Nouriel Roubini, the New York University economist who gained renown for accurately calling the housing bubble, has purchased a condominium in Manhattan worth $5.5 million, according to a Bloomberg News report.
Public records show Roubini took out a $2.99 million mortgage to buy the condo on East First Street, according to Bloomberg. The apartment is reportedly a 3,700-square-foot triplex penthouse.
Roubini was dubbed "Dr. Doom" because of his many pessimistic forecasts about the global economy. He recently said there is still a risk the U.S. economy could slide back into recession, Bloomberg notes, and last month he said another "disaster" will happen if U.S. house prices fall again and prime mortgage defaults increase.
Does Roubini now think housing prices have bottomed? Bloomberg reached Roubini on his cell phone Friday, but he declined to comment on the condo purchase.
Perhaps the economist has succumbed to "frugal fatigue" -- a term that refers to when consumers, beaten down by the "Great Recession" become tired of fretting about every expense and treat themselves again.
The condo's listing by Halstead Property broker Richard Orenstein certainly makes the home sound alluring.
"Connected by a custom cantilevered steel staircase, each level of this amazing home offers something unique and unforgettable," the listing reads. "On the first floor, you'll find a massive living/dining area bathed in southern light with 11-foot beamed ceilings, exposed brick walls, a wood-burning fireplace, and light from a 50-foot expanse of oversized windows."
By Roland Jones, msnbc.com editor December 18, 2010
Sunday, December 19, 2010
Harmonized Sales Tax
The provincial government's decision to harmonize the provincial and federal sales taxes into the new 12% Harmonized Sales Tax (HST) removed $2 billion in costs to BC businesses and provide point-of-sale rebates on many important goods and services. You can find out more about the government rationale for the HST here.
However, REALTORS® and BCREA are concerned that the HST has increased the cost of buying and selling all property and have a significant impact on the purchase of newly-built homes. The people of BC are particularly affected since this province has some of the highest priced real estate in the country. The HST is an additional tax burden on BC homebuyers, homeowners and landlords.
Increasing Cost of New Homes
For new homes, under the previous system, only 5% GST was charged on new home sales. Under the HST, implemented on July 1, 2010, new homes are subject to the 12% HST.
To offset the increase in costs, the BC Government is offering a partial rebate of the HST for new housing, intending that new homes up to $525,000 should bear no more tax than under the previous PST system. Homes above $525,000 receive a flat rebate of $26,250. New home sales over $525,000 are impacted, as buyers have to pay an additional 7% tax less the $26,250 flat rebate.
On November 18, 2009 the provincial government announced the HST transitional rules on housing which includes a threshold increase from $400,000 to $525,000, moving the threshold to above the median new home price in the province. According to the government news release announcing the transitional rules, the limit was increased due to feedback from consumers and the industry. To read the news release and backgrounder click here.
For more information and to see the Residential Housing New Housing Rebates and Transitional Rules for BC click here.
Increasing Cost of Professional Services like REALTOR® Commissions
The HST also introduced a new tax on most services provided by GST/HST registrants in BC. As such, service-providers like REALTORS®, home inspectors, and appraisers are required by government to collect and remit 12% HST on their fees. Under the previous system, only 5% GST was charged on professional services associated with real estate transactions. Under the new HST system, the taxes charged on those services jumped an additional 7%, adding to nearly all closing costs.
The bottom line is that the HST has increased the cost of buying and selling all property, and it has a much greater impact on the purchase of newly-built homes. Almost 60% of the average family's household income is required to cover home ownership costs. Now that the HST has been implemented, they're paying even more.
Copyright BCREA reprinted with permission
However, REALTORS® and BCREA are concerned that the HST has increased the cost of buying and selling all property and have a significant impact on the purchase of newly-built homes. The people of BC are particularly affected since this province has some of the highest priced real estate in the country. The HST is an additional tax burden on BC homebuyers, homeowners and landlords.
Increasing Cost of New Homes
For new homes, under the previous system, only 5% GST was charged on new home sales. Under the HST, implemented on July 1, 2010, new homes are subject to the 12% HST.
To offset the increase in costs, the BC Government is offering a partial rebate of the HST for new housing, intending that new homes up to $525,000 should bear no more tax than under the previous PST system. Homes above $525,000 receive a flat rebate of $26,250. New home sales over $525,000 are impacted, as buyers have to pay an additional 7% tax less the $26,250 flat rebate.
On November 18, 2009 the provincial government announced the HST transitional rules on housing which includes a threshold increase from $400,000 to $525,000, moving the threshold to above the median new home price in the province. According to the government news release announcing the transitional rules, the limit was increased due to feedback from consumers and the industry. To read the news release and backgrounder click here.
For more information and to see the Residential Housing New Housing Rebates and Transitional Rules for BC click here.
Increasing Cost of Professional Services like REALTOR® Commissions
The HST also introduced a new tax on most services provided by GST/HST registrants in BC. As such, service-providers like REALTORS®, home inspectors, and appraisers are required by government to collect and remit 12% HST on their fees. Under the previous system, only 5% GST was charged on professional services associated with real estate transactions. Under the new HST system, the taxes charged on those services jumped an additional 7%, adding to nearly all closing costs.
The bottom line is that the HST has increased the cost of buying and selling all property, and it has a much greater impact on the purchase of newly-built homes. Almost 60% of the average family's household income is required to cover home ownership costs. Now that the HST has been implemented, they're paying even more.
Copyright BCREA reprinted with permission
Resale housing market on solid ground in November
National resale housing activity continues its return to normal levels, having risen in November 2010 for the fourth consecutive month, according to statistics released today by The Canadian Real Estate Association (CREA).
Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards climbed 4.8 per cent in November 2010. Although this is well short of record level activity for the month of November posted a year ago, seasonally adjusted sales now stand 19.5 per cent above levels recorded in July 2010, when it reached this year’s low point.
“Sales activity rose in many local markets but eased in others,” said Georges Pahud, CREA President. “Home buyers and sellers need to recognize that local and national market trends may differ, and for that reason, they would do well to consult their local REALTOR® in order to understand how the housing market is shaping up in their market.”
Seasonally adjusted activity was up from October levels in two-thirds of all local markets, including eight of Canada’s ten most active markets. Month-over-month increases were reported in Calgary (+2.6 per cent), Edmonton (+6.9 per cent), Fraser Valley (+10.5 per cent), London & St. Thomas (+6.5 per cent), Montreal (+8.2 per cent), Ottawa (+4.2 per cent), Toronto (+6.0 per cent), and Greater Vancouver (+11.3 per cent). These markets accounted for more than half of national activity in November.
Actual (not seasonally adjusted) national sales activity in November 2010 was 9.3 per below levels in November 2009.
The persistence of large year-over-year declines from last year’s record levels has been masking the steady improvement in national sales activity since July 2010. A comparison of November sales activity to sales for the same month in previous years suggests that activity is currently running at more normal levels (Exhibit 1).
The number of new residential listings on Canadian MLS® Systems edged down 0.7 per cent on a seasonally adjusted basis in November. New listings remain 14.6 per cent below the peak reached in April 2010.
The national housing market has been firming up since July 2010 due to improving sales activity and a muted rise in new listings, but overall remains balanced. About 60 per cent of local markets in Canada were in balanced market territory in November. Of the remaining 40 per cent, three-quarters of these markets have a sales to new listings ratio consistent with a being classified as a sellers’ market.
“An increase in new listings is likely to return many sellers markets to balanced territory over the coming months,” said Gregory Klump, CREA’s Chief Economist. “With sales activity having returned to better health and a firm floor under prices, sellers who previously shied away from putting their home on the market are expected to list their home in response to improved housing demand in recent months.”
The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand. The seasonally adjusted number of months of inventory stood at 5.8 months at the end of November on a national basis. This is down from 6.1 months in October. The number of months of inventory now stands 1.4 months below the level reached in July 2010, when it stood at this year’s highest level.
The national average price for homes sold in November 2010 was $344,268, up two per cent from November 2009. Nearly two-thirds of local markets recorded a year-over-year increase in average price. In recent months, the national average price has been influenced by rising prices but fewer sales in some of Canada’s priciest markets compared to one year ago.
“Following the chilling lows at the onset of the recent recession and the dizzying heights during the subsequent recovery, the national housing market appears to be returning to some semblance of normalcy,” said Klump. “Changes to mortgage regulations earlier this year were prudent and sufficient, striking the right balance between preventing speculative housing market activity and keeping homeownership affordability within reach for creditworthy home buyers. That’s a good thing, since housing activity helped support Canadian economic growth this year. Rising interest rates and weaker expected job growth are likely to contribute to softer prospects for housing market activity and average price growth next year, reflecting weakening economic growth prospects.”
Copyright CREA reprinted with permission
Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards climbed 4.8 per cent in November 2010. Although this is well short of record level activity for the month of November posted a year ago, seasonally adjusted sales now stand 19.5 per cent above levels recorded in July 2010, when it reached this year’s low point.
“Sales activity rose in many local markets but eased in others,” said Georges Pahud, CREA President. “Home buyers and sellers need to recognize that local and national market trends may differ, and for that reason, they would do well to consult their local REALTOR® in order to understand how the housing market is shaping up in their market.”
Seasonally adjusted activity was up from October levels in two-thirds of all local markets, including eight of Canada’s ten most active markets. Month-over-month increases were reported in Calgary (+2.6 per cent), Edmonton (+6.9 per cent), Fraser Valley (+10.5 per cent), London & St. Thomas (+6.5 per cent), Montreal (+8.2 per cent), Ottawa (+4.2 per cent), Toronto (+6.0 per cent), and Greater Vancouver (+11.3 per cent). These markets accounted for more than half of national activity in November.
Actual (not seasonally adjusted) national sales activity in November 2010 was 9.3 per below levels in November 2009.
The persistence of large year-over-year declines from last year’s record levels has been masking the steady improvement in national sales activity since July 2010. A comparison of November sales activity to sales for the same month in previous years suggests that activity is currently running at more normal levels (Exhibit 1).
The number of new residential listings on Canadian MLS® Systems edged down 0.7 per cent on a seasonally adjusted basis in November. New listings remain 14.6 per cent below the peak reached in April 2010.
The national housing market has been firming up since July 2010 due to improving sales activity and a muted rise in new listings, but overall remains balanced. About 60 per cent of local markets in Canada were in balanced market territory in November. Of the remaining 40 per cent, three-quarters of these markets have a sales to new listings ratio consistent with a being classified as a sellers’ market.
“An increase in new listings is likely to return many sellers markets to balanced territory over the coming months,” said Gregory Klump, CREA’s Chief Economist. “With sales activity having returned to better health and a firm floor under prices, sellers who previously shied away from putting their home on the market are expected to list their home in response to improved housing demand in recent months.”
The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand. The seasonally adjusted number of months of inventory stood at 5.8 months at the end of November on a national basis. This is down from 6.1 months in October. The number of months of inventory now stands 1.4 months below the level reached in July 2010, when it stood at this year’s highest level.
The national average price for homes sold in November 2010 was $344,268, up two per cent from November 2009. Nearly two-thirds of local markets recorded a year-over-year increase in average price. In recent months, the national average price has been influenced by rising prices but fewer sales in some of Canada’s priciest markets compared to one year ago.
“Following the chilling lows at the onset of the recent recession and the dizzying heights during the subsequent recovery, the national housing market appears to be returning to some semblance of normalcy,” said Klump. “Changes to mortgage regulations earlier this year were prudent and sufficient, striking the right balance between preventing speculative housing market activity and keeping homeownership affordability within reach for creditworthy home buyers. That’s a good thing, since housing activity helped support Canadian economic growth this year. Rising interest rates and weaker expected job growth are likely to contribute to softer prospects for housing market activity and average price growth next year, reflecting weakening economic growth prospects.”
Copyright CREA reprinted with permission
Housing Market Recovers from Summer Doldrums
The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province climbed 20 per cent in November from October 2010, on a seasonally adjusted basis. Compared to November of last year, MLS® residential unit sales were down 21 per cent to 5,647 units. The average MLS® residential price rose 9 per cent to $523,394 in November compared to the same month last year.
“Improved economic conditions and low mortgage interest rates have contributed to a 46 per cent increase in home sales since July,” said Cameron Muir, BCREA Chief Economist. Employment in BC eclipsed the July 2008 record by 2,600 jobs last month, while the unemployment rate dipped to 6.9 per cent, the lowest recorded since January 2009.
“The inventory of homes for sale has trended lower since last spring, improving market conditions in many areas of the province,” added Muir. Vancouver and Victoria climbed back into balanced market conditions in last month.
Year-to-date, BC residential sales dollar volume declined 4 per cent $35.5 billion, compared to the same period last year. Residential unit sales declined 11 per cent to 70,382 year-to-date, while the average MLS® residential price climbed 9 per cent to $504,042 over the same period.
Copyright BCREA reprinted with permission
“Improved economic conditions and low mortgage interest rates have contributed to a 46 per cent increase in home sales since July,” said Cameron Muir, BCREA Chief Economist. Employment in BC eclipsed the July 2008 record by 2,600 jobs last month, while the unemployment rate dipped to 6.9 per cent, the lowest recorded since January 2009.
“The inventory of homes for sale has trended lower since last spring, improving market conditions in many areas of the province,” added Muir. Vancouver and Victoria climbed back into balanced market conditions in last month.
Year-to-date, BC residential sales dollar volume declined 4 per cent $35.5 billion, compared to the same period last year. Residential unit sales declined 11 per cent to 70,382 year-to-date, while the average MLS® residential price climbed 9 per cent to $504,042 over the same period.
Copyright BCREA reprinted with permission
The best time to sell a home in 2011
One of the questions that we frequently get asked is, "When is the best time to sell our house?" In fact what those people are really asking is, "How do we get the maximum value for our property?" It is not really about the time of the year.
However, weather and holidays do play an important factor in selling your home. Almost no one goes house hunting around Christmas, and few give up their summer vacations.
Late spring and summer are usually thought of as the best times to put a home on the market because buyer demand builds steadily through spring. Sales then peak during the warmest months when the nice weather and beautiful flowers make it a great time to show your home.
Families with school aged children are less likely to move during the school year and summer is an ideal time.
August brings a lag in sales, as people go away on vacation and start to think about the new school year. Sales surge briefly in the fall before dropping in winter as buyers and sellers focus on the holidays. However, by January, buyers are out again and sales steadily increase into spring.
Of course, selling in the hot season isn’t the whole story. You should pay attention to your local housing market and try to list during a seller’s market, when there will be more competition among buyers for your home – which could mean a better price, a quicker closing and fewer conditions on the offer. Your real estate agent will be able to tell you what the local housing market is like.
On the other hand, if it is a buyers' market, you may be in a strong position to purchase a new home, especially if you have accumulated large equity in your current property.
Another key factor to consider is the economy. Are interest rates higher or lower in comparison to your current mortgage? If they are higher, you may want to stick with your current home, as your new mortgage payments could be uncomfortable. If rates are lower, you might be able to trade up to a more expensive home without a significant increase in your monthly mortgage obligation.
Some sellers may have no choice but to sell at a slow time of year. Job relocation and the need to free up assets are facts of life that can deprive families of the luxury of waiting until the spring bloom to put their homes on the market. But there are ways to improve your chances of a sale if you have to list your home late in the year, like playing up holiday decorations and shovelling walkways to maximize curb appeal. Selling at this point in the cycle isn't always the worst fate.
Try not to sell a house in a quiet market. As a general rule of thumb, you'll want to sell your home within 6-8 weeks from listing, while it's fresh. After this period the listing becomes "old" and buyers start getting suspicious. They tend to assume something is wrong with the property and stay away. When this happens, it could damage your chance of getting the best price.
Trying to time the real estate market is no different than trying to predict the financial markets. One can make broad assessments, however precise predictions would be tantamount to having a crystal ball. If we could all predict the future, we would never have market corrections or crashes.
The truth is, there are people buying real estate every week of the year, and often for personal reasons. The best time to sell is when you are ready.
However, weather and holidays do play an important factor in selling your home. Almost no one goes house hunting around Christmas, and few give up their summer vacations.
Late spring and summer are usually thought of as the best times to put a home on the market because buyer demand builds steadily through spring. Sales then peak during the warmest months when the nice weather and beautiful flowers make it a great time to show your home.
Families with school aged children are less likely to move during the school year and summer is an ideal time.
August brings a lag in sales, as people go away on vacation and start to think about the new school year. Sales surge briefly in the fall before dropping in winter as buyers and sellers focus on the holidays. However, by January, buyers are out again and sales steadily increase into spring.
Of course, selling in the hot season isn’t the whole story. You should pay attention to your local housing market and try to list during a seller’s market, when there will be more competition among buyers for your home – which could mean a better price, a quicker closing and fewer conditions on the offer. Your real estate agent will be able to tell you what the local housing market is like.
