced in most price segments of the luxury home and condominium market with two exceptions.  Properties sold in the $2 to $3 million range increased from eight sales in 2017 to eleven sales during 2018, an increase of almost 36%.  MLS® sales above $3 million remained uncha nged from the prior year with three sales reported in both 2017 and 2018.  While the actual number of sales in these two segments is not large, these results clearly reflect that our market is continuing to move upscale with both full and part-time residents increasing to invest in expensive, finely finished homes and condominiums.


  In terms of luxury home and condo sales by area, the municipality of the Blue Mountains had 49% of all properties sold above $750,000 in our market last year.  Many of the buyers for these properties are members of the area's private ski and golf clubs and as such, desire a residential location close to those amenities as well as ready access to shopping etc.  As shown in the attached graphs, MLS® sales above $750,000 in the Blue Mountains totalled 109 units and over $130 million last year.  The town of Collingwood was a distance second with 49 sales totalling $49 million representing 22% of the market overall for higher end property sales in 2018.  All other municipalities had MLS® sales ranging from 12 to a maximum of 20 residential units or 5% to 9% of the total market.

  In terms of prices, the Blue Mountains lead the market with an average sale price for properties above $750,000 of $1.190 million.  Clearview Township was second with an average sale price of $1.146 million with Collingwood coming in third with an average sale price of  $1.014 million.  Sales in the remaining three municipalities averaged from $927,000 to $1.003 million.  Of the three residential sales that were over $3 million, all were located in the Blue Mountains.

  The slowdown in market activity is somewhat seasonal in nature and will trend upwards in the months ahead as we approach spring.  As of this post, there are 157 active MLS® listings for properties priced over $750,000 which represents 8.5 months of inventory based on the current rate of sales.  As per the accompanying graph the majority of these listings are in the $1.5 million range and higher where unlike below the $1.5 threshold, inventory in these price segments well exceeds total sales for all of 2018.  Higher price homes and condominiums typically take longer to sell.  The potential market for high price properties is smaller with fewer buyers in this segment.  The higher the price the longer it generally takes to sell.  Properties sold in 2018 above $750,000 were on average on the market for anywhere from 52 to 123 days depending on price.  Right now active listings currently for sale have been on the market for anywhere from 70 to 144 days.

  As we head towards spring it will be interesting to see how this segment of our real estate market behaves.  Given weaker sales and market activity in the Greater Toronto Area (GTA) buyers of luxury homes appear to be stepping back and are taking a wait-and-see attitude before committing to a purchase.  At the same time two area waterfront properties recently sold for over their asking price and I am aware of another sale which was over $2 million did not close due to insufficient funds so there are definitely some mixed signals being sent.

  Overall I remain positive about the level of market activity we will see in the coming year.  At the same time however both buyers and sellers need to be well informed and advised about pricing, market activity and other factors that may impact their buying and selling objectives. The market has definitely changed, multiple offers are no longer as prevalent as they were in 2016 and 2017.  For sale signs without SOLD stickers are much more commonplace.  Those are the things that we as REALTORS® need to excel at communicating with our clients.  We need to follow the market closely, know the numbers and share them with our valued clients to assist them in making informed, rational decisions.

Copies of my other real estate market reports are available on the Newsletters page of my website www.rickcrouch.realtor.  Please feel free to contact me if you have any questions or would like a no obligation consultation as to how current market conditions relate to your real estate buying and or selling needs.

  Download a complete copy of my 2018 Year End Sothern Georgian Bay Carriage Trade Homes Market Review located on the Luxury Homes page of my real estate website.

Copies of my other real estate market reports are available on the Newsletters page of my website.











  

Southern Georgian Bay Luxury Home & Condo Sales Soften in 2018

  As previously covered in my regular real estate blog, year-to-date real estate sales across southern Georgian Bay in 2018 are running well below what we experienced in both 2016 and 2017 and nowhere is this more prevalent than in the upper price segments of the market.

  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.   








     

Royal LePAGE Canada Luxury Property Market Report

Royal LePAGE Canada has just released their report on the luxury home and condominium market across Canada.  Below is what they have reported for the country overall with an emphasis on the Greater Toronto Area, a market that plays a direct role on what happens in our local market here on southern Georgian Bay.

TORONTO, May 10, 2018 – Canada’s spring luxury real estate market is well underway in Canada’s largest cities. While sales in Greater Vancouver and the Greater Toronto Area (GTA) are significantly down in the first four months of the year, luxury home prices have remained relatively resilient, according to Royal LePage.

