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US house prices 'see record fall'
US house prices fell by a record 19% in January compared with a year earlier, according to a closely-watched index.
The Standard & Poor's/Case-Shiller Home Price index records prices in 20 of the largest cities in the US. The index also showed a month-on-month fall as prices fell 2.8% in January compared with December. Earlier this month, figures showed home construction in February rose by a quarter year-on-year, raising hopes the US housing market may be bottoming out.
'Downward path'
"Home prices, which peaked in mid-2006, continued their decline in 2009," said David Blitzer at S&P. "There are very few bright spots. Most of the nation appears to remain on a downward path, with all 20 metro areas reporting annual declines," he explained.
Jim Awad at Zephyr Management said: "I think what this says is that the rally in the [stock] markets is based on a hope that the economy is bottoming and that the housing market is bottoming.
"This data is part of the reality check we're going to get over the coming month."
From their peak in the second quarter of 2006, house prices have now fallen by 29.2%, according to the S&P/Case-Shiller index.
The 19% fall in January is the biggest drop since the index began in 1988.
Prices in Phoenix fell the most (35%), closely followed by Las Vegas (32.5%) and San Francisco (32.4%).
The smallest fall was in Dallas, where house prices fell by 4.9%.
March 31, 2009 in World View [of real estate] | Permalink | Comments (1) | TrackBack
Toronto's Condo King says:
Brad Lamb (Toronto's self-appointed Condo King) says he's convinced the worst is over. "There are 1,600 condos for sale on MLS right now. That's pretty low, considering the economic holocaust we're in. So maybe it's not that bad; maybe it's more like apartheid.
"But then, I'm a glass-100-per-cent-full kind of guy", Lamb says.
See full story in the Toronto Star »
March 29, 2009 in Real Estate Personalities | Permalink | Comments (7) | TrackBack
Realtors fight sales tax harmonization
Ontario's Realtors say the McGuinty governments plan to harmonize the GST and PST will add over $2,000 to the cost of a real estate transaction, hurting the resale home market and prolonging the housing industry's recovery from the current economic downturn.
"Now is not the time to be erecting barriers to homeownership," said Pauline Aunger, President of the Ontario Real Estate Association. "We need consumers to invest in housing to help get our economy going again."
According to the Canadian Real Estate Association, home sales in the province of Ontario were down 29 per cent in February, compared to 2008.
Under a harmonized sales tax (HST: 13%), home buyers and sellers will have to pay extra tax on a range of services associated with real estate transactions such as legal fees, moving costs, real estate commissions and home inspection fees. Currently, consumers only pay the 5% Goods and Services Tax on these services.
"These additional taxes could price some homebuyers, especially first-time homebuyers, right out of the market," explained Mrs. Aunger. "Harmonizing will not help homebuyers in any way."
For a resale house priced at $360,000, a HST could add over two thousand dollars in new taxes to closing costs. In total, a HST will add $313 million annually in new taxes to resale home transactions.
"In the last decade, Ontario's homeowners have faced a barrage of new costs," said Aunger. "From municipal land transfer taxes to sky rocketing property taxes, homeowners are being pushed to the brink to accommodate increasing demands from government. A harmonized sales tax is yet another cash grab on Ontario's already overtaxed homeowners."
The Ontario Real Estate Association represents 47,000 brokers and salespeople who are members of the 42 real estate boards throughout the province. Members of the association may use the Realtor trademark.
March 28, 2009 in Selling Toronto Real Estate | Permalink | Comments (2) | TrackBack
Stop Sticking It To Us!
Canadian consumers paid over $4.5 billion in hidden credit card fees last year. Now these companies want to raise these skyrocketing hidden fees.
Big Credit Card companies need to stop sticking it to us.
March 26, 2009 | Permalink | Comments (1) | TrackBack
Windsor real estate "catalyst"
Homes in Windsor are selling for less than new cars:
Windsor-Essex County Real Estate Board
Real estate prices in Windsor-Essex are dropping lower than what it would cost to buy a new car. Mark Imeson, president of the Windsor-Essex County Real Estate Board, says he has seen houses selling for just $25,000. He blames the low prices on the rising number of so-called power-of-sale properties, which have been taken back by the bank and turned over to the Canada Mortgage and Housing Corp. for sale.
Imeson says some houses are selling for what the lot alone is worth. He says last month, the majority of real estate sales in Windsor-Essex were for less than $100,000.
But he also says the lower prices could be a catalyst for people thinking of moving into the area.
So let's all move to Windsor.
Source: The Canadian Press
March 25, 2009 in Canadian Real Estate Market | Permalink | Comments (3) | TrackBack
Toronto Real Estate Decline Easing
The Toronto Real Estate Board reported 2,565 transactions in the first half of March 2009, a 19% drop from the 3,183 transactions reported during the same period last year. The mid-month March MLS sales increased compared to the 2,044 sales experienced in the first half of February -- and the year-over-year rate of decline decreased.