On the other hand, if it is a buyers' market, you may be in a strong position to purchase a new home, especially if you have accumulated large equity in your current property.
Another key factor to consider is the economy. Are interest rates higher or lower in comparison to your current mortgage? If they are higher, you may want to stick with your current home, as your new mortgage payments could be uncomfortable. If rates are lower, you might be able to trade up to a more expensive home without a significant increase in your monthly mortgage obligation.
Some sellers may have no choice but to sell at a slow time of year. Job relocation and the need to free up assets are facts of life that can deprive families of the luxury of waiting until the spring bloom to put their homes on the market. But there are ways to improve your chances of a sale if you have to list your home late in the year, like playing up holiday decorations and shovelling walkways to maximize curb appeal. Selling at this point in the cycle isn't always the worst fate.
Try not to sell a house in a quiet market. As a general rule of thumb, you'll want to sell your home within 6-8 weeks from listing, while it's fresh. After this period the listing becomes "old" and buyers start getting suspicious. They tend to assume something is wrong with the property and stay away. When this happens, it could damage your chance of getting the best price.
Trying to time the real estate market is no different than trying to predict the financial markets. One can make broad assessments, however precise predictions would be tantamount to having a crystal ball. If we could all predict the future, we would never have market corrections or crashes.
The truth is, there are people buying real estate every week of the year, and often for personal reasons. The best time to sell is when you are ready.
Upgrades that don’t pay off
Many home owner are probably thinking about making some home upgrades to attract flocks of admiring buyers. While it's certainly a smart move to make a few improvements, don't overdo it. If you spend stacks of cash on remodelling expenses, you'll probably never recoup your investment.
Before you invest tons of money into an elaborate renovation project, consider what the competing properties in your neighbourhood have to offer. While you want your house to stand out from the competition, you shouldn't make unwarranted upgrades that greatly exceed other properties in the area. Not only will you end up losing money, but you may even scare off potential buyers.
Find out how similarly priced homes in your neighbourhood measure up, and make improvements based on your specific marketplace.
1. High maintenance upgrades
If your upgrade requires too much upkeep, buyers may view it as more of a nuisance than an asset. A prime example is an in-ground swimming pool, which can cost a small fortune to install and maintain. Real estate agents anywhere, except in exclusive neighbourhoods of warm climates, will tell you that a swimming pool can be more of a negative than a positive on resale.
Buyers with young children often steer clear of homes with pools because of safety concerns. In other words, home buyers are more likely to view your in-ground pool as an inconvenience - not a selling point.
2. Replacing a popular feature
Before you consider making a major home change, such as converting your garage into a game room, take a look around. If every other home in your neighbourhood boasts a two-car garage, you should probably think twice. Do you really want to be the only house in the area with no garage? Most homebuyers would prefer to have a sheltered place to park their car than a room to play ping pong and darts.
3. Unpopular upgrades
Homeowners may, in an attempt to increase the value of a home, make improvements to the property that unintentionally make the home fall outside of the norm for the neighbourhood. While a large, expensive remodel, such as adding a second story with two bedrooms and a full bath, might make the home more appealing, it will not add significantly to the resale value if the house is in the midst of a neighbourhood of small one-story homes.
4. Extensive Landscaping
Homebuyers may appreciate well-maintained or mature landscaping, but don't expect the home value to increase because of it. A beautiful yard may encourage potential buyers to take a closer look at the property, but will probably not add to the selling price. If a buyer is unable or unwilling to put in the effort to maintain a garden, it will quickly become an eyesore, or the new homeowner might need to pay a qualified gardener to take charge. Either way, many buyers view elaborate landscaping as a burden and, as a result, are not likely to consider it when placing value on the home.
5. High-End upgrades
A home that has a beautifully remodelled and modern kitchen with stainless steel appliances and new granite countertop can be viewed as a work in progress if the bathrooms remain functionally obsolete. Therefore, the remodel might not fetch a high return if the rest of the home is not brought up to the same level. High-quality upgrades generally increase the value of high-end homes, but not necessarily mid-range houses where the upgrade may be inconsistent with the rest of the home.
6. Invisible Improvements
Invisible improvements are those costly projects that you know make your house a better place to live in, but that nobody else would notice or likely care about. A new plumbing system or HVAC unit (heating, venting and air conditioning) might be necessary, but don't expect it to recover these costs when it comes time to sell. Many homebuyers simply expect these systems to be in good working order and will not pay extra just because you recently installed a new heater. It may be better to think of these improvements in terms of regular maintenance, and not an investment in your home's value.
Overall, it's good to put some work into your house before you try to sell it, as it can add value and make it more attractive to potential buyers. However, there are some things that will have the buyer running for the door - or will at least not add anything to the house's closing price. Keep these things in mind when you're getting ready to put up that "For Sale" sign.
Before you invest tons of money into an elaborate renovation project, consider what the competing properties in your neighbourhood have to offer. While you want your house to stand out from the competition, you shouldn't make unwarranted upgrades that greatly exceed other properties in the area. Not only will you end up losing money, but you may even scare off potential buyers.
Find out how similarly priced homes in your neighbourhood measure up, and make improvements based on your specific marketplace.
1. High maintenance upgrades
If your upgrade requires too much upkeep, buyers may view it as more of a nuisance than an asset. A prime example is an in-ground swimming pool, which can cost a small fortune to install and maintain. Real estate agents anywhere, except in exclusive neighbourhoods of warm climates, will tell you that a swimming pool can be more of a negative than a positive on resale.
Buyers with young children often steer clear of homes with pools because of safety concerns. In other words, home buyers are more likely to view your in-ground pool as an inconvenience - not a selling point.
2. Replacing a popular feature
Before you consider making a major home change, such as converting your garage into a game room, take a look around. If every other home in your neighbourhood boasts a two-car garage, you should probably think twice. Do you really want to be the only house in the area with no garage? Most homebuyers would prefer to have a sheltered place to park their car than a room to play ping pong and darts.
3. Unpopular upgrades
Homeowners may, in an attempt to increase the value of a home, make improvements to the property that unintentionally make the home fall outside of the norm for the neighbourhood. While a large, expensive remodel, such as adding a second story with two bedrooms and a full bath, might make the home more appealing, it will not add significantly to the resale value if the house is in the midst of a neighbourhood of small one-story homes.
4. Extensive Landscaping
Homebuyers may appreciate well-maintained or mature landscaping, but don't expect the home value to increase because of it. A beautiful yard may encourage potential buyers to take a closer look at the property, but will probably not add to the selling price. If a buyer is unable or unwilling to put in the effort to maintain a garden, it will quickly become an eyesore, or the new homeowner might need to pay a qualified gardener to take charge. Either way, many buyers view elaborate landscaping as a burden and, as a result, are not likely to consider it when placing value on the home.
5. High-End upgrades
A home that has a beautifully remodelled and modern kitchen with stainless steel appliances and new granite countertop can be viewed as a work in progress if the bathrooms remain functionally obsolete. Therefore, the remodel might not fetch a high return if the rest of the home is not brought up to the same level. High-quality upgrades generally increase the value of high-end homes, but not necessarily mid-range houses where the upgrade may be inconsistent with the rest of the home.
6. Invisible Improvements
Invisible improvements are those costly projects that you know make your house a better place to live in, but that nobody else would notice or likely care about. A new plumbing system or HVAC unit (heating, venting and air conditioning) might be necessary, but don't expect it to recover these costs when it comes time to sell. Many homebuyers simply expect these systems to be in good working order and will not pay extra just because you recently installed a new heater. It may be better to think of these improvements in terms of regular maintenance, and not an investment in your home's value.
Overall, it's good to put some work into your house before you try to sell it, as it can add value and make it more attractive to potential buyers. However, there are some things that will have the buyer running for the door - or will at least not add anything to the house's closing price. Keep these things in mind when you're getting ready to put up that "For Sale" sign.
Housing market in Canada lands safely
By John Morrissy, Financial Post December 10, 2010
There was no bubble and there will be no bust in Canada's housing market, a TD Economics report said Thursday.
The market has instead "landed safely," said economist Pascal Gauthier. He said 2010 "was not what bubbles are made of. Similarly, under our forecast interest-rate profile, the next two years will not be what crashes are made of."
Statistics Canada reported Thursday new home prices edged up in October for the third straight month, due to increases in Toronto and Vancouver. The federal agency's New Housing Price Index rose 0.1 per cent during, following a 0.2 per cent increase in September.
The market's stellar recovery through 2009 had many worried it had become overheated as first-time buyers rushed to capitalize on rock-bottom mortgage rates, and sales and prices soared.
But the race to get in before borrowing costs rose front-loaded the market, and sales eased into 2010. Listings also retreated, keeping the market in check and preventing a steep price drop, Gauthier said.
By the second half of this year, sales have begun to rebound, as mortgage rates eased. The bank now expects those low rates and higher sales to carry into 2011, and it has revised up its annual sales forecast by eight per cent to 420,000 units.
The 2011 outlook is pretty much in line with a forecast earlier this week from realtor Re/Max, which said it expects sales next year of 441,000 units, and for average prices to rise three per cent to $350,000 by year-end. TD expects average prices to drop slightly in 2011 to $336,000 from $338,400 in 2010.
© Copyright (c) The Province
There was no bubble and there will be no bust in Canada's housing market, a TD Economics report said Thursday.
The market has instead "landed safely," said economist Pascal Gauthier. He said 2010 "was not what bubbles are made of. Similarly, under our forecast interest-rate profile, the next two years will not be what crashes are made of."
Statistics Canada reported Thursday new home prices edged up in October for the third straight month, due to increases in Toronto and Vancouver. The federal agency's New Housing Price Index rose 0.1 per cent during, following a 0.2 per cent increase in September.
The market's stellar recovery through 2009 had many worried it had become overheated as first-time buyers rushed to capitalize on rock-bottom mortgage rates, and sales and prices soared.
But the race to get in before borrowing costs rose front-loaded the market, and sales eased into 2010. Listings also retreated, keeping the market in check and preventing a steep price drop, Gauthier said.
By the second half of this year, sales have begun to rebound, as mortgage rates eased. The bank now expects those low rates and higher sales to carry into 2011, and it has revised up its annual sales forecast by eight per cent to 420,000 units.
The 2011 outlook is pretty much in line with a forecast earlier this week from realtor Re/Max, which said it expects sales next year of 441,000 units, and for average prices to rise three per cent to $350,000 by year-end. TD expects average prices to drop slightly in 2011 to $336,000 from $338,400 in 2010.
© Copyright (c) The Province
Buying a Home in the off season
If you ’ve been thinking about buying a new home but don’t think that the cooler months make for an ideal time, you may actually benefit from changing your perspective. Though spring and summer are typically the most active real estate buying and selling seasons, house hunting in winter has its own benefits. Knowing what they are and how to use them to your advantage can put you on the path to homeownership sooner rather than later.
One of the best reasons to buy a house in winter is that there is less competition out there. Because many people believe that buying a home in cooler months is a bad idea, they stay home waiting for spring to come instead of house hunting. After all, moving at this time can be inconvenient and messy if you have to deal with inclement weather. Additionally, families will be less likely to move in the months of September through June if their children are in school.
It’s the perfect time to start looking for a home during months when there are fewer house hunters. With fewer buyers in the market, homes move more slowly and sellers are more willing to negotiate on their asking price. They often need to move from the property in the near future, and you can use that to your advantage to get a favourable deal on a house that may otherwise be out of your price range during the peak selling seasons.
Lenders also usually have fewer loans to process and less paperwork to deal with in the off-season. With lenders less hassled, you can expect a smoother mortgage approval process.
Touring a home during the winter allows you to see things that you may not have been exposed to if you had come in the summer months. For instance, drafts may be a sign that windows need replacing or that there are air leaks that may need to be sealed. If the house feels warm without the thermostat being set too high, it may be an indication that the home has good insulation.
If you decide to brave the cold and hunt for a home during winter, there are a few things you should keep in mind. First, don’t feel like you’re going to inconvenience someone by viewing their home during the holidays, evenings or weekends. Sellers want to sell just as much as buyers want to buy. Also, don’t be overcome by holiday decorations, which can make a house look cramped or have the opposite effect of making the house more emotionally appealing than it otherwise would be.
Just like any holiday shopping sale, knowledgeable shoppers know where to find great opportunities. The same holds true for real estate. There are still homes for sale in winter and bargains to be found, so don’t let the seasons rule your search for a home.
Regardless of when you decide to buy or sell, answers to your questions are just a phone call or e-mail away!
One of the best reasons to buy a house in winter is that there is less competition out there. Because many people believe that buying a home in cooler months is a bad idea, they stay home waiting for spring to come instead of house hunting. After all, moving at this time can be inconvenient and messy if you have to deal with inclement weather. Additionally, families will be less likely to move in the months of September through June if their children are in school.
It’s the perfect time to start looking for a home during months when there are fewer house hunters. With fewer buyers in the market, homes move more slowly and sellers are more willing to negotiate on their asking price. They often need to move from the property in the near future, and you can use that to your advantage to get a favourable deal on a house that may otherwise be out of your price range during the peak selling seasons.
Lenders also usually have fewer loans to process and less paperwork to deal with in the off-season. With lenders less hassled, you can expect a smoother mortgage approval process.
Touring a home during the winter allows you to see things that you may not have been exposed to if you had come in the summer months. For instance, drafts may be a sign that windows need replacing or that there are air leaks that may need to be sealed. If the house feels warm without the thermostat being set too high, it may be an indication that the home has good insulation.
If you decide to brave the cold and hunt for a home during winter, there are a few things you should keep in mind. First, don’t feel like you’re going to inconvenience someone by viewing their home during the holidays, evenings or weekends. Sellers want to sell just as much as buyers want to buy. Also, don’t be overcome by holiday decorations, which can make a house look cramped or have the opposite effect of making the house more emotionally appealing than it otherwise would be.
Just like any holiday shopping sale, knowledgeable shoppers know where to find great opportunities. The same holds true for real estate. There are still homes for sale in winter and bargains to be found, so don’t let the seasons rule your search for a home.
Regardless of when you decide to buy or sell, answers to your questions are just a phone call or e-mail away!
Top 10 Home Staging Ideas
For many hom¬eowners, the concept of profes¬sional home staging is shedding new light on how to promote a home in their real estate marketplace. If you’re thinking of selling your home, deciding on the best ways to organize your property before the “For Sale” sign is erected can help sell your home. Following are some tips that may help you sell your home faster and at a higher price.
1. Make an impression. Prospective buyers make up their minds about your house even before they get out of the car. To ensure they have the right idea, clean up your yard, get rid of unsightly weeds, and sweep/shovel your driveway and porches. Get out the rags and cleanser and spend 30 minutes scouring your front door, porch, railings and steps. Then tuck away all your recycling cans and bins at the back of the house or in a corner of the garage.
2. De-clutter. A common phrase used to describe the importance of de-cluttering is: Clutter eats equity. So purge your closets, empty cupboards and box up small appliances. You may even want to rent a storage locker to keep items you simply cannot part with, while throwing out items you’ve collected over the years that you don’t want to take with you to your next home. This will also save you time during your big move. Ensure you pay close attention to your countertops and coffee tables as well.
3. Impersonal works. You want buyers to imagine themselves living in your home, so stash anything connected to your family or personal interests. Hide your son’s hockey trophies, store family photos and remove all traces of day-to-day life. This also included removing personal effects from the bathrooms.
4. Keep it fresh. There’s nothing worse than stepping into a house that smells of smoke, dampness or pet odours. The easy solution is to keep your windows open for 10 minutes a day. This strategy works better than deodorizers since a lot of people have allergies to artificial room fresheners. The oldest trick of all? Leave chocolate chip cookies baking in the oven. Yes, it’s hokey, but the smell does do wonders to help buyers bond with your home.
5. Declare war on grime. Cleanliness helps put a buyer’s mind at ease since it suggests that you’ve probably taken good care of your residence in other ways as well. So clean everything: walls, door handles, light fixtures and pantry cupboards. And don’t forget to dust your furnace room and furnace, since this makes your furnace look newer. Power washing windows, walkways, eaves troughs and pathways can also do wonders for your home’s exterior.
6. Hire a handyman. If you don’t have the time or expertise to deal with the aesthetics of your home, consider hiring a professional. Dripping faucets, cracked tiles and mouldy caulking around the bathtub can knock thousands of dollars off the price of your home.
7. Colour it up. Your single best investment may be a fresh coat of paint in key areas of your home. Try painting your front door and placing some urns containing seasonal arrangements on your front step or just inside the entryway. Remember that small touches can make a house seem cared for and important.
8. Reduce furniture. An easy way to create a sense of space is to get rid of some furniture. Moving a sofa and end tables into storage can give a small room some much-needed breathing space. If your furniture dates from the Mulroney era, consider packing it away and renting or borrowing some modern, stylish furniture or a couple of well-chosen pieces of wall art. Keep your rooms clean and simple like a hotel room or the showroom for a new house.