Overall, sales activity declined in Greater Vancouver and the GTA luxury real estate market as both sellers and buyers adjusted to federal and provincial measures affecting both domestic and foreign buyers. The introduction of the new mortgage stress test implemented by the Office of the Superintendent of Financial Institutions (OSFI) at the beginning of 2018 created market turmoil as buyers moved to the sidelines in order to gauge the impact on luxury home prices, similar to what was witnessed in the overall residential resale market. More significantly, in British Columbia, the 2018 provincial budget included policies targeting foreign and domestic buyers who do not pay tax in the province, as well as a tax increase for all homes over $3-million through increases to the property transfer and school tax. Similarly, the non-resident property tax included in Ontario’s 16-Point Fair Housing Plan dampened price expectations for the GTA region.

“Home prices in Canada’s luxury real estate market have remained remarkably resilient when you consider the economic headwinds that serial government interventions have created,” said Phil Soper, president and CEO, Royal LePage. “The resilience of home values reflects the strong aspirations of luxury buyers to reside and work in cities that are consistently ranked among the most desirable on the planet.”

During the first four months of 2018, price appreciation of a luxury condominium in Greater Vancouver and the GTA outpaced that of a luxury detached home, with median condominium prices rising by 7.0 per cent and 10.4 per cent year-over-year, respectively. For the same period, the median price of a luxury condominium in the Greater Montreal Area and Ottawa rose by 3.9 per cent and 4.0 per cent, respectively, while Calgary posted the only decline, decreasing 6.1 per cent.

The Greater Montreal Area posted the largest year-over-year price gain in the detached luxury home segment, increasing 9.1 per cent to $1,569,515 in the first four months of the year. During the same period, detached luxury homes in Ottawa (6.3%) and Greater Vancouver (5.2%) also saw prices rise, while home values in Calgary (0.6%) and the Greater Toronto Area (-0.2%) remained flat.

“Somewhat unusual in historical terms, and reflecting an important demographic shift happening across North America, appreciation in the luxury condominium market is outpacing the traditional target for large value residential property investment, the detached house,” said Soper. “Baby Boomers are finally exiting their large family homes, and luxury condos, with their low maintenance lifestyles, are the favoured destination.

“Contrary to popular belief, wealthy homebuyers are price sensitive too. They didn’t reach the point in their lives where they have the capacity to acquire high-value real estate without being financially astute,” concluded Soper. “Luxury condominiums represent value in today’s market.”

Spring 2019 Forecast

The momentum behind luxury condominium price growth is forecast to continue through the year and into the 2019 spring market in all cities surveyed, with the exception of Calgary. When broken out by region, the median price of a luxury condominium in the GTA is forecast to post the largest price gain, rising 8.0 per cent to $1,847,194 in the first four months of 2019 when compared to the same period in 2018. Over the same timeframe, luxury condominiums in both Ottawa and the Greater Montreal Area are forecast to increase 3.0 per cent. Calgary is the only city surveyed that is expected to see the median price of a luxury condominium dip in spring 2019 when compared to 2018, decreasing 4.0 per cent year-over-year.

Detached luxury home prices in Greater Vancouver are forecast to decline in the first four months of 2019, decreasing 3.0 per cent year-over-year to $5,619,153, while properties in this segment in the GTA are estimated to remain flat (0.0%) over the same period. The Greater Montreal Area and Ottawa are both forecast to increase 5.0 per cent year-over-year, and detached luxury homes in Calgary are expected to rise 2.0 per cent during the same period. 

Greater Toronto Area (GTA)

GTA luxury home price appreciation falls flat after the introduction of Ontario’s 16-Point Fair Housing Plan and OSFI’s most recent mortgage stress test, while luxury condos make largest price gain of any region studied 

The median price of a luxury detached home in the Greater Toronto Area remained relatively unchanged (-0.2%) at $3,522,117 in the first four months of 2018, while the median price of a luxury condominium increased 10.4 per cent year-over-year to $1,710,365 during the same period.

On April 20th, 2017, the Ontario government introduced a 15 per cent non-resident tax on home prices in the Golden Horseshoe as part of the province’s 16-Point Fair Housing Plan. Leading up to the announcement, the median price of a luxury detached home in the first four months of 2017 was $3,527,882, a 23 per cent increase over the same period in 2016, while luxury condos appreciated 8 per cent to $1,549,864.

“When examining the second half of 2017, it is clear that the province’s measures have impacted price appreciation in the Greater Toronto Area’s luxury home market,” said Soper. “The new OSFI mortgage stress test introduced in January, in addition to dampening sales, has also put further downward pressure on detached luxury home prices.”

