City housing market still supercharged

IF you thought those heady days of bidding wars and soaring house prices were over, think again.

One overjoyed St. Vital homeowner recently got $24,000 more than her asking price for her 50-year-old, 900-square-foot bungalow. And Royal LePage Real Estate Services predicted Thursday the Winnipeg market will lead the way in house-price increases for major Canadian cities in 2011.

The firm said in its fourth-quarter 2010 house-price and market forecast report it expects the average selling price for a resale home in Winnipeg to jump by seven per cent to $244,000 this year from $228,000 in 2010.

That's more than double what it thinks the national average increase will be -- about three per cent -- and well above the projected increases for the other eight cities covered in its report.

It also would come on the heels of a 10 per cent average-price hike in 2010.

The Royal LePage report notes that while the Winnipeg market has slowed a bit over the past year, demand remains strong and listings remain in short supply. That's keeping upward pressure on selling prices.

And while not as common as they were during the pre-recession boom of 2007 and early 2008, multiple offers and above-list selling prices are still very much a part of the local market, the company added.

A good example is the St. Vital bungalow Royal LePage Prime Real Estate agent Brad Gross sold last month on behalf of a client who is moving into a care home.

The woman's two-bedroom, Hindley Avenue home was listed at $199,000 and sold for $223,000. Gross said there were seven bids for the home, all at or above the listing price.

"That's pretty rare. Usually you get at least one or two that are below."

He and John Froese, a broker with Royal LePage Prime Real Estate, said the hottest-selling homes these days are bungalows. They're popular with first-time buyers because they tend to be more affordable than two-storey homes and older buyers like them because they don't have to climb as many stairs.

That's why bungalows saw the biggest price gains between the final quarter of 2009 and the last quarter of 2010. Royal LePage said the average selling price for a standard bungalow jumped by 10.3 per cent to $266,500. By comparison, the average price for a standard two-storey increased by 6.5 per cent to $296,750 and the price for a standard condo rose by 7.8 per cent to $170,286.

Although Royal LePage expects Winnipeg to post the biggest price hike this year, it predicts unit sales will essentially level off, with an increase of only 0.9 per cent to 11,600 units from about 11,500 in 2010.

Froese blames that mainly on the short supply of available homes.

"If we had more product, we could sell a lot more."

But he also noted mortgage rates are expected to start climbing again in the second quarter of this year, and that could bump some first-time buyers out of the market. Manitoba's also having a provincial election next fall, he said. That creates uncertainty, so some may postpone their house purchases until they see what happens.

Nationally, Royal LePage predicts the Canadian real estate market will follow a similar pattern this year as in 2010, with stronger sales activity in the first half of the year in anticipation of mortgage rate hikes in the second half.

"Canadians realize that interest rates are unsustainably low and that homes will become effectively more expensive when mortgage rates return to normal levels," said Phil Soper, president of Royal LePage.

However, the number of transactions will be slightly lower than last year, it added.

murray.mcneill@freepress.mb.ca

Winnipeg price changes quarter by quarter

How house prices in Winnipeg have changed from the fourth quarter of last year to the fourth quarter of this year:

Area Bungalow % Two-storey % Condo % Charleswood $262,000 8.3 $302,000 9.4 $163,000 7.2

River Heights $268,000 14.4 $310,000 9.5 $160,000 8.1

Southdale $263,000 11.1 $272,000 3.8 N/A N/A

Westwood $253,000 10.7 $290,000 3.6 $148,000 6.5

Northwest $264,000 10.9 $295,000 3.5 $210,000 2.4

Northeast $268,000 9.8 $290,000 3.6 $138,000 7.0

South St. Vital $276,000 10.9 $317,000 10.8 $190,000 9.8 Fort Richmond $278,000 6.5 $298,000 6.4 $183,000 14.4

-- Source: Royal LePage

Republished from the Winnipeg Free Press print edition January 7, 2011 B4