Real Estate Sales Down In May

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Real Estate Sales Down In May

Residential property sales recorded through the MLS System of the Barrie District Association of REALTORS Inc. were down from year-ago levels for the first time in a year in May 2010.

The average price for homes sold via the Association's MLS System in the first five months of the year was $278,708. This is up eight per cent from the year-to-date average price last May, and represents the highest average price for this period on record.

The Barrie & District Association of REALTORS cautions that over a period of time, the use of average price information can be useful in establishing trends, but it does not indicate actual prices in widely divergent areas or account for price differentials, between geographical areas.
"Demand fell back in May, following very strong sales in March and April," said Elizabeth Wilson, President of the Barrie and District Association of REALTORS. "Softer sales combined with gains in new supply are resulting in a more balanced market, which will likely have a cooling effect on prices heading into the second half of the year."
The total dollar value of all home sales amounted to $124.8 million in May 2010, 10 per cent below year-ago levels.
Total sales activity in the Barrie region numbered 451 units in May, down 12 per cent on a year-over-year basis. The total value of all properties sold in May 2010 was $127.7 million, a decrease of 10 per cent from May 2009.
New listings were up for a fourth consecutive month in May, although the increase was much smaller than in the previous three months. New residential listings numbered 853 units in May 2010, up five per cent year-over-year. The number of active residential listings on the Association's MLS System edged up one per cent on a year-over-year basis to 2,110 units at the end of May 2010. This is the first increase in 13 months.

There were 4.8 months of inventory at the end of May 2010, up from 4.1 months one year earlier. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

The Barrie and District Association of REALTORS Inc. covers a geographical area that includes the City of Barrie and part or all of the surrounding townships, including Springwater, Oro-Medonte, Innisfil, Essa, Bradford-West Gwillimbury and Clearview. The Association provides continuing education, Multiple Listing Service (MLS), statistical information, and many other services to its members.

Our view on this is the following: There are a number of circumstances coming together that are likely to slow down the market further in the coming months. 1. HST will / is kicking in about now 2. Interest rates have gone up officially, but more importantly the 5 year rate has risen from approx 3.75% 6 months ago to around 4.60 today. 3. Pre approvals from prospective Buyers either have run out or are about to run out. This means prospective Buyers now have to re-qualify at a higher mortgage rate. 4. In about 3 weeks the kids will be out from school and the seasonal hike to the cottage will be upon us. 5. Financial markets are again under pressure from a number of differing factors and this time it's more about country risk than corporate risk. This will cause uncertainty and create a situation where Buyers are more cautious and less likely to take any risks. 6. The govt. has changed the rules for investors making it much more difficult for investors to invest in Real Estate. The last downturn was held up in part by investors picking away at homes at the lower end of the market.
Bottom line, prepare for a lack lustre summer / fall market and keep your fingers crossed that this slow down doesn't turn into something a little more sinister.
If you would like to discuss the Barrie Real Estate market or our thoughts on where real estate prices may be heading don;t hesitate to give us a call.

Regards,
Ian Hocking
Hocking Homes Team at Royal LePage First contact Realty, Brokerage.
Tel: 705 252 7939

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