“Cool” seems to be the operative word not only for our weather of late but certainly for the volume of sales this January. Mainly led by a sluggishness in the detached market but also in other types of residential properties. As I alluded to last month, the lack of inventory is one problem but so is a somewhat unrealistic expectation on the part of wannabe sellers. Couple that with some wannabe buyers’ belief that tomorrow’s prices will likely be lower and we see the reason for fewer ratified contracts.
We are experiencing one of the first times in many years that the Province’s Tax Assessment values are, in numerous cases, exceeding actual market values. Condo apartments and some in the attached category (townhouses and 1/2 duplexes) are evidencing sharply lower sales inventories. For serious sellers in the $350 – $850k range, activity is strongest, owing to relatively high buyer demand in this lower price range. An interesting fact is that the Provincial Government’s dramatic action in July last year has led to little evidence of improved affordability. Especially so for 1st and 2nd time buyers. For our offspring it is cold comfort that fewer $2M and above detached homes are selling. The illusion that average sales prices are dropping because fewer “expensive” homes are selling is by no means proof of any success on the affordability front.