Real estate market takes a break in March

Despite a 13 per cent drop in MLS® sales, WinnipegREALTORS® Association president Darlene Clare says Winnipeg is still in the midst of a sellers’ market.

There were 993 sales in March compared to the same month in 2007, but lower sales figures did not actually reflect the strength of the market since dollar volume sales rose 10 per cent to $195 million. 

By the end of March, year-over-year dollar volume was up over 10 per cent to $429 million, while actual sales were down six per cent to 2,334 units when compared to the same period in 2007.

In addition, MLS® listing inventory was still tight and went down two per cent to 1,462 units when compared to March 2007.

Even though there were fewer listings entered into MLS® during March, the number of active listings for 2008 on the system was up 1.5 per cent from 2007 to 1,884 properties available.

“We’ve noticed some dramatic listings swings in other major cities ,” said Clare. “Listing inventory has swelled in Calgary, Edmonton and Vancouver. We’re nowhere near that yet. This is only a dip for one month, so let’s see how the first half of the year unfolds.”

Clare said the limited number of listings available and strong consumer demand has meant multiple offers have been common in the Winnipeg housing market during the first couple months of the year, which has contributed to double-digit home selling price increases.

“Only if listings continue to struggle will it push up home prices,” she added.

“We do not see a need to panic looking at one month’s activity,” said Clare of the decrease in home sales. “This is what we’ve expected for the last couple of years. 

“The market has been overheated and not really that healthy for the past five years,” she added. “It has been great for sellers — provided they have somewhere to move — but it has been frustrating for buyers. 

“This may just be the start of a balance that will be better for all consumers.”

Clare said the media has been too quick to report the possibility of the housing market panic in the United States spreading  to Canada.

“We have to remember we have different fundamentals in Canada,” she explained. “Our banking system and mortgage markets are quite different than those in the States. Our interest and inflation rates are still low. Jobs and consumer confidence are still up.

“In fact, predictions for Manitoba from all sources point to a solid 2008 and beyond,” Clare added.

Manitoba is expected to continue to outperform the national average, growing by 2.8 per cent in 2008 and 2.9 per cent in 2009, according to the latest provincial economic outlook released by RBC.

“The diversified composition of the economy has helped keep Manitoba’s growth profile more stable compared to the other provinces,” said Craig Wright, senior vice-president and chief economist, RBC. “Manitoba is better-positioned than most other provinces to weather a U.S. slowdown and should remain one of the fastest growing provinces in 2008.”

“We know now that the Canadian real estate market has followed a markedly different path from that of the United States,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. “Our tiny sub-prime mortgage market has exposed us to very few of the pitfalls that have created the unfortunate chaos south of the border. 

“While Canada will not escape the negative impact of a troubled American economy, Canadians’ home equity should remain safe, as the market moves into a period of slow growth, but growth nonetheless,” he added.

“You also have to remember that Winnipeg is still a city where real people are buying homes, it’s not a speculative market as is the case in other cities,” said Clare. “Winnipeg is still a very affordable city compared to other markets in Canada.”

Because of the present conditions, Clare urges a potential home buyer or seller to work closely with a REALTOR® who understands the market.

“Consumers need to be informed about what is happening out there, which is the expertise provided by REALTORS® since they are involved in the market every day,” she added.

The most active segment of the housing market was the $160,000 to $199,999 price range which accounted for 20 per cent of all sales. Next was the over-$300,000 category with 14 per cent of sales, followed by the under-$100,000 category with 11 per cent of sales.

At 23 days, the average time on the market for a residential-detached listing  in March was identical to the same month in 2007.