TweetThe warmer temperatures experienced throughout the Georgian Triangle this winter appear to reflect the heat being generated by the real estate market in the area. According to the statistics released by the Georgian Triangle Association of REALTORS® (“GTAR”) for the month of January, sales are up by a whopping 37% with 104 properties changing hands in the first month of the year as compared to only 76 recorded in January of last year. This marks the fifth month in a row in which monthly sales have bested last year’s performance for the same month.
Total dollar volume figures were even more impressive than unit sales, registering a 43% gain over last year at this time, highlighting the ongoing strength of the higher end of the Georgian Triangle real estate market. In particular, four sales were recorded in the $1-1.5 million range compared to only one last year at this time. Market strength, however, was not limited to higher priced properties. In fact, sales surged across a broad range of price categories with January’s performance either matching or exceeding last year’s sales in all price categories below the $600,000 range.
Despite the fact that 4% more new listings came onto the market in January than last year at this time (509 versus 489), the swift pace of sales contributed to a shrinking inventory with active listings slipping 3% year over year to 1829 compared to 1884 in January 2011.
The increase in demand for properties in the Georgian Triangle was further reflected in the jump in average sale residential sale price for January which came in at $358,643. This marks a 25.6% hike over last year at this time when the average residential sale price came in at only $285,447. Caution, however, should be exercised in ascribing too much weight to these figures as they represent a relatively small sampling of sales over only one month.A more meaningful and likely representative figure in broader price trends is likely found in GTAR’s figures related to single family residential activity. In that context year over year monthly figures reflect a similar price bump, however, average sales price figures measured over the last twelve months indicate a more sustainable 4% price increase with the average sales price coming in at $327,299 compared to $315,108 over the same period the previous year.
A cross section of market commentators attribute the ongoing vitality of the real estate market in large part to the persistence of historically low borrowing costs, making property purchases comparatively accessible to a growing number of potential buyers. Most financial sector and economic commentators indicate that interest rates are unlikely to move significantly if at all over the next year and accordingly borrowing costs should continue to remain extremely affordable within the current economic climate. A few potential qualifiers, however, are worth monitoring. Government and financial sector regulators have expressed increasing concern over growth in average household debt to income ratios, and may consider measures to further tighten lending rules. In addition, the American economy is showing welcome signs of life with positive employment figures and related indicia of real economic recovery finally taking root. In that event, and if this trend continues, it is less certain that interest rates will remain unchanged. Finally, the other element of instability in this equation is the ongoing turmoil on the international stage, including the stubborn European financial crisis. All of these factors make it more complicated to predict the performance of the real estate market with any certainty moving forward. That said, the Georgian Triangle remains well positioned in this climate to continue to attract buyers to the area with its enviable position of comparative affordability and market stability, to say nothing of its natural attributes and wide range of local services and attractions.
By: Richard Stewart, Vice-President and Legal Counsel, Chestnut Park Real Estate Ltd.
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