9. Lighten up. The brighter and sunnier a space, the easier it is to sell. If you don’t have the time or energy to clean all of your windows – inside and out – it may be a wise investment to hire a professional window-cleaning company. Thoroughly clean the shades on your light fixtures, change light bulbs and add floor lamps if an area seems dim. Finally, when it comes time to show your home, make sure all the lights are on, especially in hallways.
10. Add a touch of humanity. A couple of planters containing seasonal arrangements on your front porch, a vase of flowers on your dining room table, or even a simple rose in a vase can warm up a room. Candles can also do wonders in lighting and warming a room.
1. Make an impression. Prospective buyers make up their minds about your house even before they get out of the car. To ensure they have the right idea, clean up your yard, get rid of unsightly weeds, and sweep/shovel your driveway and porches. Get out the rags and cleanser and spend 30 minutes scouring your front door, porch, railings and steps. Then tuck away all your recycling cans and bins at the back of the house or in a corner of the garage.
2. De-clutter. A common phrase used to describe the importance of de-cluttering is: Clutter eats equity. So purge your closets, empty cupboards and box up small appliances. You may even want to rent a storage locker to keep items you simply cannot part with, while throwing out items you’ve collected over the years that you don’t want to take with you to your next home. This will also save you time during your big move. Ensure you pay close attention to your countertops and coffee tables as well.
3. Impersonal works. You want buyers to imagine themselves living in your home, so stash anything connected to your family or personal interests. Hide your son’s hockey trophies, store family photos and remove all traces of day-to-day life. This also included removing personal effects from the bathrooms.
4. Keep it fresh. There’s nothing worse than stepping into a house that smells of smoke, dampness or pet odours. The easy solution is to keep your windows open for 10 minutes a day. This strategy works better than deodorizers since a lot of people have allergies to artificial room fresheners. The oldest trick of all? Leave chocolate chip cookies baking in the oven. Yes, it’s hokey, but the smell does do wonders to help buyers bond with your home.
5. Declare war on grime. Cleanliness helps put a buyer’s mind at ease since it suggests that you’ve probably taken good care of your residence in other ways as well. So clean everything: walls, door handles, light fixtures and pantry cupboards. And don’t forget to dust your furnace room and furnace, since this makes your furnace look newer. Power washing windows, walkways, eaves troughs and pathways can also do wonders for your home’s exterior.
6. Hire a handyman. If you don’t have the time or expertise to deal with the aesthetics of your home, consider hiring a professional. Dripping faucets, cracked tiles and mouldy caulking around the bathtub can knock thousands of dollars off the price of your home.
7. Colour it up. Your single best investment may be a fresh coat of paint in key areas of your home. Try painting your front door and placing some urns containing seasonal arrangements on your front step or just inside the entryway. Remember that small touches can make a house seem cared for and important.
8. Reduce furniture. An easy way to create a sense of space is to get rid of some furniture. Moving a sofa and end tables into storage can give a small room some much-needed breathing space. If your furniture dates from the Mulroney era, consider packing it away and renting or borrowing some modern, stylish furniture or a couple of well-chosen pieces of wall art. Keep your rooms clean and simple like a hotel room or the showroom for a new house.
9. Lighten up. The brighter and sunnier a space, the easier it is to sell. If you don’t have the time or energy to clean all of your windows – inside and out – it may be a wise investment to hire a professional window-cleaning company. Thoroughly clean the shades on your light fixtures, change light bulbs and add floor lamps if an area seems dim. Finally, when it comes time to show your home, make sure all the lights are on, especially in hallways.
10. Add a touch of humanity. A couple of planters containing seasonal arrangements on your front porch, a vase of flowers on your dining room table, or even a simple rose in a vase can warm up a room. Candles can also do wonders in lighting and warming a room.
Tuesday, November 16, 2010
BC Home Sales Trend Higher
Vancouver, BC – November 15, 2010. The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province declined 36 per cent to 5,507 units in October compared to the same month last year. On a seasonally adjusted basis, MLS® residential unit sales in the province increased 2 per cent in October from September 2010. The average MLS® residential price climbed 6 per cent to $521,859 in October compared to the same month last year.
“BC home sales have posted moderate gains since the summer months,” said Cameron Muir, BCREA Chief Economist. “Consumer demand was bolstered by double-dip in mortgage interest rates and the associated increase in purchasing power.”
“Total active residential listings in the province have declined 18 per cent since June,” added Muir. “However, the housing market remains tilted in favour of homebuyers.”
Year-to-date, BC residential sales dollar volume declined 2 per cent $32.5 billion, compared to the same period last year. Residential unit sales declined 10 per cent to 64,735 year-to-date, while the average MLS® residential price climbed 9 per cent to $502,353 over the same period.
Copyright BC Real Estate Association. Reprinted with permission.
“BC home sales have posted moderate gains since the summer months,” said Cameron Muir, BCREA Chief Economist. “Consumer demand was bolstered by double-dip in mortgage interest rates and the associated increase in purchasing power.”
“Total active residential listings in the province have declined 18 per cent since June,” added Muir. “However, the housing market remains tilted in favour of homebuyers.”
Year-to-date, BC residential sales dollar volume declined 2 per cent $32.5 billion, compared to the same period last year. Residential unit sales declined 10 per cent to 64,735 year-to-date, while the average MLS® residential price climbed 9 per cent to $502,353 over the same period.
Copyright BC Real Estate Association. Reprinted with permission.
Finding a Perfect Home
Before you begin searching for a home, it’s always helpful to think about your needs both now and in the future. And if you have any questions about the home-buying process or different types of real estate, don’t hesitate to call or e-mail.
Following are some things to consider when you’re deciding which type of home to buy:
• Location. Do you want to live in a city, town or in the countryside? How long will your work commute be? Where will your children attend school and how will they get there? Are you close to amenities?
• Size requirements. Do you need several bedrooms, more than one bathroom, space for a home office, a two-car garage?
• Special features. Do you want air conditioning, storage or hobby space, a fireplace, a swimming pool? Do you have family members with special needs? Do you want special features to save energy, enhance indoor air quality and reduce environmental impact?
• Lifestyles and stages. Do you plan to have children? Do you have teenagers who will be moving away soon? Are you close to retirement? Will you need a home that can accommodate different stages of life?
New Versus Resale Homes
When thinking about your ideal home, the first thing you should consider is whether you want a previously-owned home (often called a resale) or a new home.
Some things to consider with a new home include: up-to-date designs that take into account the latest trends, materials and features; you may be able to upgrade or choose certain items such as siding, flooring, cabinets, plumbing and electrical fixtures; schools, shopping malls and other services may not be complete for years; and you may have to pay extra if you want to add a fireplace, plant trees and sod or pave your driveway. Make sure you know exactly what’s included in the price of your home.
Some things to consider with a resale home include: easy access to services, since it’s likely established in a neighbourhood with schools, shopping malls and other services; may have extras like fireplaces, a finished basement or swimming pool; and you may need to redecorate, renovate or do major repairs such as replacing the roof, windows and doors.
Deciding Which Type of Home to Buy
There are many types of homes to choose from and each has its advantages and disadvantages. Think about your needs before making a decision, and don’t forget to look beyond the interior walls. The environment surrounding your home can be as important as the environment within.
Following are some different types of homes from which to choose:
Single-Family Detached – A home containing one dwelling unit that stands alone and sits on its own lot, thereby offering a greater degree of privacy.
Semi-Detached – A single-family home that is joined to another one by a common wall. It can offer many of the advantages of a single-family detached home and is usually less expensive to buy and maintain.
Row House or Townhouse – Many similar single-family homes, side-by-side, separated by common walls. They can be freehold, condominiums or rental units. They offer less privacy than a single-family detached home but still provide a separate outdoor space. These homes can cost less to buy and maintain – but they can also be large, luxury units.
Link or Carriage Home – Houses joined by garages or carports, which provide access to the front and back yards. Builders sometimes join basement walls so that link houses appear to be single-family homes on small lots. These houses can be less expensive than single-family detached homes.
Condos/Stratas – A condo/strata is a form of ownership, not a type of construction. Condos/stratas can be high-rise residential buildings, townhouse complexes, individual houses and low-rise residential buildings.
Regardless of the type of home you decide to buy, answers to your questions are just a phone call or e-mail away!
Following are some things to consider when you’re deciding which type of home to buy:
• Location. Do you want to live in a city, town or in the countryside? How long will your work commute be? Where will your children attend school and how will they get there? Are you close to amenities?
• Size requirements. Do you need several bedrooms, more than one bathroom, space for a home office, a two-car garage?
• Special features. Do you want air conditioning, storage or hobby space, a fireplace, a swimming pool? Do you have family members with special needs? Do you want special features to save energy, enhance indoor air quality and reduce environmental impact?
• Lifestyles and stages. Do you plan to have children? Do you have teenagers who will be moving away soon? Are you close to retirement? Will you need a home that can accommodate different stages of life?
New Versus Resale Homes
When thinking about your ideal home, the first thing you should consider is whether you want a previously-owned home (often called a resale) or a new home.
Some things to consider with a new home include: up-to-date designs that take into account the latest trends, materials and features; you may be able to upgrade or choose certain items such as siding, flooring, cabinets, plumbing and electrical fixtures; schools, shopping malls and other services may not be complete for years; and you may have to pay extra if you want to add a fireplace, plant trees and sod or pave your driveway. Make sure you know exactly what’s included in the price of your home.
Some things to consider with a resale home include: easy access to services, since it’s likely established in a neighbourhood with schools, shopping malls and other services; may have extras like fireplaces, a finished basement or swimming pool; and you may need to redecorate, renovate or do major repairs such as replacing the roof, windows and doors.
Deciding Which Type of Home to Buy
There are many types of homes to choose from and each has its advantages and disadvantages. Think about your needs before making a decision, and don’t forget to look beyond the interior walls. The environment surrounding your home can be as important as the environment within.
Following are some different types of homes from which to choose:
Single-Family Detached – A home containing one dwelling unit that stands alone and sits on its own lot, thereby offering a greater degree of privacy.
Semi-Detached – A single-family home that is joined to another one by a common wall. It can offer many of the advantages of a single-family detached home and is usually less expensive to buy and maintain.
Row House or Townhouse – Many similar single-family homes, side-by-side, separated by common walls. They can be freehold, condominiums or rental units. They offer less privacy than a single-family detached home but still provide a separate outdoor space. These homes can cost less to buy and maintain – but they can also be large, luxury units.
Link or Carriage Home – Houses joined by garages or carports, which provide access to the front and back yards. Builders sometimes join basement walls so that link houses appear to be single-family homes on small lots. These houses can be less expensive than single-family detached homes.
Condos/Stratas – A condo/strata is a form of ownership, not a type of construction. Condos/stratas can be high-rise residential buildings, townhouse complexes, individual houses and low-rise residential buildings.
Regardless of the type of home you decide to buy, answers to your questions are just a phone call or e-mail away!
Moderate Rise in Home Sales Forecast
BCREA Fall Housing Forecast 2010
Vancouver, BC – November 10, 2010. The British Columbia Real Estate Association (BCREA) released its Fall Housing Forecast 2010 today.
BC Multiple Listing Service® (MLS®) residential sales are forecast to decline 12 per cent from 85,028 units in 2009 to 74,950 units this year, before increasing 6 per cent to 79,700 units in 2011.
“Consumers are responding to a double-dip in mortgage interest rates,” said Cameron Muir, BCREA Chief Economist. “While housing demand waned in the province through the spring and summer, the added purchasing power from low borrowing costs combined with gradual improvement in the BC economy has trended home sales higher in recent months.”
“A moderate increase in BC home sales is expected next year coinciding with employment and population growth,” added Muir. “However, the 79,700 unit sales that are forecast for 2011 are well below the ten-year average of 85,500 units.” A record 106,300 MLS® residential sales were recorded in 2005.
The average MLS® residential price is forecast to climb 7 per cent to $498,500 this year and remain relatively unchanged in 2011, albeit declining by 1 per cent to $495,600.
Copyright BCREA reprinted with permission
Vancouver, BC – November 10, 2010. The British Columbia Real Estate Association (BCREA) released its Fall Housing Forecast 2010 today.
BC Multiple Listing Service® (MLS®) residential sales are forecast to decline 12 per cent from 85,028 units in 2009 to 74,950 units this year, before increasing 6 per cent to 79,700 units in 2011.
“Consumers are responding to a double-dip in mortgage interest rates,” said Cameron Muir, BCREA Chief Economist. “While housing demand waned in the province through the spring and summer, the added purchasing power from low borrowing costs combined with gradual improvement in the BC economy has trended home sales higher in recent months.”
“A moderate increase in BC home sales is expected next year coinciding with employment and population growth,” added Muir. “However, the 79,700 unit sales that are forecast for 2011 are well below the ten-year average of 85,500 units.” A record 106,300 MLS® residential sales were recorded in 2005.
The average MLS® residential price is forecast to climb 7 per cent to $498,500 this year and remain relatively unchanged in 2011, albeit declining by 1 per cent to $495,600.
Copyright BCREA reprinted with permission
CREA Ratifies Competition Consent Agreement
St. John’s NL – October 24, 2010 – The President of the Canadian Real Estate Association (CREA), Georges Pahud, today welcomed the decision of delegates to its Special General Meeting to approve CREA’s consent agreement with the Commissioner of Competition regarding the case before the Competition Tribunal.
“We are pleased that after careful consideration and reflection, real estate Boards and Associations from across Canada have endorsed the agreement,” says Pahud.
The agreement was approved by CREA’s Board of Directors and the Commissioner of Competition on September 30th and was in escrow pending today’s vote. It confirms CREA’s commitment to a competitive real estate services market.
The Commissioner and CREA have agreed that its rules as well as those of its members should not deny or discriminate against REALTORS® wishing to offer mere posting services. CREA does not believe that such rules exist today, but if they do, they must be repealed or Boards will lose their license to operate under the MLS® trademarks. Board MLS® Systems remain a member to member service designed to provide accurate and timely information critical to the delivery of professional real estate services to Canadians.
“This 10-year agreement brings a close to a long process of negotiation with the Competition Bureau and will allow CREA and REALTORS® to do what they do best – help people with the biggest financial decision of their lives, buying and selling a home in these challenging economic times,” says Pahud.
CREA believes the agreement reflects both current practices and intent regarding posting to Board MLS® Systems. Buying and selling homes is an incredibly competitive business, with 100,000 REALTORS® working through thousands of brokerages. Business models are diverse and CREA members offer a variety of services.
MLS® Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.
The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade Associations, representing more than 100,000 REALTORS® working through more than 100 real estate Boards and Associations.
Copyright Canadian Real Estate Association. Reprinted with Permission
“We are pleased that after careful consideration and reflection, real estate Boards and Associations from across Canada have endorsed the agreement,” says Pahud.
The agreement was approved by CREA’s Board of Directors and the Commissioner of Competition on September 30th and was in escrow pending today’s vote. It confirms CREA’s commitment to a competitive real estate services market.
The Commissioner and CREA have agreed that its rules as well as those of its members should not deny or discriminate against REALTORS® wishing to offer mere posting services. CREA does not believe that such rules exist today, but if they do, they must be repealed or Boards will lose their license to operate under the MLS® trademarks. Board MLS® Systems remain a member to member service designed to provide accurate and timely information critical to the delivery of professional real estate services to Canadians.
“This 10-year agreement brings a close to a long process of negotiation with the Competition Bureau and will allow CREA and REALTORS® to do what they do best – help people with the biggest financial decision of their lives, buying and selling a home in these challenging economic times,” says Pahud.
CREA believes the agreement reflects both current practices and intent regarding posting to Board MLS® Systems. Buying and selling homes is an incredibly competitive business, with 100,000 REALTORS® working through thousands of brokerages. Business models are diverse and CREA members offer a variety of services.
MLS® Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.
The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade Associations, representing more than 100,000 REALTORS® working through more than 100 real estate Boards and Associations.
Copyright Canadian Real Estate Association. Reprinted with Permission
National Resale Housing Activity Improves In October
OTTAWA – November 15th, 2010 – National resale housing activity rose for the third consecutive month in October 2010, according to statistics released by The Canadian Real Estate Association (CREA).
Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards climbed 4.6 per cent in October 2010. The monthly rise in activity builds on similar increases in August and September. As a result, activity now stands 13.3 per cent above July levels, when it reached this year’s low point. Three-quarters of local markets posted monthly increases in seasonally adjusted activity in October, led by Toronto and Vancouver.
As further evidence that the market is returning to normal, sales activity in October stood halfway between the recessionary low reached in December 2008, and the record level activity posted in December 2009.
