Here come the newbies: First-time buyers drive housing market
It may surprise some real estate armchair quarterbacks but the St. John's market has been holding steady during the recent economic slip due to oil's price tumble.
It also may surprise them that in this so-called buyer's market, it's first time home-buyers who are leading the charge.
Take Becky Winsor, 26, who earlier this year became a homeowner.
For Winsor, the market conditions had changed enough to persuade her to pull the trigger and buy her first home.
"All the agents I talked to said that the interest rates were pretty good at this point, and the housing prices probably weren't going to fall any more," she told me.
Buyers like Winsor have been able to get into a marketplace that had been favourring sellers.
Last week, the local Royal LePage office released its latest update. The headline: St. John's home prices soften during the second quarter of 2015.
But what does that mean?
"After consecutive quarters of solid growth across housing types, it is not surprising to see a healthy pause in the housing market in St. John's," agent Glenn Larkin said in the statement.
Larkin also said the there are more houses on the market compared to last year, which means there are more choices for people looking to buy.
On the stats side of things, Chris Janes, the senior market analyst with the Canada Mortgage and Housing Corporation in St. John's, agrees with Larkin.
"The market has certainly taken a breather from where it has been for the past five-plus years," he said.
According to Janes, what just a couple years ago was a seller's market has flipped to the other side. Buyers are now in control. .
Weathering the storm
"I think it's kind of surprising to a lot of people when you look at what's happening to the price of oil and what the expectation was," said Janes.
Janes says the local scuttlebutt on the street was that there would be a 20 to 30 per cent drop in prices.
"We're certainly weathering the storm and the market has been fairly resilient so far this year."
Indicators of the economy's resiliency are the fact that employment and population growth for St. John's are up a per cent each as of June.
And when it comes to the outlook for home prices, Janes says CMHC doesn't expect any price drops in the near future.
Who is buying?
When you combine a buyer's market with low mortgage rates it can make for a tempting time to buy a new house. And in the St. John's market, it's first time home buyers who are leading the way.
"I think right now a lot of first time buyers have recognized the slow down in activity and prices have stabilized to being slightly down in some sub markets and for certain housing types," said Janes.
He added that 60 per cent of homes bought so far this year were by first time home buyers. The group normally clocks in at 50 per cent.
Janes says the average price paid by a first time home buyer in St. John's this year is just under $300,000.
ABOUT THE AUTHOR
