Well Markham home buyers and sellers, as I write this on June 9th, 2010 it has become quite clear that the buying frenzie of the past few months has ended! Buyers who had been staying on the sidelines for fear of getting involved in a multiple offer bidding war are safe to emerge from the trenches and start house hunting! At least in the Markham area anyway. The number of sales in the N11 district of Markham/Unionville peaked in March at 368 dropping to 349 in April with a further drop to 256 in May. Prices on the other hand didn't peak until April with the median price for N11 at $486,000 and the median price for detached homes hit $619,500. Prices retreated in May in N11 with the median price dropping to $463,500 and detached homes fell to $552,500. With a 38% annual increase in new listings for TREB in May to 18,940, Jason Mercer, Treb's Senior Manager of Market Analysis stated "The gap between listings and sales has widened, which means there is more choice for buyers" Jason also predicted that "The annual rate of price growth will slow in the second half of 2010, from the current double digit pace into the single digits." In Markham N11 further evidence of the effect of the growth in listings is that the average number of days on market or DOM has been increasing from 14 in March to 16 in April and now 20 in May and I expect it will continue to rise back to a normal level of 30 to 40 days. Also in May the Average % of list price achieved in Markham N11 slipped below 100 to 99%. Doesn't seem like much of a drop but considering in March it was at 101% I think the downward trend is there.
What does all this mean? Well, I think that owners and agents who are unwilling to adjust their prices will quickly watch their listing become stale and with it their prospects for a sale. In addition to the bulging listing inventory, The Bank of Canada BOC bumped the prime interest rate to 2.5% from 2.25% June 1st. I would recommend reading the article by Mark Carney Governor of the BOC dated 24th March 2010 titled "The Economic Recovery in Canada continues Apace" click on http://bankofCanada.ca/en/about/where_economy.html In April another government measure came into effect, new mortgage applicants now are required to be approved under the posted 5 year fixed rate rather than the 3 year rate. The 5 year rate is historically been higher than the 3 year rate which will no doubt bump some new first time home buyers out of the market. This causes a ripple effect when the 1st time buyer isn't there to buy the townhome then the townhome seller can't move up to a larger home etc. Another factor affecting the market that I hadn't mentioned yet, is of course the pending HST coming July 1st. Sellers who went to market early and are now sold I'm sure are grateful they missed it but sellers who are still on the market are now realizing they will probably have to pay it and may be digging in their heels a little more in negotiations trying to retain as much of their equity as possible. It's coming, there's nothing we can do about that and it will add 8% to the services of a realtor for an owner trying to sell their home.
I don't mean to sound like gloom and doom, anything but. The housing market in Markham has gone through a very unusual period with pent up demand towards the end of 2009 and low inventory levels causing prices to skyrocket and now they are returning to a more normal level. I don't expect the summer period to be any slower than last year but then no one knows the effects the HST may have. In any case whether buying or selling in today's market the consumer needs to hire the services of a professionally trained realtor!