In what has been anything but a normal year weather-wise, April MLS® sales actually held their own, falling just shy of last year’s total.
Sale numbers are exactly at the 10-year average performance level for this month.
Affordability issues for first-time buyers, such as the lowering of the Canada Mortgage and Housing Corporation (CMHC) mortgage insurance amortization period from 30 to 25 years, has had a broader impact on other aspects of the housing market. As a result, single-family homes continue to underachieve compared to more affordable property types such as condominiums and single-attached properties.
Since single-family homes, or residential-detached homes, units make up the majority of sales in the Winnipeg MLS® market region, converting less than 50 per cent of the housing inventory made it difficult to see a stronger overall April MLS® sales result.
Year-to-date sales are down four per cent from the 10-year average of 3,548 sales. The best year ever for total MLS® sales was 2007, which also holds the highest sales number for the first four months at 3,740 units.
April MLS® unit sales were down less than two per cent (1,227 in April 2013 vs. 1,245), while dollar volume was up two per cent ($333.1 million vs. $325.9 million last year) in comparison to the same month last year.
Year-to-date MLS® sales essentially were even (3,391 vs. 3,401 units), while dollar volume rose three per cent ($904.0 million this year vs. $876.3 million) in comparison to the same period last year.
The MLS® inventory remains healthy with 11 per cent more to choose from at this time than last year.
“May will now be a true test of how our MLS® market behaves this year as this is the month where sales usually reach the highest monthly total of the year and push dollar volume up another notch,” said David Powell, president of WinnipegREALTORS®. “We are in great shape with supply, so demand will be the determining factor.”
Powell said home buyers should be contacting their REALTOR® to find out just what is available on the current market.
Some consumers, who have been unsuccessful in the past securing the home they desire, may be pleasantly surprised this year as there were 3,860 active MLS® listings available at the end of April, he added.
The most active residential-detached price range was from $250,000 to $299,999 with 20% of total sales. The immediate price ranges above and below this range were next at 17 per cent each.
There were only five sales from $750,000 to $1 million, with no sales at or above $1 million. The lowest sale price was $42,500.
Condominium sales were most active in the $150,000 to $199,999 price range at 29 per cent of total sales. A strong second place result was the $200,000 to $249,999 price range at 22 per cent.
The average time on the market for residential-detached property sales in April was 26 days, two days quicker than last month and one day off pace set in April 2013.
The average time on the market for condominium sales was 38 days, six days slower than last month and nine days behind the turnover rate in April 2013.
Meanwhile, CMHC predicts that the amount of mortgages it insures will decline by 2.2 per cent in 2014 to $545 billion from 2013’s $557 billion. In 2011, the government agency insured mortgages worth $567 billion.
CMHC provides the majority of mortgage insurance to Canadian home buyers who have less than a 20-per-cent down payment when borrowing from a federally-regulated banking institution. The agency said more restriction will be added to the housing market to prevent it from becoming overheated, and to lessen its exposure in the market.
Last month, CMHC announced it will no longer be providing mortgage insurance for anyone buying a second home and self-employed borrowers without third-party income validation.
Tightening of mortgage rules have been occurring over the last few years. In July, 2013, former Finance Minister Jim Flaherty announced the lowering of the amortization period for CMHC-insured mortgages to 25 years, which had a decelerating effect on the housing market.