Nova Scotia’s real estate market appears to be in the doldrums, and those hoping for a quick recovery may be disappointed.
Some veteran real estate agents in Halifax have described the local market as being the worst they’ve seen in more than 30 years.
One agent who asked not to be identified is predicting the number of real estate transactions this year could be more than 25 per cent fewer than in 2012.
Gary Mailman, president of the Nova Scotia Association of Realtors, admits there are far fewer buyers in the market than this time last year. At the same time, the number of houses put up for sale has increased.
Mailman agrees with most of the real estate people I’ve talked to who believe the sudden euphoria that swept the metro area in late 2011 and early 2012 — after Irving Shipbuilding Inc. was awarded the right to build $25-billion worth of combat ships — appeared to pull a number of buyers into the market earlier than they would have otherwise.
The desire to cash in on the expected influx of people working at the Halifax Shipyard also led to a bump in housing prices. But for now, the elation has subsided as it appears the process of building ships for Ottawa will not start overnight, and that is showing up in the real estate statistics.
Another factor, says Mailman, is the change in rules for first-time home buyers. Many of those affected by stricter rules governing mortgages decided to buy while they still could and before lending regulations were stiffened.
The slump in the real estate market this year has forced some of the 1,800 Realtors in Nova Scotia to seek part-time jobs, Mailman says, especially during December and January, the two weakest months on the real estate calendar in Nova Scotia.
Despite all this, he says, statistics show home prices have remained steady, for the most part.
On that point, the veteran agent I talked to Tuesday says he doesn’t believe home prices can withstand market pressures. He knows many anxious sellers have lowered their prices considerably in an effort to attract a buyer.
“Sellers are better off knowing the market is down at the beginning instead of having high expectations about the price they’re going to get for their home,” he said.
In metro, on average, sellers have about a 50 per cent chance selling their home in the current market. The average time on the market is about 80 days.
While it is easy to deal in generalities about the average price in metro, the experienced Realtor says there are pockets within the market where it appears easier to sell a home.
Using listings-to-sales ratios, he says the best neighbourhoods for selling a home are Forest Hills, north-end Halifax, Woodside, Cow Bay, Eastern Passage and Spryfield, which all provide a better-than-60 per cent chance of being sold.
Affordability is the main reason those areas provide a better opportunity to sell a home, he suggests.
In Bedford, he says, statistics show sellers have about a 45 per cent chance of selling their home, and about 50 per cent in the Sackville/Beaver Bank area.
The worst markets are in Purcells Cove, Herring Cove and the Eastern Shore, with less than a 30 per cent chance of selling a home. Sambro and Harrietsfield offer a little better than 30 per cent chance, while Hammonds Plains, Waverley and Fall River show about 35 per cent of homes listed are being sold.
There are always individual circumstances, such as a unique home in an extraordinary location, that are exceptions to the rule. But there are also many frustrated sellers feeling the pressure to lower their asking prices in an effort to attract a buyer.
Mailman says, however, there are some instances where the seller cannot lower the price because the home was financed to the hilt based on an “area code appraisal” rather than the value of that particular house. In some cases, he says, the homeowner would end up still owing money to their financial institution after the sale.
It may not be such a good time to be a Realtor or someone with their home on the market, but this definitely offers an opportunity for buyers.