STABILITY CONTINUES IN CANADA’S RESALE HOUSING MARKET

By now, as professionals in Canadian real estate, most are feeling that the market is experientially stabilizing, but Friday’s announcement of September 2010 statistics by The Canadian Real Estate Association (CREA) affirms that with subjective numbers.  The national resale housing activity moved slightly upward for a second consecutive month, while supply of homes on the market and number of months of inventory declined also for the second consecutive month.  It may be too early to celebrate, but it is certainly time to breathe a sigh of relief.

Seasonally adjusted national home sales activity through MLS was up three percent month-over-month in September, reaching their highest level since May.  Breaking it down to local markets, about 66 percent of those posted increases in their seasonally adjusted activity, so it was a fairly healthy, nationwide result.  Comparably, the actual sales activity, without seasonal adjustment saw a volume decrease of 19.8% over September 2009’s record sales, but is just slightly below and far more in line with September sales from 2006 through 2008.

“Supply and demand are rebalancing, and that’s keeping prices steady in many markets,” said Georges Pahud, CREA’s President. “Local and national housing market conditions often differ, so home buyers and sellers should consult their REALTOR® to understand how sales, inventory and pricing trends are shaping up in their market.”

Clients are typically far less concerned with volume and far more interested in prices, even though this only ever paints a portion of the picture.  Fortunately there is good news for them here as well as the national price trend continues to stabilize.  The national average price remains consistent with September 2009 pricing at $331,089. And this does not seem to be a blip in the market, as we are now experiencing the second consecutive month in which average price remained even with year-ago levels.

For the number crunchers out there, note that the weighted average price trends are also moderating. There was a 3 percent year-over-year rise in the national weighted average price in September 2010, making it the sixth month of diminishing gains.  Similarly, the residential average price in Canada’s major markets rose 1.3 per cent year-over-year, while the weighted major market average price rose 5.7 per cent.

Mortgage lending rates eased in the third quarter, which helped support sales activity over the past couple of months,” said Gregory Klump, CREA’s Chief Economist. “Interest rates are going nowhere fast, so home ownership will remain within reach for many homebuyers.”

“Since Canada’s interest rate outlook is tied to a weakening outlook for economic and job growth, consumer sentiment will remain under pressure until economic prospects improve next year. In the meantime, many Canadians will be focused on paying down their debts in anticipation of interest increases next year.  That means the continuation of low and stable interest rates is unlikely to cause housing demand or prices to take off, especially since the hangover from accelerated home purchases earlier this year is expected to persist for some time.”  << Source: www.propertywirecanada.com  >>


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