I am pleased to say that once again, real estate sales were good to us in 2007. As I look back on the 2007 MLS statistics, 2007 was the best year on record for the K-W Board and the second best year on record for the Cambridge Board. I guess it can’t get much better than that. The strange thing is that, it came in like a lion, and out like a lamb. There were great numbers at the beginning of the year, but November and December were very slow. But, overall, we must be very happy.
Here are couple personal observations. In December, the average sale price in Toronto went over $400,000 for the first time. Our average sale price is still under $ 250,000. For the past 15 to 25 years the market has maintained a gap of about $ 100,000 in these average sale price numbers. Now, that number has spread to $ 150,000. My first thought is that our prices are a little undervalued. Average sale prices in Saskatchewan are now higher than ours. The average sale price in North Vancouver and West Vancouver is over a million dollars. Does that make sense? You be the judge. We are continually rated as one of the top five places to live in Canada in all categories, but our real estate prices move upward at a slow, controlled pace.
When talking real estate, the favourite topic is the U.S sub-prime dilemma. In some major American markets, there are horrific stories about foreclosures and price declines. Someone told me recently, that with price declines and the US dollar, you can now buy a condo in Florida for less than half the price you could five years ago. In some areas, like Florida, it is definitely not a fun time to be in our business. As Canadians, we “think” that we always follow the American lead. But, given the background, I would suggest that we are about to turn the corner and be able to say that we dodged the bullet. Political differences, our mortgage rules, our economy, and, let’s face it... a bit of luck, have left us in a great situation.
Regarding our local market, it is interesting to note the issue of new home sales. CMHC (Canada Mortgage and Housing) numbers show single family housing starts as marginally lower this year than 2006. But, when you analyze those numbers, it becomes interesting. In Cambridge, there were less than 60 new homes built in 2007. Development restrictions, and government delays, caused a city of 120,000 people to build almost no houses. How this affects the market in 2008, is anybody’s guess. Kitchener-Waterloo numbers were slightly lower than normal but not as remarkable. The other issue is, that lots have become so expensive for builders that it has become very difficult for builders to compete price-wise with re-sale homes. The gap is definitely wider than normal. This should prove to be an interesting observation in 2008. We already know that there will be many more lots available and new homes built. Will the pricing affect the resale market? We’ll find out.
What does 2008 hold in store? Nobody knows for sure, but all indications are for another good year. Unemployment rates are good, and, the economy is good. The increase in the Canadian dollar does not appear to have hugely affected the Canadian economy as feared. It looks like we will have another good year in real estate in Waterloo Region.
Please find below some of the barometer statistics from our two real estate boards. The key numbers are: an average sale price around $245,000 after a 5.5 % increase from 2006.
Let’s hope we can report similar numbers a year from now. Best wishes for a great 2008.
| K-W 2007 | K-W 2006 | Cambridge 2007 | Cambridge 2006 |
| Avg. Sale Price | $ 248,879 | $235,629 | $242,753 | $230,371 |
| Percentage Change | +5.6% | | +5.4% | |
| Properties Sold | 6808 | 6014 | 2991 | 2813 |
| New Listings/Sales Ratio | 70.6% | 62.4% | 67.5% | 58.6% |
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