The Difference a Year can make in Real Estate
I thought you might like to see the difference a year makes by looking at some of these headlines.
Here are some of the Headlines from 2009
BC Home Sales Decline by One-Third in 2008 – January 12, 2009
BC Home Sales Start with a Whimper in 2009 – February 16, 2009
Home Sales Increase in February – March 13, 2009
Affordability Drives Home Sales Higher – April 15, 2009
Housing Market Balancing Out – May 14, 2009
BC Home Sales Continue to Climb – June 11, 2009
Home Sales Climb for Fifth Consecutive Month – July 13, 2009
BC Housing Market Exhibits Balanced Conditions – August 14, 2009
August Home Sales Continue at Brisk Pace – September 11, 2009
BC Housing Market Gains Momentum – October 15, 2009
So what are we to make of all these Headlines looking forward into 2010. The following comments are intended to be Canada wide but remember we are living in one of the most desirable places in Canada so what happens across our land will only happen here if not sooner than later.
1) Canadian Housing starts are expected to rise
Canada Mortgage and Housing Corp. says starts statistics – which mark the actual, shovel-in-the-ground beginning of construction – were expected to improve throughout 2009.
The reason?
“Over the next several years, housing starts will gradually become more closely aligned to demographic demand, which is currently estimated at about 175,000 units per year,” CMHC said.
2) Building permits have bounced higher
This indicator of builder confidence and construction plans has made steady gains.
“Building permits are recovering from the extreme lows earlier this year,” the Bank of Montreal said in a research note.
In June, the value of building permits was $5.2-billion, 1 per cent higher than the revised $5.1-billion measured for May. Residential permits rose 0.5 per cent to $2.7-billion, marking the fourth month in a row for an improvement.
3) Existing home sales soar
Nowhere has the turnaround been more apparent than in July sales of existing homes in Canada’s biggest cities.
“For instance, sales in Greater Vancouver were up a massive 89 per cent year-over-year, a world away from a 70-per-cent drop last November. Toronto is a little less frenetic, but managed to post a 28 per cent year-over-year gain in July.”
Edmonton also reported a 28 per cent increase in the number of homes that changed hands year-over-year and, in Calgary, the level of resale activity was up 22 per cent year-over-year.
The Canadian Real Estate Association (CREA) is expected to report further gains in national home resale activity later this week.
4) It’s still a buyers’ market, but prices are firming up
Economists expect that when CREA reports on the national picture Friday, the statistics will show that the prices are up about 4 per cent year over year – skewed upwards by sales in the higher-priced markets.
Real estate agents are sleeping with their pagers again with the return of bidding wars in some local markets.
5) Affordable mortgages
The sharp drop in mortgage rates has almost single-handedly returned housing affordability to its long-term norm from the worst levels in 17 years. That affordability has made a big impact. Record low interest rates are what is driving the market.
You may have seen this recent article but I thought it was worth passing on.
By The Canadian Press, cp.org, November 16, 2009
October home sales improve 41.5 per cent year over year, marking monthly record
OTTAWA – Canadian home resales improved 41.5 per cent year over year to 42,288 units in October, a record for the month, according to the Canadian Real Estate Association.
The national average price for homes listed on the Multiple Listing Service also reached a new high in October at $341,079. This was 20.7 per cent higher than the same month last year.
New sales records for the month were reported in one-fifth of local markets, including Toronto, Montreal and Ottawa.
On a seasonally adjusted basis, MLS home sales totalled 45,818 units in October, two per cent higher than the previous record set in May 2007 and 74 per cent above the recent low in January.
“Low interest rates and upbeat consumer confidence continue to release the pent-up demand that built late last year and earlier this year,” stated CREA president Dale Ripplinger.
“The release of that pent-up demand has boosted national sales activity to new heights and is drawing down inventories.”
The sharp rise in demand for homes has shrunk inventories to 194,994 or a seasonally adjusted 4.1 months worth, the lowest level in more than two years and 20.8 per cent below the peak reached a year ago. This is the sixth month in a row in which inventories are down from year-ago levels.
Seasonally adjusted new listings on MLS were slightly higher in October compared to September at 65,148 units. New listings peaked in May 2008, then declined until March 2009, and have remained relatively steady since then.
“New listings are still expected to rise in the coming months in response to headline average price increases,” stated CREA chief economist Gregory Klump.
“New supply dropped dramatically in December last year and earlier this year in response to a difficult pricing environment. Sellers who moved to the sidelines should be drawn back to the market as prices rise further over the rest of the year and in early 2010.”
