Edmonton Real Estate Blog

The REALTORS® Association of Edmonton released market housing statistics for the month of October based on sales through the Multiple Listing Service® in the Edmonton CMA. The all-residential average price in the Edmonton CMA is $337,599 as compared to $332,232 in October 2012, a +2.5% change. The median price for a home in Edmonton is up at $327,250 compared to $315,600 last October.

All-residential sales totalled 1,454 (adjusted for late reported sales, 1,346 reported) in October, a positive change of 15.6% from the same month last year when there were 1,258 residential sales. There were 888 (822) adjusted SFD sales, 449 (416) adjusted condo sales and 90 (83) adjusted duplex/rowhouse sales (reported sales in brackets).

“Total annual sales are the highest they have been for five years and we had the best October in five years as well,” said RAE President Darrell Cook. “There is a 74% sales-to-listing ratio which means that sellers have a better than usual expectation of selling their property. At the current level of sales there is adequate inventory (4,807) for 2.7 months which is lower than normal in this market. The youthful nature of our city (average age 36) and good job prospects means that the demand for housing remains high.”

The unemployment rate declined from 5.2% in August 2013 to 5.1% in September 2013. City of Edmonton economist John Rose states that; “These numbers demonstrate that Edmonton has become one of Canada’s most attractive locations for individuals seeking work.”

The average price for a single-family dwelling in October was $397,613 (up 2.5% Y/Y) and an average condo sold for $235,680 (up 2.1% Y/Y). The average price for a duplex/row house was $326,195 (up 5.2% Y/Y). Median prices for SFDs was $375,000, for condos $222,750 and for duplex/rowhouses, $318,900.

“The first time buyer or young person moving into this market will often choose a condo because of the lower price point,” said Cook. “About 60% of all condo sales are under $250,000 and that represents 17.6% of all residential sales. Condos priced over the average price of a SFD represent only 1.5% of total residential sales.” There were 584 SFDs sold for under $250,000 which is less than 4% of all residential sales.

The average days-on-market was 54, down from 60 days last year. For real estate advice or further explanation of the market conditions, consult a REALTOR®.

Source: Realtors Association of Edmonton

To View & Search All MLS Listed Houses for Sale Visit Us At:
www.EdmontonHomesforSale.biz

Serge Bourgoin
Senior Managing Partner
Team Leading Edge
RE/MAX ELITE
780-995-6520

Statistics Canada says its new housing price index rose 0.1 per cent in August, following a 0.2 per cent increase in July.

The agency says Calgary was the top contributor to the national increase in August, with prices rising 0.6 per cent because of market conditions, increased material and labour costs and a shortage of developed land.

It says the largest monthly price advance in August came in Windsor, Ont., where prices rose 1.0 per cent due to increases in material, labour and land development costs.

New housing prices rose 0.3 per cent in both Montreal and Saskatoon.

Negotiated selling prices contributed to lower prices in Vancouver, Halifax, Ottawa–Gatineau and Victoria.

Prices were unchanged in nine of the 21 metropolitan areas surveyed.

Source: Money.ca.MSN.com

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Canadian consumer sentiment climbed to the highest in more than two years as employment rose and the housing market remained buoyant, according to the new Bloomberg Nanos Canadian Confidence Index.

The index, a weekly measurement of the economic mood of Canadians, rose to 59.75 in the period ended Sept. 27, from 59.23 the previous week. That’s the highest since March 2011 for the index, which tracks consumers’ perceptions of the strength of the economy, job security, real estate and their financial situation.

“September remains above average in terms of positive consumer sentiment in Canada,” said Nik Nanos, chairman of Nanos Research Group, the Ottawa-based polling company.

The data reflect recent improvement in economic reports. Job security among Canadians rose this month after Statistics Canada reported Sept. 6 that the economy added 59,200 jobs in August, the second highest total this year. Data this month also have shown the number of Canadians receiving jobless benefits is falling.

“Modest improvements in housing finances and the Canadian labor market are the primary factors for the best reading of the index in over a year,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York.

The index has two sub-indexes: the Bloomberg Nanos Canadian Pocketbook Index on personal finances, and the Bloomberg Nanos Expectations Sub-index on future views. The data in the indexes date to 2008 and is based on phone interviews with 1,000 consumers, using a four-week rolling average of 250 respondents. The results are accurate to within 3.1 percentage points.

Pocketbook Survey

The Pocketbook Index, based on survey responses to questions on personal finances and job security, rose to 61.37 from 60.55. The difference between the share of Canadians who report their jobs are secure and those saying they’re not secure rose to 59.1 percentage points last week, the most since March 2011.

