Tim Thiessen

Dispite a sizzling hot market characterized short supply and and high demand resulting in quick sales, multiple offer situations and frustrated buyers, average prices do not seem to be increasing dramatically.

Number of Units Sold per Month

• Fewer properties sold in August than in July. This a normal decline for this time of year.
• 26% more properties sold in August 2009 vs. August 2008. This is a significant increase, particularily in light of consistent inventory levels.

New Listings Processed per Month

• Similar, or in fact slightly fewer properties have come onto the market over the summer months of July and August compared with last year.
• Similar or slightly fewer new listings and more sales has resulted in dramatically less inventory. The number of active listings at the end of August were 8 percent lower than at the end of July and 7 percent lower than at the end of August 2008. The inventory level is currently around 1,900 units.

Average Sale Price

• One would expect that more sales and fewer listings would result in higher prices, but such does not seem to be the case. Average prices for properties sold in August are down 9 percent from July and 4.5 percent from August 2008.
• It seems more properties are selling, but at lower prices.
• Year-to-date Average Price remains 1.28 percent lower than last year's overall avarege.

Earlier today RE/MAX released its 2009 Recreational Property Report.

Starting prices for properties in high end Ontario markets like Port Carling, Bala, Midland and Collingwood saw significant declines of 10 to 15 percent and currently sit at around $450,000 to $550,000.

Some low to mid-range markets such as Parry Sound, Temagami, Haliburton and Huntsville held constant entry level prices with almost no measurable change at all. Parry Sound shows one of the lowest entry level price points in the province at $185,000.

A few markets like Grand Bend and Bancroft saw starting prices increase 10 to 15 percent.

The RE/MAX report notes a significant increase in demand from Generation X buyers in this year's report.

Download RE/MAX Recreational Property Report 2009

First Quarter of 2009 saw sales for residential properties in the Kitchener-Waterloo market area drop by nearly one quarter from 1,484 to 1,121 units.

Average sale prices remain stable, but at five to six percent lower values than last year. Average sale price for all residential properties sold during the first three months of 2009 was $249,774 compared with $264,367 for 2008 overall. Monthly averages range from $246,846 to $252,744.

Inventory levels are seven to ten percent higher than they were at this time last year. Until very recently this was more due to properties staying on the market longer rather new listings coming onto the market. However, the month of March 2009 saw 920 new listings come onto the market compared with 752 in February 2009 and and 787 in March 2008.

The resulting sales to new listings ratio is hovering around 50 percent. That's the number of sales in a month versus the number of new listings in a month. It is generally accepted that around 50 percent is a balanced market. Above 60 to 70 percent is considered a seller's market. Below 40 percent or so is a buyer's market.

Download my KW Market Snapshot report by clicking here.

Ontario Minister of Energy and Infrastructure, George Smitherman introduced the Green Energy Act as Bill 150 in the Provincial Legislature this past Monday.

I am not in favour of this act at this time. At best, this is a good idea at the wrong time.

Under the heading, "Mandatory conservation and energy efficiency practices," the act reads as follows:

“2. (1) No person shall offer to sell or to lease, for a term in excess of the prescribed period, an interest in real property unless the person provides, at a cost as determined in the prescribed manner, such information, reports or ratings as are prescribed, (a) relating to energy consumption and efficiency with respect to a prescribed residence or other building on the property or a class of prescribed residences or other buildings on the property;”

In simple terms, home sellers will be required to have a home energy audit conducted at a cost of $300.00 and produce the audit report to a buyer in order to sell their home. This reminds me a bit of the "Clean Air" inspections required to keep our older cars on the road. It's not just the cost of the inspections, but the added costs of required repairs to our "beaters" following a failed inspection.

It's hard to argue with the importance of wise energy consumption, just as it is hard to argue in favour of pollutant belching automobiles, but introducing additional frictional costs into an already sluggish real estate market, may be a good idea at the wrong time.

Energy and resource efficiency is a good thing. Anything that moves us towards increasing energy efficiency is morally and ethically positive. A positive home energy audit may indeed increase a property's marketability and value.

However, a home energy audit will no doubt reveal energy inefficiencies that will require remediation at significant expense to the home owner. This is particularly true of older homes. The cost of the inspection and resulting retrofits and remedies could cause significant financial stress on many home owners. A negative home energy audit could in fact decrease your home's marketability and lower its market value. Again this would be particularly unfair and possibly prejudicial towards lower income owners of older homes.

I believe a better direction to go is with education campaigns like David Suzuki's PowerWise Ontario ads and incentive programs like the Ontario Home Energy Audit and Retrofit Program. The Ontario Government has created an incentive program that awards homeowners with rebates of up to $5,000 for home energy improvements. This program matches up to $5,000 available from the federal government — for a total of up to $10,000.

Continued education on energy conservation through ad campaigns and increased promotion of sensible incentive programs both benefits energy conservation efforts and facilitates economic activity. Win win!

These items can determine whether or not a buyer will make an offer on your home. Most people don't think about these but they are an important part of preparing your home for sale. Buyers want to envision themselves living in the house, and if the home is not presented in a manner that will allow them to do that easily, most buyers will move on. Click here to see video.