Real Estate Market – Good News/Bad News

SUBURBAN SALES DOWN, URBAN SALES UP

Halifax Real Estate Market Update

First quarter single family sales stats are in from the Nova Scotia Association of REALTORS and the news is well, ho hum. Many will point to the bad weather – particularly in March – and tell us that the market will bloom as the spring flowers pop up and show their colours. I hope they’re correct, but I do have concerns. First, let’s take a look at the year to date numbers for those single family sales.

First quarter sales this year in the Halifax region totaled 889, down from 890 in Q1 of 2014. As usual, prices were up modestly by 1.7%. So, according to the MLS System, there has been almost no change in the real estate market compared to the same period last year.

However, when we drill down a bit we see an emerging pattern and it is a trend I’ve been predicting for some time now. Urban sales are on the rise – 17% on The Peninsula, for example – and suburban sales appear to be in decline. Here are a couple of examples: Bedford – down 6.5%, Hammonds Plains/Kingswood/Haliburton Hills – minus 18.8% and the Waverly/Fall River/Oakfield area is down a whopping 20%. Prices have not yet taken a hit in suburban areas, but a price decline would inevitably follow if this sales trend continues for the rest of the year. Sackville sales are down 16.5% and prices are down by 6.3%. I am not as concerned about Sackville because most of the homes are in a more affordable range and most are older and consequently, many of the owners are older and have more equity, so if they are motivated to sell, they have room to negotiate or they are in a position to wait it out until the market turns.

I think the biggest concern is in the high end, new construction markets in places like Fall River and Hammonds Plains. Currently on MLS there are 248 homes for sale in Hammonds Plains/Kingswood and about 100 of those are new construction. In the Fall River area there are 209 active listings and 85 of those are new construction. Granted, not all of the properties listed as new construction have actually been built yet. As you click through the listings you will see many with renderings rather than actual photos, meaning they are under construction or that the builder has just optioned the lot and is waiting for a buyer to come along before starting to build.