Houses in New Brunswick selling at unusually fast rate
Increase in home sales backed by record-setting month in May
New Brunswick homes are selling at the fastest rate in 10 years, creating a demand for supply that has agents hitting the streets in search of new listings, according to the New Brunswick Real Estate Association.
The rise in sales is backed by the best month the association has ever recorded. In May, 1,124 units were sold, an all-time record and 24.6 per cent higher than May 2018.
The numbers for June are still being crunched, but association president Sheila Henry said sales should remain high for much of 2019.
"What we're seeing essentially is a great situation for sellers in New Brunswick," Henry told Information Morning Fredericton on Friday.
"Basically what's going on if you've got a home in good condition in a good location, and you've priced it well, it's going to sell fast and, as such, demand is still there."
She said housing supply is low, make situations ripe for multiple offers.
The year-to-date figures, gathered by the Canadian Real Estate Association, are also strong. A total of 3,622 units were sold across New Brunswick in the first five months of the year — a 20.3 per cent increase from the same period in 2018.
The trend has been felt acutely in the capital city. Home sales in Fredericton have outpaced the first five months of 2018 by 58 per cent. In Moncton, the increase was 23.7 per cent and 11.6 per cent in Saint John.
The association's other district — Northern Region and Valley — was the only one to see a decline in year-over-year sales, which dipped 6.7 per cent.
What's at play?
Henry said there are several factors at play, including more people coming, or returning, to New Brunswick.
The "mixed bag" of buyers include U.S. making the most of the exchange rate or escaping the current political climate, people coming home to retire, and Canadian workers heading east for "very good jobs here."
New Brunswick also has the lowest average home price in the country.
The year-to-date average sale price rose to $180,385, a 4.8 per cent jump from the first five months of 2018.
According the national association, the average price for sales in May 2019 jumped to $192,848, from $177,272 in May 2018.
The closest average price in another Canadian jurisdiction in May 2019 was $233,456 in Newfoundland and Labrador. The average price in Prince Edward Island was $242,318 and $252,442 in Nova Scotia.
"People who are coming back, let's say, to retire and they've been out in Calgary for a while or whatever," said Henry. "What you've sold your home for in Calgary buys you a lovely property here with money to spare."
The average price of a home in Alberta is roughly $200,000 higher than in New Brunswick. That gap jumps to more than $400,000 in Ontario and more than $500,000 in British Columbia.
Henry said the housing sector was also under the impression interest rates would jump this year.
"But that really hasn't happened," she said. "So that makes it even better for the home buyer because your dollar buys a little more."
Henry said if the listing is "reasonably priced" it will sell fast. Sellers who hear of the high demand may be tempted to raise the asking price, she said, but they could face a much longer time on the market.
"If you've got a realtor who can come into your home and give you an analysis based on what's been selling, because that's always really the bottom line when it comes to it," Henry said, "what we've been seeing is if those homes are properly priced, they've been selling quicker and they've been getting approximately 97 per cent of their asking price."
The high demand is supported by a decrease in housing stock. The Canadian Real Estate Association reported a total of 5,648 active MLS listings at the end of May — a 17.5 per cent drop from this point last year and an 11-year low.
A decrease in listings balances the market, Henry said, but it has also forced agents to rethink how they operate.
"You get somewhat more back to basics, if I can call it that," Henry said.
"You go door knocking. You know, you really do, you know, a higher level perhaps of solicitation, you maybe call your past clients, people who were interested who might have been expired and say, 'Look, here's what the market's like now.'
"So there's a lot more backdoor activity, if you will, from the real estate perspective to get people to realize what the market's like."
With files from Information Morning Fredericton