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Archive for September, 2012

Canadian Real Estate Association cuts home sales forecast for this year and next

Wednesday, September 19th, 2012

OTTAWA The Hamilton and Burlington real estate market was among only six out 27 in Canada to record growth in home sales in August over the month before, according to data published Monday by the Canadian Real Estate Association.

The decline was spurred by large drops in sales activity in the country’s largest markets and led CREA to cut its 2012 and 2013 outlook for home sales. The association also lowered its national average price forecast as it reported the biggest month-to-month drop in activity in two years.

The association said that tighter regulations on mortgage lending that came into effect in July helped push August homes sales to their largest month-over-month decline since June 2010.

Sales of previously owned Canadian houses and condos have now gone down in five of the past six months.

“While we always caution that housing market trends at the national level can and do run counter to trends in many local markets, the decline in activity in August was definitely the result of much of the country moving in the same direction,” CREA president Wayne Moen said in a statement.

Nationally, sales in August slipped 5.8 per cent compared with July and were down 8.9 per cent compared with August 2011.

Hamilton saw a 0.4 per cent growth in sales from July to August. But year over year, sales in the Hamilton-Burlington area dropped 11.3 per cent comparing August this year to the same month a year ago.

Sales dropped in 24 of 27 markets year over year, including 31 per cent in Vancouver and 14.9 per cent in Toronto.

Listings are also down 3.9 per cent in Hamilton-Burlington between July and August and 16.2 per cent year over year.

In terms of dollar value, $399 million in residential real estate was sold in Hamilton-Burlington in August, up 4.9 per cent from July and up 0.7 per cent year over year. Only six of 27 markets have seen dollar value growth year over year.

The average local sale price has grown 13.5 per cent, from $321,036 in August 2011 to $364,464 last month. The national year over year average price increase is just 0.3 per cent.

Cameron Nolan, president of the Hamilton-Burlington Real Estate Board, says Hamilton continues to be “undervalued compared to the rest of Canada and especially the GTA. That’s because we have pretty solid immigration numbers, pretty solid employment and a strong economic outlook.”

A drop in listings but continuing strong sales has tipped Hamilton-Burlington into a sellers’ market, says CREA chief economist Gregory Klump, which then impacts average price.

“If the sales to listing ratio is between 40 and 60 per cent, that’s a balanced market. Hamilton is well above that.”

Hamilton’s ratio in August was 72.6 per cent, up from 63.7 per cent in August 2011. The national figure for August was 51 per cent.

He attributes the drop in national sales to new mortgage rules which shorten amortization periods on government-insured mortgages from a maximum of 30 to 25. The new rules took effect midway through July. That has shrunk the pool of qualified first-time homebuyers, says Klump, although the full effect won’t be clear until several months of data are in.

The new mortgage rules will likely have a greater impact in high-priced markets and may drive some first-timers to more affordable markets like Hamilton, says Klump.

In its outlook for the year, CREA said Monday that home sales are now forecast to rise by 1.9 per cent to 466,900 units in 2012. That compared with a forecast in June that suggested 475,800 homes would be sold in 2012, up 3.8 per cent from 2011. CREA expects volume will slip by 1.9 per cent to 457,800 units in 2013.

CREA also forecast the national average home price would rise by just 0.6 per cent to $365,000 in 2012 and edge lower by one tenth of one per cent to $364,500 in 2013. The outlook was down from a June forecast that prices would rise by 2.2 per cent to $370,700 in 2012.

Economist David Madani of Capital Economics said the recent slump in home sales suggests that a housing correction is under way. He suggested the price decline could be as much as 25 per cent over the next year or two.

However, TD Bank senior economist Sonya Gulati suggested that absent a catalyst like an interest rate increase or external economic shock, there is no reason to think the housing market will rapidly unravel from the current levels.

“The weakness in both the price and sales series in August was largely expected and the regulatory-induced slowdown should persist over the next six to eight months,” Gulati said.

TD has suggested that the tighter mortgage rules will shave five percentage points off sales activity and cut prices by 3 per cent on average during the second half of this year and early 2013.

CREA said sales were lower in about two-thirds of all local markets across Canada representing 80 per cent of national activity, with lower monthly sales in almost all large urban centres, Toronto, Montreal, Vancouver, the Fraser Valley, Calgary, Edmonton and Ottawa.

With files from The Canadian Press

mmacleod@thespec.com

Open house in Sherwood Park on Saturday September 15

Friday, September 14th, 2012

Please join us for an open house  2-4 pm.

Property details.

 

Making your Real Estate needs my Priority
Dave Dry
Realtor, Re/max Real Estate
Website: www.davedry.com
Blog: blog.davedry.com
Office: 780 457 3777
Direct: 780 446 3727
Fax 780 478 7017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September newsletter

Thursday, September 6th, 2012

 

 

 

Making your Real Estate needs my Priority
Dave Dry
Realtor, Re/max Real Estate
Website: www.davedry.com
Blog: blog.davedry.com
Office: 780 457 3777
Direct: 780 446 3727
Fax 780 478 7017

 

 

 

 

 

 

 

 

 

 

 

 

Open house Saturday September 8 in Calmar

Thursday, September 6th, 2012

Please join us for an open house

on Saturday September8, 2-4 pm.

Property details.

Making your Real Estate needs my Priority

Dave Dry

Realtor, Re/max Real Estate

Website: www.davedry.com

Blog: blog.davedry.com

Office: 780 457 3777

Direct: 780 446 3727

Fax 780 478 7017

 

 

The data included on this website is deemed to be reliable, but is not guaranteed to be accurate by the REALTORS® Association of Edmonton. Trademarks used under license from CREA.
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