WinnipegREALTORS® Press Release, April 8, 2013
WINNIPEG - Will someone turn the pilot light back on and warm up our MLS® market? You have to go back to the old Winnipeg Jets era when the likes of Teemu Selanne and Thomas Steen were entertaining fans at the Winnipeg Arena to find the last March where sales were lower than March 2013. It just so happened to be the 1994-1995 NHL lockout season where only 48 games were played. Sound familiar! And lack of scoring or conversions of listings to sales clearly hurt sales activity in March. To use another sports analogy, many buyers decided to sit on the sidelines and not venture out onto the field of play.
Listings were not the issue as new ones coming on the market were down less than 7% while the active inventory at the end of March remains up 4% over the same time last year. A collective buyer pause seemed to engulf the local real estate market. If it helps restore some supply-demand balance to what has been one of the tightest resale housing markets in the country, this development should be viewed favourably by buyers feeling unduly pressured by a lack of listings.
The extent of the decline in sales activity is evident when you consider March 2013 MLS® sales were 19 per cent below the 10-year sales average of 1,043 for March. You more or less expect March now to consistently deliver over 1,000 MLS® unit sales.
On a quarterly basis you only have to go back four years to find a poorer MLS® sales performance and dollar volume is the third highest on record behind the previous two years.
March MLS® unit sales decreased 26% (844/1,138) while dollar volume was off 15% ($224.7 million/264.7 million) in comparison to the same month last year. Year-to-date MLS® unit sales are down 13% (2,156/2,483) while dollar volume dropped 6% ($550.4 million/$589.0 million) in comparison to the same period last year. Listings entered on MLS® for the first three months have decreased less than 4% in comparison to the same period in 2012.
“Instead of March madness it was Match calmness with buyers noticeably absent from our MLS® market at this time of year,” said Richard Dettman, president of WinnipegREALTORS®. In looking more closely at what happened, the drop off in buyer activity was three times greater in the first-time homebuyer price ranges than in the upper ones. In fact, our highest price range of over $500,000 clearly outperformed March 2012 in sales, less days on market and having a higher sale price of $1,650,000.”
In a recent membership survey WinnipegREALTORS® conducted this year over 90 per cent of the respondents stated they either strongly agree, agree or somewhat agree that they are having difficulty finding homes for first-time buyers which they can afford. This result has never been more definitive in its conclusion.
While some vendors may be unrealistic in their expectations for what sales price they expect to get for their home, Winnipeg still has some of the most affordable home prices in the country so other front end costs such as high provincial land transfer taxes (no first-time homebuyer exemption in Manitoba) have to be considered when you do further analysis on this affordability issue.
“Good or bad, we do not overreact either way as one month does not make a trend so we will be watching April very closely to see if spring thaw brings many more buyers out of the woodwork and MLS® sales are more in line with our expectations,” said Dettman.
The most active residential-detached price range in March was from $250,000 to $299,999 at 22% of total sales activity. Second most active was the $200,000 to $249,999 range at 18%. For condominiums, the busiest price range was from $150,000 to $199,999 at 30 % of total sales. The $200,000 to $249,999 price range had another 21% of condominium sales.
The average days on market for residential-detached sold properties in March was 28 days, one day off last month’s pace and 3 days slower than March 2012. As for condominium sales, the average days on market was 27 days, 19 days quicker than last month and 4 days ahead of March 2012.