Montreal single family home sales take a big hit in February Read more: http://www.montrealgazette.com/business/Montreal+single+family+home+sales+take+February/8081122/story.html#ixzz2NNIXJuDO
Montreal single family home sales take a big hit in February
It took an average of 108 days last month to sell a condo, compared to 93 days in February 2012. By comparison, a single family home in Montreal sold in 76 days last month, on average, compared to 67 days in February 2012.
Photograph by: John Mahoney , THE GAZETTE
MONTREAL — Montreal Island sales of single family homes plunged by a third in February, the largest drop since July 2010, fuelling continuing talk of a broader slowdown in the city’s resale market beyond the generally softening condo sector.
While median prices rose in all housing categories, city resales dropped 28 per cent on an annual basis, as the weaker numbers spread beyond areas typically attractive to first-time buyers, whose presence dropped off following the introduction of tougher new federal rules last year on insured mortgages.
The February slowdown hit all property categories, price brackets and regions in Greater Montreal, where sales dropped 22 per cent on an annual basis, the Greater Montreal Real Estate Board said Monday.
Despite fears of overbuilding in the Greater Montreal condo market, following record housing starts in 2010 and 2011, February sales on the island were actually softer for single family homes than for condos, for the first time in seven months. The sting in Montreal’s February numbers was felt in other large markets like Toronto, where sales dropped 15 per cent last month on an annual basis.
Paul Cardinal, a director of market analysis for the board, said he wasn’t worried about the long-term vitality of Montreal’s single family home sector, and cautioned against interpreting February’s weaker numbers as a trend.
But some observers interviewed by The Gazette suggest that a slowdown in sales of the lower-priced properties attractive for first-time buyers could be hitting the broader market, as owners shopping for a new house find it more difficult to sell their existing homes.
Montreal mortgage broker Louis Glazer described two cases where his clients have accepted offers on more expensive properties, but cannot complete their purchases because they can’t sell their current homes.
“They’re just sitting there,” he said of the existing properties. “The (real estate) brokers are going crazy.”
Single family homes have largely escaped analysts’ concerns over weakening prices and overbuilding that have targeted certain parts of Montreal’s condo market. Limited construction of single family homes — condos now account for 60 per cent of new home building in Greater Montreal — means there is no risk of an oversupply of houses, Cardinal noted.
“It’s a question of supply,” Cardinal explained. “In the single family home sector, there has been little buildup in inventory.”
Condos also take far longer to sell, on average, than single family homes. According to board data, it took an average of 108 days last month to sell a condo, compared to 93 days in February 2012.
By comparison, a single family home in Montreal sold in 76 days last month, on average, compared to 67 days in February 2012.
Mortgage specialist Brad Weigensberg said perceived fears of a housing bubble have also contributed to weaker sales, even though Montreal home prices have actually continued to rise, year over year. He described one client who has yet to buy a house but keeps renewing his pre-approved mortgage every six months since first obtaining it in April 2010.
“We hear ‘I want to avoid the bubble,’ ” Weigensberg said. “I’ve had clients who’ve been telling me for three years that the prices are going to go down.”
Read more: http://www.montrealgazette.com/business/Montreal+single+family+home+sales+take+February/8081122/story.html#ixzz2NNIe7cgL