The expectations index, based on surveys for the outlook for the economy and real estate prices, rose to 58.13 from 57.91 as more Canadians predicted home prices would rise.

The improvement in attitude comes as the Bloomberg Consumer Comfort Index, a separate gauge of consumer sentiment in the U.S., rose for a third straight week.

Canada’s economy grew at its fastest pace in two years in July, Statistics Canada reported today, with the 0.6 percent advance reversing the prior month’s drop.

The country’s output is poised to accelerate at a 2.1 percent pace from July to September, after slowing to 1.7 percent in the second quarter, according to Bloomberg economist surveys.

Housing Rebound

Concerns that Canada’s housing market will cool rapidly are dissipating. Canadian home sales rose 2.8 percent in August from the previous month, the Canadian Real Estate Association reported Sept. 16. Sales have increased for six consecutive months at an average pace of 2.3 percent, the most since January 2011.

The Bloomberg Nanos gauge of Canadians’ view on real estate strengthened this month, with 38.1 percent polled predicting increased real estate values in their neighborhoods, up from as low as 34.5 percent in August. Twenty-one percent of those surveyed said they are better off financially over the past year, the highest reading since June.

The youngest age groups, and lowest income earners, are showing among the biggest confidence gains, according to the polling results. Consumers in Ontario led gains over the past week for the Bloomberg Nanos index.

Store Sales

Statistics Canada reported last week the nation’s retailers boosted sales in July by 0.6 percent, adding to evidence the nation’s economy is rebounding.

Statistics Canada also reported today that industrial product prices rose 0.2 percent in August, while raw materials prices increased 0.9 percent.

Elsewhere in the economy, Bank of Canada Senior Deputy Governor Tiff Macklem will give a speech tomorrow in Toronto on “Global Growth and the Prospects for Canada’s Exports.”

Western University in London, Ontario will release its Ivey Purchasing (IVEYSA) Managers Index for August at the end of the week, with economists forecasting a reading of 53.5 from 51 in July.

Source: bloomberg.com/news

Canadians continued to snap up housing in August, with home sales up 2.8 per cent from July and up 11.1 per cent from the previous year.

The Canadian Real Estate Association says the recent rise in mortgage rates caused people who already had mortgage approvals from their lenders to move their decisions forward.

Mortgage rates rose 0.2 percentage points the week of August 22, but many prospective buyers locked in rates with their banks, and the impact of higher rates is not expected to be felt until later in the fall.

The August numbers also seem high by comparison with a year ago because sales activity had dropped sharply last summer after Ottawa tightened mortgage rules.

That tightening dampened enthusiasm to buy homes last fall, but by the spring, Canadians were again shopping for housing.

Sales rose sharply in most major cities and especially Vancouver Island, Victoria, Greater Vancouver, the Fraser Valley, Calgary, Edmonton and Greater Toronto.

Prices down in Fraser Valley, Ottawa, Kitchener-Waterloo

The average price of a home was up 8.1 per cent at $378,369, with price rises in Toronto and Vancouver driving most of the increase. The average price of a Vancouver house was $775,811 and in Toronto, it was $523,228.

Average prices dropped in the Fraser Valley, Ottawa-Gatineau and Kitchener-Waterloo, Ont.

CREA doesn’t expect the strong numbers will last this fall.

“That pool of homebuyers [who had locked in mortgage rates] has largely evaporated, so demand may soften over the fourth quarter,” said CREA chief economist Gregory Klump.

The big year-over-year gains will persist because sales were so weak in fall of 2012, he said.

Around 325,180 homes traded hands across the country so far this year. That is 2.9 per cent below levels recorded last year and overall sales are expected to stay below 2012 levels.

Source: CBC.ca/news

Canada Mortgage and Housing Corp. is limiting guarantees it offers banks and other lenders on mortgage-backed securities. The measure comes amid the federal government’s efforts to protect taxpayers from financial risks in the housing sector, further cool lending and add upward pressure to mortgage rates.

The Crown corporation has notified banks, credit unions and other mortgage lenders that they will each be restricted to a maximum of $350-million of new guarantees this month under its National Housing Act Mortgage-Backed Securities (NHA MBS) program. The decision comes in the wake of “unexpected demand” for the guarantees, a spokeswoman for CMHC said in an e-mailed statement.

The conversion of loans into securities with CMHC backing has become a popular way for lenders to tap funds from a broad range of investors, enabling banks to issue more mortgages and at a lower cost.

Federal Finance Minister Jim Flaherty, concerned that Canada’s housing market might overheat and infect the economy, has been taking steps to cut back the flow of mortgage credit. This spring, he went as far as to publicly chastise some banks for dropping their mortgage rates too low.