Actual (not seasonally adjusted) national sales activity in October 2010 was 21.6 per below levels for October 2009, when activity set a new record for the month.
National sales activity rebounded last year without a single monthly decline and hit record levels in the second half of 2009. As a result, large declines in activity compared to year-ago levels are masking recent monthly gains in national sales activity. Record level activity late last year is expected to continue stretching year-ago comparisons over the rest of 2010 (Exhibit 1).
The number of new residential listings on Canadian MLS® Systems edged up 1.3 per cent on a seasonally adjusted basis in October. New listings remain 14 per cent below the recent peak reached in April 2010.
National sales activity and new listings have swung widely but synchronously, which has kept the market in balanced territory since the spring. Over half of all local markets in Canada are balanced, with an almost equal proportion of the remainder in buyers’ or sellers’ market territory.
The national average price trend remains stable, in keeping with a balanced market. The national average price trend has remained fairly steady for more than a year, but only recently is this being reflected in year-over-year comparisons. The national average price for homes sold in October 2010 was $343,747, up less than a percentage point compared to one year ago. October marks the fourth consecutive month in which the average home price has remained roughly even with year-ago levels.
The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and measures the balance between housing supply and demand. The seasonally adjusted number of months of inventory stood at 6.2 months at the end of October on a national basis. This is down from 6.5 months in September. The number of months of inventory now stands a full month below where it was in July.
“The continuation of low interest rates is supporting sales activity, which has been improving over the past few months in a number of major markets including Vancouver,” said Georges Pahud, CREA’s President. “National housing market trends are improving, but local market trends can differ significantly, so home buyers and sellers should consult their REALTOR® to understand how their housing market is evolving.”
“National sales activity is now running almost halfway between the highs and lows posted between late 2008 and late 2009,” said Gregory Klump, CREA’s Chief Economist. “This suggests that the Canadian housing market may be starting to normalize. After the wild rollercoaster ride that many housing markets have been on, normal and stable market conditions are something that many buyers and sellers will likely welcome.”
PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.
CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards climbed 4.6 per cent in October 2010. The monthly rise in activity builds on similar increases in August and September. As a result, activity now stands 13.3 per cent above July levels, when it reached this year’s low point. Three-quarters of local markets posted monthly increases in seasonally adjusted activity in October, led by Toronto and Vancouver.
As further evidence that the market is returning to normal, sales activity in October stood halfway between the recessionary low reached in December 2008, and the record level activity posted in December 2009.
Actual (not seasonally adjusted) national sales activity in October 2010 was 21.6 per below levels for October 2009, when activity set a new record for the month.
National sales activity rebounded last year without a single monthly decline and hit record levels in the second half of 2009. As a result, large declines in activity compared to year-ago levels are masking recent monthly gains in national sales activity. Record level activity late last year is expected to continue stretching year-ago comparisons over the rest of 2010 (Exhibit 1).
The number of new residential listings on Canadian MLS® Systems edged up 1.3 per cent on a seasonally adjusted basis in October. New listings remain 14 per cent below the recent peak reached in April 2010.
National sales activity and new listings have swung widely but synchronously, which has kept the market in balanced territory since the spring. Over half of all local markets in Canada are balanced, with an almost equal proportion of the remainder in buyers’ or sellers’ market territory.
The national average price trend remains stable, in keeping with a balanced market. The national average price trend has remained fairly steady for more than a year, but only recently is this being reflected in year-over-year comparisons. The national average price for homes sold in October 2010 was $343,747, up less than a percentage point compared to one year ago. October marks the fourth consecutive month in which the average home price has remained roughly even with year-ago levels.
The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and measures the balance between housing supply and demand. The seasonally adjusted number of months of inventory stood at 6.2 months at the end of October on a national basis. This is down from 6.5 months in September. The number of months of inventory now stands a full month below where it was in July.
“The continuation of low interest rates is supporting sales activity, which has been improving over the past few months in a number of major markets including Vancouver,” said Georges Pahud, CREA’s President. “National housing market trends are improving, but local market trends can differ significantly, so home buyers and sellers should consult their REALTOR® to understand how their housing market is evolving.”
“National sales activity is now running almost halfway between the highs and lows posted between late 2008 and late 2009,” said Gregory Klump, CREA’s Chief Economist. “This suggests that the Canadian housing market may be starting to normalize. After the wild rollercoaster ride that many housing markets have been on, normal and stable market conditions are something that many buyers and sellers will likely welcome.”
PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.
CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Canadian Real Estate Association Introduces Hand Held House-Hunting with New Mobile Application
November 12, 2010 – The Canadian Real Estate Association (CREA) unveiled its latest home buying and selling innovation, a new mobile application of REALTOR.ca for Windows® Phone 7. REALTOR.ca is operated by CREA, and is the most visited real estate website in Canada, with about 350 000 property listings available at any one time.
“Allowing people to check out houses whenever they want, wherever they want, will make the home and property hunt that much easier,” said CREA President Georges Pahud. “Today’s consumers want portable, on-the-go information and REALTORS® across Canada are happy to be able to meet this need with the new REALTOR.ca app.”
The REALTOR.ca app provides house hunters with the functionality of REALTOR.ca while taking advantage of Windows Phone 7 device features such as GPS. The app allows users to search for houses and properties across Canada and to connect with REALTORS® to view, buy or sell a property. Photos, newly listed properties and open house information are all available.
Using the handheld’s GPS technology, and the REALTOR.ca search function, users can search for properties near their location and get driving directions too. Interactive BING mapping is embedded to allow consumers to focus on specific neighbourhoods.
“Buying a home is often the biggest financial transaction of one’s lifetime. Easily accessible, detailed information about homes and neighbourhoods, as well as fingertip access to the expertise of REALTORS®, helps people make well-informed decisions” said Pahud.
The REALTOR.ca app was developed through a partnership with Microsoft Canada Inc. and Navantis.
The REALTOR.ca app will be available for other handheld devices in the coming weeks. Plans are currently underway for iPhone and BlackBerry versions.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
“Allowing people to check out houses whenever they want, wherever they want, will make the home and property hunt that much easier,” said CREA President Georges Pahud. “Today’s consumers want portable, on-the-go information and REALTORS® across Canada are happy to be able to meet this need with the new REALTOR.ca app.”
The REALTOR.ca app provides house hunters with the functionality of REALTOR.ca while taking advantage of Windows Phone 7 device features such as GPS. The app allows users to search for houses and properties across Canada and to connect with REALTORS® to view, buy or sell a property. Photos, newly listed properties and open house information are all available.
Using the handheld’s GPS technology, and the REALTOR.ca search function, users can search for properties near their location and get driving directions too. Interactive BING mapping is embedded to allow consumers to focus on specific neighbourhoods.
“Buying a home is often the biggest financial transaction of one’s lifetime. Easily accessible, detailed information about homes and neighbourhoods, as well as fingertip access to the expertise of REALTORS®, helps people make well-informed decisions” said Pahud.
The REALTOR.ca app was developed through a partnership with Microsoft Canada Inc. and Navantis.
The REALTOR.ca app will be available for other handheld devices in the coming weeks. Plans are currently underway for iPhone and BlackBerry versions.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
CREA Revises Annual Resale Housing Forecast
OTTAWA – November 5, 2010 – The Canadian Real Estate Association (CREA) has lowered its forecast for home sales activity via the Multiple Listing Service® (MLS®)Systems of Canadian real estate Boards and Associations for 2010 and 2011.
Sales activity in the third quarter of 2010 began on a weak footing, but gained traction as the quarter progressed. Improving momentum for home sales activity suggests the resale housing market is stabilizing, but weaker than expected third quarter activity has reduced CREA’s annual forecast.
National sales activity is now expected to reach 442,200 units in 2010, representing an annual decline of 4.9 per cent. While monthly levels for sales activity are stabilizing, year-over-year comparisons are likely to remain stretched well into 2011 due to the record-level activity reported in late 2009 and early 2010.
Lackluster economic and job growth, muted consumer confidence, and the resumption of interest rate increases are expected in 2011. Against this economic backdrop, national home sales activity is forecast to decline by nine per cent to 402,500 units.
“Interest rates are expected to resume their return to more normal levels next year, but will still be at levels that are friendly to the housing market,” said Georges Pahud, CREA’s President. “For the tenth year in a row, more than 400,000 homes are expected to change hands over the MLS® Systems of Canadian real estate Boards and Associations next year.”
Levels for sales activity and new listings have swung widely until recent months. Despite their volatility, movements in sales activity and new listings have remained in synch and have kept the resale housing market balanced since early 2010. The overall supply of homes for sale has also been trending lower in recent months. The resale housing market has remained balanced on a national basis and in most provinces, resulting in stable average price trends.
The national average home price is forecast to rise 3.1 per cent in 2010 to $330,200, with increases in all provinces. The small revision to CREA’s average price forecast reflects changes to the forecast for provincial sales activity and corresponding provincial contributions to the national average price calculation. The balance between supply and demand is forecast to remain stable, resulting in stable price trends.
Modest average price gains are forecast in 2011 in all provinces except British Columbia, Alberta, and Ontario. Lower sales activity in British Columbia and Ontario are expected to result in a 1.3 per cent decline in the national average price to $326,000.
“Housing demand and supply is stabilizing,” said Gregory Klump, CREA’s Chief Economist. “That’s good news for home buyers, who will feel less hurried to make an offer than they did when transitory factors ignited housing demand in early 2010. It’s also good news for home sellers, who will feel more confident about price stability now that the housing market has become balanced.”
“Interest rates are widely expected to remain low for some time due to recent downward revisions by the Bank of Canada to its outlooks for economic growth and inflation. Consumer sentiment will likely remain under pressure until economic prospects improve meaningfully,” said Klump.
“In the meantime, many households will be focused on paying down their debts before the Bank of Canada resumes hiking interest rates next year,” Klump added. Economic uncertainty is likely to keep potential homebuyers in a cautious mood, so the continuation of low and stable interest rates is unlikely to cause housing demand or prices to swell.”
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Sales activity in the third quarter of 2010 began on a weak footing, but gained traction as the quarter progressed. Improving momentum for home sales activity suggests the resale housing market is stabilizing, but weaker than expected third quarter activity has reduced CREA’s annual forecast.
National sales activity is now expected to reach 442,200 units in 2010, representing an annual decline of 4.9 per cent. While monthly levels for sales activity are stabilizing, year-over-year comparisons are likely to remain stretched well into 2011 due to the record-level activity reported in late 2009 and early 2010.
Lackluster economic and job growth, muted consumer confidence, and the resumption of interest rate increases are expected in 2011. Against this economic backdrop, national home sales activity is forecast to decline by nine per cent to 402,500 units.
“Interest rates are expected to resume their return to more normal levels next year, but will still be at levels that are friendly to the housing market,” said Georges Pahud, CREA’s President. “For the tenth year in a row, more than 400,000 homes are expected to change hands over the MLS® Systems of Canadian real estate Boards and Associations next year.”
Levels for sales activity and new listings have swung widely until recent months. Despite their volatility, movements in sales activity and new listings have remained in synch and have kept the resale housing market balanced since early 2010. The overall supply of homes for sale has also been trending lower in recent months. The resale housing market has remained balanced on a national basis and in most provinces, resulting in stable average price trends.
The national average home price is forecast to rise 3.1 per cent in 2010 to $330,200, with increases in all provinces. The small revision to CREA’s average price forecast reflects changes to the forecast for provincial sales activity and corresponding provincial contributions to the national average price calculation. The balance between supply and demand is forecast to remain stable, resulting in stable price trends.
Modest average price gains are forecast in 2011 in all provinces except British Columbia, Alberta, and Ontario. Lower sales activity in British Columbia and Ontario are expected to result in a 1.3 per cent decline in the national average price to $326,000.
“Housing demand and supply is stabilizing,” said Gregory Klump, CREA’s Chief Economist. “That’s good news for home buyers, who will feel less hurried to make an offer than they did when transitory factors ignited housing demand in early 2010. It’s also good news for home sellers, who will feel more confident about price stability now that the housing market has become balanced.”
“Interest rates are widely expected to remain low for some time due to recent downward revisions by the Bank of Canada to its outlooks for economic growth and inflation. Consumer sentiment will likely remain under pressure until economic prospects improve meaningfully,” said Klump.
“In the meantime, many households will be focused on paying down their debts before the Bank of Canada resumes hiking interest rates next year,” Klump added. Economic uncertainty is likely to keep potential homebuyers in a cautious mood, so the continuation of low and stable interest rates is unlikely to cause housing demand or prices to swell.”
“Copyright Canadian Real Estate Association. Reprinted with permission.”
The Value of A Rate Hold
Securing a rate hold is like having insurance on your mortgage rate – you no longer have to worry about mortgage rates increasing while you find your new home over the next 90-120 days. And if rates drop within that same period, so too will your pre-approved rate.
For instance, if you obtain a 3.75% rate hold and then global risks subside and the economy strongly recovers over the next three to four months, that 3.75% could easily jump to 4.50% or higher. In this case, your rate hold for 3.75% would have saved you three-quarters of a percentage point, which would translate to a savings of a significant amount of money over the term of your mortgage.
But a rate hold means nothing if you don’t meet the lender’s qualifications. By working with a mortgage professional or lender to obtain a pre-approval and a rate hold, you can be confident you have access to mortgage financing and you will know how much you can spend before you head out shopping for a property.
It’s important to note, however, that there is a significant difference between being pre-approved and pre-qualified. In order to obtain a pre-approval, the lender fully underwrites the deal, whereas with a pre-qualification only the most basic details are considered. Remember that many banks will only issue a pre-qualification.
There are several reasons why you may want to secure a rate hold, including when you:
• Are thinking of buying a home in the next few months
• Are considering locking in your variable rate to a five-year fixed if rates rise, but your lender won’t hold a good rate for you
• Are casually thinking of refinancing but prefer to wait for fixed rates to rise so that your interest rate differential (IRD) penalty falls
You want to hold a rate on a different term than you were pre-approved for by a different lender
For instance, if you obtain a 3.75% rate hold and then global risks subside and the economy strongly recovers over the next three to four months, that 3.75% could easily jump to 4.50% or higher. In this case, your rate hold for 3.75% would have saved you three-quarters of a percentage point, which would translate to a savings of a significant amount of money over the term of your mortgage.
But a rate hold means nothing if you don’t meet the lender’s qualifications. By working with a mortgage professional or lender to obtain a pre-approval and a rate hold, you can be confident you have access to mortgage financing and you will know how much you can spend before you head out shopping for a property.
It’s important to note, however, that there is a significant difference between being pre-approved and pre-qualified. In order to obtain a pre-approval, the lender fully underwrites the deal, whereas with a pre-qualification only the most basic details are considered. Remember that many banks will only issue a pre-qualification.
There are several reasons why you may want to secure a rate hold, including when you:
• Are thinking of buying a home in the next few months
• Are considering locking in your variable rate to a five-year fixed if rates rise, but your lender won’t hold a good rate for you
• Are casually thinking of refinancing but prefer to wait for fixed rates to rise so that your interest rate differential (IRD) penalty falls
You want to hold a rate on a different term than you were pre-approved for by a different lender
Now is an ideal time to buy
There are several reasons why now is an ideal time to purchase your first home, upgrade to the house of your dreams, purchase vacation property or buy a real estate investment property.
One important fact is that interest rates are unlikely to rise for the short term, as inflation dips. The annual rate of inflation softened in August, casting more doubt on the need for the Bank of Canada to raise interest rates this month. With home prices stabilizing and rates near all-time lows, it’s an ideal time to buy a property.
Making Your First Home Purchase
If you’re a first-time homebuyer, you may feel you can’t afford to purchase a home because you haven’t managed to save your down payment. But there are many solutions available today that can help first-time buyers with their down payments.
Many lenders will allow for a gifted or borrowed down payment. And of those lenders that will not provide this alternative, many offer cash-back options that can be used as a down payment.
Better yet, there are programs available from some financial institutions where they will offer a “free down payment” or a “flex down”. Of course, you will end up paying about 1% more in your interest rate, but the program will help you get in the homeownership door and start accumulating equity earlier. You must, however, stay with the original lender for the full initial five-year term or else you’ll have to pay the down payment back.
Last year, a $5,000 increase was made to the RRSP Home Buyers’ Plan, meaning first-time homebuyers can now withdraw up to $25,000 from your RRSPs for a down payment – tax- and interest-free.
And if you’re part of a couple making a home purchase together, you can each withdraw up to $25,000 from your RRSPs.
If you already own a home and are concerned that now may not be the best time to sell because the market has slowed down, remember that what you may lose on selling your home, you’ll gain on the purchase of your new home – so everything will balance out.
As always, if you have any questions about buying or selling a home, your answers are just a phone call or e-mail away!
