Canadian Monthly GDP Growth

The Canadian economy grew 0.2 per cent in January, reversing a similar decrease in December. January's economic growth was lead by a 1.2 per cent rebound in manufacturing output from a 1.9 per cent decline the previous month as well as gains in mining and oil and gas extraction and wholesale and retail trade. A pick-up in housing market activity reversed a three month decline in the output of real estate agents and brokers which rose 0.4 per cent. 

Our first quarter GDP growth estimate is currently reading 1.6 per cent (at an annual rate), a significant improvement from the 0.6 per cent rate that prevailed in the second half of 2012. We anticipate that growth will continue to be modest through the first half of 2013 before accelerating in the second half of the year and into 2014.

Copyright BCREA -reprinted with permission

Buyers Value Storage Space, In-Law Suites, NAR Survey Finds

Purchasing a home is an important life decision, and many factors can influence the home choices buyers make.

The National Association of Realtors® 2013 Profile of Buyers’ Home Feature Preferences examines the features buyers prefer when it comes to purchasing a home, as well as the differences in preferences when it comes to factors such as region, demographics and household composition. The survey captures buyers who purchased a home between 2010 and 2012.

“Deciding where to live comes with a lot of options, but buyers quickly realize that some features are more important than others when it comes to choosing the right house for them,” said NAR President Gary Thomas, broker-owner of Evergreen Realty, in Villa Park, Calif. “Buyers need to have a clear idea of what features are important to them and know where they are willing to compromise; in this respect, Realtors® can bring buyers home. Realtors® visit hundreds of homes with buyers each year, and have a unique understanding of what buyers value in their local markets.”

Geography and demography strongly influence what buyers value in a home. The typical recently purchased home was 1,860 square feet and was built in 1996. Repeat buyers, buyers of new homes, married couples and families with children typically purchased larger homes. First-time buyers and single women tended to buy older homes. The typical buyer purchased a home with three bedrooms and two full bathrooms. Slightly over half of the homes purchased were on a single level.

Southerners tend to buy newer homes; they were more likely to want a home less than five years old and in a wooded lot with trees when compared to other regions. Not surprisingly, buyers in the South also placed a higher importance on central air conditioning.

While more than three-fourths – 78 percent – of all buyers purchased a home with a garage, garages were more popular among new-home buyers, Midwesterners, and suburbanites. Forty-one percent of homes purchased had a basement, but this feature was more popular among buyers in the Midwest and Northeast. Northeastern buyers also value hardwood floors more than people in other regions. Southerners typically bought the largest home at 2,000 square feet. Those in the Northeast followed closely behind with a typical home purchase of 1,850 square feet.

Among buyers 55 and older, 42 percent considered finding a single-level home very important, compared to just 11 percent of buyers under age 35. Single women also placed higher importance on single-level homes, while single men wanted finished basements. Both single men and married couples placed higher importance on new kitchen appliances.

Among all 33 home features in the survey, central air conditioning was the most important to the most buyers; 65 percent of buyers considered this feature very important. The next most important feature was a walk-in closet in the master bedroom; 39 percent of buyers considered this feature very important. Closely behind was having a home that was cable-, satellite TV-, and/or Internet ready, as well as an en-suite master bathroom.

When it came to actually buying a home, among buyers who considered central AC and cable-, satellite TV-, and/or Internet ready very or somewhat important, 94 percent bought a home with these features. The next most common feature was an eat-in kitchen; 89 percent of buyers who thought this was important purchased a home with an eat-in kitchen.

Buyers value some features so much that they are willing to spend more money to have them. Sixty-nine percent of buyers who did not purchase a home with central AC would be willing to pay $2,520 more for a home with this feature. Sixty-nine percent of buyers who did not purchase a home with new kitchen appliances would be willing to pay $1,840 more for a home with this feature. A walk-in closet in the master bedroom was the third most common feature on which buyers would spend more. Sixty percent of buyers who did not purchase a home with a walk-in closet would be willing to pay $1,350 more for a home with this feature.

The features on which buyers placed the highest dollar value were waterfront properties and homes that were less than five years old. Thirty-two percent of buyers would be willing to pay a median of $5,420 more for a home on the waterfront, and 40 percent of buyers would be willing to pay a median of $5,020 more for a home that was less than five years old.

The rooms that buyers were willing to pay the most for were a basement and an in-law suite. Thirty-three percent of buyers would be willing to pay a median of $3,200 more for a home with a basement, and 20 percent of buyers would be willing to pay a median of $2,920 more for a home with an in-law suite.
When it came to rooms that buyers want in a home, 55 percent of buyers thought it was very important to have a living room, although buyers in the Northeast placed more importance on a home with a dining room. Buyers aged 55 and older placed more importance on a bedroom on the main level of the house. Buyers aged 35 to 54 placed more importance on a laundry room, while those with children placed more importance on a family room.

