There has never been a better time to buy.

People are always asking me, “How’s the market?” They anticipate that my answer will be bad, but they’re assumption couldn’t be further than the truth. There is no such thing as a bad market. It’s either in an upward or downward trend. Just like the stock market, the real estate market is a bull or a bear. Does competing with five others on the purchase of a property in an upward market sound like a solid time to invest?

Now is the time to buy your first home or recreational property or upgrade your current property:

  • Mortgage rates are at a record low and the Bank of Canada is focusing on keeping them stable.
  • Statistical data supports long-term investment potential
  • Attractive prices in an adjusting market
  • Wide selection of waterfront locations available on larger and smaller lakes

Here are the numbers:

These stats are taking from the Muskoka, Haliburton Association of Realtors --- The total number of listings has hardly changed, however, the number of expired listings, has increased 24% over last year. Homes are not selling — not because of the lack of buyers, but because the buyers are educated and not willing to pay the amounts that have been demanded in the past. The lack of activity and the unwillingness for the sellers to reduce their prices has slowed the market by 35%.


In Huntsville the same holds true (see above) the total active listings are up from ’07 but are very close to ’08 levels. With residential sales down 19.4%, recreational sales down 50% and listings remaining fairly consistent, the difference we see from year to year is the number of expired listings. Why does a listing expire? Because it’s not priced at market value. Market Value: It’s the price a buyer is willing to pay for a property in a reasonable amount of time with no outside influences or duress. There are two factors for selling a home — time and price. If the price is high, it will take longer to sell. Eventually it will sell but instead of days on market, it’s years on market.

The average home price has fallen 1.6% in Huntsville since January, so when pricing a home for sale you need to price as accurate as possible to avoid chasing the market. What happens when sellers chase the market -- pricing slightly above market value hoping to make a couple extra dollars. Once they realize their property isn’t selling they reduce the price, but it’s already too late because the market has fallen further. If the property was priced at market value or slightly lower, sellers won’t receive low ball offers and may get  asking price or even competing offers. Market Value can only be estimated by using recent comparable sales, not what’s listed down the street or advice from someone that sold a year ago. Sellers of second properties should also take into account the carrying costs, taxes, insurance, maintenance, etc. when arriving at a listing price. Time is money and the longer a property remains on the market the more costs incurred.

Bracebridge is very comparable to Huntsville, (population/demographics) but hasn’t realized any decrease in average residential pricing to speak of, because their average home price was already 2.5% lower than ours in January, that’s most likely why they’ve had 7% more sales volume ytd. Average prices are now very comparable between Huntsville and Bracebridge.

Market classifications:


According to CMHC, with the SNL Range being the percentage of sold to new listings. In April ’08 the percentage was 27%, this year we have 18%. This is further proof that prices need to come down to get into a more balanced market.

Rental Market

Other expected events will be that rental vacancies will decrease and monthly rent will increase. This is evident with the new surge of multi-unit properties being built in Huntsville. This impacts the housing market with respect to first-time homebuyers. The average monthly rent in Huntsville was $745/mth in Oct. 07 and has increased to $774/mth in Oct. 08, approximately 3.75%. It’s assumed that rent for Oct. 09 will be $803/mth. So let’s see what that will get you in the resale housing market. I’m estimating with that type of rental payment you can afford is a home worth $140000. $140,000 mortgage over 25 years (and you can still do 30 as well for younger people) @ 4.25% - 5 year term is $755 per month principal & interest, axes on top of course (which is a subject for another day). The biggest stumbling block is the 5% down payment, here are some incentives that can help that first time home buyer: Land Transfer taxes paid to a maximum of $2,000. You can also borrow against your RRSPs to make a down payment. Click for more information on these programs.

Buyers’ advice:

Don’t buy for the quick flip, or don’t expect a great return in a year or two. The growth may take a bit of time. This graph shows average recreational property pricing. Notice with the recession in ’89 the market declined in ’90 and remain flat or marginal growth for quite a few years.

Sellers’ advice:

It’s a great time to upgrade! Let’s say the market is down 10%. For simplicity, if your home was worth $200,000, now it’s $180,000, but if you buy a home that was worth $400,000, it’s now worth $360,000. You may be losing $20,000 on the sale of your home but realizing a savings of $40,000 on your new home. The prices may continue to decline for the near future and any growth realized 2010 will be minimal, so there’s no reason to wait. Price your home at market value. Your home will sell quicker and closer to asking instead of you receiving low-ball offers (if any offers) and having to deal with the inconveniences of keeping your home presentable and interruption in day-to-day life.

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