The Reiss Report: Condo Real Estate Blog - Summer 2024

Article from Volume 11, Issue Number 3, 2024

The Reiss Report: Condo Real Estate Blog - Summer 2024

By Alan Reiss | Other articles by Alan Reiss | Regular Column

Upwards trends in a favourable year

Let’s start by saying 2024 is not just another repeat of what happened in 2023. The numbers back up this statement. Indeed, March condominium sales were up 26 per cent over March 2023 and 20 per cent ahead of the first quarter condo market activity last year. You can’t ask for much more than that market appreciation in sales. Still, the average condo sales price in the first quarter of 2024 was $273,320, a 12 per cent increase over the same quarter in 2023.

How do you continue this upward trend in the second quarter of 2024? Let’s look at April, the first month of a typical spring market. A healthy influx of new listings to entice would-be buyers is critical to getting spring sales kickstarted as the snow disappears.

There were 354 new listings in April. Considering that active listings or current condo inventory have been trending under 500 from month to month, this is a significant game changer in bringing on a high percentage of fresh new condo supply relative to what existed at the end of the previous month. Compared to the last three Aprils, the increase in new listings was 20 per cent, 38 per cent and 11 per cent. Those include the unusual year of 2021, when condo sales easily surpassed the 2,000 annual sales threshold for the first time.

April sales of 217 were respectable, with buyers capitalizing on greater availability of choice. Sales rose 27 per cent over a slow-performing April 2023. Still, they finished ahead of the five year sales average (including 2019) after removing the COVID year of 2020, when only 76 condos were sold.

May sales of 279, 25 per cent ahead of May 2023 and only 12 behind one the best Mays on record in 2021, show how 2024 differentiated itself from 2023. Sellers and buyers are adjusting to higher interest rates, which peaked in July 2023, with the Bank of Canada’s overnight lending rate rising to 5 per cent after being at only 0.25 per cent in March 2022. How much will they come down in the second half of 2024 and into 2025, with the first 0.25 per cent rate cut in June?

The last month of the second quarter was less robust than April or May 2023, but we still needed to change the second quarter result in 2024.

Jeremy Davis, The Winnipeg Regional Real Estate Board’s director of external relations and market iIntelligence, provides a good recap below of June, the second quarter and the first half of 2024.

Condominium snippets from our Market Release for June:

MLS sales of 209 for condominiums in June were 16 per cent below the 249 seen last June and 6 per cent below the five-year average of 223.
The 469 active MLS listings for condominiums were statistically even, with the 468 seen last June and 16 per cent below the five-year average of 561.
The average price of $273,303 for a condominium in June was six per cent above last June’s $257,413 and four per cent above the five-year average of $263,808.
Of the 209 total condominium MLS sales across the Winnipeg Regional Real Estate Board’s market region in June, 177 were within Winnipeg, the rest outside Winnipeg.
Of the 469 active MLS listings for condominiums, 373 were in Winnipeg and 96 were outside Winnipeg.
For the second consecutive month, Osborne Village was the Winnipeg neighbourhood that saw the most MLS condominium sales, followed by Linden Woods.

April to June highlights

MLS sales of 701 for condominiums were nine per cent above the 643 from April to June 2023 and eight per cent above the five-year average of 647.
The 971 MLS listings for condominiums were seven per cent above the 906 seen from April to June 2023 and statistically even with the five-year average of 972.
The average price of $279,584 was seven per cent higher than the same quarter in 2023 and finished seven per cent above the five-year average of $260,537.
Total dollar volume of $196 million was 17 per cent above 2023’s $168 million and 16 per cent above the five-year average of $169 million.
Sales to new listings: 72.19 per cent

January to June 2024 highlights

Condominium sales rose 13 per cent in 2023 and remain three per cent above the five-year average.
Listings rose six per cent higher than the first half of 2023 but remained six per cent below the five-year average.
The average condominium price of $277,252 rose nine per cent over the first half of 2023 and eight per cent higher than the five-year average.
From January to June, the dollar volume of $310 million rose 23 per cent over the first half of 2023 and closed 11 per cent higher than the five-year average.
First-half sales to new listings: 67 per cent.
Sixty-six per cent of condominiums sold under their list price.
First-half condominium sales made up 15 per cent of all MLS sales.
Osborne Village saw the most condominium sales, with 114, followed by Linden Woods, with 53.