The two most common rooms buyers were willing to spend more for were a laundry room and a den/study/home office/library. Sixty-three percent of buyers who did not purchase a home with a laundry room would be willing to pay $1,590 more for a home with this room. Forty-four percent of buyers who did not purchase a home with a den/study/home office/library would be willing to pay $1,920 more for a home with this room.

Although 97 percent of recent buyers were satisfied with their home purchase, there are always features buyers would like that they don’t have, said NAR Vice President of Research Paul Bishop. “Most satisfied homeowners still said they would like more or larger closets and storage space. In addition, nearly half of recent buyers would prefer a larger kitchen, and two out of five would prefer a larger home overall.”
Within three months of a home purchase, 53 percent of buyers undertook a home improvement project. The typical buyer spent $4,550 on various projects. Remodeling the kitchen was the most common home improvement project; 47 percent of buyers undertook a project in the kitchen. Bathrooms were a close second at 44 percent. Forty-one percent of buyers who made home improvements added or replaced lighting, and 37 percent added or replaced appliances soon after becoming a homeowner.

In October 2012, a sample of households that had purchased any type of residence real estate during 2010 to 2012 and still owned the property was surveyed. The survey sample was drawn from a representative panel of U.S. households monitored and maintained by an established survey research firm. A total of 2,005 qualified households responded to the survey. Households were sampled to meet age and income quotas representative of all home buyers drawn from the 2011 NAR Profile of Home Buyers and Sellers.

Copyright NAR  

http://www.realtor.org/sites/default/files/home-feature-preferences-EDITS-2013-03-13.pdf  

USA Existing-Home Sales and Prices Continue to Rise in February

February existing-home sales and prices affirm a healthy recovery is underway in the housing sector, according to the National Association of Realtors^®. Sales have been above year-ago levels for 20 consecutive months, while prices show 12 consecutive months of year-over-year price increases.
Total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 0.8 percent to a seasonally adjusted annual rate of 4.98 million in February from an upwardly revised 4.94 million in January, and are 10.2 percent above the 4.52 million-unit level seen in February 2012. February sales were at the highest level since the tax credit period of November 2009.
Lawrence Yun, NAR chief economist, said conditions for continued housing improvement are at play. "Job growth in the improving economy and pent-up demand are causing both home sales and rental leasing to rise. Though home prices are rising much faster than rents, historically low mortgage rates are still making home purchases affordable," he said. "The only headwinds are limited housing inventory, which varies greatly around the country, and credit conditions that remain too restrictive."
Total housing inventory at the end of February rose 9.6 percent to 1.94 million existing homes available for sale, which represents a 4.7-month supply ² at the current sales pace, up from 4.3 months in January, which was the lowest supply since May 2005. Listed inventory is 19.2 percent below a year ago when there was a 6.4-month supply.
The national median existing-home price³ for all housing types was $173,600 in February, up 11.6 percent from February 2012. The last time there were 12 consecutive months of year-over-year price increases was from June 2005 to May 2006. The February gain is the strongest since November 2005 when it was 12.9 percent above a year earlier.
"A strong rise in home values is contributing to housing wealth recovery, which has risen by $1.4 trillion in the past year and looks to top that increase this year," Yun said. "The extra consumer spending arising from growth in housing wealth is expected to be $70 billion to $110 billion this year."
Distressed homes⁴ - foreclosures and short sales - accounted for 25 percent of February sales, up from 23 percent in January but down from 34 percent in February 2012. Fifteen percent of February sales were foreclosures, and 10 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in February, while short sales were discounted 15 percent.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 3.53 percent in February from 3.41 percent in January; it was 3.89 percent in February 2012.
NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said interest rates remain extraordinarily low. "In the history of mortgage interest rates since 1971, the 30-year fixed rate has been below 4 percent in only 15 months, and those have all been in the past 15 months," he said. "Even with rising home prices, affordability remains historically favorable because home prices over-corrected during the downturn. This means there is still great value for buyers in the current market."
The median time on market for all homes was 74 days in February, which is 24 percent below 97 days in February 2012. Short sales were on the market for a median of 101 days, while foreclosures typically sold in 52 days and non-distressed homes took 77 days. One out of three homes sold in February was on the market for less than a month.
First-time buyers accounted for 30 percent of purchases in February, unchanged from January; they were 32 percent in February 2012.
All-cash sales were at 32 percent of transactions in February, up from 28 percent in January; they were 33 percent in February 2012. Investors, who account for most cash sales, purchased 22 percent of homes in February, up from 19 percent in January; they were 23 percent in February 2012.
"There was an upward bump in the shares of investor and all-cash closed purchases in February. These sales result from purchase offers during the holidays when shopping activity by traditional home buyers slows, but investors, who typically pay cash, remained active," Yun said. "This is a seasonal pattern, but we're now seeing a general increase in buyer traffic, which is 25 percent above a year ago."
Single-family home sales slipped 0.2 percent to a seasonally adjusted annual rate of 4.36 million in February from an upwardly revised 4.37 million in January, but are 8.7 percent above the 4.01 million-unit pace in February 2012. The median existing single-family home price was $173,800 in February, which is 11.3 percent higher than a year ago.
Existing condominium and co-op sales rose 8.8 percent to an annualized rate of 620,000 in February from 570,000 in January, and are 21.6 percent above the 510,000-unit level a year ago. The median existing condo price was $172,500 in February, up 13.9 percent from February 2012.
Regionally, existing-home sales in the Northeast fell 3.1 percent to an annual rate of 630,000 in February but are 8.6 percent above February 2012. The median price in the Northeast was $238,800, which is 7.6 percent above a year ago.
Existing-home sales in the Midwest slipped 1.7 in February to a pace of 1.14 million but are 12.9 percent above a year ago. The median price in the Midwest was $129,900, up 7.7 percent from February 2012.
In the South, existing-home sales increased 2.6 percent to an annual level of 2.01 million in February and are 14.9 percent above February 2012. The median price in the South was $150,500, up 9.3 percent from a year ago.
Existing-home sales in the West rose 2.6 percent to a pace of 1.20 million in February and are 1.7 percent above a year ago. With limited choices and multiple bidding, the median price in the West rose to $237,700, which is 22.7 percent above February 2012.

