Kitchener Waterloo, ON

In 2008 6,115 residential properties sold on the Kitchener Waterloo Real estate Board's MLS (R). This represents a decrease of 10.2 percent from 2007. The average price of all properties sold was $264,312. That's up 6.2 percent from 2007. On average these properties took 47 days to sell and sold within 97 to 98 percent of their asking price.

Since December 1st, approximately 250 homes took an average 63 days to sell and sold for 95 to 96 percent of their asking price. Despite slower sales and greater discounts from initial list prices, average sale prices appear to remain relatively high and stable at around $260,000.

So, high and stable prices contrasted with longer market times, more price reductions and fewer sales? What's going on here? The answer may lie in the state of our supply.

The year ended with 1,564 residential properties in inventory. That's 36 percent more inventory than at the end of 2007. As of yesterday (January 8th, 2009), there were 1,637 active listings on our MLS (R). Currently listed properties have been on the market an average of 81 days. The average price of all properties in inventory is $342,112. That's 29 percent higher than the average sale price for 2008 - 29 percent! No wonder asking prices are being reduced substantially during the marketing process. No wonder buyers are slow to act in the face of such out-of-line prices.

Clearly, our abundant inventory is stale and overpriced. This is reflected in sluggish sales activity, even for this time of year when sales are expected to be somewhat slower. We need new listings to balance this market.

Properly staged and well priced properties are in demand right now!

Let's meet to assess your real estate goals for 2009. I offer a free staging consultation with a professional home stager and decorator when you list your home with me.

I have a friend who is a real estate analyst for the federal government, he wrote me an email this morning asking...

"(I've noticed) some really cheap looking sales ... and a number of listings that are just sitting, but average prices are not seemingly affected??? I just don't get it???"

I don't get it either... predicting prices right now is as challenging as I can remember in my 25 year career. In an earlier blog I wrote that RE/MAX Ontario and Atlantic Canada forecasted a 7% decline for house prices in the K-W area. A few days ago in The Record reported that one of our larger competitors forecasted a 3% decline for house prices across Canada. Only yesterday, Karen Shartun, president of our illustrious Kitchener Waterloo Real Estate Board made the following statement, "we expect to see the average selling price to either remain constant or continue to rise on par with what we have seen in 2008." Now that's positive thinking! Norman Vincent Peale would be proud :)

Well here are my two cents worth of nonsense about this unpredictable market. We in Waterloo Region have a lot to be optimistic about. Our local economy remains buoyant and consumers seem to be optimistic for the most part. Our diverse economic base is generally considered relatively resilient to economic downturns that affect other markets. Canada's economy is relatively stable and interest rates are expected to remain low.

However, the credit crisis in the U.S. is not over yet. There are predictions of second and third waves of economic doom and gloom on the way. Further morgage problems, an impending credit card crunch and manufacturing sector layoffs just to mention a few.

Is our local optimism enough to keep us sailing while the rest of the world struggles to keep a float? Well, for all the positive reasons you and I can list, our local real estate market will resist downturn, but I don't think we are impurvious to it. While prices appear to remain high at present, I expect our market will decline.

If you, or someone you know is thinking of selling their property, now is the time to get that property on the market. Call me for a free, no obligation, market evaluation of your property.

Of the 503 properties that have sold in our market to-date in November and December 2008, 212 (42%) received price reductions of an average 5.2% before they were sold.

This represents a shift in a market that has been characterised by properties selling near or even over their original list prices. Typically, well priced properties are expected to sell for 97-98 percent their asking price.

Curious about today's value for your property - give me a call for a no-obligation meeting.

Average prices in Kitchener-Waterloo continue to hold steady at around $265,000, which is where they have been for most of this year. RE/MAX's Market Outlook Report for 2008 predicted a 5% increase in average prices for 2008. The market in fact bettered that by increasing more than 6% to its current level of $264,628 for all residential properties sold in K-W area. This represents the highest prices on record and, I think its safe to say, the peak of the current real estate cycle. RE/MAX's current Market Outlook Report for 2009 is predicting a 7% decrease in average prices for our market area. Yes you read that right - 7 percent!!! - Effectively clawing back whatever gains we've seen in 2008.

While it is true that average price levels have not moved yet, there are other signs that the real estate market is taking a turn. The first of these indicators is declining unit sales. The Kitchener-Waterloo Real Estate Board processed 6,800 residential sales in 2007. That number is expected to be down a little more than 10% to 6,100 sales by the end of the year. Most of that decline has taken place in recent months as sales dropped 22% from September to October and 28% from October to November. November 2008 saw 41% fewer sales than November 2007.

Sharp declines in unit sales have been met with rising MLS (R) inventories. While the number of residential units sold has been declining more or less steadily, listing inventory remains high - averaging 22% higher than last years levels.

Although, our region's diverse economy is characteristically robust and tends to weather declines with moderation, some decline is inevitable. The only question is, "how long and how deep?"

Read the most recent KWREB Media Release (November2008MediaRelease.pdf).

Check out my K-W Market Snapshot statistical summary (KW Market Snapshot.pdf).

The number of residential sales for the cities of Kitchener - Waterloo dipped to pre-2005 values for the month of October while average sale prices held steady at $261,948.

Today the Kitchener Waterloo Real Estate Board released it's October market results. Download the entire Media Release by clicking here (November2008MediaRelease.pdf).