St. John's Real Estate Market Cools A Little

According to the Senior Market Analyst with CMHC, the fourth quarter average MLS® prices in St. John's surged 27% to $193,529 compared to $152,160 during the fourth quarter of 2007, representing the only growth market in Canada.

Prices spiked in the 2008 as there were often multiple buyers for the same home leading to a bidding war which contributed to the significant rise in average prices for the year. In light of this, real estate in St. John's, NL was one of the best places to have been invested in North America in 2008.

Thus far in 2009, market demand has weakened allowing for a more moderate pace of sales. As well, inventory has began to rise and some prices which were set with the 2008 demand in mind have now started to decline. But we are a long way from the buyers market that characterized St. John's in the early 90's.

While prices are cooling off from the peak of 2008, agents that I have spoken to are expecting that we will see a return to a more "normal" market in the current year. This will allow first time home buyers an opportunity to purchase a home at a more affordable price.

Buyers who have been put off by the slowing economy worldwide will find some selection again as well as home prices that are within their reach. But the fear of buying in a slowing economy may delay the next rise in prices. Some industry experts are suggesting that a return to market growth nation wide may not occur until 2011 to 2012.

It should be remembered though that the Newfoundland market will trump any national trends if any of the major construction projects anticipated are given the go ahead. In this event, real estate prices would rise again as demand would quickly return to the 2008 levels.

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