Edmonton Real Estate Blog

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Could the tide be turning for real estate?

It’s probably premature to make that call, but you can’t ignore the encouraging signs – especially when they come in multiples.

First, we saw a surprising 6.5 percent jump in home sales for December. Now we’ve just gotten the latest Pending Home Sales Index, and it’s up 6.3 percent, thanks to double digit gains of 13 percent in the Midwest and the South.

The index is based on signed contracts for home sales that haven’t gone to closing, but that are scheduled to settle in the coming two or three months.

The National Association of Realtors collects the data from Multiple Listing Services around the country, and most economists accept the index as a reliable gauge of where we’re headed in housing activity.

Lawrence Yun, chief economist for the National Association of Realtors, attributed the upward movement to “buyers responding to lower home prices and interest rates” that have improved the affordability equation to its most favorable level in 39 years.

Sales in the coming months might also be powered by something no index can measure: Congress is likely to improve last year’s $7,500 home buyer tax credit by turning it into a non-repayable incentive for new sales this year – all as part of the stimulus package on Capitol Hill.
Though it’s impossible to predict how many more home sales a true credit might stimulate – one that doesn’t have to be paid back to the government like the 2008 version – industry estimates range anywhere from several hundred thousand upward, provided the expiration date runs through this coming December.

On other economic fronts last week, reports of tens of thousands of industry layoffs definitely won’t help housing, but new numbers on inventories of unsold homes just might be a plus. Total homes for sale on the market nationwide dropped nearly 18 percent last month to the lowest level since May of 2007.

Mortgage rates inched up slightly last week, according to the Mortgage Bankers Association, with thirty year fixed rate loans averaging 5.3 percent compared to 5.2 percent the week before. That’s up a notch, but it’s still close to 40-year historic lows.

As we’ve said before on this program: Keep your eyes open for the little statistical improvements in the market that often get ignored by the media: Once they start mounting up, month after month, you’ll know we’re in turnaround mode.

We’re not there yet, but we’re headed in a promising direction.
Source: Kenneth R. Harney, Realty Times

To view and search all Edmonton and area MLS listed homes visit me at www.FindMyHouse.ca

Also visit www.FindMyHouse.ca to enter the free draw for a $5,000 travel certificate.

As of today Feb. 13, 2009 there are 2,514 single family homes listed in Edmonton proper. That is not much different than we have been for the last couple of months.

However what has changed is an increase in sales in the last 30 with 476 sales. That gives up a listing/sales ratio of 5.28:1 which is the lowest ratio since the market started it’s nose dive in valuations back in mid-2007.

And that is getting very close to the 4:1 that we require for the market to stabilize. Considering that last month we were at over 10:1 this is great news and could be indicating that we are close to the market hitting the bottom.

So if you have been thinking of waiting to buy that next home you might want to start looking now.

To view and search all Edmonton and area MLS listed homes visit me at http://www.findmyhouse.ca/

Also visit http://www.findmyhouse.ca/ to enter the free draw for a $5,000 travel gift certficate.

The next first time buyer seminar dates are:
Wednesday Feb. 18th from 7-9pm
Saturday Feb. 21 10am-noon

There will be 4 instructors: A lawyer, a mortgage broker, a home inspector, and a real estate agent.

To register just click on the following link to register:
http://www.findmyhouse.ca/view_custom.php?cpc_id=5735

Serge Bourgoin
Re/Max Real Estate
Edmonton, AB
780-488-4000

To view and search all Edmonton and area MLS listed homes visit www.FindMyHouse.ca

