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Collingwood, ON

January 2010 Georgian Triangle Real Estate Market Report

Marg Scheben-Edey - Collingwood, Ontario: Real Estate Agent in Collingwood, ON

I know it will not be a surprise to you to learn that real estate sales in Collingwood, Blue Mountain and area last month presented a far rosier picture than we saw one year ago.

Sales in the Georgian Triangle in January, 2010 were up 56% over the same period last year when we were in the depth of the recession. There were 81 sales reported for January 2010 and 455 new listings representing a decline a just 2% over 12 months ago.

Sales in units have not yet returned to 2008 levels however, the 12 month average sale price continues to climb. Of particular interest is the number of condominium sales last month which showed a sharp rise compared to the previous two years. These sales occurred across our area in all price ranges and follow the pattern of buyers moving to condominium living being reported in larger urban centres.

The following information was obtained from the MLS® statistics provided by the Georgian Triangle Real Estate Board. The first number is for January 2010 with January 2009 and 2008 results in brackets:

Total Number of Sales in all areas reported: 81 (52, 111)
Total # of Listings in all areas reported: 455 (462, 454 )
# Active Listings as of January 31: 1695

Single Family Residential Only
(Data is limited to Collingwood, Clearview, Grey Highlands, Meaford, Blue Mountains and Wasaga Beach areas only):

# Single Family Residential Sales: 44 (25, 69 )
Average Sale Price: $293,377 ($290,483, $312,779 )
Sales-to-Listings Ratio: 20% (12%, 33% )

# Condo Sales: 23, (8, 19 )
# Farms Sold: 0
# Vacant Land Sold: 5
# Commercial Sold: 2

Market conditions are much improved over last year and all bets are on this trend continuing through the traditional spring market months as people act to avoid the HST coming into effect on July 1, 2010.

Real Estate Market Forecast for 2010

Marg Scheben-Edey - Collingwood, Ontario: Real Estate Agent in Collingwood, ON

Trying to do a forecast of what is likely to happen in the real estate market in 2010 for the Collingwood, Blue Mountain and Georgian Triangle area is a bit like playing at a roulette table. There are way too many strategies, systems, odds and lucky omens to consider.

I've spent the better part of the last week tabulating, reading, crunching, analyzing and surmising. You've already seen the data from 2009 over the last couple of posts. Below are some of the things I've been studying that will impact our market over the next 12 months or so.

General Economics

  • Canada is the leading country in the G7 for economic growth. Foreign investors are attracted to Canadian commodities, stocks and real estate assets
  • There are trillions of dollars of commercial debt outstanding in the U.S. and the ability to service it will potentially impact the Canadian economy. Just look at Intrawest as an example.
  • Some economists (generally the ones that were wrong all through the "recession") are saying we are in a housing bubble or headed toward one. Others agree that there are elements in place such as a risk of rising interest rates but still others see a steady and sustainable recovery underway.
  • Government stimulus decisions will impact us. If they choose to say in too long, we risk inflation but if the government pulls out too soon, we can easily dip back into recession.
  • Bankruptcies grew an alarming 41% in July to September but drop significantly in October. We don't have data for the last two months.
  • According to both RBC and the Conference Board of Canada, consumer confidence is firming up with respondents feeling more positive about the economy in 2010. The risk is that consumers will add to household debt relative to their incomes which increases their vulnerability should rates rise.

Real Estate Specific

  • The introduction of the HST on July 1, 2010 will impact in several ways. Buyers and Sellers will face higher costs on fees when buying or selling properties that close after July 1st. The impact will potentially be quite large on new homes priced over $400,000. Homeowners will have to absorb higher costs on things like household utilities and maintenance impacting general affordability.
  • Many potential home sellers sat on the sidelines in 2009 having given up selling their homes or waiting for prices to firm up again. Many of these sellers may list their properties early in 2010 as might others wanting to avoid the HST for closing later in the year. These could drive up the inventory thereby suppressing property prices unless demand rises at the same level.
  • For the same reasons, inventory levels of homes for sale could start to decline by June putting upward pressure on prices if the economy stays strong.
  • Both commercial and residential vacancy rates continue to rise
  • Interest rates could rise after the Bank of Canada guarantee to hold its overnight lending rate at 0.25% expires in June. They could also stay where they are if inflation is not an issue.
  • The Chief Economist for the Canadian Real Estate Association (CREA) thinks they are more likely to stay low through to 2011.

Local Considerations

  • At any given point over the last year, anywhere from 60-87% of properties for sale in the Georgian Triangle DID NOT SELL during their listing period. The number of expired listings far exceeds the number sold.
  • Sellers did not adjust their expectations as much as anticipated over the last 18 months.
  • The local market tends to follow the GTA market although to a smaller effect. As the GTA is the economic engine of the Province with 1/5th of the country's GDP and 40% of all new immigrants landing there, it's economic performance directly affects us. The Tornot market is BOOMING with unprecedented sales levels, a shortage of inventory and record setting pricing.
  • The closest large urban market to us is in Barrie where they have a growing economic base and attract many commuters to the GTA. Despite this, their average sale price of a residential property is relatively comparable to the Georgian Triangle urban centres.
  • Who is buying or likely to buy in 2010? It appears to be investors looking for a combination of personal recreational use and seasonal rental income, recreational buyers in general, retirees, some first-time buyers who in many cases plan to or have relocated to the area. I've noticed an increase in two buyer categories in particular over the last year: single, 50+ women who have moved to the area for lifestyle reasons and, immigrant Canadians who have settled for 10+ years in the GTA and are now branching into recreational property purchases and investments.

