Re/Max recently came out with thier annual forecast of local real estate markets across Canada. The entire report can be found here, and is a very interesting read.
Here is what they have to say about our local market in Kitchener Waterloo:
After an unusually strong start to the year, Kitchener-Waterloo’s residential real estate market has stabilized at more sustainable levels of activity. Balanced market conditions now prevail, with multiple offers the exception, rather than the rule. By year-end 2006, sales are forecast to experience a slight decline of about six per cent to 5,800 units, down from 6,147 one year ago. Prices are expected to climb close to nine per cent to $240,000, up from $220,511 in 2005.
Vendors who list their homes at fair market value are generally selling within 55 days, up from 47 one year ago. Purchasers are taking their time in selecting properties, thanks to a good supply of inventory currently listed for sale. Move-up buyers are a force in today’s marketplace, fueling demand for product priced from
$300,000 to $350,000, while first-time buyers are largely satisfied.
Bungalows on 50 ft. lot sizes are particularly coveted by retirees in the area, prompting more building out of town in areas like New Hamburg and Baden. Although sales of executive homes have tapered, the number of homes sold at $1 million plus has risen 165 per cent (three sales to eight).
Small-to-mid size investors are also active in the market, driving demand for higher-density product. Many are tearing down existing properties, rezoning for multi-unit residential, and constructing apartments with 16 to 20 units, particularly in areas in close proximity to the university.
Kitchener-Waterloo has one of the lowest unemployment rates in the province, as well as one of the highest population growth rates in the country – growing more than twice the national rate. Known as Canada’s technology triangle, Waterloo is home to 224 technology companies and another 404 companies providing related services. The diverse mix of manufacturing and service companies, a well-educated population and effective economic development collaboration among academia, business and government has made the area a success. However, layoffs at BF Goodrich earlier this year had an impact on the local economy, despite its diversity. Jobs created at the new Toyota plant in Woodstock may help to offset the full effect of the closure.
Incremental interest rate hikes throughout the year had little impact on residential real estate activity during 2006 and 2007 is expected to be no different. Concerns over the higher Canadian dollar and its effect on manufacturing are weighing heavily in the marketplace. Increasing inventory levels – about 10 per cent – will hold price appreciation in check in Kitchener-Waterloo. New construction is forecast to slow next year, especially in areas like Elmira, Heidelberg and St. Agagtha where local townships are struggling with subdivision expansion and preserving valuable farmland. In 2007, the number of homes sold in Kitchener-Waterloo is predicted to dip to 5,500 units, an eight per cent decline from 2006 levels, while average price is expected to hold the line at $240,000.
There are a couple of graphs embedded in the pdf file, which I’ll try to get on the blog later tonight.
Benjamin Bach is a Real Estate Consultant with Keller Williams Golden Triangle Realty in Kitchener Waterloo dedicated to building wealth for his clients through smart Real Estate investments, and helping people achieve success. If you are interested in how you can start your Real Estate portfolio, or have any questions and buying or selling a home, you can email Benjamin (benjamin AT benjaminbach.com) or reach him at 519 772 4376.