132
|
WINTER
2017
MARKET
watch
What a ride!
Dynamic, exciting, and frustratingare someof the
words I have heardmy team use todescribe the real estatemarket in
2016. Certainly,2016wasa really interestingyear inSouthernGeor-
gianBay real estate.
Themarket, for the first timeever, topped$1,000,000,000 (yes…
billion) in total sales.Consideringwewere seeingvolumesaroundhalf
of that a fewyearsago, you caneasily seewhypeoplewoulduse the
word dynamic to describe what was going on. This is especially
poignant if youarea regular reader of this pieceandyouhavenoted
that wewere saying that theonly hard limit togrowth last year was a
lackof inventory. That lackof inventory fueled theSeller’smarket and
perhaps skews thedata somewhat as toexactlywhat theappetitesare
for realestate inourmarket. Weremore inventoryavailable,whatmight
thenumbershave looked like?
Interestingly, theeffect hasbeen felt inareas inourmarket that have
never really seen inventory issues. Sure,back in the Intrawestdays,we
saw this kindof thing inCollingwoodandBlueMountains.Wasaga
Beachhasbeenexperiencing short inventory for the last fewyears. But
markets likeMeaford, just 11kilometersdown thebay fromThornbury
seemed tohavebeenstuck inneutral.Nomore! Aska localREALTOR
®
what inventory is like in andaroundMeaford right nowand theywill
say: “Inventory? What inventory?”
My reaction: “Finally”. I havebeen saying for years that it makes
nosense thatyoucanhave2 lovelysmall towns11kilometers fromeach
other,bothwithbeautifuland traditionaldowntowns, trails, stunninghar-
bours, public spaces, andexposure toamenitieswhereonehasanav-
erage market value fully twice that of another. It should be noted
however that likeMaclean’sMagazine’s continuouspredictionsof the
downturn in theCanadian real estatemarket, if I say the same thing for
longenough…eventually, Iwill be right.
Multipleofferswere thenewnormal inourmarket. Well-pricedand
wellmarketed real estate receiving2,3,4up to7ormoreoffers inone
sitting. Thismaybe totallymundane inotherprimarymarkets inSouthern
Ontario, but it is thenewnorm for us.
Advertising,bothprintandelectronicarescreaming that ithasnever
beenabetter time to list yourhome. Very true. It hasbeenagreat time
tobea seller. However, theproblem is that the samemarket conditions
that assureyouof topdollar for thehomeyouare selling, aregoing to
make thepurchaseof your newhomeproportionallymoreexpensive.
So, if itwasagreat time tobeaSeller in2016, itmeans,bydefinition
that it was a tougher time tobeaBuyer. Andby extension, aBuyer’s
REALTOR
®
. That is probably themost constant complaint inmyoffice.
“I haveaBuyerwhohas lost out 4 times inmultipleoffersand theyare
starting toget really frustrated.” Iget it. Nothing ismore frustrating than
whenyou fall in lovewithapropertyand thenhaveyourdreamsdashed
by someonewhowaswilling topay just a littlebitmore, orwhodidn’t
needa financingcondition, ordidnot have to sell ahouse first.
You imagineyourselfbarbequing in theyardofyournewhome,watch-
ing thekidsget ready forschool in themudroom, readingbedtimestories
in thekid’s room,preparingmeals foryour friends in thegourmet kitchen.
Only to findout it isnot your yard, yourmudroom, yourbedroom, your
kitchen. Worse…it is someoneelse’s!
Failedbuyers haveevery right to feel frustrated. Their REALTORS
®
feel it.Weknowour job is togetyou into thathome.We take it seriously.
But, tobe honest, sometimes last year, failedBuyers got in their own
way. Secondguessinga strategy, ignoringadvice, not doingall the
work they needed toquantify their financing. That is frustrating for all
parties.Sometimes though…it is justbad luck.And there isone thing that
I know for sure: There isnooneperfect house.New inventorycomes to
market all the time. Even inmarketswhere inventory is tight. Therewill
beanother chanceat the “perfect”house. Theexperienceyougain in
failedattemptswillmakeyoumoreprepared for thenextone. Trustme.
All segments of themarket saw the impact of improveddemand in
2016. In-town detached, condo, waterfront, luxury, recreational, va-
cant land. Late in theyear,wemarveled inourweeklyofficemeetings
at the listingpricesof new inventory incategoriesasdisparateasorigi-
nal Cranberry condos to vacant land inGreyHighlands. Listingprices
that would have been considered unlikely togarner interest from the
public2yearsago,werecausingbiddingwarsat theendof2016.
Newdevelopment is catching up however. All you need todo is
drivedown thehighwayand see thebuildinghappeningonpreviously
dormant sites.Product tobebuilt thatwas languishing2yearsago,was
movingwell at the end of 2016. Developments such as Trailwoods,
Shipyards, LoraBay,andsomanyothersaredoingvolumesofbusiness
that theyhadn’texperienced inyears.Bigdevelopmentparcelssuchas
the former Terrasan development including the oldmotel and Easter
Seals Camp sold late in the year topeople obviously feeling that the
time is right again toexploremaster communities in thisgreat area.
And,ofcourse, luxury. Inventory isatanall time low.Anecdotally,we
see that thebiggest competition in luxury resale is new-build. If people
can’t findwhat theywant tobuyon themarketcurrently, theyarecreating
it bybuyingaparcel andhiringoneof themany talented local builders
tomake their dreams come true. Someof mybuilder friends arebusier
than theyhaveeverbeen,projectingbusinessout into2018andbeyond.
Interestingly, theproliferationof newdevelopments, andnewbuilds
maybehelping tounderstate theactual growth in themarket. Thenum-
bersyouseeopposite,and thenumberswe relyonwhen interpreting the
marketarederived, typically, fromMLS
®
data. Newdevelopmentsand
newbuildsdonotusuallyshowuponMLS
®
andassucharenotcounted
inour growth figures. Therefore, thegrowth in the real estatemarket in
2016was likelyquiteabitmore significant thanweare stating.
DesmondvonTeichman
Broker of Record, Owner, Royal LePage
LocationsNorthRealty, Brokerage
By
escarpment real estate