Prices

  • In its Housing Market Outlook for 2010, RE/MAX is forecasting an increase in prices of about 4% in the GTA
  • CREA is forecasting an increase of 1.7% in Ontario and a 4% increase in the number of sales
  • If prices and interest rates climb in 2010, both predict that potential buyers will put off purchase decisions which will quickly cool off the hot market revising upward projections

Predictions

I'm really tempted to say that I don't have a clue but that would be a cop out so I'll tell you what my gut is saying. This is merely my own opinion and could be about as reliable as a throw of the dice. On the other hand, it's based on 21 years of experience, a big ear to the ground and lots and lots of research.

I think we'll see a strong market in the first four months of this year as consumers try to beat the HST and potential interest rates hikes. Based on this plus our normal seasonal trends, we may see both sales and prices peaking in April and May. After that, I think we'll see things slow down until the fourth quarter as people adjust to the implementation of the new tax and as it becomes clearer where interest rates are headed. I don't think we'll see huge price gains in 2010 as we may face a surplus of inventory in the first half of the year and a slow-down in the second half of the year. In general, prices should hold fairly steady with an annual increase over-all of under 2%. I think we'll see continued strength in the condo market with increased inventory appearing in places like Lighthouse Point and Rupert's Landing as those people start to move into units at the new Shipyards development. I suspect the demand will eat up that inventory leading to good unit sales.

Sellers need to adjust their thinking and remember that less than 50% of properties will sell and we may have sluggish prices in most of the market. They need to spruce-up their homes to compete with new home inventory and should start concentrating on improving energy efficiencies as the "second price tag" of homes rises with the HST.

Buyers need to plan ahead for higher interest rates. If rates climb by 2 or 3%, the future carrying costs should still be below the 40% of gross income threshold. This is not the time to max out debt. Buyers too should look for energy efficiencies in homes as the costs of utilities and associated taxes rise later in 2010.

2009 Year End Real Estate Report for the Georgian Triangle

Marg Scheben-Edey - Collingwood, Ontario: Real Estate Agent in Collingwood, ON

2009 Real Estate Market Report for Collingwood, Blue Mountain and Area

What a year 2009 was in the real estate market. It was somewhat like driving in a snowstorm trying to sense the road ahead and having to make adjustments with each new gust.

First, a quick explanation about the data to follow. The Georgian Triangle area traditionally includes Collingwood, Blue Mountain, Wasaga Beach, Clearview, Grey Highlands and Meaford. The data collected by our Georgian Triangle Real Estate Board MLS® however, captures a wider area that includes towns on the edges of our typical trading area. As I know most of you are focused on the traditional six communities, the statistics used in this report include only those areas and, only reflect data collected in our MLS® system.

We started the year about 10 months into what has been called the worst recession of the last 100 years. Starting in March 2008, unit sales month over month were consistently below the record levels set in 2007. The trend continued until June of 2009 when almost miraculously, the market turned sharply upward and continued to gain momentum through the balance of the year. Here are the highlights:

SALES

  • The number of properties sold in the first quarter was down from Q1 2008 by 13.6% compared to a drop of 27% nationally and just over 20% in the GTA. (Note: I reported in February that very early signs of a recovery were emerging.) http://blog.collingwood-bluemountain.com/are-there-early-signs-of-an-economic-recovery
  • In Q2, sales were down 3.9% compared to the previous year showing the first signs of some hope returning to the market. (Note here, yours truly did report in April that IT WAS TIME TO BUY http://blog.collingwood-bluemountain.com/georgian-triangle-real-estate-market-barometer-april-10th-to-16th-2009/)
  • June was the first time in 16 months that the number of sales for the month exceeded the previous year. The real estate recession was over.
  • In the third quarter, sales were up 14% of Q3 2008 but still down 11% over 2007.
  • In the final quarter of 2009, the number of sales were up a remarkable 78.6% over the same period in 2008. They were just 7.5% below the record levels set in 2007.

LISTINGS

  • New listings more or less followed normal seasonal trends having peaks in May and September with some moderating in the summer months as I think some people were just giving up on it being a good time to sell unless really necessary.
  • There were 1593 active listings (all types) on the Georgian Triangle Real Estate Board MLS® (all areas) at years' end.

SALE-TO-LISTING RATIO

  • The sales to listing ratio is firmly into the Buyer's market zone. This ratio is measured by dividing the number of properties sold by the number listed. A ratio of under 40% suggests a Buyers market, 40-50% is a more balanced market and over 50% is typically considered to be a Sellers market. Q1 had a ratio in the teens to low 20's. It rose into the mid 20s in the spring. By June, the ratio climbed into the 30-25% range where it remained for the balance of the year.
  • At years end, Collingwood's sale to listing ratio hit 40% (balanced) with Meaford and Wasaga Beach close behind at 38% each. The Blue Mountains had the lowest year end ratio at 31%.