The numbers and percentages speak for themselves. A few comments here are warranted.

The results for the second quarter reveal the condo market is seeing increased sales activity in higher price ranges. It was not that long ago that more than one in two sales fell under the $200,000 threshold. In April and May 2024, to attain 50 per cent of total monthly condo sales, you need to go up two price ranges, from $250,000 to $299,999, and in June, the following price range is $200,000 to $249,999.

Looking at June specifically, the comparison to last year shows how the first price range category of $0-$149,999 has fallen from a double-digit percentage market share of more than 15 per cent of total sales to almost half this percentage this year. The reverse happens at the other end of the price spectrum, with a market share sales percentage of close to six per cent in 2024 to slightly over three per cent in 2023.

June 2024 also delivered the highest condo sales price on record for the first six months, with a spacious luxury two-level penthouse on Waterfront Drive selling for $1,425,000.

This movement to higher price range sales activity keeps prices elevated this year, with the average condo sales price rising to just under $280,000 in the second quarter and $277,000 in the first half of 2024. Both are percentage increases in the high single-digits over 2023. One key reason is that inventory remains tight, with just over two months available if no new listings were to come to the market. A balanced market for a property type like condominiums or residential-detached homes is more in the four to five-month range.

There are a few more metrics to highlight this point further. As of the end of June, year-to-date condo sales show 20 per cent sold above list price when it was 14 per cent for the first half of 2023. Similarly, sales selling at the list price are up three per cent to just under 14 per cent. The average continuous days on the market to sell a condo in June was 32 or about a month, while in June 2023, it was 49 days. In 2024, this will lead to quicker turnover in a shorter time.

The conversion of sales to listings entered on the MLS system is robust at 72 per cent from April to June and 67 per cent in the first half of 2024. For comparison's sake, single-family detached is 65 per cent for the first half of 2024 and residential attached is 56 per cent. This development has just evolved over the past few years since condos historically have always needed to catch up in this performance measure metric by the dominant single-family detached property type category.

When you examine specific MLS neighbourhoods, the two areas with the highest average area-priced sales this year stand out compared to the first half of 2023. They are Royalwood and East St. Paul. While both neighbourhoods have far lower total sales than Osborne Village, the trendline is essential.

With only eight sales, Royalwood saw its average sales price go from $436,963 in 2023 to $654,979 in 2024 with nine transactions. East St. Paul has ten sales this year with an average price of $613,960. This is noticeably up from the six sales last year, which resulted in an average sales price of $546,600.

Another observation revolves around the high 67 per cent overall conversion of listings to sales in 2024. When two-thirds of all your region’s condo listings, including Winnipeg’s, are selling, several of your MLS neighbourhood areas are doing even better, with some realizing near-complete sell-outs. The above areas cited for the highest average sale prices were one listing shy of selling out this year. In contrast, the Fort Rouge area, leveraging its close access to Winnipeg’s bus rapid transit corridor, has sold 11 out of 10 listings entered this year since one listing as a carryover from 2023. Another example is the Maples area in northwest Winnipeg, where there have been 16 sales, yet 14 new listings were added in 2024.

Leading condo sales areas like Linden Woods and River Park South are converting most of their listings. Similarly, regional markets outside Winnipeg, like Morden and Steinbach, are seeing high turnover. Assuming more condo owners are looking to take advantage of the favourable market metrics cited in the first half of 2024 by putting their property on the MLS market, this bodes well for many MLS areas in the third quarter as eager buyers will welcome new listings.

On the other hand, downtown, with just 45 sales out of 125 listings, and some rural areas are well under 50 per cent conversions. It is always best to talk to your area REALTOR to share what is happening in your case, as similar conditions only prevail in a local market.

Finally, while 2024 is a real improvement over 2023, it is also worth mentioning that for the first half of the year, there were 18 per cent more sales in 2021 and 9 per cent in 2022. However, 2024 is the third-best first-half-year total for condominium sales ever, and there is no reason to believe that it should be able to maintain this position in the third quarter based on all the indicators above.