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Slow And Steady (Posted On: Monday, April 28, 2014)

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On The Bay Magazine

That's how local realtors describe the resale home market in Southern Georgian Bay as it continues to slowly edge towards a balanced market, fuelled by demand for our four-season recreational lifestyle and the number of empty nesters, retirees and even young families wanting to buy a little piece of Paradise.

While the Toronto real estate market continues its breakneck pace, our local market is seeing more slow and steady growth. The reason? For most, purchasing a home here is discretionary - those looking for a second home, and even those looking to retire to Southern Georgian Bay, don't have to buy and can afford to take a wait-and-see approach, or hold out for just the right home at just the right price.

However, local realtors are seeing an increasing trend towards young families moving to the area, thanks to a new take on the age-old 'three Ls' of real estate - lifestyle, lifestyle, lifestyle.

"Since a large part of our market is fueled by discretionary purchasing, I would say that the better economic outlook in general is having a positive impact on the local real estate market," said Desmond von Teichman, broker of record for Royal LePage Locations North. "Many people don't HAVE to buy up here, they WANT to buy up here. Before they make a big decision like that, they look at external factors such as their stock holdings and RRSPs."

Andres Paara, also of Royal LePage Locations North, agreed that the slow but continued improvement in both the Canadian and U.S. economies is gradually giving potential buyers a greater level of comfort to act on their plan to buy a recreational, semi-retirement or retirement property, or make their next move to their next home.

"With the market slowly headed to a balanced market and with fewer properties available than in previous years, the discretionary and slow-to-take-action buyers may be more motivated to pull the trigger on a purchase," explained Paara.

"We are seeing more young families buying recreational properties again, as well as the about-to-be retired and retired moving from the GTA to our region to enjoy the active four-season lifestyle our region provides. Our region continues to be a steady slow, but continued, growth region. Slow and steady is, in my opinion, better that sharp spikes and dips."

The Numbers
Home sales in Southern Georgian Bay hit a new record in 2013.

"Resale housing demand was strong overall in 2013, with all sales recorded via the association's MLS system reaching their highest annual level in six years," said Wayne Cornfield, president of the Southern Georgian Bay Association of Realtors. "Residential sales recorded through the MLS system came in at above average levels in 2013."

Overall, 2,683 homes were sold in 2013, up 2.8 per cent from 2012 and above both the five- and 10-year averages. Monthly sales outperformed those of 2012 for nine out of the 12 months of 2013 and came in close behind 2012 number in the other three months.

As this issue of On The Bay went to press, the first quarter report for 2014 was not yet available, but the year was off to a disappointing start due mainly to extreme weather that kept both visitors and potential buyers away in January and February.

"Travel conditions were often hazardous and many properties remained snowbound, affecting access and the ability of potential buyers to fully appreciate the outdoor components of the landscape of properties, to say nothing of the willingness of property hunters to venture out into the winter storms to view listings and keep their scheduled appointments," noted Barb Thompson of Chestnut Park Realty.

"It is difficult to pinpoint and quantify the impact of any one factor on market trends, but property sales did continue to lag behind last year's pace, which was compounded in part by a lower inventory of available properties. February sales were 3 per cent behind last year, and year-to-date figures remain 14 per cent behind last year's pace. Despite the 'polar vortex', sellers were able to bring out 428 new properties on the market, which was 6 per cent more than last year. That was not enough to make up for January's shortfall in new supply."

East vs. West

While our area lags behind the still-booming Toronto market, the good news is that we are significantly outperforming neighbouring towns to the east of the Georgian Triangle.

In 2013, two real estate boards merged to form the Southern Georgian Bay Association of Realtors (SGBAR), which now serves a huge region from Meaford to Midland. The new association represents two very distinct markets - the Western District and the Eastern District. The Western District includes Wasaga Beach, Collingwood, Clearview Township, The Blue Mountains, Municipality of Meaford and Grey Highlands, while the Eastern District encompasses Midland, Penetanguishene, Elmvale, Port McNicoll, Victoria Harbour, Coldwater, Port Severn, Honey Harbour and Tiny, Tay, Springwater, Oro-Medonte, Severn and Georgian Bay Townships.

"The big story in 2013 was the strength of demand in the Western District along the south shore of Georgian Bay, where sales topped the 1,800 mark for the first time ever," said the SGBAR'S Cornfield. "The Western District saw 1,845 homes sold in 2013 - a new annual record, at eight per cent above 2012 levels."

In contrast, annual home sales in the Eastern District totaled only 838 units, down six per cent from 2012. "That is a little below average from the standpoint of recent history, which has seen activity bounce around roughly in the 800 to 900 range since 2008."

Pulling out the six key areas of the Georgian Triangle (Collingwood, Clearview, Blue Mountains, Wasaga Beach, Meaford and Grey Highlands), residential sales were up 3.87 per cent in 2013 over 2012, suggesting some stability in the marketplace, noted Marg Scheben-Edey, broker with Remax Four Seasons Realty in Collingwood.

"Within those areas, almost 59 per cent of all the residential sales took place in Collingwood and Meaford, which suggests demand is still strongest in the full-time, local resident market."

But while the Western District is generally a stronger market, it also has the capacity to be more affected by weather conditions, and that is exactly what happened in January and February this year.

"Significantly reduced sales activity during the first two months of 2014 in the Western District clearly illustrates the difference in market dynamics between east and west due to the impacts the winter recreational market has on real estate in this area," said Cornfield. "While we have experienced one of the snowiest and longest ski and snowboard seasons in recent years, adverse weather conditions, an abundance of snow, and frequent road closures, especially on weekends, have adversely impacted property showing activity and subsequent sales."

On the positive side, if weather was the culprit for slow winter sales, the arrival of spring could start to see a turnaround. "As spring approaches, we anticipate robust market conditions to prevail, thus helping to make up some of the shortfall in sales activity felt through January and February," said Cornfield.

Read More of this article in the latest edition of On The Bay Magazine by clicking here.


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