Mike Murphy

Existing home sales in Halifax will record little change in 2010 before declining slightly in 2011. MLS® sales are expected to increase by less than one per cent this year before declining about two per cent in 2011. Average home prices will continue to rise, reaching $251,000 in 2010 and increasing to $258,000 in 2011. A rebound in existing home sales in the first four months of 2010 was preceded by two consecutive years of declining sales. Economic weakness in the latter part of 2008 and 2009 resulted in reduced sales activity in the existing homes market. MLS® sales declined nearly 11 per cent in 2008 and another 5.5 per cent in 2009. However, sales in the fourth quarter of 2009 were quite strong, up 32 per cent from the fourth quarter of 2008, a trend that continued into the early part of 2010. Potential home buyers took advantage of favorable buying conditions in the latter part of 2009 and into the beginning of 2010. As a result, existing home sales increased for seven consecutive months, from October 2009 to April of 2010. However, little growth in employment and modest real wage growth in 2010 resulted in declining levels of existing home sales in the April to August period of the year. Existing home sales will remain well below the record levels set in 2007 when sales reached nearly 7,000. Sales are expected to be 5,900 in 2010 and 5,800 in 2011. Strong demand in the first four months of the year coupled with fewer new listings exerted upward pressure on prices. The average price of an existing home is expected to increase approximately 5.8 per cent in 2010. In 2011, weaker demand will result in more modest price growth than what has been recorded in recent years. Expect price growth of approximately 2.8 per cent in 2011. The number of homes that were newly listed for sale as of August 2010 was four per cent lower than August of last year. Active listings in the HRM are now six per cent lower than last year in spite of sales activity being similar to a year ago. Expect new listings to remain essentially unchanged for the remainder of 2010. Recent market forces have combined to create an existing homes market which continues to trend towards balanced conditions. The combination of slower employment and real wage growth will result in relatively subdued demand for existing homes.