Re/Max recently came out with thier annual forecast of local real estate markets across Canada. The entire report can be found here, and is a very interesting read.
Here is what they have to say about our local market in Kitchener Waterloo:
Kitchener-Waterloo's strong residential housing market shifted gears mid-year in response to growing inventory levels. Although record breaking sales activity is forecast for year-end 2005 at 6,050 units, an increase of two per cent over 2004 levels, buyer resistance to higher prices was observed during the latter half of the year. As a result, the number of days on market increased from 46 to 51. Price adjustments became more commonplace and multiple offers were laid to rest.
More balanced market conditions have emerged in Kitchener-Waterloo. Move-up buyers have a significant presence in the market, stimulating activity for homes priced from $250,000. Baby boomers continue to spur upper-end sales between $400,000 and $600,000.
Downsizing now occurs with more frequency as empty nesters and retirees sell their single-detached homes and move to popular condominium loft projects such as the converted Seagram building in Uptown Waterloo. The city's peripheral areas - Baden and New Hamburg - are experiencing an influx of mature buyers, thanks to an ample supply of two-bedroom bungalows listed for sale. First-time buyers played a secondary role in the market in 2005. Demand has largely been satisfied in this segment of the market.
Although the half a percentage point hike in interest rates in the Fall did little to deter purchasers, it's suspected that an increase of one per cent or more in 2006 will slow home buying activity in Kitchener-Waterloo. Those first-time buyers that remain in the market are already stretched to the limit in terms of debt.
Condo conversions currently underway, including the redevelopment of the old Kaufman Footwear building in Kitchener and the Bauer industry building in Uptown Waterloo, are attracting younger purchasers as well. Starting from an affordable $150,000, developers are specifically targeting University of Waterloo graduates who are staying in Kitchener-Waterloo after completing school to work at some of the high-tech firms in the area.
The redevelopment phenomenon is also helping Kitchener-Waterloo revitalize tired core areas. Future plans include a $6.5 million expansion to Wilfred Laurier School of Social Work; a $30 million commitment to University of Waterloo's School of Pharmacy; and over $7 million designated to improve parks and the downtown area, including a new community centre and $32.5 million public library. Non-residential
construction, such as the Brick Brewery Co.'s 103,000 sq. ft. bottling facility, is expected further bolster economic performance in the Kitchener-Waterloo area.
Immigration and in-migration are forecast to have a more significant impact on the marketplace in 2006. The high-tech sector's reach is far and wide in terms of skilled help. Given a continuation of strong economic fundamentals, sales are expected to maintain a healthy, albeit more leisurely, pace throughout 2006. The number of homes changing hands is forecast to hover between 5,800 to 5,900 units in 2006.
After several consecutive years of strong upward momentum, average prices are expected to settle into more normal patterns. By year-end 2006, average price is expected to climb a modest two per cent to just over $225,000, up from $219,000 one year earlier.
There are a couple of graphs embedded in the pdf file, which I'll try to get on the blog later tonight.
Benjamin Bach is a Real Estate Consultant with Keller Williams Golden Triangle Realty in Kitchener Waterloo dedicated to building wealth for his clients through smart Real Estate investments, and helping people achieve success. If you are interested in how you can start your Real Estate portfolio, or have any questions and buying or selling a home, you can email Benjamin (benjamin AT benjaminbach.com) or reach him at 519 772 4376.
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