Guelph, ON

If you're receiving mixed messages regarding the economy lately well join the club. The Canadian economy is performing brilliantly right now, the best in the G8 or is it the G20? The first quarter GDP came in with an amazing and unforeseen 6.1 per cent growth. Although inflation isn't a problem yet you can bet that interest rates will rise if our economy maintains this torrid pace. On the other hand if you believe the news, the crisis involving Greece and other members of the European Union threatens to plunge us into the second half of a double-dip world recession.

It's true that Canada did weather the storm better than just about any other country during the recent economic crisis and our current economy is the leader of the pack (vroom, vroom).But the thing that scares me is that by way of various stimulus packages we spent our way out of trouble thus increasing our debt load. That's like renovating your home because you can't pay the mortgage.

On the local scene the average sale price of MLS listings has never been higher but have prices really increased 14% since last May or is it just that more expensive homes are selling right now? I expect the latter. The remainder of May's numbers indicate a downward trend in our local real estate market. In fact the market peaked in March this year and has been steadily slowing ever since. The impending implementation of the dreaded HST likely has a lot to do with the early spring market and subsequent slide and one has to question the wisdom of implementing such a harsh tax when the economic outlook is still a little shaky (Dalton?).

So sales are down, inventory is up and homes are selling slower and farther away from asking price. Is the market getting ready to tank again or will it bounce back in the fall? I guess it depends on who you're talking to. I expect the slow-down to continue through the dog days of summer and then if things have stabilized in Europe by then I think we'll see the market rally a little as the leaves begin to turn colour. I don't expect prices to go down over the long term but I don't think they'll go up much either. This stagnant market should remain until the end of 2010 and quite likely well into 2011. The moral of this storey, if you have to sell, don't drag your feet! Your strategy should be to sell before the end of June. If you're thinking of buying, take your time and wait for the right home at the right price. If you want to buy and sell, you have nothing to worry about. No matter what the market is doing, things will pretty much even out for you.

Could Early Spring Mean Early Summer?

Those of you who are regular readers of my market update may recall that back in February we were enjoying spring-like market conditions. It was the hottest February for real estate in recent memory and local Realtors who were more than ready for the end of the recession were delighted with the early arrival of the spring market. Buyers and sellers wanting to avoid the impending HST plus a general economic recovery stimulated our local market which lead to record sales and market conditions typical of April or May.

After a very strong March where market conditions continued to improve, April's numbers look a little lackluster. This makes me wonder if summer might arrive early this year as well. The real estate market typically slows down a little during the summer and usually bounces back after the kids are back in school in September. Considering the less than spectacular April, could that summer slow down be starting now?

Although April's stats look relatively strong by themselves they pale in comparison to March's numbers. Total sales for April were down 8% from March. The average days on market for MLS listings increased by 3.5% and the number of homes for sale increased by 10%. Although April's market wasn't bad by any stretch, it clearly was slower than the previous month. Could this be a trend? You know what slower sales and increased inventory mean, lower prices. This is true whether you're selling houses, cars or shoes. In addition, the number homes that sold for full price or more were down 5.5% in April and the average sold % of list price was down ½ a percent as well.

Now don't get me wrong, the current market is still pretty strong. Homes are selling quickly and close to or over asking price but if summer does come early the market could slow down sooner than expected. By the end of May the proof will be in the pudding. If the market bounces back, we'll be in good shape well into the summer. But if the slow-down continues we could be looking at a serious summer slow-down. Stay tuned! We'll have a better idea in another month.

Canadian banks sent a clear signal that the era of rock-bottom interest rates is over by hiking mortgage rates this week, a move that will cost Canadians more to finance home purchases and could hasten a slowdown of the red-hot housing sector.

Surging home sales and prices may cool in the second half of this year due in part to the implementation of the Harmonized Sales Tax in July. The new tax will increase costs for home buyers in Ontario for new homes over $400,000 and for related services such as real estate commissions, home inspections and lawyer's fees. The double whammy of an increase in mortgage rates plus the HST could result in potential buyers staying out of the housing market at least for the short term.

