Lets try to make sense of what has happened in the Real Estate Market over the last few months, and look to the future to 2012. The Real Estate Market is strong and some indicators have had economist and professionals waiting for a small dip in 2012.
Sales activity rose slightly (+0.5 per cent) from October to November on a seasonally adjusted basis. Year-to-date sales remained in line with the 10 year average, but pulled further ahead of last year’s levels. The number of newly listed homes was down 3.4 per cent from October to November. The national housing market remains balanced, but is edging closer to seller’s market territory. The national average price posted a 4.6 per cent year-over- year gain in November, the smallest increase since January.
Sales activity recorded through the MLS® Systems of real estate Boards and Associations in Canada edged upward by one-half of a percentage point. This marks the third straight month in which national activity was up from the previous month’s levels.
The national housing market remains balanced, but is edging closer to seller’s market territory. The national sales-to-new listings ratio, a measure of market balance, stood at 55.5 per cent in November, up from 53.4 per cent in October. This marks the third month in which the national ratio has risen, and it now stands at its highest reading since the spring.
Based on a sales-to-new listings ratio of between 40 to 60 percent, just over half of local markets in Canada were balanced in November, while a third of markets qualified as sellers’ markets.
The actual (not seasonally adjusted) national average price for homes sold in November 2011 stood at $360,396. This represents a year-over-year increase of 4.6 per cent, its smallest increase since January.
First-time homebuyers are poised to comprise an even bigger proportion of real estate activity next year. Sales and prices are expected to stabilize as demand from owners intent on upgrading while mortgages are cheap dries up after more than two years of stimulative interest rates
Low overnight lending rates at the Bank of Canada — which have been at one per cent since September 2010 — affect variable mortgage rates and other loans tied to banks' prime rates. Meanwhile, government debt crises in Europe and the U.S. are keeping fixed rate mortgages at ultra low levels by depressing the bonds that back them.
Mortgage rates had been expected to rise in 2011, increasing the cost of home ownership and keeping house prices in check. That was supposed to lead to a slowdown in the housing market, according to the predictions of several top economists at the end of 2010.
They were wrong. Now they believe that easing is coming in 2012.
Instead, home prices for the first 10 months of the year have risen 7.8 per cent year-over-year, according to the Canadian Real Estate Association.
even more surprising was that robust activity in Vancouver, Toronto and other hot markets, did not drop off nearly as much as expected after the Finance Minister introduced new mortgage rules in March.
Every City and Town in Canada is experiencing a different Real Estate Market. Speak with your local Real estate expert and receive current and relevant information on your Market.
The Aziz Group