One important fact is that interest rates are unlikely to rise for the short term, as inflation dips. The annual rate of inflation softened in August, casting more doubt on the need for the Bank of Canada to raise interest rates this month. With home prices stabilizing and rates near all-time lows, it’s an ideal time to buy a property.
Making Your First Home Purchase
If you’re a first-time homebuyer, you may feel you can’t afford to purchase a home because you haven’t managed to save your down payment. But there are many solutions available today that can help first-time buyers with their down payments.
Many lenders will allow for a gifted or borrowed down payment. And of those lenders that will not provide this alternative, many offer cash-back options that can be used as a down payment.
Better yet, there are programs available from some financial institutions where they will offer a “free down payment” or a “flex down”. Of course, you will end up paying about 1% more in your interest rate, but the program will help you get in the homeownership door and start accumulating equity earlier. You must, however, stay with the original lender for the full initial five-year term or else you’ll have to pay the down payment back.
Last year, a $5,000 increase was made to the RRSP Home Buyers’ Plan, meaning first-time homebuyers can now withdraw up to $25,000 from your RRSPs for a down payment – tax- and interest-free.
And if you’re part of a couple making a home purchase together, you can each withdraw up to $25,000 from your RRSPs.
If you already own a home and are concerned that now may not be the best time to sell because the market has slowed down, remember that what you may lose on selling your home, you’ll gain on the purchase of your new home – so everything will balance out.
As always, if you have any questions about buying or selling a home, your answers are just a phone call or e-mail away!
Market Watch – October 2010
Housing Market Conditions Remained Healthy in September
Residential real estate markets across Canada are set to return to a normal level of activity for the last half of 2010, according to the Canadian Real Estate Association. This news comes after a summer lull; however, the return to normality for markets coast to coast will not likely exceed the sales posted in the final half of 2009.
“The number of sales we saw in September is pretty much on par with the levels of sales for Septembers over the last eight years, last year excepted,” said Joe Ferrante, REALTORS® Association of Hamilton-Burlington (RAHB) President, “Our year-to-date sales are still ahead of last year’s, although the gap is closing as the year progresses.”
Based on a variety of indicators that we look at each month, signs of more market stability are showing in most areas across the country.
Ontario - Sales are normal for September
Toronto, October 5, 2010 - Greater Toronto REALTORS® reported 6,310 sales through the Multiple Listing Service® (MLS®) in September 2010. This represented a 23% decrease compared to the 8,196 sales recorded during the same period in 2009. Through the first nine months of the year, sales amounted to 69,069 – up 4% compared to the first three quarters of 2009.
"The level of sales in the second half of 2010 has been lower, representing a balancing out period following record levels of sales in the latter half of 2009 and the first few months of 2010. We remain on track for one of the best years in history for existing home transactions in the GTA," said Toronto Real Estate Board (TREB) President Bill Johnston.
The average price for September transactions was $427,329– up 5% compared to the average of $406,877 reported in September 2009. The average selling price through the first nine months of the year was $429,657.
"Resale homes in the GTA remain affordable," said Jason Mercer, TREB's Senior Manager of Market Analysis.
In September, the median price was $360,325, up from the $347,000 recorded during September of 2009.
Ottawa, October 5, 2010 – In Ottawa, 1,074 residential properties (240 condominiums and 834 residential properties) were sold in September compared with 1,218 in September 2009, recording a decrease of 11.8%.
“After record-breaking sales in September of 2009, this year’s sales were closer to the five-year average for this time of year. Home prices continued to appreciate but not skyrocket, as they generally do in Ottawa. I would describe the current state of the housing market in our region as balanced, with a good supply of homes available for sale,” said Immediate Past President Rick Snell, Ottawa Real Estate Board.
The average sale price of residential properties, including condominiums, sold in September in the Ottawa area was $324,745, an increase of 6.6% over September 2009.
The average sale price for a condominium-class property was $240,050, a decrease of 0.8% over September 2009. While the average sale price of a residential-class property was $349,117, an increase of 8.2% over September 2009.
Hamilton, October 5, 2010 – The Greater Hamilton-Burlington area resale market reported a total of 1,046 units sold in September, indicating a decrease of 13.5% from the same month last year but an increase of 2.8% over August of this year, according to Multiple Listing Service® (MLS®) statistics released by the REALTORS® Association of Hamilton-Burlington (RAHB). Total unit sales for the first three quarters of 2010 are being reported at 5.4% higher than the same period last year, while new units listed are 13.3% higher year-to-date.
Residential properties sold during September totaled 1,007 which included 813 freehold properties and 194 condominiums. Commercial sales for September, including industrial, farm, vacant land and business, totaled 39 units.
The average price of freehold residential properties sold in the month of September was $336,351, an increase of 3.4% over September last year. The average sale price reflects the dollar volume of residential sales divided by the number of total residential units sold.
In the condominium market, the average price of condominiums in September was $233,596, an increase of 1.7% over September 2009.
The total number of units listed for sale during August was 1,935, which is a 17.2% increase over the number listed in the same period in 2009.
Alberta - Home sales in the city of Calgary increased in September
Calgary, October 1, 2010 – Home sales in Calgary were up month-over-month in September 2010, the first up tick in sales since April 2010. Year over-year sales continued to trend lower in the month of September, but at a pace slower than previous months, according to figures released today by the Calgary Real Estate Board (CREB®).
The number of single family home sales in the month of September 2010 grew by 10% at 958, compared with August 2010, when sales were 867. The number of condominium sales for the month of September 2010 was 366. This was an increase of 1% from the 364 condominium transactions recorded in August 2010.
Year-over-year, the number of single family homes sold in September 2010 in the city of Calgary were down 24%. In September 2009, single family home sales totaled 1,257. Condominium sales saw a decrease of 37% from the same time a year ago. In September 2009, condominium sales were 580.
“There are signs that September may mark a gradual, if not slight, up tick for Calgary’s housing market—we are seeing a modest improvement since the market’s decline, that really started in April of this year,” says Diane Scott, president of CREB®. “The Bank of Canada is in no hurry to raise interest rates to any significant level, and affordability continues to improve in key segments of the Calgary housing market. These factors, along with great selection, have clearly tipped this market in favour of the buyer,” says Scott.
The average price of a single family home in the city of Calgary in September 2010 was $460,278, showing a 3% increase from August 2010, when the average price was $445,617, and no significant change from September 2009, when the average price was $459,085.
The average price of a condominium in the city of Calgary in September 2010 was $284,028, showing a 1% decrease from August 2010, when the average price was $286,384 and a 2% decrease over last year, when the average price was $290,253.
British Columbia – Housing market factors indicate stability
Vancouver, Oct 5, 2010 - September home sales in Greater Vancouver were consistent with activity experienced in the preceding two months across most categories.
The Real Estate Board of Greater Vancouver (REBGV) reports that the number of residential property sales in Greater Vancouver totaled 2,220 in September 2010. This represents a 0.8% increase compared to August 2010 and 37.6% decline from the 3,559 sales in September 2009.
In comparison, last month’s residential sales represent a 40.1% increase over the 1,585 residential sales in September 2008, a 20% decline compared to September 2007’s 2,776 sales, and an 11.9% decline compared to September 2006’s 2,519 sales.
“We’ve seen fewer properties coming on to the market over the last three months. This trend, combined with the continued attraction of low interest rates, is likely having the effect of less downward pressure on home prices,” Jake Moldowan, REBGV president said.
Since spring, housing prices in the region have trended slightly downward, with a decrease of 2.7% compared to the all-time high reached in April when the MLSLink® Housing Price Index (HPI) residential benchmark price was $593,419. The overall benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 5.5% to $577,174 in September 2010 from $547,092 in September 2009. The current price remains consistent with last month, rising just 0.1% between August and September 2010.
Total active property listings currently sit at 15,401, basically unchanged compared to last month and a 22% increase from September 2009. Over the last three months, active listings in the region have declined 12.3%.
New residential property listings posted in September declined 17.6% to 4,731 compared to September 2009 when 5,746 new units were listed.
“We saw signs of more stability in our marketplace last month than we have seen since spring based on a variety of indicators that we look at each month,” Moldowan said. “At 56 days, it took, on average, three days less to sell a home in our region compared to August. This is the first month-over-month decline we’ve seen in this category since April.”
Sales of detached properties in September 2010 reached 866, a decrease of 39.1% from the 1,423 detached sales recorded in September 2009, and a 58.6% increase from the 546 units sold in September 2008. The benchmark price for detached properties increased 6.7% from September 2009 to $790,992.
Sales of apartment properties reached 971 in September 2010, a decline of 34.7% compared to the 1,489 sales in September 2009, and an increase of 27.1% compared to the 764 sales in September 2008. The benchmark price of an apartment property increased 3.7% from September 2009 to $388,373.
Attached property sales in September 2010 totaled 383, a decline of 40.1% compared to the 647 sales in September 2009, and a 39.3% increase from the 275 attached properties sold in September 2008. The benchmark price of an attached unit increased 5.2% between September 2009 and 2010 to $490,385.
Residential real estate markets across Canada are set to return to a normal level of activity for the last half of 2010, according to the Canadian Real Estate Association. This news comes after a summer lull; however, the return to normality for markets coast to coast will not likely exceed the sales posted in the final half of 2009.
“The number of sales we saw in September is pretty much on par with the levels of sales for Septembers over the last eight years, last year excepted,” said Joe Ferrante, REALTORS® Association of Hamilton-Burlington (RAHB) President, “Our year-to-date sales are still ahead of last year’s, although the gap is closing as the year progresses.”
Based on a variety of indicators that we look at each month, signs of more market stability are showing in most areas across the country.
Ontario - Sales are normal for September
Toronto, October 5, 2010 - Greater Toronto REALTORS® reported 6,310 sales through the Multiple Listing Service® (MLS®) in September 2010. This represented a 23% decrease compared to the 8,196 sales recorded during the same period in 2009. Through the first nine months of the year, sales amounted to 69,069 – up 4% compared to the first three quarters of 2009.
"The level of sales in the second half of 2010 has been lower, representing a balancing out period following record levels of sales in the latter half of 2009 and the first few months of 2010. We remain on track for one of the best years in history for existing home transactions in the GTA," said Toronto Real Estate Board (TREB) President Bill Johnston.
The average price for September transactions was $427,329– up 5% compared to the average of $406,877 reported in September 2009. The average selling price through the first nine months of the year was $429,657.
"Resale homes in the GTA remain affordable," said Jason Mercer, TREB's Senior Manager of Market Analysis.
In September, the median price was $360,325, up from the $347,000 recorded during September of 2009.
Ottawa, October 5, 2010 – In Ottawa, 1,074 residential properties (240 condominiums and 834 residential properties) were sold in September compared with 1,218 in September 2009, recording a decrease of 11.8%.
“After record-breaking sales in September of 2009, this year’s sales were closer to the five-year average for this time of year. Home prices continued to appreciate but not skyrocket, as they generally do in Ottawa. I would describe the current state of the housing market in our region as balanced, with a good supply of homes available for sale,” said Immediate Past President Rick Snell, Ottawa Real Estate Board.
The average sale price of residential properties, including condominiums, sold in September in the Ottawa area was $324,745, an increase of 6.6% over September 2009.
The average sale price for a condominium-class property was $240,050, a decrease of 0.8% over September 2009. While the average sale price of a residential-class property was $349,117, an increase of 8.2% over September 2009.
Hamilton, October 5, 2010 – The Greater Hamilton-Burlington area resale market reported a total of 1,046 units sold in September, indicating a decrease of 13.5% from the same month last year but an increase of 2.8% over August of this year, according to Multiple Listing Service® (MLS®) statistics released by the REALTORS® Association of Hamilton-Burlington (RAHB). Total unit sales for the first three quarters of 2010 are being reported at 5.4% higher than the same period last year, while new units listed are 13.3% higher year-to-date.
Residential properties sold during September totaled 1,007 which included 813 freehold properties and 194 condominiums. Commercial sales for September, including industrial, farm, vacant land and business, totaled 39 units.
The average price of freehold residential properties sold in the month of September was $336,351, an increase of 3.4% over September last year. The average sale price reflects the dollar volume of residential sales divided by the number of total residential units sold.
In the condominium market, the average price of condominiums in September was $233,596, an increase of 1.7% over September 2009.
The total number of units listed for sale during August was 1,935, which is a 17.2% increase over the number listed in the same period in 2009.
Alberta - Home sales in the city of Calgary increased in September
Calgary, October 1, 2010 – Home sales in Calgary were up month-over-month in September 2010, the first up tick in sales since April 2010. Year over-year sales continued to trend lower in the month of September, but at a pace slower than previous months, according to figures released today by the Calgary Real Estate Board (CREB®).
The number of single family home sales in the month of September 2010 grew by 10% at 958, compared with August 2010, when sales were 867. The number of condominium sales for the month of September 2010 was 366. This was an increase of 1% from the 364 condominium transactions recorded in August 2010.
Year-over-year, the number of single family homes sold in September 2010 in the city of Calgary were down 24%. In September 2009, single family home sales totaled 1,257. Condominium sales saw a decrease of 37% from the same time a year ago. In September 2009, condominium sales were 580.
“There are signs that September may mark a gradual, if not slight, up tick for Calgary’s housing market—we are seeing a modest improvement since the market’s decline, that really started in April of this year,” says Diane Scott, president of CREB®. “The Bank of Canada is in no hurry to raise interest rates to any significant level, and affordability continues to improve in key segments of the Calgary housing market. These factors, along with great selection, have clearly tipped this market in favour of the buyer,” says Scott.
The average price of a single family home in the city of Calgary in September 2010 was $460,278, showing a 3% increase from August 2010, when the average price was $445,617, and no significant change from September 2009, when the average price was $459,085.
The average price of a condominium in the city of Calgary in September 2010 was $284,028, showing a 1% decrease from August 2010, when the average price was $286,384 and a 2% decrease over last year, when the average price was $290,253.
British Columbia – Housing market factors indicate stability
Vancouver, Oct 5, 2010 - September home sales in Greater Vancouver were consistent with activity experienced in the preceding two months across most categories.
The Real Estate Board of Greater Vancouver (REBGV) reports that the number of residential property sales in Greater Vancouver totaled 2,220 in September 2010. This represents a 0.8% increase compared to August 2010 and 37.6% decline from the 3,559 sales in September 2009.
In comparison, last month’s residential sales represent a 40.1% increase over the 1,585 residential sales in September 2008, a 20% decline compared to September 2007’s 2,776 sales, and an 11.9% decline compared to September 2006’s 2,519 sales.
“We’ve seen fewer properties coming on to the market over the last three months. This trend, combined with the continued attraction of low interest rates, is likely having the effect of less downward pressure on home prices,” Jake Moldowan, REBGV president said.
Since spring, housing prices in the region have trended slightly downward, with a decrease of 2.7% compared to the all-time high reached in April when the MLSLink® Housing Price Index (HPI) residential benchmark price was $593,419. The overall benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 5.5% to $577,174 in September 2010 from $547,092 in September 2009. The current price remains consistent with last month, rising just 0.1% between August and September 2010.
Total active property listings currently sit at 15,401, basically unchanged compared to last month and a 22% increase from September 2009. Over the last three months, active listings in the region have declined 12.3%.
New residential property listings posted in September declined 17.6% to 4,731 compared to September 2009 when 5,746 new units were listed.
“We saw signs of more stability in our marketplace last month than we have seen since spring based on a variety of indicators that we look at each month,” Moldowan said. “At 56 days, it took, on average, three days less to sell a home in our region compared to August. This is the first month-over-month decline we’ve seen in this category since April.”
Sales of detached properties in September 2010 reached 866, a decrease of 39.1% from the 1,423 detached sales recorded in September 2009, and a 58.6% increase from the 546 units sold in September 2008. The benchmark price for detached properties increased 6.7% from September 2009 to $790,992.
Sales of apartment properties reached 971 in September 2010, a decline of 34.7% compared to the 1,489 sales in September 2009, and an increase of 27.1% compared to the 764 sales in September 2008. The benchmark price of an apartment property increased 3.7% from September 2009 to $388,373.
Attached property sales in September 2010 totaled 383, a decline of 40.1% compared to the 647 sales in September 2009, and a 39.3% increase from the 275 attached properties sold in September 2008. The benchmark price of an attached unit increased 5.2% between September 2009 and 2010 to $490,385.
Monday, September 20, 2010
Existing home sales edge up in August
National resale housing activity improved in August 2010, according to statistics released by The Canadian Real Estate Association (CREA).
Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards in August rose 4.1 per cent from the previous month. This marks the first monthly increase since March 2010.
Activity was up most in Ontario and British Columbia, with monthly gains in these two provinces accounting for most of the improvement in national sales activity in August. Seasonally adjusted sales activity either increased or remained stable in over half of all local markets across Canada.
Year-to-date transactions are up 2.2 per cent compared to the first eight months of last year. Activity rose sharply over the second half of 2009 and reached levels that are unlikely to be matched in the final four months of 2010, so year-to-date comparisons are forecast to turn down in the coming months.