During the first quarter of 2018, luxury detached home sales decreased 67.9 per sent year-over-year. However the decline was significantly more modest when compared to the same period in 2016 (-18.1%). In the first quarter of 2018, luxury condominium sales decreased 28.2 per cent year-over-year compared to the same period in 2017, while almost twice as high (90.6%) compared the same period in 2016.

The region’s high quality of life for families, a result of good schools and excellent healthcare, is expected to continue to drive foreign buyer interest in the detached luxury home segment once the real estate market adjusts to government measures, and consumer confidence improves.

“Foreign buyers looking at luxury properties in the Greater Toronto Area can often prioritize lifestyle over finances but they also have the privilege of flexibility, allowing them time to watch the market,” said Elli Davis, sales representative, Royal LePage Real Estate Services Ltd. “The draw for many foreign buyers is our excellent quality of life. While some may choose to sit on the sidelines to gauge the market, the desire to relocate here is still strong.”

While luxury home price appreciation stalled, demand for luxury condominiums remained strong largely driven by established homeowners.

“The selection of luxury condominiums has greatly increased over the years and we are seeing more retirees selling their luxury homes to buy condos with great amenities and little upkeep. Condominiums are also easy properties to manage when you want to spend more time travelling,” added Davis.

When looking ahead to the 2019 spring market, the median price of a luxury condominium in the Greater Toronto Area is forecast to increase 8.0 per cent year-over-year to $1,874,194, while the median price of a luxury detached home is forecast to remain flat (0.0%) at $3,523,378 when examining the first four months of the year.

“Our longer term forecast for the Greater Toronto Area real estate market, including the luxury market, is for healthy price appreciation. The region has experienced significant inventory shortages for many years, has a robust economy and an international reputation as a great place to live and work,” concluded Davis.

Property Sales Between $1 and $2 Million Are Up 88% in 2017

  Through the first nine months of 2017, MLS® unit sales overall across Southern Georgian Bay have actually decreased from one year ago with 12% fewer properties sold through the local MLS® system than in the same period last year.  The one exception to this is the upper end of the market where the sale of higher priced homes and condominiums is significantly higher this year resulting in an 8% increase in MLS® dollar volume.  MLS® dollar sales totals $876 million to the end of the 3rd Quarter and it’s all due to the sales of upper end homes and condominiums in the region which are those properties priced $750,000 and higher.

  Through the end of the 3rd Quarter, MLS® home and condominium sales priced $750,000 and higher are up 88% from this time last year with 196 sales reported this year compared to 104 in the first nine months of 2016.  The combined value of these 196 sales is just over $203 million, almost 21% of the total market. The real strength is in the $1 to $2 million segment which has doubled this year with 99 sales compared to 49 sales during the same period last year.  Not so many years ago, a $1 million property sale in our area caught your attention.  Now it's almost an every day occurrence and this trend is increasing as the number of luxury home and condominium properties valued at $1 to $2 million and higher grows annually.

  Not surprisingly the Blue Mountains is where the bulk of the higher end homes are located.  Year-to-date, 70 of the 196 sales (39%) reported above $750,000 are in the Blue Mountains close to area ski clubs, in the Thornbury area or west at Lora Bay. The Town of Collingwood is a distant second with 40 sales above $750,000 through the first nine months of the year.  By comparison in 2009 there were just two MLS® sales in Collingwood over $750,000 plus I sold an unlisted property in the town that year for just over $1 million.  Here we are eight years later and we are on track to do well over 50 MLS® sales in Collingwood this year above the $750,000 mark.  The main driver behind this trend is the growing influx of buyers coming from the Greater Toronto Area where they have sold their former residence for $1 million dollars or more and are retiring to Collingwood and the neighbouring municipalities.  How soon with this trend end?  I believe we are only in the early stages of this retirement migration and we have ten to twenty years of solid growth yet to come in this and all aspects of the local real estate market.

   As of this post there are 163 active MLS® listings in our market area priced $750,000 and higher.  This translates into about 7.5 months of inventory at the current rate of sales.  Understandably, the higher a property is priced the longer it will typically take to sell.  Buyers with $1 million dollars or more in their pocket are not as plentiful as in the lower price ranges.  Add to this the fact that upper end buyers are by their nature very discerning with specific tastes and the time to successfully market an expensive property to secure a worthy buyer goes up even more.

