Homes remaining on market much longer
By Robert Frank
Condo prices continued to rise marginally in April, despite a continued drop in demand, the Greater Montreal Real Estate Board reported last week.
Even though new listings were down 3% compared to April last year, the average condo price eased upward by 2% to $176,500 from $172,500 in April 2013.
Average single-family home prices remained virtually flat, though, posting a negligible drop from $239,000 in April last year to $238,500 in April 2014.
Stronger sales earlier this year mean that prices for the first four months of the year are still up 3% for condos and 1% for single-family homes compared to the first four months of 2013.
The increases defied economic gravity, given the supply situation. The number of listings was up by 11% for the month of April, compared to April last year; for the full first four months of 2014, the jump is 13% over the first four months of 2013.
In such economic circumstances, something had to give, and in the case Laval’s residential real estate market, it means that it now takes much longer to sell a home—as much as three or four months on the market.
“The average number of days that a Laval single family home is on the market [before it is sold] is 81 days – up by 10 days compared to April 2013,” Quebec Federation of Real Estate Boards (QFREB) analyst Paul Cardinal told The Suburban. “For condos, the same figure is 113 days, up by 16 days compared to April 2013.”
As previously reported in The Suburban, the federal government tightened residential mortgage criteria in July 2012, to dampen a frothy real estate market inflated by the lowest interest rates in recorded history.
“Specifically, Laval has seen residential real estate transactions decrease for 29 months in a row,” Cardinal said in an interview. “The trend started in August 2012, the month right after the new rules for mortgage insurance came into effect, reducing the maximum amortization period for a mortgage from 30 years to 25 years. Since then we’ve seen fewer and fewer transactions each and every month for Laval, as there has been a steady, though gradual, reduction in demand in Laval’s residential real estate sector.