The number of new residential listings on Canadian MLS® Systems also edged up 1.9 per cent on a seasonally adjusted basis in August compared to the previous month. Despite having edged slightly higher in all provinces except Alberta, new listings remain 16 per cent below the peak reached last April on a national basis. The average price of homes sold via Canadian MLS® Systems in August was $324,928, which is on par with the same month last year ($324,843). Average home prices eased slightly in Alberta and New Brunswick in August, but gains in every other province exceeded the national increase. Average price rose or was stable in nearly two-thirds of all local markets on a year-over-year basis, but increases are shrinking in Canada’s most active and priciest markets.
The national weighted average price compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It climbed 3.3 per cent on a year-over-year basis in August 2010. Similarly, the residential average price in Canada’s major markets was up 2.2 per cent year-over-year in August, while the weighted major market average price rose 6.6 per cent.
The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and measures the balance between housing supply and demand. It stood at 6.9 months at the end of August 2010 on a national basis, which is down slightly from the seven months of inventory at the end of July 2010.
The seasonally adjusted number of months of inventory also stood at 6.9 months at the end of August on a national basis. This is down from 7.3 months at the end of July, and marks the first month-over-month decline since last November.
“Rising interest rates and a projected slowdown in job growth mean that the Canadian housing market is expected to continue to cool,” said Georges Pahud, CREA’s President. “This is overlooked in recent commentary that suggests further changes to mortgage regulations may be needed. A further tightening of regulations could negatively impact Canada’s softening housing market and consumer confidence.”
“High sales activity late last year and earlier this year borrowed from sales this summer and will continue do so over the coming months,” said Gregory Klump, CREA’s Chief Economist. “This makes the return to more normal levels of sales activity look like a steep downward trend.”
“The hangover from accelerated home purchases is likely to persist over the rest of the year. Although economic and job growth are expected to be tepid, they will continue to support housing markets,” he added.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards in August rose 4.1 per cent from the previous month. This marks the first monthly increase since March 2010.
Activity was up most in Ontario and British Columbia, with monthly gains in these two provinces accounting for most of the improvement in national sales activity in August. Seasonally adjusted sales activity either increased or remained stable in over half of all local markets across Canada.
Year-to-date transactions are up 2.2 per cent compared to the first eight months of last year. Activity rose sharply over the second half of 2009 and reached levels that are unlikely to be matched in the final four months of 2010, so year-to-date comparisons are forecast to turn down in the coming months.
The number of new residential listings on Canadian MLS® Systems also edged up 1.9 per cent on a seasonally adjusted basis in August compared to the previous month. Despite having edged slightly higher in all provinces except Alberta, new listings remain 16 per cent below the peak reached last April on a national basis. The average price of homes sold via Canadian MLS® Systems in August was $324,928, which is on par with the same month last year ($324,843). Average home prices eased slightly in Alberta and New Brunswick in August, but gains in every other province exceeded the national increase. Average price rose or was stable in nearly two-thirds of all local markets on a year-over-year basis, but increases are shrinking in Canada’s most active and priciest markets.
The national weighted average price compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It climbed 3.3 per cent on a year-over-year basis in August 2010. Similarly, the residential average price in Canada’s major markets was up 2.2 per cent year-over-year in August, while the weighted major market average price rose 6.6 per cent.
The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and measures the balance between housing supply and demand. It stood at 6.9 months at the end of August 2010 on a national basis, which is down slightly from the seven months of inventory at the end of July 2010.
The seasonally adjusted number of months of inventory also stood at 6.9 months at the end of August on a national basis. This is down from 7.3 months at the end of July, and marks the first month-over-month decline since last November.
“Rising interest rates and a projected slowdown in job growth mean that the Canadian housing market is expected to continue to cool,” said Georges Pahud, CREA’s President. “This is overlooked in recent commentary that suggests further changes to mortgage regulations may be needed. A further tightening of regulations could negatively impact Canada’s softening housing market and consumer confidence.”
“High sales activity late last year and earlier this year borrowed from sales this summer and will continue do so over the coming months,” said Gregory Klump, CREA’s Chief Economist. “This makes the return to more normal levels of sales activity look like a steep downward trend.”
“The hangover from accelerated home purchases is likely to persist over the rest of the year. Although economic and job growth are expected to be tepid, they will continue to support housing markets,” he added.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Low Mortgage Rates Boost August Home Sales
The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province declined 35 per cent to 5,590 units in August compared to the same month last year. On a seasonally adjusted basis, MLS® residential unit sales in the province increased 7 per cent in August from July 2010. The average MLS® residential price climbed 4 per cent to $487,804 in August compared to the same month last year.
“August home sales posted the first month-to-month increase since March of this year,” said Cameron Muir, BCREA Chief Economist. “Lower mortgage interest rates and an improving labour market are inducing additional consumer demand.”
“The number of new residential listings in the province has fallen 30 per cent since April,” added Muir. “With fewer new listings, total active listings are now on the decline, signalling that an end to the buyer’s market may be on the horizon.”
Year-to-date, BC residential sales dollar volume increased 8 per cent to $26.9 billion, compared to the same period last year. Residential unit sales rose 2 per cent to 53,717 year-to-date, while the average MLS® residential price climbed 10 per cent to $501,226 over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
“August home sales posted the first month-to-month increase since March of this year,” said Cameron Muir, BCREA Chief Economist. “Lower mortgage interest rates and an improving labour market are inducing additional consumer demand.”
“The number of new residential listings in the province has fallen 30 per cent since April,” added Muir. “With fewer new listings, total active listings are now on the decline, signalling that an end to the buyer’s market may be on the horizon.”
Year-to-date, BC residential sales dollar volume increased 8 per cent to $26.9 billion, compared to the same period last year. Residential unit sales rose 2 per cent to 53,717 year-to-date, while the average MLS® residential price climbed 10 per cent to $501,226 over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Mortgage Forcast
MORTGAGE RELIEF FOR BC HOUSEHOLDS
The global economy is feeling the lasting effects of the most serious financial crisis since the 1930s. As meticulously documented by economists Ken Rogoff and Carmen Reinhardt in their examination of 8 centuries of data, recoveries from financial crises are characterized by sluggish growth in output and employment.
Although Canada’s relative stodgy banking system ensured that we did not suffer a domestic financial crisis, our fundamental dependence on the United States, the epicenter of the global crisis, means that we are mired in the second-hand effects of the US’s economic lethargy. However, as we detail below, there may be a silver lining for BC households in these cloudy skies.
Growth Outlook
Second quarter GDP growth fell well below expectations at just 2% (annualized). This represented a marked deceleration from first quarter growth of 5.8%. Flagging consumer spending and weaker residential investment resulting from the expiration of the home renovation tax credit tempered growth in the second quarter.
Economic growth in the remainder of 2010 and 2011 may continue to underwhelm due a cooling housing sector, sluggish economic growth in the United States and an end to Government fiscal stimulus. Moreover, unemployment that is projected to hover near 8% for several quarters may hinder consumption going forward.
In all, we see the Canadian economy growing at a 3.3% pace in 2010 before slowing to 2.5% in 2011.
Interest Rate Outlook
In the face of slowing growth and low inflation, the Bank of Canada raised rates for what we expect to be the final time in 2010 at its September 8th meeting. Although the Bank’s medium-run objective of returning rates to normal long-run levels is still intact, the Bank will take a very cautious approach to tightening monetary policy over the next 6 to 12 months and further rate tightening will be highly dependent on how solid the ground is underneath both the Canadian and US economies.
Given that inflation is projected to remain subdued and growth is expected to slow, we have trimmed our forecast for the overnight rate to 1% at the end of 2010 and 2.00% by the end of 2011 (from 1.0%-1.25 and 2.50% respectively).
In our July forecast, we noted that mortgage rates would continue to trend lower in the short-run and indeed downward pressure on interest rates has not only continued, but has in fact intensified.
Although fear stemming from the European debt crisis has seemingly subsided, fresh concern has emerged about the United States economy where hopes of a “summer of recovery” have quickly faded into fear of a dreaded “double-dip” recession.
In response, cautious households and companies have increased savings, adding to the flood of demand for safe assets and forcing long-term Government bond yields to levels not seen since the height of the global financial crisis.
Yields on Canadian Government 5-year bonds, the benchmark for mortgage pricing, have fallen a remarkable 100 basis points since the spring to just 2.10%. Although this decline in interest rates is likely overdone, it is difficult to say when bond markets may normalize.
A much discussed second round of quantitative easing by the Federal Reserve (so-called QE2) could mean that US and Canadian interest rates stay low for an extended period. On the other hand, unexpected good news on the US economy may translate to faster pace of interest rate normalization.
Mortgage Rate Forecast
The silver-lining in the lacklustre economic outlook is that the normalization of both short-term and long-term interest rates will be deferred. BC households with variable rate mortgages will therefore be facing lower payments than we would have originally predicted at the beginning of the year.
Moreover, new homebuyers or homeowners set to renew their mortgages will be offered a second chance at securing rates at levels last seen at the depths of the financial crisis.
The BCREA mortgage rate forecast is for a continuation of the current low-rate environment into early 2011, when prompted by a new round of tightening by the Bank of Canada and (hopefully) brighter economic prospects, interest rates will renew their ascendency to historical norms but at a measured pace.
The 1-year fixed mortgage rate is forecasted to finish 2010 at around 3.20% and to reach 4.05% by the end of 2011. The 5-year fixed mortgage rate is forecasted to end the year at 5.35% and to reach 6.10% by the end of 2011.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
The global economy is feeling the lasting effects of the most serious financial crisis since the 1930s. As meticulously documented by economists Ken Rogoff and Carmen Reinhardt in their examination of 8 centuries of data, recoveries from financial crises are characterized by sluggish growth in output and employment.
Although Canada’s relative stodgy banking system ensured that we did not suffer a domestic financial crisis, our fundamental dependence on the United States, the epicenter of the global crisis, means that we are mired in the second-hand effects of the US’s economic lethargy. However, as we detail below, there may be a silver lining for BC households in these cloudy skies.
Growth Outlook
Second quarter GDP growth fell well below expectations at just 2% (annualized). This represented a marked deceleration from first quarter growth of 5.8%. Flagging consumer spending and weaker residential investment resulting from the expiration of the home renovation tax credit tempered growth in the second quarter.
Economic growth in the remainder of 2010 and 2011 may continue to underwhelm due a cooling housing sector, sluggish economic growth in the United States and an end to Government fiscal stimulus. Moreover, unemployment that is projected to hover near 8% for several quarters may hinder consumption going forward.
In all, we see the Canadian economy growing at a 3.3% pace in 2010 before slowing to 2.5% in 2011.
Interest Rate Outlook
In the face of slowing growth and low inflation, the Bank of Canada raised rates for what we expect to be the final time in 2010 at its September 8th meeting. Although the Bank’s medium-run objective of returning rates to normal long-run levels is still intact, the Bank will take a very cautious approach to tightening monetary policy over the next 6 to 12 months and further rate tightening will be highly dependent on how solid the ground is underneath both the Canadian and US economies.
Given that inflation is projected to remain subdued and growth is expected to slow, we have trimmed our forecast for the overnight rate to 1% at the end of 2010 and 2.00% by the end of 2011 (from 1.0%-1.25 and 2.50% respectively).
In our July forecast, we noted that mortgage rates would continue to trend lower in the short-run and indeed downward pressure on interest rates has not only continued, but has in fact intensified.
Although fear stemming from the European debt crisis has seemingly subsided, fresh concern has emerged about the United States economy where hopes of a “summer of recovery” have quickly faded into fear of a dreaded “double-dip” recession.
In response, cautious households and companies have increased savings, adding to the flood of demand for safe assets and forcing long-term Government bond yields to levels not seen since the height of the global financial crisis.
Yields on Canadian Government 5-year bonds, the benchmark for mortgage pricing, have fallen a remarkable 100 basis points since the spring to just 2.10%. Although this decline in interest rates is likely overdone, it is difficult to say when bond markets may normalize.
A much discussed second round of quantitative easing by the Federal Reserve (so-called QE2) could mean that US and Canadian interest rates stay low for an extended period. On the other hand, unexpected good news on the US economy may translate to faster pace of interest rate normalization.
Mortgage Rate Forecast
The silver-lining in the lacklustre economic outlook is that the normalization of both short-term and long-term interest rates will be deferred. BC households with variable rate mortgages will therefore be facing lower payments than we would have originally predicted at the beginning of the year.
Moreover, new homebuyers or homeowners set to renew their mortgages will be offered a second chance at securing rates at levels last seen at the depths of the financial crisis.
The BCREA mortgage rate forecast is for a continuation of the current low-rate environment into early 2011, when prompted by a new round of tightening by the Bank of Canada and (hopefully) brighter economic prospects, interest rates will renew their ascendency to historical norms but at a measured pace.
The 1-year fixed mortgage rate is forecasted to finish 2010 at around 3.20% and to reach 4.05% by the end of 2011. The 5-year fixed mortgage rate is forecasted to end the year at 5.35% and to reach 6.10% by the end of 2011.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Monday, September 13, 2010
HOME SALES TO RISE IN 2011
BC housing markets are returning to typical post-recession demand pat-terns. The dramatic rebound in consumer demand during 2009 and sub-sequent decline during the first two quarters of 2010 has set the stage for a gradual increase in home sales during the fall and through 2011. Residential unit sales through the Multiple Listing Service® (MLS®) in BC are forecast to decrease 7 per cent to 79,500 units in 2010, before climbing 5 per cent to 83,400 units in 2011.
A slower than expected normalization of interest rates will temper erosion of affordability as economic output posts more moderate growth for the balance of this year and through 2011. Stronger corporate profits are triggering employment growth and a reduction in the unemployment rate is now underway.
A larger inventory of homes for sale has created the most favourable supply conditions for home buyers in more than a year. While tighter mortgage qualifications for low equity home buyers has negatively impacted demand, more borrowers are now channelling into 5-year fixed mortgages where discounted rates increase purchasing power.
The average MLS® residential price is forecast to increase 6 per cent to $492,800 this year and edge down 1 per cent to $489,500 in 2011. Some softness in home prices is expected through the summer months in most regional markets. However, inventory levels peaked in May and will likely edge lower in the coming months, leading to more balanced conditions in the fall with a commensurate firming of home prices.
After a sharp pull back in new home construction last year, home builders are gradually increasing production to meet demand. BC led the country in population growth over the last three quarters and with the inventory of complete and unoccupied units expected to decline, builders are adjusting production to match supply with household formation.
A slower than expected normalization of interest rates will temper erosion of affordability as economic output posts more moderate growth for the balance of this year and through 2011. Stronger corporate profits are triggering employment growth and a reduction in the unemployment rate is now underway.
A larger inventory of homes for sale has created the most favourable supply conditions for home buyers in more than a year. While tighter mortgage qualifications for low equity home buyers has negatively impacted demand, more borrowers are now channelling into 5-year fixed mortgages where discounted rates increase purchasing power.
The average MLS® residential price is forecast to increase 6 per cent to $492,800 this year and edge down 1 per cent to $489,500 in 2011. Some softness in home prices is expected through the summer months in most regional markets. However, inventory levels peaked in May and will likely edge lower in the coming months, leading to more balanced conditions in the fall with a commensurate firming of home prices.
After a sharp pull back in new home construction last year, home builders are gradually increasing production to meet demand. BC led the country in population growth over the last three quarters and with the inventory of complete and unoccupied units expected to decline, builders are adjusting production to match supply with household formation.
Bank of Canada raises key rate to 1%
The Bank of Canada raised its target for the overnight rate by one quarter of one percentage point to one per cent on September 8th, 2010. It was the third consecutive quarter point hike. The Bank rate was raised to 1.25 per cent and the deposit rate is now 0.75 per cent.
The Bank noted that, while the global economic recovery is proceeding, it remains uneven. The main downside risk cited in the Bank’s announcement was the recent weakness in the U.S. recovery, saying, “In the United States, the recovery in private demand is being held back by high unemployment and recent indicators suggest a more muted recovery in the near term.”
Owing largely to the weaker profile for U.S. activity, the Bank now expects Canadian growth to be “slightly slower” than it had previously forecast in July. The Bank downplayed the small revision to the outlook, however, saying, “consumption growth is expected to remain solid and business investment to rise strongly. Both are being supported by accommodative credit conditions, which have eased in recent weeks mainly owing to sharp declines in global bond yields.”
While the outlook for the Canadian economic recovery has changed slightly, inflation in Canada has remained in line with the Bank’s expectations. The Bank noted that, while the monetary policy measures undertaken since April have had the effect of modestly tightening financial conditions in Canada, they nevertheless remain “exceptionally stimulative.”