The average price for MLS sales was $365,499 compared to $385,405 last year — a decline of 5%
“As we move into the spring market, it appears that we are seeing stronger demand for ownership housing in the Greater Toronto Area,” said TREB President Maureen O’Neill. “Buyers are reacting to the market’s strong foundation of affordability.”
“Affordability has improved over the past few months due to a combination of lower home prices, near record lows for mortgage rates and rising earnings,” according to Jason Mercer, TREB’s Senior Manager of Market Analysis.
March 19, 2009 in Toronto Real Estate Update | Permalink | Comments (7) | TrackBack
Toronto Commercial Real Estate
472,663 Square Feet Leased In February
In February 2009, Toronto Real Estate Board Members reported 472,663 square feet of space through the TorontoMLS system, Commercial Council Chair Garry Lander announced today. This figure compares to the 844,348 figure recorded during the same month in 2008. The average lease rate for Industrial space was $5.17 sfn, from February 2008’s level of $5.84 sfn. “Lease rates have responded to the softer commercial market conditions experienced this year,” according to Lander.
Sales Market Highlights
TREB Members reported 36 sales of all property types during February. Of these, the 21 Industrial sales averaged $92.37 per square foot. This compares to a figure of $74.03 derived from non-MLS sources.
See Full Report [in PDF format] »
March 19, 2009 | Permalink | Comments (0) | TrackBack
Recession and the real estate market
Looking for more information about buying a home in the current Toronto market?
The current global recession can be traced back to a collapse in the U.S. real estate market. Canada's market was never as hot as it got south of the borer, but it's already been slammed by the economic downturn.
The Investor Education Fund has a wealth of resources to help you make better decisions. How does buying a home compare with other investments? Find out by clicking here. Is a home a good investment? You can find more information by clicking here.
March 18, 2009 in Toronto Real Estate Trends | Permalink | Comments (1) | TrackBack
Resale prices fall 9.2% in February
House prices and sales continued to slide across Canada in February compared to the same time last year, but activity was up for the first time since September.
The Canadian Real Estate Association said Monday that resale home prices fell 9.2% across Canada last month to an average of $281,972. Sales fell 31% to 25,373 units in February, the smallest year-over-year decline since October 2008. Seasonally adjusted sales fell 26.8%.
The association, known as CREA, also said the number of homes that traded hands on the multiple listing service, or MLS, was up 8.6 per cent above seasonally adjusted levels in January.
"It looks like the Category 5 hurricane which had been pounding the home resale market has been downgraded to 'just' a Category 4," BMO Capital Markets economist Douglas Porter said Monday.
But Porter said he expects prices to continue to fall in the months ahead.
"Even with a moderate improvement in February home sales from the exceedingly weak levels around the turn of the year, it's still a clear-cut buyer's market in most regions of the country. And, that doesn't look likely to change any time soon."
CREA said February's average price is being skewed lower in large part by fewer sales in British Columbia, Alberta and Ontario "where homes are more expensive and demand has softened most."
The weighted average, which compensates for larger swings in sales activity in some provinces, was down 5.3 per cent year-over-year.
For instance, February sales fell the most in British Columbia, down 46.5 per cent to 3,653 units compared to last year, followed by drop of 32.1 per cent in Saskatchewan to 628 units and down 29.8 per cent to 3,231 units in Alberta.
Sales in Ontario, which has the largest housing market in the country, fell 29.2 per cent to 9,861 units year-over-year in February.
Prices also fell the most in B.C., at 12 per cent to $421,023, followed by a 9.2-per-cent drop in Alberta to $326,785. Prices in Ontario fell 6.2 per cent last month to an average $284,843.
Prices rose 29 per cent to $195,072 in Newfoundland and Labrador, but sales there fell 17.2 per cent to 197 units.
CREA also said 28,669 homes traded hands on the MLS last month, up 8.6 per cent from January, "the first monthly increase in activity since September 2008."
Monthly seasonal increases in activity were largest in British Columbia at 14.4 per cent, Nova Scotia at 12.7 per cent and Alberta at 11.9 per cent. Ontario and Quebec were on par with the national increase.
CREA president Calvin Lindberg said the market typically picks up in February and into the spring, but that this year buyers are being lured by historically low mortgage rates and increased affordability.
"Realtors are reporting increased interest especially from first time home buyers," Lindberg said.
Ottawa recently announced incentives for first-time home buyers including an increase in how much they can withdraw from their RRSPs from $20,000 to $25,000, as well as a tax credit of up to $750 to help cover closing costs.
CREA said the supply of homes for sale remains high, but has been trending lower. New national listings fell 10.9 per cent from the same month one year ago and are down 11.4 per cent from their peak reached in May 2008.
"The housing supply is expected to continue easing, but it will take time before it realigns with lower demand," said CREA chief economist Gregory Klump.
"Economic uncertainty is keeping home buyers in a cautious mood, so homes are taking longer to sell than in recent years."
CREA said seasonally adjusted residential dollar volume for MLS sales totalled $8 billion in February 2009, an increase of 7.2 per cent from the previous month.
"Consumer confidence will continue to be depressed by a barrage of negative economic news in the months ahead," said Klump.
