The dust has finally settled on the local 2009 Real Estate statistics and what a finish we had to the year! Here are some numbers provided by the Quinte & District Real Estate Board that will make homeowners happy about their largest investment.
In December 2009, the total dollar volume of sales (for all property types) increased by an amazing 98% over December 2008 i.e, $34.8 million vs $17.5 million respectively. This represented 182 sales last month compared to only 106 in December 2008.
Unfortunately, there are other statistics that may turn that homeowner smile upside down. There were 25% more residential listings on the market last month compared to December 2008. In other words, more competition if you are thinking of selling. As well, the average annual residential sale price was down 1% from 2008.
I could talk endlessly about statistics, but we all know that figures lie and liars figure. So what should homeowners do if they are thinking of selling this year? Sadly, Santa didn’t bring me a crystal ball for Christmas so here is my best guess for 2010.
If possible, you might think about listing early to try and be sold before July 2010 when the Harmonized Sales Tax (HST) takes affect and before mortgage interest rates begin to increase.
I’ll discuss the dreaded Horrible Sales Tax and how it impacts Real Estate sales on another occasion but, suffice it to say, this tax will steal hundreds of millions of dollars from the pockets of Ontarians who buy and sell Real Estate beyond 30 June 2010. I concede that the government’s plan to implement this unprecedented tax is not final, but we all know it’s coming despite massive lobbying efforts by groups such as the Ontario Home Builders Association and the Ontario Real Estate Association.
As for mortgage rates, the Bank of Canada has kept their overnight rate at an amazing .25% for a number of months, which, in turn, has allowed Lenders to hold prime at about 2.25%. However, there have been consistent comments from Canadian Banking authorities that suggest our “interest holiday” is going to come to an end mid-2010 or by the third quarter of the year at the latest.
Many Buyers who were keeping abreast of these two significant issues have wisely purchased a home recently or plan to do so before July. If you doubt the numbers provided by our local Real Estate board, just check out the hot markets of Toronto and Ottawa.
In conclusion, it might be that the strong 2009 year-end was a function of Buyers who jumped off the fence early, when they ordinarily would have waited to buy in 2010. Moreover, we might also want to consider that a strong start to the year may be followed by a stagnant second half to 2010, especially in view of the HST and mortgage interest scenarios discussed above.
Are you selling your most valuable asset in 2010? If so, list early and be prepared to move before 1 July 2010. Is your mortgage up for renewal or are you not yet locked into a fixed rate? If so, talk to your Lender about your long-term options. Oh, and by the way, I am looking for a crystal ball – preferably one in HD.
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