The number of properties sold via the MLS® in Canada edged down further in December 2008 to reach the lowest level for the month since December 2000, according to CREA.
Seasonally adjusted residential MLS® sales activity numbered 27,357 units in December 2008, a decline of 1.8% compared to the previous month. However, seasonally adjusted activity was up in more than half of Canadian housing markets. Activity declines in Montreal, Calgary and Edmonton more than offset a rebound in the number of transactions in Vancouver, resulting in a small monthly decline in national sales activity.
The small month-over-month decline in national MLS® seasonally adjusted sales activity in December followed double digit declines in September (-14.9%) and October (-12.1%). Activity plummeted 22.2% in the fourth quarter of 2008 to 86,879 units, with seasonally adjusted quarterly declines in activity in all provinces. The sharp drop in fourth quarter activity accounted for over half of the decline in transactions since the peak in 2007.
Year-over-year declines in the MLS® average home price were reported in about half of local markets in December. Lower activity and average prices compared to one year ago remain most pronounced in Canada’s more expensive housing markets. This continues to weigh on the national MLS® residential average price.
The MLS® national average price of homes in December 2008 declined by 11% from where it stood a year ago. The major market price trend was similar to the national trend, down by 9.9% year over year in December 2008.
“Moderating home prices in Canada should not be confused with the downturn in the U.S. housing market,” says CREA President Calvin Lindberg. “But any local real estate market is not immune to global economic challenges, and that is what we face today. Low prices are not the concern as much as the perception of doom and gloom. Buyers are waiting to see if the real estate market has hit bottom, and that is a very complex thing to try and calculate. Most of us will only be affected by the market correction psychologically, because the majority of Canadians will not buy or sell property in the coming year.”
Seasonally adjusted new MLS® residential listings numbered 72,931 units in December, down 3% from levels recorded in November. New listings are trending lower. In December, they stood 8.1% below the peak reached in May 2008.
Resale housing market balance is represented by sales as a percentage of new listings. The rise in the number of new listings in the first half of last year along with declining sales activity, particularly in the fourth quarter, resulted in an increasingly balanced resale housing market over the course of 2008.
Sales as a percentage of new listings in the fourth quarter of 2008 fell to the lowest level since the mid 1990s. New listings are trending down from the peak reached in the second quarter of 2008. If this trend continues, the balance of supply and demand will stabilize in 2009.
“Average prices will remain under downward pressure during the Canadian economic recession,” said CREA Chief Economist Gregory Klump. “Shaky financial market confidence is pulling down business and consumer confidence. The consensus economic forecast predicts the economy will rebound in the second half of 2009, so housing market trends should strengthen next year.”

Source:Realtors Association of Edmonton

To view and search all Edmonton and area MLS listed homes visit www.FindMyHouse.ca

