Because of the multitude of media reports proclaiming month after month of records, it’s difficult to be oblivious to what is happening in the Winnipeg real estate market.
For example, there has been eight consecutive months when MLS® dollar volume has surpassed last year’s monthly amount. Listings are being converted quickly and, in a number of MLS® areas throughout Winnipeg, it really is a matter of days between seeing a listing sign go up and a property being sold. And, often these houses are being sold at or above their list price. As of the end of August 2005, there have been more residential-detached sales that have attained list or above list price than have not.
At 15 per cent, the spread between the increase in MLS® sales and the rise in dollar volume is the highest it has been in recent memory. As of the end of August 2005, MLS® sales are up six per cent to 8,649 total unit sales, while dollar volume is on a more rapid trajectory of 21 per cent ahead of the same period last year.
This activity translated into the Winnipeg Real Estate Board eclipsing the $1 billion milestone level in record fashion — one and one-half months quicker than 2004 — on August 3. Another $153 million worth of sales activity occurred last month, making it by far the best August on record.
The average residential-detached sale price for the 15 sales last August in Riverview/Fort Rouge was $86,000, while this August on 27 sales, the average sale price was $117,000, a 36 per cent increase. River Heights North (north of Corydon) went from $183,000 to over $207,000. Tuxedo, based on eight sales, three more sales than last August when the average sale price was $272,000, had an average sale price of $411,000. Linden Woods with more sales this August than last year went from $258,000 to $305,000.
The MLS® area covering Island Lakes, Royalwood and Southland Park had more sales than last year — most MLS® areas did — and its average sale price shot up nearly $30,000 to $244,000.
In the inner-city portion of the West End MLS® area, including West Broadway where many housing groups have concentrated their revitalization efforts, 21 properties had an average sale price of over $64,000. This is remarkable since just five years ago the average sale price for this area in August was $28,000.
The other West End MLS® area, east of Alverstone Street and all the way to Polo Park, saw its average sale price go over $90,000, up $18,000 from the same month last year.
The highest year-to-date average residential-detached sale price is in Headingley South at $373,000 with Tuxedo close behind at just under $370,000. East St. Paul is third highest at $326,000.
While it has gone up significantly in percentage over the past few years, the heart of the North End still has the lowest average sale price at $42,000.
It therefore should come as no surprise that sales activity has increased in the higher price ranges. This is becoming more consistent as the year unfolds. July and August both show 70 per cent of all residential-detached sales being over $100,000. It used to be the other way around when at least 60 per cent of all house sales were under $100,000.
If this trend continues, it will not be long before 20 per cent of all sales are at $200,000 or higher. In August, this price range represented 18 per cent of total sales and over three per cent of that, or 34 sales, were over $300,000.
To put this into perspective, less than one per cent of Calgary’s residential-detached sales in July 2005 were under $129,999. There was one sale under $100,000 and 15 sales between $100,000 and $129,999, 10 of which were from $120,000 to $129,999. Year-to-date activity had similar results with only 13 sales under $ 100,000. In percentage terms, things really do not start happening in Calgary until you get to the $150,000 to $174,999 price range with nearly eight per cent of total sales.
The next four price range increments, from $175,000 up to $274,999, are all in double-digit figures. There is then a single-digit sales percentage in the price range between $275,000 to $299,999. The next largest price range, from $300,000 to $349,999, reverts back to a double-digit percentage — 12.21 per cent in July and 11.01 per cent year-to-date. After that, it is all single-digit percentages.
If you add them all up and include the $300,000 to $349,999 price range, the sales percentage in July was just under 30 per cent. While over three per cent of Winnipeg homes sold in August were $300,000 or more, the same percentage does not apply in Calgary until over $500,000. Between $300,000 and $399,999, there were 200 sales in Calgary.
Another perspective comes from Alberta’s capital city. By the end of August, the Edmonton Real Estate Board reported that it has traded more than $3 billion worth of real estate through the MLS®, the shortest period on record to realize this lofty level. In 2004, it took them until early October. The board is predicting 2005 may well be the first year they break through the $4-billion barrier. Edmonton’s total dollar volume for the month was $435 million, a little over two and a half times larger than Winnipeg’s dollar volume.
Based on its population and economic base, Winnipeg is experiencing excellent MLS® activity. Despite prices heading upward, Winnipeg’s market remains quite affordable, especially in comparison to other markets in Canada. A local buyer sometimes has to lower expectations and choose something less expensive to match their income, but in other cities, such as Calgary, a buyer may not even have this option, since houses in lower price ranges are becoming rare or else non-existent.