How's the Market, You Ask?

How's the Market, You Ask?

Halifax’s real estate market looks set for a 2014 recovery following a year of weaker-than-usual sales. The low-activity trend seen in 2013 did continue through January and February 2014, with total unit sales down by 19 per cent year-over-year. High inventory levels carried over from the fall, with active listings higher than the norm. Observers point to a winter marked by numerous snowstorms contributing to softening demand and prices. Warmer weather is expected to reverse this trend.

Average January and February residential sale prices in Halifax-Dartmouth declined 0.5 per cent year over year to $269,293. The strongest category has been in the $150,000 to $250,000 range. Properties lingering on the market are seeing price reductions, and if purchased recently sometimes dropped to levels below their original purchase price, while some luxury properties have remained on the market for several years. Tighter mortgage rules over the last year pushed many first-time buyers out of the market, and the availability of high quality rentals have provided an attractive alternative for those who choose not to buy. This trend seems to be reversing over the last 2 months, and many more first-time buyers are searching with their agents, even if they haven’t purchased a home yet.

Greater Halifax is currently a buyer’s market with approximately 35 residents per listing. With sales lagging at approximately 325 per month in the Halifax Regional Municipality, inventory is expected to grow, but Halifax is expected to move towards a more balanced market as buyer activity picks up this spring. Average home prices in Halifax are projected to increase slightly between 0.5-1 per cent in 2014.

Despite the slow start to the year, overall economic prospects for Halifax are positive. The local shipbuilding industry is projected to be strong and major natural resource developments have the potential to significantly benefit the region and draw buyers into the market. While Nova Scotia’s population has decreased slightly over the past decade, the population of Halifax has climbed. Baby boomers are downsizing from houses to apartments or condos and young people are migrating into Halifax, drawn by the urban lifestyle and the affordability of small suites in the city’s core.

Source: Spring Market Trends Report, RE/MAX Canada, April 2014