As of September 8th, the advertised five-year conventional mortgage rate stood at 5.39 per cent. This is down 0.1 per cent from a year earlier, and stands 0.4 per cent below where it was when the Bank made its previous interest rate announcement on July 20, 2010. It is also 0.1 percentage points below where it stood at the beginning of the year.
The statement ended with the message, “Any further reduction in monetary policy stimulus would need to be carefully considered in light of the unusual uncertainty surrounding the outlook.” The Bank had previously characterized the uncertainty in the outlook as “considerable.”
Most analysts now expect the Bank to hold off on any further rate hikes this year while it gauges the effects of recent tightening on the domestic economy, and watches the very uncertain situation south of the border. However, the overall tone of the Bank’s statement was more hawkish than expected, and this has led some economists to suggest this may not be the last hike of the year. Much will depend on economic data out over the next month and a half in advance of the Bank’s next decision on October 19th.
The Bank’s next Monetary Policy Report will be published on October 20th. The Bank will make its next scheduled rate announcement on October 19th.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
The Bank noted that, while the global economic recovery is proceeding, it remains uneven. The main downside risk cited in the Bank’s announcement was the recent weakness in the U.S. recovery, saying, “In the United States, the recovery in private demand is being held back by high unemployment and recent indicators suggest a more muted recovery in the near term.”
Owing largely to the weaker profile for U.S. activity, the Bank now expects Canadian growth to be “slightly slower” than it had previously forecast in July. The Bank downplayed the small revision to the outlook, however, saying, “consumption growth is expected to remain solid and business investment to rise strongly. Both are being supported by accommodative credit conditions, which have eased in recent weeks mainly owing to sharp declines in global bond yields.”
While the outlook for the Canadian economic recovery has changed slightly, inflation in Canada has remained in line with the Bank’s expectations. The Bank noted that, while the monetary policy measures undertaken since April have had the effect of modestly tightening financial conditions in Canada, they nevertheless remain “exceptionally stimulative.”
As of September 8th, the advertised five-year conventional mortgage rate stood at 5.39 per cent. This is down 0.1 per cent from a year earlier, and stands 0.4 per cent below where it was when the Bank made its previous interest rate announcement on July 20, 2010. It is also 0.1 percentage points below where it stood at the beginning of the year.
The statement ended with the message, “Any further reduction in monetary policy stimulus would need to be carefully considered in light of the unusual uncertainty surrounding the outlook.” The Bank had previously characterized the uncertainty in the outlook as “considerable.”
Most analysts now expect the Bank to hold off on any further rate hikes this year while it gauges the effects of recent tightening on the domestic economy, and watches the very uncertain situation south of the border. However, the overall tone of the Bank’s statement was more hawkish than expected, and this has led some economists to suggest this may not be the last hike of the year. Much will depend on economic data out over the next month and a half in advance of the Bank’s next decision on October 19th.
The Bank’s next Monetary Policy Report will be published on October 20th. The Bank will make its next scheduled rate announcement on October 19th.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Wednesday, September 8, 2010
Bank of Canada increases overnight rate target to 1 per cent
The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.
The global economic recovery is proceeding but remains uneven, balancing strong activity in emerging market economies with weak growth in some advanced economies. In the United States, the recovery in private demand is being held back by high unemployment and recent indicators suggest a more muted recovery in the near term.
Economic activity in Canada was slightly softer in the second quarter than the Bank had expected, although consumption and investment have evolved largely as anticipated. Going forward, consumption growth is expected to remain solid and business investment to rise strongly. Both are being supported by accommodative credit conditions, which have eased in recent weeks mainly owing to sharp declines in global bond yields.
The Bank now expects the economic recovery in Canada to be slightly more gradual than it had projected in its July Monetary Policy Report (MPR), largely reflecting a weaker profile for U.S. activity. Inflation in Canada has been broadly in line with the Bank's expectations and its dynamics are essentially unchanged.
Against this backdrop, the Bank decided to increase its target for the overnight rate to 1 per cent. As a result of monetary policy measures taken since April, financial conditions in Canada have tightened modestly but remain exceptionally stimulative. This is consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada.
Any further reduction in monetary policy stimulus would need to be carefully considered in light of the unusual uncertainty surrounding the outlook.
Information note:
The next scheduled date for announcing the overnight rate target is 19 October 2010. A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 20 October 2010.
Copyright © 1995 - 2010, Bank of Canada.
The global economic recovery is proceeding but remains uneven, balancing strong activity in emerging market economies with weak growth in some advanced economies. In the United States, the recovery in private demand is being held back by high unemployment and recent indicators suggest a more muted recovery in the near term.
Economic activity in Canada was slightly softer in the second quarter than the Bank had expected, although consumption and investment have evolved largely as anticipated. Going forward, consumption growth is expected to remain solid and business investment to rise strongly. Both are being supported by accommodative credit conditions, which have eased in recent weeks mainly owing to sharp declines in global bond yields.
The Bank now expects the economic recovery in Canada to be slightly more gradual than it had projected in its July Monetary Policy Report (MPR), largely reflecting a weaker profile for U.S. activity. Inflation in Canada has been broadly in line with the Bank's expectations and its dynamics are essentially unchanged.
Against this backdrop, the Bank decided to increase its target for the overnight rate to 1 per cent. As a result of monetary policy measures taken since April, financial conditions in Canada have tightened modestly but remain exceptionally stimulative. This is consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada.
Any further reduction in monetary policy stimulus would need to be carefully considered in light of the unusual uncertainty surrounding the outlook.
Information note:
The next scheduled date for announcing the overnight rate target is 19 October 2010. A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 20 October 2010.
Copyright © 1995 - 2010, Bank of Canada.
Wednesday, September 1, 2010
Housing Activity Stabilizing
After rebounding in the second half of 2009 and early 2010, housing starts are expected to moderate in the second half of 2010. Starts are expected to stabilize at levels consistent with demographic fundamentals in 2011, according to Canada Mortgage and Housing Corporation’s (CMHC) third quarter Housing Market Outlook, Canada Edition.
Housing starts are expected to be in the range of 170,200 to 198,400 units in 2010, with a point forecast of 184,900 units. In 2011, housing starts will be in the range of 146,900 to 210,500 units, with a point forecast of 176,900 units.
"Housing starts will moderate in the coming months as activity becomes more in-line with long term demographic fundamentals,” said Bob Dugan, Chief Economist for CMHC.
Mr. Dugan also noted that the existing home market conditions will remain balanced over the next two years as MLS®2 sales ease and inventory levels remain elevated. Existing home sales will be in the range of 450,000 to 485,700 units in 2010, with a point forecast of 463,800 units. In 2011, MLS® sales will move lower and are expected to be in the range of 425,000 to 490,700 units, with a point forecast of 456,000 units.
With an improved balance between demand and supply, the average MLS® price is expected to edge lower through the end of 2010 and then rise modestly in 2011.
CMHC August31, 2010
Housing starts are expected to be in the range of 170,200 to 198,400 units in 2010, with a point forecast of 184,900 units. In 2011, housing starts will be in the range of 146,900 to 210,500 units, with a point forecast of 176,900 units.
"Housing starts will moderate in the coming months as activity becomes more in-line with long term demographic fundamentals,” said Bob Dugan, Chief Economist for CMHC.
Mr. Dugan also noted that the existing home market conditions will remain balanced over the next two years as MLS®2 sales ease and inventory levels remain elevated. Existing home sales will be in the range of 450,000 to 485,700 units in 2010, with a point forecast of 463,800 units. In 2011, MLS® sales will move lower and are expected to be in the range of 425,000 to 490,700 units, with a point forecast of 456,000 units.
With an improved balance between demand and supply, the average MLS® price is expected to edge lower through the end of 2010 and then rise modestly in 2011.
CMHC August31, 2010
Why Use a Realtor, 5 Reasons
Thanks to resources such as the Internet, many people believe they can tackle virtually any project on their own – everything from renovating a kitchen to buying or selling a home. And while it’s true that the Internet has helped consumers become more informed on a number of topics, seeking the expertise of a professional is often a wise investment. Whether you’re a first-time homebuyer, upgrading to a new home, purchasing vacation or rental property or looking to sell, you really need a real estate expert to ensure the transaction is seamless – someone to walk you through the multiple steps involved with buying or selling real estate.
Following are five top reasons why you should use an expert the next time you’re buying or selling a home:
1. Local Expertise
Purchasing a home is the largest investment most people make throughout their lives and having a professional to guide you through the experience can make a huge difference in the choices you make throughout the buying or selling process. A real estate expert will assist you with creating a financial plan so you know what homes to seriously consider in your neighbourhood of choice. And because real estate professionals focus on local marketplaces, they can evaluate whether a home is a smart investment and how the price compares to other properties in the neighbourhood. Experts also have access to the Multiple Listing Service (MLS), which offers the latest information on every home listed by an agent in your market, including how long a home has been on the market and what special features the property may have. And when you’re looking to sell, the MLS is the number one reference agents use to help buyers look for homes. Having your home in the MLS puts every agent in the area on alert that your home is for sale. Real estate agents know how to market a home, attract prospective buyers and hold successful open houses.
2. Time is Money
Working with home sellers or buyers and their agents can be extremely time-consuming. If you have a full-time job, meeting with buyers or sellers – or even talking on the phone – may wreak havoc on your already full schedule. A real estate agent will save you time by providing answers to all of your questions and take care of the leg work involved in eliminating prospects that don’t meet your needs, which means you’re not wasting time touring homes that you will never buy.
3. A Professional Negotiator
Negotiating is definitely an aspect of the buying and selling process that many people simply aren’t comfortable with. A real estate agent handles the negotiation process on your behalf and ensures you receive the best possible price. A professional will have a firm grasp of your local market and neighbourhoods know when you have room to negotiate with the seller, and understand which aspects of the house are desirable and which ones may lower the possibility of sale.
4. Professional Connections
There is more to buying a house than just negotiating the sale. You will often be best served by working with a mortgage broker, home inspector, lawyer, the escrow company and many more professionals. A real estate agent can suggest a reputable choice for any professional you must hire in order to ensure your home and financing needs are well taken care of. After all, agents deal with a wide assortment of professionals on a daily basis – and will only suggest you work with the best.
5. Expertise & Knowledge
Real estate agents understand more than merely the market and financial aspects involved with buying and selling homes. They also know what people want and need, and how to hone in on fine details. There may be a myriad of small things that you don’t think to consider when buying or selling a home that an expert will quickly point out to you.
Even if you have purchased and sold a few homes in the past, chances are you aren’t an expert. Real estate agents are familiar with the trends in the neighbourhoods in which you wish to buy or sell a home, and in all of the various changes in regulations and technology. Because we help people buy and sell homes every day, we understand all of the nuances involved in these processes. From the purchase agreement to closing, our job is to make sure you get the best possible deal.
As always, if you have any questions about buying or selling a home, your answers are just a phone call or e-mail away!
Following are five top reasons why you should use an expert the next time you’re buying or selling a home:
1. Local Expertise
Purchasing a home is the largest investment most people make throughout their lives and having a professional to guide you through the experience can make a huge difference in the choices you make throughout the buying or selling process. A real estate expert will assist you with creating a financial plan so you know what homes to seriously consider in your neighbourhood of choice. And because real estate professionals focus on local marketplaces, they can evaluate whether a home is a smart investment and how the price compares to other properties in the neighbourhood. Experts also have access to the Multiple Listing Service (MLS), which offers the latest information on every home listed by an agent in your market, including how long a home has been on the market and what special features the property may have. And when you’re looking to sell, the MLS is the number one reference agents use to help buyers look for homes. Having your home in the MLS puts every agent in the area on alert that your home is for sale. Real estate agents know how to market a home, attract prospective buyers and hold successful open houses.
2. Time is Money
Working with home sellers or buyers and their agents can be extremely time-consuming. If you have a full-time job, meeting with buyers or sellers – or even talking on the phone – may wreak havoc on your already full schedule. A real estate agent will save you time by providing answers to all of your questions and take care of the leg work involved in eliminating prospects that don’t meet your needs, which means you’re not wasting time touring homes that you will never buy.
3. A Professional Negotiator
Negotiating is definitely an aspect of the buying and selling process that many people simply aren’t comfortable with. A real estate agent handles the negotiation process on your behalf and ensures you receive the best possible price. A professional will have a firm grasp of your local market and neighbourhoods know when you have room to negotiate with the seller, and understand which aspects of the house are desirable and which ones may lower the possibility of sale.
4. Professional Connections
There is more to buying a house than just negotiating the sale. You will often be best served by working with a mortgage broker, home inspector, lawyer, the escrow company and many more professionals. A real estate agent can suggest a reputable choice for any professional you must hire in order to ensure your home and financing needs are well taken care of. After all, agents deal with a wide assortment of professionals on a daily basis – and will only suggest you work with the best.
5. Expertise & Knowledge
Real estate agents understand more than merely the market and financial aspects involved with buying and selling homes. They also know what people want and need, and how to hone in on fine details. There may be a myriad of small things that you don’t think to consider when buying or selling a home that an expert will quickly point out to you.
Even if you have purchased and sold a few homes in the past, chances are you aren’t an expert. Real estate agents are familiar with the trends in the neighbourhoods in which you wish to buy or sell a home, and in all of the various changes in regulations and technology. Because we help people buy and sell homes every day, we understand all of the nuances involved in these processes. From the purchase agreement to closing, our job is to make sure you get the best possible deal.
As always, if you have any questions about buying or selling a home, your answers are just a phone call or e-mail away!
Wednesday, August 18, 2010
BC and Ontario housing markets feel effects of HST in July
The Canadian Real Estate Association (CREA) says national home sales activity continued to trend down in July 2010. The decline was almost entirely the result of fewer sales in British Columbia and Ontario. A slowdown in demand in these two provinces had been widely expected in July, as many purchases were brought forward into the first half of the year in advance of the introduction of the HST.
Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards was down 6.8 per cent on a month-over-month basis in July. The national decline was smaller than the previous two months, as July sales in the Prairies and Quebec came in on par with June levels. Declines in British Columbia (-14.1 per cent) and Ontario (-8 per cent) accounted for 85 per cent of the change in national activity in July.
Actual (not seasonally adjusted) national sales activity was 30 per cent lower in July 2010 compared to last year’s record July. Year-to-date transactions are still up 5.6 per cent compared to the first seven months of last year, although this gap is expected to continue to shrink as the year progresses, since activity rose sharply over the second half of last year, reaching levels that are unlikely to be matched in the final five months of 2010.
New supply continues to adjust to lower demand. The seasonally adjusted number of new residential listings on Canadian MLS® Systems declined by 7.2 per cent in July 2010 compared to the previous month. This is the third consecutive month-over-month decrease, and the steepest in more than a decade. Since reaching their most recent peak in April, new listings have fallen 17.5 per cent.
The declining trend in new listings will help maintain the balance between supply and demand, and temper home price volatility. The national sales-to-new listings ratio, a measure of market balance, has held steady between 48 and 49 per cent for the past three months, which is characteristic of a balanced market.
The average price of homes sold via Canadian MLS® Systems in July was $330,351, edging up one per cent from the same month last year. While year-over-year comparisons have been shrinking as prices stabilize, the national average home price is likely somewhat understated this month, since the majority of activity declines occurred in British Columbia and Ontario, which include many of Canada’s most expensive markets.
The same phenomenon is widely known to have caused much of the downward skewing in the national average price during the recession. This is most evident when looking at a breakdown of average prices by province. Average home prices eased slightly in Nova Scotia and Prince Edward Island in July, but gains in every other province exceeded the national increase.
The national weighted average price compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It climbed four per cent on a year-over-year basis in July 2010. Similarly, the residential average price in Canada’s major markets was up 2.9 per cent year-over-year in July, while the weighted major market average price rose 7.4 per cent.
The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and measures the balance between housing supply and demand. It stood at seven months at the end of July 2010 on a national basis. This is up from 4.4 months one year ago, which was one of the lowest levels in the past three years.
The seasonally adjusted number of months of inventory stood at 7.3 months at the end of July on a national basis. This is the highest level since March 2009, but the pace of monthly gains is slowing as new listings continue to adjust to lower demand.
“The soft sales figures we’re seeing right now can be attributed in part to accelerated home purchases earlier in the year,” said CREA President Georges Pahud.
“Activity may remain at lower levels for some time, but ultimately we expect a more stable market to emerge, with demand coming back into line with economic fundamentals.”
“While the outlook for economic and job growth remains generally positive nationally and in all provinces, the pace of the recovery will vary by region,” he added. “Buyers and sellers should consult with a REALTOR® to find out about conditions in their local market.”
PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.
CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards was down 6.8 per cent on a month-over-month basis in July. The national decline was smaller than the previous two months, as July sales in the Prairies and Quebec came in on par with June levels. Declines in British Columbia (-14.1 per cent) and Ontario (-8 per cent) accounted for 85 per cent of the change in national activity in July.
