Luxury home sales plummet

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Luxury home sales plummet
Slow economy blamed for drop
The Edmonton Journal
+ \- m/ N1 C3 V/ z6 W0 yPublished: 2:33 am
) Y& t9 M2 s6 @0 K7 B9 o- b. AEDMONTON - Sales of luxury homes in Edmonton dropped 39 per cent in the first seven months of the year compared to 2007, says a report released Thursday.
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Real estate group Re/Max said 110 homes priced at $850,000 or more sold in the period during 2007 but the number dropped to 67 this year.
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& k7 B% |- o* Z4 Z; I+ b7 v$ L) ^Sales over the $1-million mark dipped to 40 from 45. There are currently 218 properties for sale that top the $850,000-mark and average number of days on the market jumped to 72 in 2008 from 59 last year.
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9 g. `" e+ L- q2 m$ x# CFont:****Re/Max blamed a slowing economy and overheated real estate market for the downward trend.
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The top price for an MLS sale this year was $2.25 million, while the highest-priced listing is a $6.9-million property in Crestwood. A $1.39-million property in Strathcona is the highest price condo on the market.
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* B. D; m0 m- O8 K7 B% P' BRe/Max predicts prices will soften this year and a rebound isn't expected until late 2009 when excess housing inventory is sold.
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In Calgary, where Re/Max defines a luxury home as costing $1 million or more, sales dropped 17 per cent to 258 from 312 units. And there's lots of choice for high-end buyers -- 395 properties are currently listed.

Besides Edmonton and Calgary, sales fell in Toronto, Hamilton and Kelowna. Those cities bucked the national trend that saw sales rise in 10 of the 15 major Canadian markets tracked.

% Q1 E: P% U4 e. Y5 THowever, the real estate organization said strength in this market segment is not expected to last.
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( R$ y0 \; i/ {1 Q0 |, _6 ~$ D"The market for luxury homes is usually the first to show pressure cracks, but the reverse is actually true this year, with pent-up demand (due to trade-up activity), less speculation and job transfers all factors contributing to stability in this segment," Michael Polzler, Re/Max's executive vice-president for Ontario and Atlantic Canada, said in statement.
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, R. R* X3 \" P6 _. b6 h" f! `; gBut financial market conditions and more higher-end homes being put up for sale are expected to curtail both sales volumes and price levels in the coming months, Re/Max said.
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$ }5 ^1 p0 F' j/ M3 G/ QElton Ash, Re/Max's executive vice-president for Western Canada, said, "We are seeing a return to more balanced conditions. This situation is expected to have an impact on high-end values in coming months, especially in areas that have experienced consistent double-digit growth."

In terms of growth in upper-end homes sales, Regina saw the most proportionally this year at 306 per cent. Winnipeg was next at 89 per cent, followed by St. John's, N.L., at 78 per cent.
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Each market has a different price point that marks what Re/Max defined as the start of the luxury-home category.
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It ranges from about $2 million in Greater Vancouver to $1 million in Calgary to $750,000 in Ottawa, and $400,000 in St. John's and Halifax.


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© The Edmonton Journal 2008

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