Real estate demand rising
Still sellers market despite territorial population shrinkage
Walter Strong
Northern News Services
Published Wednesday, July 2, 2014
SOMBA K'E/YELLOWKNIFE
With only about 130 homes listed for sale with Yellowknife realtors and another 40 or 50 available through private sales, Yellowknife Coldwell Banker's Rod Stirling describes the local real estate scene as a seller's market.
"There's not as much inventory on the market as we'd like to see," said Stirling. "Everything seems to be selling reasonably quickly."
In its 2014 Northern Housing Report, the Canada Mortgage and Housing Corporation (CMHC) confirms Stirling's observations, while at the same time forecasting improved 2014 home sales over last year.
Confirming the shrinking supply of available homes, Stirling noted so far this year in Yellowknife, the CMHC shows 44 new listings in the first quarter of 2014, down from 60 new home listings in the first quarter of 2013.
Sales of those homes are also moving more briskly.
The first quarter of 2014 showed 27 existing homes sales, up from 21 sales in the first quarter of 2012 (first quarter 2013 sales are not available from CMHC).
"There were several properties we hadn't sold last year that we re-listed this year," said Stirling.
"They sold."
The report forecasts 465 residential sales in 2014. If that forecast holds true, it would be an improvement over last year's total sales of 431 residential units.
Improving sales and a shrinking pool of homes on the market mean the average home sale price is also on the rise.
The CMHC is forecasting average home sale prices in 2014 of $390,711, a $19,550 increase over the 2011 average home sale price of $375,050.
And those sales are not leaving much room for negotiating on price.
"Homes are selling pretty close to asking price, or above," said Stirling.
"There's not much going below asking price," added Stirling, noting that homes not moving tend to be properties needing a lot of work without a price to reflect that.
Real estate listed between $300,000 and $400,000 is doing best, added Sterling.
This is confirmed by the CMHC, which reports increasing demand for entry-level, first-time home owner housing.
The top end of Yellowknife's market - anything listed at more than $800,000 - is a little slower, said Stirling, but most everything below that is moving well.
"We had a number of properties in the $700,000 range in Niven Lake," said Stirling. "In the past few months, they all sold."
What is lacking in Yellowknife is real estate in the $500,000 range, said Stirling.
"There's a bit of a void in stick-built, non-modular or non-mobile, homes," he said.
"In the $500,000 to $650,000 (range), there doesn't seem to be much there."
"There are a lot of people looking but not a lot of supply."
Stirling said he has the impression that sales are driven fairly evenly by newcomers to Yellowknife and current residents trading up or downsizing.
If that's the case - and the CMHC does not track Yellowknife's population growth as it relates to home sales specifically - then the city's real estate market is managing to buck the NWT's overall population decline.
"Population growth continues to be held back by ... tepid employment expansion as the number of people leaving the NWT for employment opportunities elsewhere outpaces the people moving in," the CMHC report reads.
Statistics from the GNWT show the territory nets 521 fewer people in 2013.
The decline in territorial population may begin to reverse if, as the Conference Board of Canada anticipates, 2,400 new jobs are created over the course of the next five years thanks to new mine construction.
The commercial market isn't sharing in the residential market's simmering pace.
"It's a bit harder to finance the commercial sector," said Stirling. "So it's a bit slower out in Kam Lake."
"There seems to be an over-abundance of leasing (opportunities) and office space."
