With all the economic news available online now, it can get confusing out there. What does it all mean? One day things are looking up and another the Canadian dollar is down and the outlook is uncertain.
Firstly there is some truth to the adage “you can’t believe everything you read”. Working in Oakville Real Estate now for almost 12 years I’ve learned that is most definitely the case and here’s why:
Most of the statistics floating around in major reports on today’s Real Estate market are National. Canada is a big country and Ontario is a huge province. National statistics are a blend and the more localized you get your information relative to where you live the better.
Don’t get me wrong, there is value in the overall picture, especially when you’re looking at the influence the economy has on the Real Estate market and vice versa. Many businesses, industries and economic sectors are national and international. If they are affected, it can certainly effect the local markets.
The short of the article is that the overall moderate decline nationally is a short term trend that they fully expect to see change in the last half of 2009.
“The slight decline in July’s housing starts is mostly attributable to the volatile multiple starts segment,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “Although July registered a decline, housing starts are expected to improve throughout 2009.”
Looking locally though, Ontario was amongst the biggest losers with housing starts falling 15%.
In June the tone was totally different:
The tone was positive and the trend was expected to continue throughout 2009. Maybe July is a blip, maybe not. The reality in Oakville is that there is limited new construction of homes right now and many builders and condominium developments still have inventory on hand. Builders are being cautious right now, take heed.
If you believe everything you read, the Real Estate market is HOT, it’s sizzling and everyone is cheering all the way to the bank. Or are they? Why am I not jumping on the bandwagon? Oakville Real Estate is selling and average and median values are close or at par to the numbers this time last year.
I would and have been cautioning my clients to look before you leap onto the bandwagon. There are a number of factors that could be influencing the recent activity. After the “crash” and mortgage meltdown in the U.S. started last fall, there was a sudden drop off in market activity between October 2008 through February 2009. Real Estate sales and new listings were almost nonexistent. Many homeowners pulled their houses off the market all together. Once the spring market hit and consumer confidence was up from last winter’s freeze, the number of new listings to sales was and still is low.
Whenever you have fewer available properties this creates greater competition amongst the quality homes or condos that are available. This is why we have been seeing more bidding wars, properties selling higher than list price and the increase in values and selling prices. The stats out now are indicating that home values are up to where they were this time last year. This must mean everything is back to normal right?
What it means is that all the activity between $400,000 and $650,000 has caused greater competition and now there is next to no available 4 bedroom homes in Oakville at the lower end of that scale. The median selling price for detached homes in Oakville for July 2009 was $549,000 up from June’s median price of $530,000.
While strong home sales are a positive economic indicator, factors like job losses and corporate and wage freezes affect buying power. The uncertain future means it’s more important than ever to work with a Realtor that is working in your best interests. I work to build relationships, not take advantage of the market. Your Realtor should do their homework and help you to buy what you can afford now and down the road.
Tell me your thoughts on Oakville Real Estate and the current economic state - are we past the worst? Or is this a micro bubble?Ryan Chelak, Broker Town-City Realty Limited, Brokerage Phone: 905.507.0040 ext.22 Website: Oakville Real Estate Homes & Condos Blog: Oakville & Mississauga Homes & Condos Twitter: @OakvilleRealtor