The Kitchener Waterloo real estate market continued to moderate in August. Residential MLS sales for August 2010 totalled 371 versus 472 in August of 2009, a decline of 21%. One bright spot was the median price for August sales rose to $254,000 from $238,500 last August. You'll recall from previous posts that the Government of Canada through the Bank of Canada and the Canada Mortage and Housing Corporation made changes to prevent "overheating" the market and it appears to have had the desired effect. The Kitchener Waterloo market seems destined for a "soft landing" after record sales in the first half of 2010. From 2001-2004, August residential unit sales ranged from 364-379 while from 2005-2009, the range was 390-478. Of note, sellers received, on average, 97.9% of their asking price in August versus 98.3% last August.
Active residential MLS listings at the end of August climbed to 1258 versus 1120 last year. However, appoximately 350 of those were new homes to be built leaving about 900 resales on the market. At current sales levels, that represents less than a 3 month supply which means Kitchener Waterloo remains in a sellers market.
What can we expect for the balance of the year? Historically, 2/3 of the buying and selling used to be done by the end of June. I think we'll find that pattern holding true this year. Once the kids are back to school, I expect the number of active MLS listings to increase brought on by consumers overloaded with debt. I anticipate fewer buyers and more selection for buyers will produce lower unit sales and sale prices. One bright spot should be improving affordability as mortgage interest rates and prices decrease.
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