He is also taking steps to reduce the degree to which taxpayers backstop the housing market.

This year, he announced he would restrict the ability of banks to buy bulk insurance from CMHC, and he curtailed the use of government-backed insurance in securities sold by the private sector. Ottawa released a legal framework for covered bonds, another type of bond backed by pools of mortgages, last year. It said banks could not use insured mortgages in such securities.

In addition to removing fuel from the housing market, these moves force banks and other lenders to take on more of the risk of mortgage defaults, rather than offloading that risk to Ottawa.

Canada’s housing market slowed in the wake of the government’s moves, namely Mr. Flaherty’s decision last summer to tighten mortgage insurance rules. Still, prices in most areas continued to climb, and sales have begun to bounce back.

“The government is attempting to tighten credit conditions for home loans, for example the changes to CMHC’s underwriting standards last year, and this is the latest iteration of that effort,” said National Bank analyst Peter Routledge.

He said that the four largest mortgage underwriters, Royal Bank of Canada, Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and Bank of Nova Scotia, had made good use of the NHA MBS program “and I expect that their funding strategies will change as a consequence.”

“Given the differentials in funding costs via NHA MBS or unsecured long-term funding, I could see [an additional] 20 to 65 basis points in the cost of funding mortgages for the larger banks,” he said. “All else equal, we could see mortgage rates start to move up in unison.”

At the start of this year, after consultations with CMHC, Mr. Flaherty said the Crown corporation could guarantee a maximum of $85-billion worth of new NHA MBS this year. By the end of July, lenders had already issued $66-billion worth of the securities, compared to $76-billion during all of 2012. As a result, CMHC is imposing the $350-million cap on each issuer effective immediately, while it comes up with a formal allocation process this month that it will put in place for the final four months of the year.

The Crown corporation guarantees timely payment of interest and principal to investors in both types of securities, and charges the banks a fee for the service.

On its website, CMHC states that “MBS [have] helped to ensure a ready supply of low-cost funds for housing finance and to keep mortgage lending costs as low as possible for homeowners.”

Mr. Routledge said that smaller mortgage lenders don’t create enough NHA MBS to be materially affected by the new $350-million cap.

The amount of NHA MBS being issued shot up during the financial crisis, as banks sought cheaper sources of funds to continue lending mortgages. The securities are backed by pools of insured mortgages, and investors receive monthly principal and interest payments that stem from the payments homeowners make on the underlying mortgages. Banks sell the securities to investors, or to be used in the Canada Mortgage Bond program.

Feel free to call for questions or more information.

Source: www.cmhc-schl.gc.ca/en/co

Edmonton, August 2, 2013: Sales of residential properties are up in double digit increments in all categories when compared to last year, according to the REALTORS® Association of Edmonton. Total residential sales in July were up 24.9% year-over-year with 1,875 sales (1,736 reported). Sales figures are adjusted to account for unreported transactions at month end. Prices were also up year-over-year in all categories.

The average price for a single family detached (SFD) property in the Edmonton Census Metropolitan Area (CMA) in July was $410,372, down 0.5% from June but up 3.4% from a year ago. Condominium average prices dropped 7.4% m/m but were up 2.6% y/y at $242,516. Duplex/row house prices were up 8.6% y/y (down 2.8% m/m) at $330,906. The all-residential average price in the Edmonton CMA in July was $350,726 (down 2.5% m/m, up 3.3% y/y).

“These are the highest figures for July that we have seen since 2009,” said President Darrell Cook. “Prices and sales have peaked for the year and the month-over-month numbers are lower than June but when compared to last year our market is very robust. Although listings are up over the same time last year, our inventory has slipped by almost 250 units. Going forward, some buyers may have to consider compromises to find their new home in this market.”

The sales-to-listing ratio of 68% was the result of 2,543 residential listings and 1,736 residential sales in July. The total value of real estate sales through the Edmonton Multiple Listing Service® System in July was $814 million; up 18% from July 2012.

Environics Analytics, a Toronto-based data analytics firm, reported last week that the average net worth of an Edmontonian was $433,970 in 2012, up 1.6% from 2011 as compared to the Canadian average net worth of $400,151.*

“Despite the rain and flooding in Alberta last month, the housing market has thrived,” said Cook. “Edmonton has jobs, housing options, and an economy that is attracting newcomers to the city and ensuring that current residents have an appealing lifestyle.”

The average days-on-market was down one from July 2012 at 49 days, which means that an average sale was completed in about a month and a half.

Source: Realtors Association of Edmonton

To View & Search All MLS Listed Houses for Sale Visit Us At:

www.EdmontonHomesforSale.biz