Canadian Consumer Price Inflation

Canadian consumer price inflation picked up marginally in February, registering 1.2 per cent year-over following a 0.5 per cent increase in January. The Bank of Canada's core inflation index, which excludes the eight most volatile components of the CPI like energy and food, rose 1.4 per cent year-over-year in February, a moderate acceleration from January's 1 per cent increase.  Inflation in BC registered only 0.9 per cent year-over-year in February. 

Subdued by sluggish growth in the Canadian economy over the past six months, inflation continues to trend well under the Bank of Canada's two per cent target.  As economic growth improves in the latter half of 2013 and into 2014, inflation should gradually move back toward 2 per cent. Until then, we expect that the Bank of Canada will remain on hold and that longer term interest rates that impact mortgage pricing will hold near historic lows.  

Copyright BCREA - reprinted with permission

Canadian Retail Sales

Canadian retail sales rose 1 per cent in January, with gains reported in 7 out of 11 retail subsectors. Adjusting for inflation, retail sales were roughly flat. With today's retail sales release, we have a full month of data for our quarterly Canadian GDP tracking estimate. While there isn't much we can tell from just one month, there are signs that real GDP growth has picked up from the sub-1 per cent level that prevailed in the second half of last year. That said, growth is still likely to come in at modest 1 to 1.5 per cent in the first quarter.

Retail sales in BC rose 1 per cent over December but were unchanged year-over-year. We anticipate that, in spite of a stronger labour market, BC retail sales will continue to grow well below trend at between 3 and 4 per cent in 2013. This would mark the third consecutive year of weak sales growth.

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Canadian Manufacturing Sales

Canadian manufacturing sales began the year on a down note, declining 0.2 per cent in January, the fourth decline in the last five months.  However, weakness was not broad  based with just 7 of 21 manufacturing sectors posting declining sales.   Adjusting for inflation, Canadian manufacturing sales were 0.4 per cent lower.

Sales in the BC manufacturing sector rose  2.1 per cent in January, and were 1.4  per cent higher year-over-year. BC manufacturing growth continues to be lead by a strong rebound in the forestry sector as evidenced by a 19 per cent year-over-year increase in wood products. We anticipate the rebound in wood product shipments to be an ongoing story through 2013 as the US housing sector gains strength. Today's US housing starts data showed that homebuilders down south broke ground on 917,000 homes at a seasonally adjusted annual rate while building permits advanced to their strongest level since June 2008. 

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Housing Market Update (March 2013)

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Home Sales Continue at Modest Pace: Pent-up Demand Growing

The British Columbia Real Estate Association (BCREA) reports that a total of 4,501 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC during February, down 23.6 per cent compared to February 2012. Total sales dollar volume was down 29.9 per cent to $2.39 million. The average MLS® residential price in the province was $514,134, up 3.1 per cent from January, but down 8.1 per cent from a year ago.