Jan. 22 (Bloomberg) — The Bank of Canada said the economy this quarter will plunge instead of stalling, while anticipating a “faster” recovery than in earlier recessions as access to credit and exports rebound.
The central bank slashed its economic growth forecast for the first quarter, saying output will shrink at a 4.8 percent annualized pace after predicting in October that it would be unchanged. Gross domestic product will shrink at a 1 percent pace in the second quarter before expanding through 2010.
“The projected return to balance of the Canadian economy is faster than either of the recoveries following the 1981-82 and 1990-92 recessions,” the Ottawa-based central bank said today in an update to its October Monetary Policy Report. “Canadian credit conditions remain better than those in other major countries” and “exports are also expected to recover next year,” the bank said.
Governor Mark Carney two days ago cut borrowing costs by half a point to 1 percent, the lowest since the central bank was founded in 1934, and said he would “carefully” assess how much more stimulus may be needed. The world’s eighth-largest economy is shrinking because of slower foreign orders for goods such as cars and commodities such as crude oil, combined with the global credit crisis which has made banks reluctant to lend.
Currency Falls
The Canadian dollar weakened 0.7 percent to C$1.2637 per U.S. dollar at 11:53 a.m. in Toronto, from C$1.2551 yesterday.
The economy will contract 1.2 percent this year, marking Canada’s first recession since 1992, and then grow 3.8 percent in 2010, the central bank said. That’s almost double the 2 percent expansion predicted by economists in a Bloomberg News survey.
“We would love the Bank of Canada’s growth projections to turn out correctly, and maybe they will, but fear they are too optimistic on 2010,” Derek Holt, an economist with Scotia Capital Inc., wrote today in a note to clients. The bank may be “erring on the side of a relatively sanguine view of Canadian credit markets,” he said.
Exports will shave 2.6 percentage points off of economic growth this year, then add 2.1 percentage points in 2010, aided by a weaker currency and a rebound in U.S. demand, the bank said.
Even amid the financial crisis that has crippled access to credit in the world’s biggest economies, lending to businesses in Canada “grew at a solid pace” through November and household credit “has slowed only moderately,” the central bank said. The cost of borrowing for commercial lenders has fallen by 1 percentage point since October, the bank said, citing reductions in its own benchmark interest rate.
Gaining ‘Traction’
Also, actions taken by Canada and other countries to shore up credit markets and economies “are starting to gain traction,” the central bank said.
The report repeated that the Bank of Canada will assess “to what extent further monetary stimulus will be required” to meet its chief goal of keeping inflation at 2 percent.
Inflation will decline by 0.6 percent in the second quarter and 1 percent in the third and won’t return to the bank’s target until the first half of 2011, the bank said.
Consumer prices haven’t dropped for two or more consecutive quarters since 1953, according to Statistics Canada.
The Bank of Canada didn’t refer to its projection as a bout of deflation, saying risks to its inflation forecast are “roughly balanced.”
Further Tools
Deflation can freeze spending by business and consumers if they hold off on purchases in anticipation of ever-lower prices. Reversing deflation can be harder than inflation because central banks can only cut interest rates so low to encourage demand.
There was also no reference in the report to whether the central bank may eventually use policy tools other than interest-rate cuts to boost credit markets in Canada.
Carney, 43, said after his Oct. 23 forecast paper that Canada doesn’t need to consider buying direct stakes in banks as in the U.S. and some European countries, where governments are trying to catch up to Canadian lenders’ level of capitalization. In December, he said after a speech that it was “premature” to discuss such moves.
Still, Bank of Canada officials and Finance Minister Jim Flaherty have said the country’s banks, rated the soundest last year by the World Economic Forum, have scope to expand lending.
The next rate decision is scheduled for March 3.
The 1 percent policy rate that the Bank of Canada set two days ago is lower than a previous record of 1.12 percent in 1958 when the rate was based on treasury-bill yields.
To contact the reporter on this story: Greg Quinn in Ottawa at gquinn1@bloomberg.net. Last Updated: January 22, 2009 11:57 EST

To view and search all MLS listed homes in the Edmonton area visit me at www.FindMyHouse.ca

As of this morning there are 2,395 single family dwellings listed in Edmonton proper. In the last 30 days there were also 249 sales of single family dwellings in Edmonton proper.

With those numbers that gives me a listing to sales ration of 9.62:1. That is over double the 4:1 needed for a neutral market. To me that indicates that we are going to see continued downward pressure on valuations.

So if you are thinking of selling this year the sooner you put your home on the market the better the chance of getting the most money possible.

If you are thinking of selling please feel free to give me a call anytime @ 780-995-6520 and ask for a free market analysis of the value of your home.

To view and search all Edmonton and area MLS listed homes visit me at http://www.findmyhouse.ca/

Well we are off to a new year with all hopes and expectations of a great year.

Currently there are 2,319 single family homes on the market in Edmonton proper. However in the last 30 days there only has been 230 sales. That gives us a listings to sales ratio of 10.08:1

That is the highest I have seen this ratio since the market turned in mid 2007. Now part of that has to be attributed to the fact that these numbers reflect the activity in December which historically has been one of the slowest months of the year.

Having said that the ratio is still way to high and I would expect there will be more pressure on valuations in the incoming few weeks of the new year.

To view and search all Edmonton and area MLS listed homes for free visit me at: www.Findmyhouse.ca

As of this morning there were 2,982 single family homes available in Edmonton proper. In the past 30 days 415 single family homes were sold in Edmonton proper. That would give us a listing to sales ratio of 7.19:1

With a ratio still significantly higher than the 4:1 required for a neutral or balanced market I expect there to be continued downward pressure on valuations.

Threat of global recession to hinder home sales in major Canadian housing markets in 2008 and 2009, says RE/MAX

Recovery linked to economic stability next year

Global economic uncertainty weighed heavily on residential real estate activity in most major Canadian centres during the latter half of 2008. Although the forecast for 2009 promises more of the same, most markets are expected to weather the storm, says RE/MAX.