  It is not surprising that the Blue Mountains is not only home to the larger number of higher end sales but also the highest average sale price for properties in the upper price ranges.  Whether it is Osler Bluff, Craigleith, Alpine or Georgian Peaks,  buyers are willing to pay more to be closer to their private ski club and these clubs along with the Georgian Bay Club or Lora Bay golf courses tend to create the biggest draw in terms where affluent buyers are willing to make a significant real estate purchase. 

  Please feel free to Contact Me and I would be happy to share my  knowledge and experience of the Southern Georgian Bay luxury real estate market in order to assist you with making you the right choice for your buying and selling needs.  These properties are different from your run-of-the-mill homes as are buyer and seller market participants that deal in them that is why you need a qualified and knowledgeable REALTOR® to assist you in making qualified decisions.  

  A copy of this information is available to download by clicking here.

Upper End Home Sales Off to a Robust Start in 2017

  As covered in my regular blog, real estate activity across Southern Georgian Bay has gotten off to a very strong start for 2017 despite the ongoing lack of inventory and the upper end luxury home and condominium market is no exception.

 MLS® unit sales of residential properties priced $750,000 and higher are up 73% for the first two months of 2017.  Through the end of February there have been 33 MLS® sales reported by the Southern Georgian Bay Association of REALTORS® (SGBAR) compared to just 19 sales in the first two months of 2016 at 73% increase.  What is perhaps of even greater significance is the fact that these 33 sales represent over 30% of the total MLS® dollar volume in the area for the first two months of the year.  The strong sales of higher priced properties is really serving to prop up MLS® dollar sales stemming from lagging sales due to low inventory in the lower price points.


  The Blue Mountains remains the stronghold for upper tier home sales in the area with 16 sales to date representing close to 50% of the market.  As I have stated before, Buyers in this segment are often private ski and or golf club members who prefer to be located near to their respective clubs. Collingwood and Clearview Township come in tied for second place with 7 sales above $750,000 in each of these two municipalities for the first two months of the year.

Selling a higher priced upper tier property in our market has typically been a long process and in the past it has not been uncommon to have two years or more inventory listed for sale priced above $750,000.  At the start of 2017 there were 134 properties listed for sale on our local MLS® system priced over the $750,000 mark which represented 9.9 months worth of inventory.  Currently that inventory has risen to 138 active listings as of this posting however based on the strong sales activity we have seen in the first two months of the year, the inventory supply number has dropped to 8.4 months.   Buyers in the upper end price ranges often prefer to build exactly what they want provided there is available land to do so.  The availability of vacant lots has not been an issue in recent years but we have seen a real run on vacant land sales over the past few months particular in the Blue Mountains in fully serviced subdivisions such as Nipissing Ridge 3 and Lendway Valley.

  Selling an upper end home in a market with abundant inventory takes more than placing a sign on the lawn and listing the property on MLS® and it starts with the appropriate pricing in order to drive showing activity and a potential Buyer.  As a Market Value Appraiser and Certified Luxury Home Marketing Specialist I can assist you in establishing a pricing and marketing strategy that will generate results.  Whether buying or selling, Contact Me for a no obligation and confidential discussion about your specific real estate needs or goals.
 

Upper Tier Luxury Home and Condo Sales Increase 54% in 2016

  The sale of upper tier homes and condominiums in the southern Georgian Bay area continues to be an increasingly significant segment of the local real estate market.  MLS® sales in this niche were up 54% in 2016 having a profound effect on total MLS® dollar sales.  For the purpose of defining luxury or upper end real estate, we consider anything priced over $750,000 as properties in this value range represent approximately the top 10% of the local market.

  A total of 162 sales were reported over $750,000 during 2016 on the MLS® system of the Southern Georgian Bay Association of REALTORS (SGBAR).   Total dollar sales in this segment were $187.4 million which represents 18% of all MLS® sales in the region for 2016.   It is important to note that this does not include any private sales, or sales made directly by builders and others that did not go through the MLS® system.

The Blue Mountains continues to lead other area municipalities by almost 50% with respect to the number of annual upper end home and condominium sales.  A total of 60 properties sold in the Blue Mountains last year with prices ranging from $751,000 for a property in Thornbury to a $3.945 million waterfront estate near Georgian Peaks. MLS® residential sales in the Blue Mountains for these 60 properties totalled just under $76 million which is 37% of the total region's upper end market during 2016 both in terms of units sold and dollar volume.  Buyers for these properties are often members of the area's private ski and golf clubs and these Buyers have a strong desire to be close to their respective clubs in developments such as Nipissing Ridge, Lora Bay, Windrose Estates and others.  The Blue Mountains is also home to some of the area's finest waterfront properties.

