Yes markets do work. An increase in supply usually puts downward pressure on prices, especially Real Estate. The Canadian Real Estate association said that sales in May pulled back 9.5% from April and prices in May 2010 were up 8.5% from May 2009.As reported in my previous blogs, sales and prices have been on a tear since April of 2009 and had many concerned about a " Real Estate Bubble" in the near future. However,as more sellers wanted to take advantage of the hot market inventory levels soared. At the same time tighter mortgage regulations and the threat of higher rates caused a slight dip in sales from April. As a result at the end of May there was a 6.1 monthe supply of residential homes in Canada. Also in the major markets of Toronto and Vancouver prices have risen so high that many are now priced out of the market, regardless of the very low interest rates.
In our local Peterborough Real Estate Market, how do we compare to the National numbers.
Number of Listings 2010 # 2265 2009 # 1905
Sales For May 2010 # 236 2009 # 247
Average Sale Price 2010 $ 241,663 2009 $ 227,319 ( An Increase of 6.4% )
As shown there has been an increase in listings from about 1450 in February to 2265 at the end of May and prices up 6.4% since May 2009, our local Peterborough Real Estate Market is pretty much following the national trends. I had earlier stated in my blogs " Real Estate Bubbles " that I did not beleive that we were going to have a bubble and the Market has pretty much proven me correct, at least this time!