Housing market performance will clearly be contingent on economic performance at a local, provincial, and national level in 2009. Issues affecting the overall economy are impacting housing markets across the country and the situation is not expected to be remedied until consumer confidence is restored. If inventory levels remain stable, pent-up demand kicks into gear, and lower interest rates stimulate home-buying activity, we could see a bounce back as early as spring.

The RE/MAX Housing Market Outlook for 2009 examined residential real estate trends in 22 markets across the country and found that average price held up remarkably well in 2008, despite 13 centres reporting double-digit declines in home sales. Solid gains earlier in the year likely served to prop-up housing values at year-end. The prognosis for housing activity in the first six to nine months of 2009 is somewhat static, given continued volatility in financial markets and the threat of recession, but as stability returns, housing markets are expected to recover.

Nationally, 440,000 homes are expected to change hands in 2008, down 15 per cent from record 2007 levels. Canadian housing values are expected to hover at $300,000, a nominal three per cent decline from last year’s historic peak. By year-end 2009, unit sales should match 2008 levels, while average price is forecast to fall another two per cent to $293,000.

Major markets are evenly split in terms of housing performance in 2009, with 11 centres forecast to match or exceed 2008 home sales and 11 expected to slide from 2008 levels. The highest percentage increase in unit sales is anticipated in Saskatoon, where the number of homes sold is forecast to climb three per cent in 2009. Housing values are expected to hold the line in 2009, with St. John’s, Montreal, Kingston, London, Winnipeg, Saskatoon, and Regina posting modest gains in average price in 2009.

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RE/MAX Housing Market Outlook 2009…2

Canada’s real estate environment is considerably more complex than it has been in recent years. The landscape is definitely changing — with most markets shifting into either balanced or buyer’s territory. The shut out is over. Sellers no longer rule the roost. Opportunities exist for purchasers like never before, including lower interest rates, greater inventory levels, the luxury of time to make decisions, and the upper-hand at the negotiating table. Motivated vendors will need to take note of the new mindset and set their prices accordingly.

Canadian sellers are slowly adjusting to new realities. For most markets, 2008 started in balanced territory and moved into buyer’s market conditions during the latter half of 2008. The year ahead will prove challenging, especially for vendors.

While the economy will dictate real estate performance next year, it’s important to remember that demand still exists in the marketplace. In the midst of stock market turmoil, sold signs continue to appear on lawns across the country. With affordable lending rates and increased selection, first-time and move-up buyers with good credit may choose to play their investment strategy safe and purchase a home. The comfort of a tangible investment like real estate goes a long way in tough times.

To view and search all Edmonton and area MLS listings visit me at: www.FindMyHouse.ca

REALTORS® had lots of time to work with their best clients in November as housing sales slowed. The number of residential sales during the month dipped to levels not seen since 1998. The average price of a single family home in the greater Edmonton area remained stable while condo prices dropped for the second month in a row, reported the REALTORS® Association of Edmonton.

“Our members report that there are a lot of potential buyers in the market but many are not ready to commit,” said Marc Perras, president of the REALTORS® Association of Edmonton. “They are being cautious and hoping for further price drops or lower interest rates that reflect the current global economic situation.”

The average* price of a single family residence was down slightly (-0.14%) in November offsetting a slight rise in October. The average price of a single family home was $362,757. Condominium sales took another drop in November (down 2.55%) with an average price of $231,531. Duplex and rowhouses sold on average for $315,813 which was up 2.8% from October. The average residential sales price (including all types of residential property) was $318,588; up by a quarter of a percent.

“Sellers may be losing heart but even in this slow market there were still about 30 housing deals made every day and every home that is priced appropriately will eventually find a new owner,” said Perras. There were 8,015 homes in the local MLS® inventory at the beginning of this month (down 510). 2,036 homes were listed during November and 891 were sold resulting in a sales-to-listing ratio of 44% as compared to 40% last month. Average days-on-market was up five days to 63 and total MLS® sales (including commercial, industrial and residential) was $319 million in November, a drop of $144 million from last year’s November.