  Not so many years ago, it was hard to find a house priced above $750,000 in Collingwood.  In 2009 I sold a non-listed home for $1.1 million.  That same year there was only one MLS® sale in Collingwood of a residential property over $750,000.  Times have changed as in 2016 there were 31 sales in the municipality placing Collingwood in the number two position in terms of unit MLS® sales for high end properties in the region.  Sales prices ranged from $749,000 for a new home at the south end of Town to $2.33 million for a waterfront home in Princeton Shores.  These 31 MLS® sales totalled $29.8 million and amounted to 19% of the region's upper end market.  Of the seven municipalities covered in my analysis, Collingwood ranks 5th in average price for upper end homes sales with an average selling price for 2016 of $960,000.

  During 2016, Clearview Township came in third in terms of the number of MLS® listings sold with 29 residential sales ranging from $760,000 to $2.9 million.  Many of these sales were properties with larger acreages and highly sought after views of the surrounding countryside and or Georgian Bay.  Although Clearview Township trails the Blue Mountains by over 50% in terms of the number of high end properties sold, Clearview is home to the highest average sale price in the upper tier market segment at $1.328 million which is primarily due to the larger property sizes associated with these homes.

  The remaining municipalities of Grey Highlands, Meaford, Mulmur and Wasaga Beach each have their own share of higher priced residential properties and combined they accounted for a total of 42 MLS® sales in 2016, 26% of the overall market with a combined sales value of $42.3 million.  These areas continue to grow in stature in terms of being desirable locations for more expensive residential properties and this trend will no doubt continue. For the foreseeable future however they will continue to play a smaller, less significant role in the rapidly growing demand for higher end homes and condominiums than we are experiencing in areas like the Blue Mountains and Collingwood stemming from vast array of recreational, cultural and other amenities that these municipalities offer.

  As of this posting there are 134 active listings on the MLS® system of SGBAR which represents almost 10 months of available inventory based on the current annual rate of sales.  Sales in this segment of the market naturally take longer, require added marketing emphasis and can not be treated the same as the sale of a run-of-the mill property typically found in  large subdivisions.  More on this in future posts.

 If you are looking to list your current high end luxury home/condo or are contemplating the purchase of a special property, please feel free to Contact Me for a confidential discussion of your particular real estate needs and objectives and put my expertise to work for you.





  

Upper End MLS® Home Sales Up 42% in 2015

  As in prior years, upper end, luxury home sales continue to play a significant role in driving total MLS® dollar sales throughout the Southern Georgian Bay area in 2015 with sales up 42% over the same time last year.

  

  Through the end of May there have been 40 sales reported though the MLS® system of the Southern Georgian Bay Association of REALTORS® above $750,000 compared to 28 sales in the same period last year.  The Blue Mountains continues to be the hot bed for luxury upper end home sales with most buyers having a strong preference to be located close to Blue Mountain and the area's private ski clubs.  Collingwood, and the Municipalities of Grey Highlands and Meaford are the other three areas where upper end home sales are currently the most prevalent.  Sales in the $800,000 to $900,000 range are the most active this year with 12 sales through the end of May representing a 140% increase over the same period last year.  Sales between $1 and $1.5 million total 9 properties year-to-date up 80% from the 5 sales in the first 5 months of 2014 while sales between $700,000 and $800,000 are up 50% year-to-date

  As with other segments of the market, we have seen a reduction in the number of new MLS® listings coming onto the market for upper end properties.  As of this posting, there are 185 listings currently active on our local MLS® system above $750,000,  This represents approximately 23 months of inventory based on the current rate of sales and clearly illustrates why upper end properties take longer to sell.  By comparison, 100 of the current 185 listings over $750,000 are priced over $1 million.  With $1 million plus sales currently running at a rate of just three per month, the currently inventory level represents 33 month supply of properties to be absorbed in the $1 million plus category.  While recently pricing out a luxury high end waterfront property which I have just listed for sale, I viewed several relevant sales in excess of $1 million and noted that days-on-market for these properties often stretched from 1 to over 3 years.  As such, no where is the element of accurately pricing upper end homes more important.

  In my next post I will talk further about the issue of pricing high end properties in order to attract a willing buyer.

Year-To-Date Upper End Home Sales by Area

As per my prior post, upper end home sales across southern Georgian Bay have remained very robust throughout 2014.  To the end of October, MLS® sales for homes and condominiums priced above $750,000 total 66 units to the end of October compared to 47 in the first ten months of 2013 an increase of 40%.

