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September Sales: Volume drops off

Sales volume dropped to its lowest level for a September in the past dozen years, an indication of hesitation created by uncertainty in the future of the Canadian economy as well as the upcoming federal election.

While indications are that the local economy is not going to suffer the tailspin which is taking place south of the border, buyers are worried that the market may have reached a peak and they are worried about future prices, as indicated in our graph a month ago. Though this month’s statitistics indicate a slight upturn, the overall trend is still toward lower prices. The monthly figure climbed back to about $1,180,000; if the third quarter of 2008 is taken as a three-month average, the figure is $1,191,066 and this is 6 percent lower than the second-quarter figure. In more general terms, the overall average price for 2008 is close to $1,248,000 which is 2.7 percent higher than last year, but that is the slowest climb in year-to-year numbers since 1995-96, when the average price actually dropped from one year to the next.

With a paltry five single-family homes (so far) reported in September, prices ranged from $769,000 to $1,530,000, and in fact three of the five sales were for less than their municipal evaluation, though the other two had markups of 33 and 52 percent, pulling the overall average above parity.

Two apartment building condominiums sold in September and brought the third-quarter total up to seven. They included one at $300,000 and another at $1,525,000, but the other five ranged in price between $430,000 and $505,000.  In general this year markups of condominiums have hovered in the range of 16 to 19 percent, much higher than the average of 5.5 percent for all of last year, but there has been little variation within the 2008 year.

Activity was modest, too, in adjacent-Westmount areas, with two September sales in eastern Notre Dame de Grâce, one in lower Côte des Neiges and one just east of Westmount. While the sample size is small and so difficult to draw conclusions, in general prices are higher in all the adjacent-Westmount areas this year, except for the Trafalgar-Daulac area where they have stayed relatively even.

Election hesitation should be cleared out in the next couple of weeks, but we are still concerned that buyers are holding back until they can determine how the United States’ economic crisis affects the market in Canada.


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