"BC home sales continued at a modest pace in February,” said Cameron Muir, BCREA Chief Economist. “Despite improved affordability, many potential buyers and sellers remain in a holding pattern. With pent up demand now becoming latent in the market, it’s not a matter of if, but when home sales rise above their current pace."

“An unusual spike in the average MLS® residential price in February 2012 is largely responsible for the year-over-year percentage change,” added Muir. “Most BC markets have experienced relatively stable price levels during the first two months of the year.”

Year-to-date, BC residential sales dollar volume declined 24.6 per cent to $4.1 billion, compared to the same period last year. Residential unit sales dipped 19.6 per cent to 7,911 units, while the average MLS® residential price was down 6.2 per cent at $523,117.

Copyright BCREA - reprinted with permission

Mortgage Rate Outlook 

 

Although there have been a number of ups and downs in the Canadian mortgage market over the past 12 months, there was very little movement in posted mortgage rates. In fact, volatility in mortgage rates, as measured by a rolling 52-week standard deviation of posted five-year rates, is at a multi-decade low. With growth and inflation remaining relatively subdued and the Bank of Canada on the sidelines for all of 2013, the unprecedented low volatility in Canadian mortgage rates is likely to continue for much of the year. 　

 

While posted mortgage rates remain relatively constant, some chartered banks have recently re-ignited a small furor by again offering below 3 per cent five-year fixed rates to help spur spring-time demand following a nationwide slowdown in home sales activity. We expect that, disapproval from Ottawa notwithstanding, lenders will continue to offer steeply discounted rates to their most credit worthy borrowers while leaving their official posted rates constant. We are forecasting that the five-year fixed rate will remain at 5.24 per cent, and the one-year rate at 3 per cent for most of 2013 before gradually rising toward the end of the year as the outlook for economic growth improves.

 

The primary risk to our outlook is that growth in the global and Canadian economy will outperform current expectations. Faster growth could cause bond yields to quickly rise off of their current near historic lows, thereby forcing banks to re-price their mortgage offerings.

 

Economic Outlook

 

The second half of 2012 saw the Canadian economy post its weakest rate of growth since the 2009 recession, expanding at an average annual rate of just 0.6 per cent. Moreover, there is reason to believe that growth will continue to underwhelm in 2013. Excluding recessionary periods, consumer credit is currently expanding at its slowest pace in decades as households look to de-leverage following several years of low-interest debt accumulation. Slower credit growth will likely constrain consumer spending and the economy will require a greater contribution from exports and business investment.  

 

However, a pivot to investment driven growth appears unlikely given that anticipated investment for 2013 is set to rise just 1.7 per cent, the smallest increase since 2009. Add-in a still struggling global economy and you have a Canadian economy that will likely struggle through much of 2013, posting growth of just 1.5 per cent.
 
However, there are reasons to be optimistic about the second half of this year and beyond. Following nearly seven long years, the US economy is set to finally post sustained economic growth, led by a resurgent housing market and a reprieve from a seeming endless string of economically injurious congressional battles. A strong US economy will help lift Canadian economic growth in 2014, though headwinds from potentially higher interest rates and slower residential construction may limit growth to around 2.6 per cent.

 
Interest Rate Outlook

 
With an expanding output gap and inflation trending well below its 2 per cent target, it is natural to ask if the next move by the Bank of Canada is a rate cut rather than the rate hike that almost all economists have penciled into their forecasts. Economists tend to evaluate the ‘rightness’ of monetary policy using estimated policy rules. That is, a formula for setting interest rates in a way that is consistent with the goals of the central bank. In the Bank of Canada’s case, that means stabilizing inflation around a target rate of 2 per cent. Using an interest rate rule that closely matches past Bank of Canada rate-setting behaviour, along with the most recent Bank of Canada forecast, we can see that the interest rate path that gets inflation back to 2 per cent is still consistent with the next rate move being up.

 

Besides that, the Bank is also unlikely to lower interest rates since doing so would run counter to a year of loudly exhorting households to cut back on debt. Instead, the Bank will likely continue to use forward guidance about the need, or lack thereof, for future rate hikes in order to influence long-term rates and the Canadian dollar lower. The combined effect of which should provide continued stimulus to the Canadian economy.

 

Copyright BCREA – reprinted with permission

　

 

 

3725 Cemetery Rd

3725 Cemetery Rd
Wide open spaces. With great sun and approximately 2 useable acres in Krestova, this 1994 mobile home has 2 bedrooms and two full baths. The master bedroom has a walk in closet and ensuite bath. The addition creates a nice entry/office space and adds to the functionality of the floor plan. Water is from a well on the property that is shared with the neighbouring home. There is an established garden area but lots of room to expand on this gently sloped property.
$219,900
MLS # K218683