CONDOMINIUMS

  • There were 325 condos sold in the six main areas in 2009. That was up 21.8% over 2008 and within 6% of 2007 levels.
  • The average sale price of condominiums rose 3.4% over 2008 and 6% over 2007.
  • There are currently only 252 active condominium listings on the market.

PRICES

  • Okay, it's not fair to put that heading. Real estate prices are a big topic all on their own so I've written a separate post on these.
  • Phooey on Macleans magazine who suggested last April that real estate prices could drop by as much as 20%. Boy, were they WRONG. So was Garth Turner.

Here's a chart showing a visual representation of the recession and recovery:

So, what happened?

I really had the sense in the fall and winter of 07/08 that the recovery would be swift in the real estate market because so many of the potential property buyers I was working with said exactly the same thing... "We're think we'll wait until the spring or summer to buy." Although they were in a position to buy, people were nervous as to where real estate prices were heading. I believed that once the good news started appearing, that buyers would come back into the market quickly and as it turns out, that is exactly what they did.

For those of you who've followed my market updates on my other blog all year long, you knew all this. For those of you who didn't, I'm rather proud to let you know that every prediction and analysis I made turned out to be correct. I hope you'll join me in following the excitement as it unfolds in 2010. Predictions are coming soon...

Collingwood Heritage Building To Get New Lease On Life

Marg Scheben-Edey - Collingwood, Ontario: Real Estate Agent in Collingwood, ON

I was so excited after reading a news release about the old Tremont Hotel building in downtown Collingwood, Ontario, that it was hard to get to sleep.

As I mentioned in another post on the subject, the Tremont building has sat neglected and abandoned since the town purchased it several years ago with the intention of tearing it down for parking. Since the building is located in the Heritage District and is considered to be an exceptional heritage asset, it would have been a horrible shame. Thankfully, the current council stopped to reconsider that decision and ultimately put out a request for proposals to the public.

Recently, Collingwood council accepted a proposal from local residents, Richard and Anke Lex. Rick is a developer and also the current president of the local chapter of the Architectural Conservancy of Ontario and a noted heritage proponent within the community. Anke is an artist specializing in gorgeous maiolica pottery. The combination of their skills are a perfect fit for a plan that is an exciting model of combined heritage preservation and environmental sustainability.

According to the media release, "The project involves the preservation, restoration and revitalization of an important designated building in the Collingwood Heritage Conservation District and its adaptive reuse to provide commercial opportunities and live/work space for the creative sector. The building will incorporate sustainable and environmental measures along with heritage preservation. Some of the green energy components that the building will feature include solar PV and solar thermal as well as grey water recycling and heat recovery." I think the concept of live/work units is a fantastic approach that is sure to garner significant interest.

For the town, this plan may also solve the other problem residents have expressed about the lack of parking for the new library being built next door. The Lex's have confirmed that their plan allows the Town of Collingwood to retain over three quarters of the property for parking. The Lex's state that work is to commence this summer and that it will include restoration of the building's 1889 façade.

This is a wonderful example of an adaptive reuse of a heritage building that will have new life in a sustainable fashion. Instead of becoming landfill, this landmark building is now destined toill become a jewel in the downtown core.

Building A Swingers Community

Marg Scheben-Edey - Collingwood, Ontario: Real Estate Agent in Collingwood, ON

Ha! Got ya with that headline! Read on...

Back in September 2007, I wrote about our foray into the world of real estate investment. Hubby and I purchased a condo in Collingwood, Ontario that we rented to a fantastic family and, we are still very happy with our decision. There's more though. One never knows where things can lead and many things have happened since then.

First, I was elected to the board of directors of the condominium corporation last year. It's been a tremendous learning curve but one I am so glad to have taken on. Having book knowledge of the Condominium Act and all of the inner workings of a corporation is quite different than having practical knowledge as I do now. Our little corporation may in fact be one of the more complex ones in the area for a variety of reasons and has therefore exposed me to a very wide range of issues from how parking is enforced to condo budgets, reserve studies, property maintenance and management.

When the condo development was first built, it had a playground for the children but over the years, it fell into disrepair and ultimately, it all but disappeared. Residents have called for its refurbishment for a long time now but money was an obstacle. This week, all that has changed.

At our last annual meeting, we put forward the idea of establishing a task force of residents to put together a business plan. It was astounding to see almost every single person at the meeting step up and volunteer to be on the committee. For the next two months, they worked together. Our own tenant used his engineering skills to pull together a design. The parents of one of our residents donated a swing set and slide. Other people donated time and equipment for land preparation and, a local company donated tires for edging and playing. Before you know it, we had a very workable plan at a relatively minor cost.

This past week-end, we called for volunteers and the turnout was outstanding. From 8 am to 6 pm, residents, property managers, owners and others worked side by side to build the playground. It was accomplished in a day. There was a BBQ. There was lots of laughter. The kids starting playing before the work was finished. It was an amazing day. More than building a playground, it was building a community.