As you may have heard, the Quinte & District Real Estate Board (QDREB) reported that there were 25% fewer properties sold in April 2011 vs April 2010. Granted, some of this decline in sales may be attributed to the poor weather so far this spring. In addition, we recognize that last year’s sales were brought forward as buyers wanted to purchase in advance of the introduction of the HST which took place on 1 July 2010.
The May 17th issue of the Toronto Star also reported a 14% reduction in home sales nationally for the month of April 2011 versus the same period last year. In addition to the points outlined above, it was also noted that changes in the amortization rules may have cooled the market. That is, the reduction of the maximum amortization period from 40 years to 30 years effectively took some buyers out of the market and it reduced the amount some buyers can spend on a home.
For those of you who are hoping for a military buyer for your home, please be aware that many military personnel have already been to the area and purchased their homes. While there will undoubtedly be more to come, I would suggest that the 'door to door' move policy has effectively dragged our normal spring market into a spring and summer market. In other words, homes may not sell until June or July when, in the past, they may have sold in April or May.
With all of these factors in mind, please be aware that competitively/realistically price homes always sell first. The average sale time of a typical in-town home should be 30-60 days and it will usually sell within 95-99% of its final list price (not necessarily the original list price). Please keep in mind that appraisals are still only one person's opinion and represent a snap shot in time. For example, a home that was appraised at a certain value one month ago may be worth less a month later as more comparable sales occur. Moreover, if a home has been on the market 20-30 days without a price reduction it will look stale to a potential buyer.
While the information in the previous paragraph is not new information, it is even more important to remember it given the sales data reported by the QDREB and Toronto Star noted above. In other words, times are becoming more challenging for sellers. Those homes that are priced properly and reduced in price regularly will be the most likely to sell. In fact, if the number of sales continues to drop in the month of May, prices will likely fall as well.
If you are selling and staying local, you will reap the benefit of any price drops when you buy in the same market place. If you are selling and moving out of the area, you will have a better selection of homes the sooner you sell here.
If you would like to read the full reports from the QDREB or Toronto Star article please check out our Facebook Page at Team David Weir. If you would like further information or clarification please contact me anytime via our private line at 613.885.9347 or david@davidweir.com