  The bulk of these upper end MLS® sales (63 units) reside in the municipalities of Clearview, Collingwood, Grey Highlands, Municipality of Meaford, the Blue Mountains and Wasaga Beach.  Approximately 38% of these sales are in the Blue Mountains driven by Buyer's desires to be close to the private ski and golf clubs they belong to.

  Inventory of upper end homes remains relatively high.  As of this posting there are 179 active MLS® listings priced above $750,000 which represents about 27 months of inventory.  Over $1 million there are now 98 active MLS® listings.  This is the first time the number of MLS® listings over $1 million has dropped below 100 properties in quite some time.  With 27 MLS® sales year-to-date to the end of October, there remains a three year inventory of MLS® listed properties over $1 million.

  As with other price ranges, correctly pricing an upper end home correctly to attract a Buyer(s) is very important perhaps even more so.  Upper end Buyers are very savvy.  Many have built their own homes in the past.  They know what they want and they know the costs associated with building.  If they don't see both the quality and value in the property listed for sale then securing a Buyer at the price being asked is highly unlikely if at all.

  If you have an upper end property you are thinking of selling or if you are in the market to purchase one, please visit the luxury home page of my personal real estate website to see how my experience in this segment of the market can benefit you. 

Luxury Home and Condo Sales Remain Strong in 2014

Following the lackluster real estate market of the first quarter, activity has started to come back reflecting a higher level of sales typically associated with the arrival of spring. Periods such as what we experienced through this past winter where demand softened this year due to the harsh winter, typically serve to create a pent-up demand and this time was no exception.

MLS® sales reported by the Southern Georgian Bay Association of REALTORS® during May reflected an 11% increase in unit sales for the month versus May 2013 while dollar volume for the month was up 14%.  While stronger sales through both April and May have helped to lessen the impact of the weak sales activity we experienced January through March, MLS® unit sales are still trailing behind 2013 particularly for single family homes.

  The upper end of the market which we define as any homes or condominiums, priced over $750,000 has remained very bullish in 2014.  As per the accompanying graph, sales though the end of May for properties over $750,000 total 27 units.  Baring any downtown in the market we are on track to handily exceed last year’s sales of 58 properties.

  Upper end homes and condominiums is one segment of the local market where there is always an abundance of available inventory.  As per the accompanying graph, there are currently 180 active MLS® listings priced above $750,000.  Based on the current pace of sales in 2014, the current level of available inventory reflects a 2.8 year supply.  If we move up to the $1 million plus range, year-to-date there have been 10 sales whereas there are currently 98 active MLS® listings over $1 million.  This translates into a 4 year inventory of homes for sale over $1 million. 

  I am always amazed when I see a contractor building a $1 million plus home on speculation ie: they are building it merely to sell.  This is in my opinion is a very risky move.  First is the obvious issue of over-supply.  With 4 years of available inventory for homes over $1 million, you are really rolling the dice so-to-speak when you are custom building a million dollar plus property strictly for resale.  It could takes months even years to find a buyer. Secondary to that but of perhaps even greater importance is the matter of clientele.  In my experience the numerous buyers that I have been fortunate enough to work with for upper end properties are very specific in what they want.  Many have been thorough the custom home building process.  They have very specific tastes and desires and more importantly they can afford it.  More often than not, they would just as soon build their own home to the standard they want and we have no shortage of available vacant land for them to fulfill that desire.  Based on their prior building experience these people are also very knowledgeable on costs.  In my next post I will speak more on the matter of luxury home pricing. 

2013 Was Another Good Year For the Wealthy

Based on various article and reports I have read in recent weeks, 2013 was another good year for wealthy individuals. This no doubt stems from a variety of reasons. The global economy continues to improve following the last recession, gains are being realized in the stock market and most importantly, many wealthy clients or individuals I have met, work smart and work hard.

The following is a summary of the key indicators that reflects the ongoing growth talking place in the wealthy demographic segment. 

• The world’s club of ultrawealthy individuals, or those with $30 million or more in net assets, added about 5,000 new members last year. Over the last decade, the ranks of the über-rich have swelled by 59 percent, and the register of billionaires climbed 80 percent, to 1,682.

• The world’s 0.1 percenters had a pretty good year; three-quarters said their assets had increased. Only 4 percent said they wound up worth less.

• By 2023, China is expected to have 322 billionaires, more than Britain, Russia, France and Switzerland combined.

Lastly and of good news for the real estate market,

• Looking for someplace to park their wealth, the world’s rich still prefer property.

