The volume of actual high-end sales receded during 2003, however, in most cases the asking prices did not fall off…. Through the latter part of 2003 and 2004, price adjustments were being made on many properties to attempt to lessen the apparent gap between asking and selling prices.

…The nature of our middle and high-end market is that an asking price is usually (but not always) set and not usually lowered through its marketing span.

Tradewinds Realty Incorporated
Market Condition Update September 2005

Background 2001 – 2004

The high-end ($1,000,000+) real estate market softened in 2003. After the banner years of 2001 and 2002, the market started to fall off towards the end of 2002. While it was not widely recognized at that time, a review of our sales patterns confirms this downward trend. Through 2003 and 2004, we have what I refer to as a plateaued market, where prices are settled-in until the next upward trend. Unfortunately, the events of 9/11 triggered the last upward trend in real estate values in the province. As the Americans started to purchase our homes in greater numbers, this scarred the local and Upper-Canadian clients into taking action. They were concerned that many of the better properties would be purchased or the market prices would trend up beyond their ability to purchase.

The volume of actual high-end sales receded during 2003, however, in most cases the asking prices did not fall off. This has lead to a large gap in prices being offered against asking prices. Through the latter part of 2003 and 2004, price adjustments were being made on many properties to attempt to lessen the apparent gap between asking and selling prices. While not very successful, it did allow us to sell a few higher-prices homes in 2003 and with greater success in 2004. Our gross sales for 2004 were fifty-five million ($55,000,000) in real estate sales.

First 9 months 2005
The luxury real estate market in the 2005 season has been fairly good. Early in 2005 we successfully brokered a near 3 million dollar sale in the village of Chester, later in the year we were the selling agents for a 2 million dollar sale in Martins River. Most recently we negotiated an offer for over a million dollar home in Annapolis Royal. The important thing to realize with these sales of these homes, is that they have been on the market for 1 to 2 years and have now sold in the latter part of 2005. At present the market condition scale shows a sellers market on oceanfront land and a buyers market for existing housing.

The middle market for $500,000 to $1,000,000 has also been good. Well priced homes are selling in the market and sellers seem to be content with the selling prices.

The nature of our middle and high-end market is that an asking price is usually (but not always) set and not usually lowered through its marketing span. This is due to the non-transient nature of our sellers, as the motivation in selling is tied to the perceived value of the property. There is little necessity to discount the value in order to move it faster on the market. Most of our clients fall in one of two categories, estate sale of family property or an up-sizing/down-sizing of existing property.

It is still extremely important to determine the correct asking pricing for the property. Pricing is especially important in a buyers market and/or plateaued market like the one we are presently experiencing. Real estate can be considered a commodity and as such, pricing is very important to the market place.

tim harris