Are house sellers too stubborn?
Are house sellers too stubborn?
MONTREAL - Consider it a New Year’s resolution for Montrealers selling their homes at a time when the words “moderation” and “reasonable” are in vogue.
With the housing market undergoing at least a mild correction in 2013, sellers will need to recognize they can no longer count on low interest rates, or a fierce bidding war to get the full listing price for their homes, the Quebec director of Royal LePage Real Estate Services said Tuesday.
As the housing market softened toward the end of 2012, homeowners have opted to hold instead of lowering their prices, a factor that contributed to weaker sales at the time, director Dominic St-Pierre said.
“The sellers are still really stubborn with their prices,” he said. “They are just not selling if they don’t get the price that they want.
“In the first part of 2013, we expect the sellers will start adapting.”
After years of record-breaking levels of construction, Montreal condo buyers are expected to have an abundance of choices this year, with inventory soaring 30 per cent, on an annual basis, at the end of 2012.
Even in Toronto, where the highrise market has provoked widespread fears of a housing bubble, the condo inventory at year’s end was only 7.4 per cent higher compared with the same period a year earlier.
In this context, Royal LePage’s prediction of a 3.8-per-cent rise in average Montreal home prices this year might be “aggressive,” but St-Pierre said strong Quebec employment numbers have helped the market fare better than many expected.
According to the Royal LePage House Price Survey and Market Survey Forecast published Tuesday, Montreal and Regina would have the highest rise in average prices in 2013, ahead of the once-sizzling Toronto and Vancouver markets. Nationally, home prices are expected to remain virtually flat this year, Royal LePage predicted, even as the country’s top bankers said Tuesday they expect the real estate market, including condominiums, will make a soft landing in 2013.
But already, some analysts, disagreed with the likelihood of prices rising in Montreal this year, given that the entire market — including single family homes — is shifting toward one that favours buyers.
National Bank Analyst Marc Pinsonneault said he is expecting about a five-per-cent drop in Montreal prices this year as sellers are faced with the choice of holding their properties or lowering their expectations.
Several real estate brokers say sellers now recognize they’ll have to lower prices that are no longer realistic.
“Sellers are asking for prices based on a five-per-cent to seven-per-cent increase in value per annum over the past two to three years,” observed Royal Lepage broker Ray Singh.
While sellers may not be forced to take the extreme step of auctioning off their homes, as did the owner of a high profile Hudson mansion in 2011, Singh and other Montreal real estate brokers are now seeing examples of houses being sold for $200,000, or even $500,000 below the original listing price.
One suburban Montreal home listed for $2.4 million boasted a “fabulous solarium-style outdoor living room,” O’Hara style staircase. But five months later, the Dollard des Ormeaux home sold for $1.85 million, or about 25 per cent below asking price.
In another recent case, a four-bedroom Hampstead home initially listed for $1,095,000 ended up selling for $810,000.
The Greater Montreal Real Estate Board couldn’t say whether the gap between the asking and sales prices has widened over the last quarters. That’s because the board only tracks the final — and not the initial — asking price for a home.
Board data for the last three months of 2012 won’t be available until a conference held on Jan. 22.