  Here in the southern Georgian Bay region we continue to modest growth in the luxury property market.  This area has yet to reach the point where we are regarded as a globally recognized destination to invest in luxury real estate and I suspect it will be years before we are.  Nonetheless, every year there is an increasingly greater number of wealthy individual looking to invest in our market.

  As of this writing, there are 108 properties listed for sale on the local multiple listing service.  As mentioned in prior posts, that represents roughly 4 years of inventory in this price segment of the market.  Selling a property in the $1 million plus segment takes time and most importantly it's all about price.  Wealthy Buyers are smart.  They know what they want and they know value.  Many have had the experience of building or extensively renovating homes and they know the costs associated with construction. When viewing your property if they do not see an asking price that is a least equal to the bare minimum replacement cost, they will simply move on.    

  If your property has been listed for an extensively long period of time with no offers and or very few showings perhaps you need to ask yourself and your REALTOR® what's wrong?

Are Luxury Home Open Houses Effective

Over the past several years I have had the privilege of listing and selling some noteworthy luxury properties in the area ranging in price from $1 to $2.75 million.  Through those sales I gained some great experience working in this exclusive and extremely small segment of the market.  Further, through attending the National Association of REALTORS® conference in the U.S. I have met and kept in contact with two of the top luxury home REALTORS® in the U.S. and I have read both their books dealing with the luxury home segment.  This has and continues to give me additional insight into the luxury home market which along with my own experience I will share via this blog.

  Many sellers and REALTORS® for that matter question the value of Open Houses.  I can honestly say that in over 13 years of practicing real estate, I have never sold a home through an Open House.  I have however met many people to whom I sold another property to at some later point in time.  Properly utilized, Open Houses have always served as a great way to meet people and gain potential clients.  Every once in a while, a house will sell through an open house but it’s rare.  Times however change and the validity of holding an Open House even for an expensive luxury home should not be discounted or casually dismissed.

  

  As I have stated before, technology and primarily the Internet has had a profound impact on all manner of businesses and real estate is no exception.  Many buyers spend weeks if not months searching for properties online.  Buyers have often viewed countless listings and gathered an abundance of information before they ever talk to a REALTOR® much less step inside the front door of a home listed for sale.  An open house, properly executed even for expensive properties can serve to bridge the gap between a prospective buyer sleuthing around online versus physically getting into a property and meeting a REALTOR® with whom they can develop a relationship.

 

  Much of the real estate market here on southern Georgian Bay has traditionally been made up of secondary properties.  While some potential Buyers in this market may be moving up from a lesser property to one of greater size and value, many of these buyers currently do not reside here nor are they ultimately familiar with the market.  I often find that a great number of attendees at Open Houses ask more market related questions than they do about the property they are in.  As a REALTOR®, this creates an excellent opportunity to demonstrate your expertise, thus potentially gaining their trust as a client. 

  What’s changed in recent times however with respect to Open Houses is this. On an increasing basis however, I learn by asking questions of my Open House attendees that they have seen and have been watching the listing online.  They have never called or emailed me to inquire further but as soon as they learn of an Open House being held, they are there.  The Open House is a non-threatening way to get inside for a first-hand look without feeling pressure by contacting a salesperson.

  In my next post I will touch on the various ways in which a luxury home Open House can be organized and executed in order to generate the best results.   

How Is Our Local Luxury Home Market Different?

The Canadian luxury home market is reported to be surging ahead significantly in many markets across the country.  According to a recent article in the HuffingtonPost, sales above $1.5 million in Toronto were up 18% in 2013 while sales over $2 million in Vancouver increased 38%.  Given the high cost of just a moderate home in these two cities, $1.5 and $2 million may not be good benchmarks to track luxury home sales activity.  I have seen some pretty ramshackle homes in places like the Beaches of Toronto going for $800,000.

 As previously mentioned herein, 2013 was a good year for luxury home sales in the southern Georgian Bayarea especially above $1.5 million.  I think this indicates to some degree, similarity with Toronto (GTA) for example where $750,000 to $1 million doesn’t necessarily buy you anything really special so you’ve got to get up over $1 million or higher in order to truly buy something luxurious with the features and quality of workmanship that belies what Buyers in this niche are looking for. The big differences I have noted between the local luxury home market and that of say of the GTA lies in a couple of distinct areas.

