Local market effected- 2009 1st Quarter for NOTL

Resale housing activity in Canada in February 2009 was up from seasonally adjusted levels the previous month, according to statistics released by The Canadian Real Estate Association (CREA). www.crea.ca

A total of 28,669 homes traded hands via the Multiple Listing Service® (MLS®) nationally in February 2009 on a seasonally adjusted basis. This is 8.6 per cent above seasonally adjusted levels in January 2009, and the first monthly increase in activity since September 2008. Seasonally adjusted activity in February also surpassed levels reported in November and December of 2008.

To read the full report go to http://creanews.ca/2009/03/16/buyers-drawn-into-real-estate-market-in-february/

"Real estate is local, so it is important that buyers and sellers accurately determine pricing issues in their specific neighbourhood," adds CREA President Calvin Lindberg, a West Vancouver REALTOR® ." Buyers are looking, but they are confused by the barrage of information they're getting about the economy and the state of real estate. Consumer confidence remains a critical factor for the housing market."

Keeping LOCAL in mind, local CENTURY 21 Real Estate Broker Gary Zalepa Jr. offers his analysis of the 1St Quarter 2009 MLS® statistics for Niagara-on-the-Lake. Information source the Niagara Association of REALTORS®. The figures represent the residential resale activity tracked by the Association.

According to Zalepa Jr., the cooling off has arrived in NOTL. This applies not only to the weather during that time but also sales activity. It was down 57% from 1st quarter 2008.  Regional Niagara was down 25% for that same period. The Region had been experiencing a decline from 2008 while NOTL had managed to keep even with 2008 figures until Jan 2009.

First time home buyers have become active throughout the Region with the exception of NOTL. Attractive prices, the best interest rates ever and increased inventory have created healthy conditions for these home buyers. The NOTL market does not offer many options to the first time home buyer. Across Niagara buyers were active in the $200,000 to 220,000 range. March 2009  reported 101 transactions in this price range compared to 106 in 2008. This indicates that first time buyers are helping to maintain the activity in this price range.

Another price range that has kept pace with 2008 is the $750,000 - 1M. Reporting 6 sales in 2009 compared to 4 for 1st quarter 2008.

Even though NOTL has experienced a reduction in sales activity it is interesting to look at what is happening to prices and market health. For instance the 12 month average price for today is $408,000. That is up 5% from this time last year. Average price is not a perfect identifier of what average prices are doing because in NOTL we have a small data set with a large gap between each end of the price line. But it does assist with identifying trends.

CMHC -Canada Mortgage and Housing recently released its Niagara Region Homes Starts report. It showed an increase in new home starts for NOTL in the 1st quarter with the townhouse category leading the way. This is the new construction in the Village and projects in St. David's. NOTL along with Lincoln were the only two municipalities that posted positive figures.

Another interesting piece of data is the days on market figure. This is a record of how long it is taking sellers to sell their home. The average days on market has been declining through 1st quarter 2009 and is 85 days. This is a reversal of the trend in 2008 of rising days on market.

This indicates that sellers who are setting a competitive asking price are attracting buyers in a reasonable time frame. Many sellers had been reluctant to put their home on the market because they did not find the expanding marketing time frame in 2008 attractive. This is changing. Competitive asking prices are well received by informed buyers. The combination of a relatively low number of homes available in NOTL  and decreasing days on market should attract sellers to the market.

All of the above describes a real estate market that is in balance. Not a sellers market nor a buyers market. These conditions should continue through 2009.