“We’re in for another busy year,” is how new WinnipegREALTORS® president Ralph Fyfe sums up the prospects for the 2011 real estate market in Winnipeg.
“We’ll see more bidding wars in this market, which is something we’re already seeing in January,” added Fyfe.
Fyfe, who along with wife, Wendy, and their children, Richard and Janice, form the Fyfe & Company team under the banner of Century 21 — Bachman & Associates, offered the example of a
1 1/2 storey property on Hastings Street, which received 15 offers in one night.
“It was a ‘meat-and-potatoes’ type of house listed at $189,900 that sold for $251,500.”
In another instance, his wife and daughter held an open house that “was just packed,” he said. “At any given time there was always people in the house. Anywhere from 30 to 40 people attended that open house.”
“We’re going to see a lot of that this year,” added Fyfe, who began his real estate career in 1977, and lives in St. Vital, which is the focus of his marketing efforts.
Fyfe said first-time home buyers may become frustrated by the market conditions, but he believes that more listings are looming on the horizon.
He expects the local move-up market to gather momentum. As homeowners sell and move on to other homes, it will free up more listings and take pressure off first-time buyers, according to Fyfe.
In addition, he said, there are more and more condominiums being built, including smaller condos in the Exchange District, such as 500-square-foot units targeting first-time wage-earning home buyers.
“New condo construction projects in South St. Vital and St. Boniface have 900- to 1,100-square-foot units which should help address some affordability issues facing first-time buyers,” said Fyfe.
WinnipegREALTORS® condo sales through the MLS® system increased 50 per cent in 2010 to 1,459 units when compared to five years ago, with many purchased by first-time buyers.
The most active price range for condos last year was between $150,000 and $199,999, which accounted for 33 per cent of all sales. The price range between $100,000 to $149,999 made up 22 per cent of all condo sales in 2010.
Fyfe said certain areas of the city will always do better than others.
“The south southwest segment of the city is already a busy market.”
In his home market of St. Vital, Fyfe said he is impressed by the housing-type diversity.
“It really runs the gamut from older fixer-uppers and starter homes through to the typical 1,200-square-foot post-war bungalow to large executive and more expensive homes. In fact, a house sold this January in my St. Vital MLS® area for $1.7 million.”
Fyfe doesn’t see the recent tightening of mortgage rules by federal Finance Minister Jim Flaherty as having much of an effect on the local housing market.
As of March 18, Flaherty announced that the maximum amortization period for government-backed insured mortgages will be lowered from 35 years to 30 years with loan ratios of more than 80 per cent.
“Mortgages are still palatable in all price ranges,” said Fyfe. “The tightening of mortgage regulations will only have a small impact on the market as local home buyers are now amortizing their mortgages for 25-year and 30-year periods, anyway.”
Despite the limited impact, Fyfe said some purchasers, including first-time home buyers, will probably react to the announcement by rushing to complete transactions before the change comes into effect.
On the other hand, demand is driving up the average sale price on a property. A recent Royal LePage report said Winnipeg’s market will lead the country, predicting an average sale price increase of seven per cent for 2011.
Due to the existing market conditions, Fyfe recommends home buyers extensively interview agents, asking them, “What are you going to do for me?”
“The point is to become very comfortable with the home buying process,” he said, “and make sure there are no surprises along the way.”
As president of WinnipegREALTORS®, Fyfe said he is urging agents to better prepare first-time buyers for the process involved in a home purchase. Their role should be to help alleviate the stress and frustration of “bidding wars,” he added.
Fyfe said more people from out-of-province are moving back to Winnipeg, and then benefiting from the fact that Winnipeg has one of the most affordable housing markets in Canada.
“In the last several years, I’ve had several clients coming here with deep pockets from Vancouver and Alberta. They are impressed by the value they can get.”
Despite the challenges it faces in 2011, Fyfe is confident the Winnipeg real estate market will do more than hold its own due to strong immigration, favourable interest rates and solid local economic fundamentals.