  First appears to be the amount of available inventory.  ReMax has released a report which says 1,908 properties over $1.5 million sold in the GTA last year with 1,000 luxury properties currently listed.  If these numbers are correct then the GTA has little more than 6 months worth of available inventory.  As of this posting we have 105 listings on the Southern Georgian Bay Association of REALTORS® MLS® system which represents 48 months of available inventory in a market segment that is somewhat fickle. The total value of the current local housing inventory over $1 million is $181.9 million so again that is 5 years of inventory. 

  

  Secondly, the 26 sales in our area last year represented $36.3 million or roughly 5.8% of total sales volume yet in terms of units, 26 sales in less than 2% of total single family homes sold.  By comparison, the ReMax report indicated that luxury home sales in Oakville last year were 5% of units sold double that of our local market.  In terms of dollars, Oakville’s luxury home sales amounted to 16% of total dollars sold or three times what we experienced here.

  What does all this mean?   Luxury home sellers in southern Georgian Bay need to understand that this is a much smaller market segment that places like Toronto, Oakville and other urban centres.  As such, they can expect a much longer days-on-market here locally than luxury property sellers in the aforementioned cities.  Secondly, the luxury home market here has at any given time, a much higher level of available inventory for sale.  This again will result in much longer days on market but also makes the whole issue of pricing your property much more important.  

  If you are looking to buy or have a luxury property in this market area to sell, I would be delighted to discuss and share my knowledge with you in confidence.

Luxury Home Sales Above $1.5 Million Double in 2013

Despite dire predictions from various media sources regarding Canada’s real estate market being on the verge of a major correction, sales across the country in 2013 remained very robust.  

  Here is the southern Georgian Bay area, MLS® sales in 2013 totaled $624.5 million, up 9% from 2012 and a new all time high.  MLS® single family home sales in terms of units sold were up 4% while 
condominium sales increased 6% during 2013. 

  The upper end of the market reflected the same positive growth with luxury homes very much in demand especially those priced over $1.5 million.  Sales over $1 million totaled 31 properties up from 26 sales in 2012.  MLS® unit sales between $1 and $1.5 million were actually 1 less than the prior year with 21 sales reported versus 22 in 2012.  Meanwhile, sales above the $1.5 million threshold more than doubled with 10 MLS® sales reported compared to just 4 in 2012. 

  The accompanying charts illustrates the five year trend for MLS® sales in our area from 2009 to 2013.  On this chart I have also included the number of current MLS® listings in the area over $1 million.  Based on the rate of sales for $1 million+ properties that we experienced in 2013, there is currently a 48 month inventory of properties priced at $1 million or more in our marketplace.       

  Successfully attracting a buyer for properties in this segment of the market is very  much dependent on price.  Potential buyers for luxury, high-end properties are perhaps the savviest of consumers.  Obviously there is an abundance of resale inventory for them to choose from.  If you are contemplating either selling or purchasing a high-end, luxury home in our area during 2014, please feel free to contact me for a candid, confidential and no obligation discussion about your needs or plans and put my expertise to work for you.  Happy New Year!    

Chinese Buyers Will Continue to Impact the Luxury Home Market in 2014

  It’s no secret that foreign investors from China have made up a large component of the buyers in Canadian cities such as Toronto and Vancouver. This is especially true within the luxury home market  and the prediction for 2014 is that the number of affluent Chinese  will be an even bigger force in the U.S. and Canadian luxury property market.  Already the second largest foreign buyer group in the U.S. (after Canadians), wealthy Chinese are drawn to the U.S. and Canada for several reasons:

Growing numbers of affluent Chinese send their kids to North America for university education.  Major university towns will see growing numbers of Chinese buyers as Mom and Dad look for a condo for the student and perhaps a luxury home for use when they visit.  Sometimes a student in the U.S. or Canada is the first step toward relocation.

Chinese, who are looking to make a favorable currency play, invest where there is economic value and political stability.  Expect them to continue to gravitate to cities where there are Asian population centers.  Cities like San Francisco where I just visited and Vancouver are good examples where a property investment is viewed favourably by Chinese

Look for very wealthy Chinese, who want a degree of status both here and back home,  look to buy what might be considered as “trophy” properties in Manhattan, San Francisco, Los Angeles, Toronto, Vancouver and a few other major cities that offer global recognition.

While we have yet to see a major influx of Chinese buying into the local luxury home market, one only need to visit the Village at Blue Mountain on a busy summer weekend or during the ski season to see that a strong Asian contingent has embraced the Southern Georgian Bay lifestyle.  I suspect in time as the luxury home market in our area matures and expands, it will gain the required notoriety that will attract not only affluent Chinese, but other foreign buyers as well.