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Well, looking at the numbers for the last few months, bears who maybe started counting their chickens and licking their chops, thinking their time was coming, could be forgiven for getting a bit discouraged by the busy real estate market this summer (guilty as charged).

On closer review though, maybe there are some points of weakness in the most recent numbers. Well, since lots of houses supposedly traded hands in the last few months, what could those weaknesses be?

Well, if one looks at the VREB price graphs, one can't help but notice that despite the high sales numbers, prices aren't going up, in fact, they are flat or falling, in all the major property types, since the spring. The big jumps in prices set the bar, before the the last few busy months - but that busy sales activity has not created any further pressure on prices.

In particular, condo prices are all over the map, and have fallen substantially in the last few months. Is this the beginning of the fabled condo glut mentioned by HHV?

Regardless, this has to be considered a banner year for real estate agents, as there are bound to be more sales commissions to go around than for the last few years.

However, with these strong sales, it seems odd that there is no further upward pressure on prices. Why might that be?

How about this scenario - panicked buyers close deals/financing while they still can, with pre-approved mortgages at their spending limits - they can't go any higher, even if they wanted to. Meanwhile, sellers see what is happening in the US, or just get tired of listing their houses at much higher prices (fishing expeditions), and drop prices to get sales. Instead of listing at $700,000, they sell for $650,000, for instance. Buyers see some lower prices, as they purchase with "price reductions", and feel like they are getting deals. And of course VREB does not capture price reductions or days on market, or if they do, they don't publish those numbers.

Remember a few years ago, how the main stream media was full of stories of bidding wars? Despite the brisk sales activity, those stories are not being heard this year in the local paper or on TV much, if at all.

So if price reductions are happening, that may be one factor encouraging sales.

On an anecdotal level, it seems prices in Fairfield are lower this year - I am seeing more houses listed for $500-$600 thousand than last year. A friend mentioned houses that would have been listed in the mid 600s are now listing and sitting - there is less activity there at that price point.

Let's not forget that some of these increases in sales activity are mechanical. People who bought pre-construction in the past few years are now closing on condos, townhouses and single family homes that are being completed this year. This should of course be driving sales numbers higher. However, if some of these purchases were for flippers, this inventory could start coming back into the market soon. We shall see about that by next spring I am sure.

Just one possible scenario. Anyway, the most striking thing to me is that, even after this busy summer, previously built up inventory and increased listing activity has resulted in the total numbers of properties for sale not decreasing much - only a couple hundred from earlier this year, despite sales that are hundreds and hundreds higher compared to last summer.

You can read the VREB numbers here. Comments are welcome.