St. John’s real estate market – RE/MAX Housing Barometer Report

February 8, 2011 · Filed Under Remax Reports · Comments Off 

St. John’s real estate market spent much of the past decade fluctuating between buyers and balanced market conditions.  These conditions characterized the resale residential sector 72 per cent of the period from 2000 to 2010 (36 per cent respectively).  Sellers held the cards just 28 per cent of the 11-year period—a fact that may come as a surprise, given the strong run up in average price in recent years.  The compounded annual rate of return for homeowners in Newfoundland  Labrador, based on average price from 2000 to 2010, was 8.14 per cent—ranking it fifth among Canada’s major centres and first among the Atlantic provinces ($99,525 vs. $235,341).  Newfoundland’s sales-to-new listing ratio hovered at 54 per cent during last decade.  Home buying activity has been solid at the outset of 2011, as Newfoundlander’s steadily regain confidence in Canada’s economic recovery and the brightening outlook for the province.

Several positive developments of late have bolstered optimism, the most substantial of which has been the Lower Churchill announcement.  Business confidence is high and non-residential building activity is up considerably.  Buyers have taken notice, moving off the sidelines, secure in the belief that the tide is turning.  Affordability continues to play a role in Newfoundland. First-time buyers are leading the charge, with sales between  $150,000 and $250,000 most active in Newfoundland, accounting for 36 per cent of all activity.

In St. John’s,  entry-level purchasers are driving the $250,000 to $350,000 price point.  The city’s newer subdivisions on the  peripherals are most sought-after, including areas such as Paradise.  Move-up buyers remain active.  However, in this  category, many transactions are conditional on the sale of another property.  Upper-end purchasers continue to make  their moves, with sales in the $500,000 to $650,000 price range relatively brisk.  Luxury homes in Clovelly Trails and  King William Estates remain very popular with affluent purchasers.

Days on market had been on the upswing across all price points post June 2010, but should begin to fall as absorption rates improve.