Historically Guelph's real estate market has been resilient to the ups and downs of national and even international market trends. Even throughout the global recession our local market remained relatively stable. So will the market slow down a little in the second half of this year? I think that is likely to happen. If you bought a home this spring, should you be worried that prices are going to fall in the fall? Don't worry your pretty little heads. There's too much demand for homes in Guelph for something catastrophic to happen. Remember we made it through the recession relatively unscathed. I expect that the actual affect on our local real estate market will be minimal when compared other markets across the nation.

Not surprisingly, our early spring market continued fast and furious throughout March and seems ready to take April by storm as well. Total sales were up 30% from the month before and the average MLS listing sold in a month or less, within 1% of asking price. Multiple offers continued to be a common occurrence with 28% of homes selling for full price or more. Enjoy the sunshine and the hot market. They should both last well into the summer.

Imagine putting your home up for sale and after two days on the market you receive eight offers and sell well over asking price. I know that sounds too good to be true but that's exactly what many fortunate sellers in Guelph experienced in February. Following a strong fourth quarter when the Canadian economy grew by 5 per cent, the biggest rebound in nine years, Canadians are feeling more positive about the economy. A recent consumer outlook index showed growing optimism last month, with 62 per cent now saying they expect the economy to improve in the next year.

Consumer optimism was evident locally as buyers willing to out-bid each other hit the streets and bought practically everything in sight. Spring had definitely come early as 33% of MLS sales sold for full price or more. But was this a city wide phenomena or did some areas fair better than others? Actually if your property was located in the south end you had a much better chance of attracting competing offers than anywhere else in the city. In fact 70% of the homes that sold for full price or more were located south of Stone Road.

Many of these purchases were likely made by investors looking for student rental properties with close proximity to U of G but neighbourhoods like Pine Ridge, Westminster Woods and Clairfields were super hot as well. Although the remainder of the city wasn't quite as active as their neighbours in the south, those areas were strong as well and did enjoy some spill over effect where buyers intent on making a purchase in the south end were forced to consider other areas because there just weren't enough homes for sale.

With the average MLS listing selling in 28 days and for 99.1% of asking price you wouldn't think the market could get much hotter but the season is yet to change and nothing would surprise me at this point. As the snow melts and things begin to turn green look for hot spring market conditions to spread throughout the city.

Congratulations to Canada and Vancouver on a fabulous winter Olympics! My family and I watched with pride as our hosts and athletes showed the world what it means to be Canadian.

I'm proud to announce that Dean Manton, Real estate Broker with Re/max Real Estate Centre Inc. is Guelph's newest Greenbroker and a member of NAGAB! What is NAGAB? The National Association Of Green Agents and Brokers (NAGAB) is Canada's largest Non Profit association of Greerealestate^TM Real Estate representatives. The Association is committed to promoting ways and means of reducing green house gas emissions, increasing building energy efficiency, conservation, overall sustainability and environmental awareness. The association offers a Greenrealestate^TM program for real estate representatives leading to the commercial and residential Accredited Greenagent^TM and Accredited Greenbroker^TM (AGA^TM & AGB^TM) designations. Greenrealestate®; designees provide a means by which consumers are able to find real world green expertise in their real estate representatives.

What is Greenrealestate?

Greenrealestate^TM promotes the sales and marketing of real estate that:

• Preserves natural resources,
• Protects air and water quality,
• Produces less toxic pollution and waste,
• Utilize readily renewable resources,
• Utilizes recycled or reclaimed materials,
• Promotes Energy Conservation and Energy Efficiency,
• Promotes Environmental awareness,
• Reduces Green House gas Emissions
• Reduces annual energy costs,
• Promotes good design and quality,
• Reduce construction associated waste
• Minimizes the use of toxic materials to reduce the emission of poisonous indoor emissions,
• Uses adaptable materials that can be reused or recycled.
• Helps leave the world a better place for future generations

When considering a particular home, it's important for buyers to know the energy-efficient features that keep home operating costs down and the conservation opportunities that will improve their home comfort. Conversely, sellers want to know what energy and cost-saving features buyers will value and what energy-efficiency upgrades can improve resale marketability.

Feel free to contact Dean Manton at 519-716-4663 or mail@deanmanton.com with any Greenrealestate questions or visit the NAGAB website for more information. https://nagab.org/index.php