Actual (not seasonally adjusted) national sales activity was 30 per cent lower in July 2010 compared to last year’s record July. Year-to-date transactions are still up 5.6 per cent compared to the first seven months of last year, although this gap is expected to continue to shrink as the year progresses, since activity rose sharply over the second half of last year, reaching levels that are unlikely to be matched in the final five months of 2010.
New supply continues to adjust to lower demand. The seasonally adjusted number of new residential listings on Canadian MLS® Systems declined by 7.2 per cent in July 2010 compared to the previous month. This is the third consecutive month-over-month decrease, and the steepest in more than a decade. Since reaching their most recent peak in April, new listings have fallen 17.5 per cent.
The declining trend in new listings will help maintain the balance between supply and demand, and temper home price volatility. The national sales-to-new listings ratio, a measure of market balance, has held steady between 48 and 49 per cent for the past three months, which is characteristic of a balanced market.
The average price of homes sold via Canadian MLS® Systems in July was $330,351, edging up one per cent from the same month last year. While year-over-year comparisons have been shrinking as prices stabilize, the national average home price is likely somewhat understated this month, since the majority of activity declines occurred in British Columbia and Ontario, which include many of Canada’s most expensive markets.
The same phenomenon is widely known to have caused much of the downward skewing in the national average price during the recession. This is most evident when looking at a breakdown of average prices by province. Average home prices eased slightly in Nova Scotia and Prince Edward Island in July, but gains in every other province exceeded the national increase.
The national weighted average price compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It climbed four per cent on a year-over-year basis in July 2010. Similarly, the residential average price in Canada’s major markets was up 2.9 per cent year-over-year in July, while the weighted major market average price rose 7.4 per cent.
The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and measures the balance between housing supply and demand. It stood at seven months at the end of July 2010 on a national basis. This is up from 4.4 months one year ago, which was one of the lowest levels in the past three years.
The seasonally adjusted number of months of inventory stood at 7.3 months at the end of July on a national basis. This is the highest level since March 2009, but the pace of monthly gains is slowing as new listings continue to adjust to lower demand.
“The soft sales figures we’re seeing right now can be attributed in part to accelerated home purchases earlier in the year,” said CREA President Georges Pahud.
“Activity may remain at lower levels for some time, but ultimately we expect a more stable market to emerge, with demand coming back into line with economic fundamentals.”
“While the outlook for economic and job growth remains generally positive nationally and in all provinces, the pace of the recovery will vary by region,” he added. “Buyers and sellers should consult with a REALTOR® to find out about conditions in their local market.”
PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.
CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Home Buyers in the Driver’s Seat
The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province declined 42 per cent to 5,784 units in July compared to the same month last year. On a seasonally adjusted basis, MLS® residential unit sales in the province declined 19 per cent in July from June 2010. The average MLS® residential price climbed 6 per cent to $491,832 in July compared to the same month last year.
“A relatively large number of homes for sale have created the most favourable supply conditions for home buyers in more than a year,” said Cameron Muir, BCREA Chief Economist. MLS® active residential listings were 21 per cent higher in July than at the start of the year on a seasonally adjusted basis. However, with newly listed MLS® residential units now declining, tighter market conditions may emerge this fall.
Year-to-date, BC residential sales dollar volume increased 16 per cent to $24.2 billion, compared to the same period last year. Residential unit sales rose 4 per cent to 48,127 year-to-date, while the average MLS® residential price climbed 13 per cent to $504,281 over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
“A relatively large number of homes for sale have created the most favourable supply conditions for home buyers in more than a year,” said Cameron Muir, BCREA Chief Economist. MLS® active residential listings were 21 per cent higher in July than at the start of the year on a seasonally adjusted basis. However, with newly listed MLS® residential units now declining, tighter market conditions may emerge this fall.
Year-to-date, BC residential sales dollar volume increased 16 per cent to $24.2 billion, compared to the same period last year. Residential unit sales rose 4 per cent to 48,127 year-to-date, while the average MLS® residential price climbed 13 per cent to $504,281 over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Thursday, August 5, 2010
BC Home Sales to Rise in 2011
BCREA Housing Forecast Update - Third Quarter 2010
Vancouver, BC – July 30, 2010. The British Columbia Real Estate Association (BCREA) released its Housing Forecast Update for the third quarter of 2010 today.
BC Multiple Listing Service® (MLS®) residential sales are forecast to decline 7 per cent from 85,028 units in 2009 to 79,500 units this year, before increasing 5 per cent to 83,400 units in 2011.
“The volatility in consumer demand characteristic of the past 24 months is expected to give way to more gradual improvement through 2011,” said Cameron Muir, BCREA Chief Economist. “Housing demand has fallen back to earth from its break-neck pace at the end of 2009 and is expected to more closely match overall economic performance over the next 18 months.”
“A larger inventory of homes for sale has created the most favourable conditions for home buyers in more than a year,” added Muir. “However, the buyers’ market is expected to be short-lived as total active listings peaked in May and are beginning to wane, with more balanced conditions set to emerge in the fall.”
The average MLS® residential price is forecast to climb 6 per cent to $492,800 this year and remain relatively unchanged in 2011, albeit declining by 1 per cent to $489,500.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Vancouver, BC – July 30, 2010. The British Columbia Real Estate Association (BCREA) released its Housing Forecast Update for the third quarter of 2010 today.
BC Multiple Listing Service® (MLS®) residential sales are forecast to decline 7 per cent from 85,028 units in 2009 to 79,500 units this year, before increasing 5 per cent to 83,400 units in 2011.
“The volatility in consumer demand characteristic of the past 24 months is expected to give way to more gradual improvement through 2011,” said Cameron Muir, BCREA Chief Economist. “Housing demand has fallen back to earth from its break-neck pace at the end of 2009 and is expected to more closely match overall economic performance over the next 18 months.”
“A larger inventory of homes for sale has created the most favourable conditions for home buyers in more than a year,” added Muir. “However, the buyers’ market is expected to be short-lived as total active listings peaked in May and are beginning to wane, with more balanced conditions set to emerge in the fall.”
The average MLS® residential price is forecast to climb 6 per cent to $492,800 this year and remain relatively unchanged in 2011, albeit declining by 1 per cent to $489,500.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Resale housing forecast revised
OTTAWA – July 30, 2010 – The Canadian Real Estate Association (CREA) revised its forecast downward for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations, and elevated its average price forecast.
Weaker than anticipated sales activity during the crucial spring home buying season in Canada’s four most active provincial markets prompted the revision. The decline is consistent with the exhaustion of pent-up demand from deferred purchases during the economic recession, and sales having been pulled forward into early 2010 due to changes in mortgage regulations.
National sales activity is forecast to reach 459,600 units in 2010, representing an annual decline of 1.2 per cent. Additional expected interest rate increases will keep homebuyers in a cautious mood, with sales activity expected to continue easing over the second half of the year as a result. In 2011, weaker economic growth and consumer spending will contribute to a decline in national sales activity of 7.3 per cent, with annual sales totaling 426,100 units.
“The Bank of Canada recognizes that inflation remains well contained and that economic growth will soften, so interest rates will rise slowly and at a measured pace, which will keep home financing within reach for many homebuyers,” said Georges Pahud, CREA President. “While the jump in national sales activity earlier this year likely borrowed from the future, local markets trends are not necessarily in sync with national trends, so buyers and sellers would do well to consult with their local REALTOR® to best understand the outlook in their market.”
Average price trends have remained stable as new listings began to shrink in the last two months of the second quarter. Supply is expected to continue to adjust to lower demand, keeping the resale housing market balanced on a national basis and in most provinces.
The national average home price is forecast to rise 3.5 per cent in 2010 to $331,600, with increases in all provinces.
“Slowing first-time home buying activity means lower- and mid-priced homes are making a smaller contribution to the average price calculation, causing the average price to be skewed upward as a result,” said Gregory Klump, CREA Chief Economist. “It also means pricing momentum will lose steam due to rising competition among current homeowners looking to trade up.”
Although modest average price gains are forecast in 2011 in most provinces, the national average price is forecast to ease by 0.9 per cent to $328,600.
“The hangover from accelerated home purchases earlier this year is expected to persist over the rest of the year, but positive economic and job market trends bode well for home price stability,” said Klump. “Sales activity and new supply are both expected to continue to ease, so inventories are unlikely to pile up the way they did during the recession.
“Transitory factors that resulted in big swings in housing supply and demand may now be largely in the rearview mirror, so while resale housing activity is expected to ease, the pace of declines should begin to slow,” he added. “Homebuyers will no doubt welcome a more relaxed housing market in places where there was a shortage of supply earlier in the year.“
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Weaker than anticipated sales activity during the crucial spring home buying season in Canada’s four most active provincial markets prompted the revision. The decline is consistent with the exhaustion of pent-up demand from deferred purchases during the economic recession, and sales having been pulled forward into early 2010 due to changes in mortgage regulations.
National sales activity is forecast to reach 459,600 units in 2010, representing an annual decline of 1.2 per cent. Additional expected interest rate increases will keep homebuyers in a cautious mood, with sales activity expected to continue easing over the second half of the year as a result. In 2011, weaker economic growth and consumer spending will contribute to a decline in national sales activity of 7.3 per cent, with annual sales totaling 426,100 units.
“The Bank of Canada recognizes that inflation remains well contained and that economic growth will soften, so interest rates will rise slowly and at a measured pace, which will keep home financing within reach for many homebuyers,” said Georges Pahud, CREA President. “While the jump in national sales activity earlier this year likely borrowed from the future, local markets trends are not necessarily in sync with national trends, so buyers and sellers would do well to consult with their local REALTOR® to best understand the outlook in their market.”
Average price trends have remained stable as new listings began to shrink in the last two months of the second quarter. Supply is expected to continue to adjust to lower demand, keeping the resale housing market balanced on a national basis and in most provinces.
The national average home price is forecast to rise 3.5 per cent in 2010 to $331,600, with increases in all provinces.
“Slowing first-time home buying activity means lower- and mid-priced homes are making a smaller contribution to the average price calculation, causing the average price to be skewed upward as a result,” said Gregory Klump, CREA Chief Economist. “It also means pricing momentum will lose steam due to rising competition among current homeowners looking to trade up.”
Although modest average price gains are forecast in 2011 in most provinces, the national average price is forecast to ease by 0.9 per cent to $328,600.
“The hangover from accelerated home purchases earlier this year is expected to persist over the rest of the year, but positive economic and job market trends bode well for home price stability,” said Klump. “Sales activity and new supply are both expected to continue to ease, so inventories are unlikely to pile up the way they did during the recession.
“Transitory factors that resulted in big swings in housing supply and demand may now be largely in the rearview mirror, so while resale housing activity is expected to ease, the pace of declines should begin to slow,” he added. “Homebuyers will no doubt welcome a more relaxed housing market in places where there was a shortage of supply earlier in the year.“
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Bank of Canada raises interest rates further
Notes slowing global economic growth
The Bank of Canada increased the target for its trend-setting overnight lending rate on July 20, 2010, raising it by a quarter of a percentage point to 0.75 per cent. The increase follows on the heels of an equal interest rate increase in June 2010, when it was raised for the first time since 2007. The Bank rate now stands at one per cent.
In its most recent interest rate announcement, the Bank marked down its outlook for economic growth globally, emphasizing the uneven economic recovery in the U.S., and weakening prospects for European economic growth.
In the Bank’s view, Canada’s domestic economy is evolving largely as expected in recent months, but trimmed its forecast for economic growth this year and next by 0.2 per cent to 3.5 per cent in 2010 and 2.9 per cent in 2011. While the Bank raised its forecast for Canadian economic to 2.2 per cent in 2012, it nonetheless left the easing trend for growth intact.
The Bank indicated, “[this] revision reflects a slightly weaker profile for global economic growth and more modest consumption growth in Canada. The Bank anticipates that business investment and net exports will make a relatively larger contribution to growth.
Where the domestic recovery had previously been led by housing and consumer spending it is now guided more by government stimulus.”
The Bank also reaffirmed its view that housing activity and household expenditures were pulled forward into the first half of 2010, which is expected to cause them to soften in the second half. It also recognized that business investment has been weaker than it previously expected, “held back by global uncertainties.” The Bank anticipates “that business investment and net exports will make a relatively larger contribution to growth” over its forecast horizon.
As of July 20th, the advertised five-year conventional mortgage rate of 5.79 per cent was down 0.06 per cent from one year earlier, and 0.2 per cent below where it stood when Bank made its previous interest rate announcement on June 1, 2010. However, it is 0.3 percentage points higher than it was at the beginning of the year.
The Bank has signaled to financial markets that it is leaving its options wide open as to whether it will raise interest rates further when it makes its next rate announcement on September 8th.
“As it did with its previous announcement in June, the Bank messaged financial markets that further interest rate increases are not pre-ordained,” said CREA Chief Economist Gregory Klump. “The strength of recent economic indicators have prompted the Bank to raise interest rates, but the Bank has signaled that it may keep rates on hold should the economic recovery begin to show signs of loosing steam.”
The Bank will make its next scheduled rate announcement on September 8th.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
The Bank of Canada increased the target for its trend-setting overnight lending rate on July 20, 2010, raising it by a quarter of a percentage point to 0.75 per cent. The increase follows on the heels of an equal interest rate increase in June 2010, when it was raised for the first time since 2007. The Bank rate now stands at one per cent.
In its most recent interest rate announcement, the Bank marked down its outlook for economic growth globally, emphasizing the uneven economic recovery in the U.S., and weakening prospects for European economic growth.
In the Bank’s view, Canada’s domestic economy is evolving largely as expected in recent months, but trimmed its forecast for economic growth this year and next by 0.2 per cent to 3.5 per cent in 2010 and 2.9 per cent in 2011. While the Bank raised its forecast for Canadian economic to 2.2 per cent in 2012, it nonetheless left the easing trend for growth intact.
The Bank indicated, “[this] revision reflects a slightly weaker profile for global economic growth and more modest consumption growth in Canada. The Bank anticipates that business investment and net exports will make a relatively larger contribution to growth.
Where the domestic recovery had previously been led by housing and consumer spending it is now guided more by government stimulus.”
The Bank also reaffirmed its view that housing activity and household expenditures were pulled forward into the first half of 2010, which is expected to cause them to soften in the second half. It also recognized that business investment has been weaker than it previously expected, “held back by global uncertainties.” The Bank anticipates “that business investment and net exports will make a relatively larger contribution to growth” over its forecast horizon.
As of July 20th, the advertised five-year conventional mortgage rate of 5.79 per cent was down 0.06 per cent from one year earlier, and 0.2 per cent below where it stood when Bank made its previous interest rate announcement on June 1, 2010. However, it is 0.3 percentage points higher than it was at the beginning of the year.
The Bank has signaled to financial markets that it is leaving its options wide open as to whether it will raise interest rates further when it makes its next rate announcement on September 8th.
“As it did with its previous announcement in June, the Bank messaged financial markets that further interest rate increases are not pre-ordained,” said CREA Chief Economist Gregory Klump. “The strength of recent economic indicators have prompted the Bank to raise interest rates, but the Bank has signaled that it may keep rates on hold should the economic recovery begin to show signs of loosing steam.”
The Bank will make its next scheduled rate announcement on September 8th.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Housing Market Favours Buyers
Vancouver, BC – July 15, 2010. The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province declined 23 per cent to 7,722 units in June compared to the same month last year. On a seasonally adjusted basis, MLS® residential unit sales in the province declined 5 per cent in June from May 2010. The average MLS® residential price climbed 8 per cent to $499,908 in June compared to the same month last year.
“Market conditions have shifted from balanced conditions at the start of the year to a buyers’ market this summer,” said Cameron Muir, BCREA Chief Economist. In June, there was 9.3 months of supply on the market given current sales activity, up from 5.6 months in January 2010. “Tighter credit conditions for homes with secondary suites and low equity home buyers have moderated consumer demand,” added Muir.
Year-to-date, BC residential sales dollar volume increased 31 per cent to $21.4 billion, compared to the same period last year. Residential unit sales rose 17 per cent to 42,343 year-to-date, while the average MLS® residential price climbed 13 per cent to $504,281 over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
“Market conditions have shifted from balanced conditions at the start of the year to a buyers’ market this summer,” said Cameron Muir, BCREA Chief Economist. In June, there was 9.3 months of supply on the market given current sales activity, up from 5.6 months in January 2010. “Tighter credit conditions for homes with secondary suites and low equity home buyers have moderated consumer demand,” added Muir.
Year-to-date, BC residential sales dollar volume increased 31 per cent to $21.4 billion, compared to the same period last year. Residential unit sales rose 17 per cent to 42,343 year-to-date, while the average MLS® residential price climbed 13 per cent to $504,281 over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
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