Luxury home sales plummet

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Luxury home sales plummet
Slow economy blamed for drop
The Edmonton Journal
Published: 2:33 am
EDMONTON - 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.

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.

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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Font:****Re/Max blamed a slowing economy and overheated real estate market for the downward trend.

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.

) Q8 O9 z' c* JRe/Max predicts prices will soften this year and a rebound isn't expected until late 2009 when excess housing inventory is sold.

In Calgary, where Re/Max defines a luxury home as costing $1 million or more, sales dropped 17 per cent to 258 from 312 units. And there's lots of choice for high-end buyers -- 395 properties are currently listed.
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# o+ j9 }: g- d& t% H6 o9 NBesides Edmonton and Calgary, sales fell in Toronto, Hamilton and Kelowna. Those cities bucked the national trend that saw sales rise in 10 of the 15 major Canadian markets tracked.
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+ |( p% x: F9 w% r+ H& @However, the real estate organization said strength in this market segment is not expected to last.
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# S  O9 \8 w) X6 ]$ v"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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But 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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Elton 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."
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1 T1 V+ Z- ~: ?/ g! Y. H) oIn 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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, Y9 |* T# K" [: k6 \& ^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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: R* n" e5 j) T- `7 {7 V6 L© The Edmonton Journal 2008

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