It’s probably a little early to wave the "all clear" flag, but the way the Winnipeg real estate market behaved in September is starting to give the impression that things are settling down.
It was less than two weeks ago that the Canada Mortgage and Housing Corporation’s (CMHC) housing market assessment showed moderate evidence of overheating and price acceleration in the Winnipeg market. Although it’s overall assessment was that market vulnerability was "low", the country’s housing authority has not had the Winnipeg market under such scrutiny since 2016.
However, the release last week of the Winnipeg Regional Real Estate Board’s September numbers showed the beginnings of a more calming dynamic to the market.
During the month, there were 1,501 sales. While it’s true the volume was 16 per cent higher than the previous five-year average for the month of September, it was also 15 per cent below the fever pitched pace of last September.
Obviously, the pandemic has dramatically affected housing markets across the country.
In its most recent assessment, CMHC said, "The Canadian housing market has moved from a moderate to a high degree of vulnerability. The change was prompted by the detection of price acceleration alongside persistent overvaluation imbalances."
Winnipeg has not been completely immune to those pernicious trends.
Heather Bowyer, CMHC’s senior analyst for Winnipeg, said, "Since we began publishing this data in 2016, neither overheating or price acceleration have been detected in the Winnipeg CMA (census metropolitan area)."
Those dynamics have been present in the Winnipeg market but to a much more moderate degree than is the case in the Greater Toronto Area, Montreal and Vancouver.
Kourosh Doustshenas, this year’s president of the Winnipeg Regional Real Estate Board, said the organization has been noticing less frantic activity for the past couple of months.
While the Winnipeg housing market has been skewed for many years in favour of single-family detached product, Doustshenas said the re-emergence of healthier sales of condominiums has been welcomed.
"At the on-set of the pandemic the condo market was really hit hard," he said. "Everyone was trying to social distance. For instance there was a fear of getting on elevators and things like that."
But those kinds of concerns are starting to wane.
Condominium sales for the first nine months of 2021 of 2,014 is comfortably ahead of the 1,847 annual record set last year for the same period.
"Condos are seen as providing good choice as far as price range and affordability," Doustshenas said. "As the bigger portion of the population are getting more informed and vaccinated, the pandemic-related fears are decreasing. They are becoming a less prominent element of the decision-making."
While average price increases on single detached homes up 12 per cent in September — the year-to-date average price is $379,056 — 83 per cent of the condo sales were for between $100,000 and $350,000.
"The growing spread between single-family detached homes and condominium average sale prices in 2021 have made the latter property type an even more affordable option for buyers, especially first-time buyers who do not have the benefit of equity gains from the sale of their existing home," said Doustshenas.
In his monthly sales report, a WRREB vice-president Peter Squire noted, "The third quarter — in comparison to a supercharged second quarter with two months of sales over 2,000 each — showed moderation with prices less heated. The second quarter average single-family home sales price was $388,422 whereas the third quarter came in at $374,777."
While sellers might bemoan a lower average price, unless they’re retiring to the summer home, chances are most sellers then become buyers and will be caught up in the same price wars they’ve previously benefited from.
"I think there is more balance occurring in the market," Doustshenas said. "A balanced market on the whole is good for everyone."
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.