"Heightened job insecurity will keep many potential home buyers on the sidelines. Those who are confident about their job situation will benefit from improving affordability in a number of housing markets."
March 16, 2009 in Canadian Real Estate Market | Permalink | Comments (0) | TrackBack
Are the first-time buyers coming back?
Re/max says the drop in house prices is driving first-time buyers to take the plunge.
First-time homebuyers are being lured into the real-estate market by falling prices, lower interest rates, more selection and new government incentives, a new report shows. The ReMax real estate company said preliminary figures show sales were up in February, after a terrible January, driven by more first-time buyers entering the market.
The report comes alongside new Statistics Canada figures showing the first year-over-year decrease in new-home prices in more than a decade.
ReMax said lower prices and record low lending rates are prompting many first time buyers to "get off the fence, out of the rental, and into the market."
"While a sense of caution still prevails, more and more first-timers are finding it hard to pass up the chance to become homeowners in today's buyer-centric real-estate climate," ReMax said in its report released Wednesday.
"Buyers are clearly in control in most Canadian markets."
Wendell Collier said he and his girlfriend have finally waded into the market in Toronto after waiting it out for years.
"There is less pressure now," said Collier. "There are no bidding wars, you see houses sitting on the market a lot longer. It's a buyer's market again."
Collier also said low interest rates have been an incentive.
"You start saying 'Okay, now it's looking very possible.' Before we would have handled it, but we would have been stretched thin for a couple of years. Now we can have our cake and eat it too."
After years of renting, Tyler Backus recently bought his first house in the Haldimand-Norfolk region of Ontario, inspired by falling prices and the new federal renovation tax credit.
"It seemed that everything was going down in price and it was the right time to buy," said Backus.
Ottawa recently announced new tax credits of up to $1,350 for homebuyers to renovate their house or cottage. It also increased the amount first-time homebuyers can withdraw from their RRSPs from $20,000 to $25,000, and implemented a tax credit for first-timers of up to $750 to help cover closing costs.
ReMax said 22 of the 32 markets in the survey, or 69 per cent, "remain firmly in buyer's market territory."
Some of these spots include Vancouver and Victoria, Edmonton and Calgary, Saskatoon and Regina, Ottawa and Toronto, and Halifax.
Cities such as Winnipeg, Kitchener-Waterloo, Ont., Sudbury, Ont. St. John's, N.L., and Charlottetown had what ReMax called "more balanced conditions" between buyers and sellers.
It said 40 per cent of the 32 markets had single-detached homes priced under $200,000.
The most affordable markets for detached homes, based on starting prices were Moncton, N.B. in Eastern Canada at $115,000, Windsor at $75,000 in Ontario and Winnipeg at $185,000 in Western Canada.
In its report released Wednesday, StatsCan said new home prices fell 0.8 per cent in January compared with the same month a year earlier.
It was the first year-over-year decrease across the country since January 1997, led by a steep drop in Western Canada.
New home prices in Edmonton fell the most by 10.4 per cent, followed by a 6.5 per cent drop in Calgary, 4.2 per cent drop in Victoria and 3.2 per cent dip in Vancouver.
Regina was the rare Western Canadian city that saw a large increase in new home prices, a lift of 21.7 per cent. Only St. John's, N.L. saw new home prices rise more, by 24.1 per cent in January compared to the same month in 2008.
Earlier this week, Canada Mortgage and Housing Corp. said housing starts fell for the sixth straight month in February, down 12.3 per cent to a seasonally adjusted annual rate of 134,600 units. That's after falling 10.9 per cent in January.
February's figures are a 30 per cent drop from the same period last year, and were lower than most economists expected
Scotiabank economist Adrienne Warren said new home sales respond to what happens in the larger resale market, which has seen a reversal in recent months after nearly a decade of constant growth.
Resale home activity fell 37.3 per cent across Canada in January compared to the same time last year, while average prices fell 11.3 per cent. National figures for February are due in the coming days.
Warren said early indications are that February sales activity has picked up compared to a dismal January, but she predicts a turnaround will not be quick.
Housing sales will continue to be weak this year and there will be "a sluggish recovery" starting in 2010, she said. That's because a lot of buyers are still concerned about losing their jobs in the current recession.
As for first-time home buyers, Warren said they can be an indicator of a market recovery.
"In any recovery you need to have first-time buyers because other buyers are just shuffling around housing. For a buyer than wants to move up, you need that first-time buyer to come in and buy from them," Warren said.
Vancouver real-estate agent Shelly Smee said she has a handful of clients who are preparing to move up in the market now that house prices have fallen in Canada's most expensive city. She said some couples are looking at moving out of their condominiums and into a house.
"Some people are thinking now is a good time to move up and they can finally afford it," Smee said.
Smee also said some clients have also built up equity in their homes in recent years and are now considering upgrading thanks to record-low borrowing rates.
Interest rates have fallen dramatically in recent months as the central banks and federal government seek to ease the credit conditions in order to jump-start the flagging economy.
Last week, the Bank of Canada did its part by dropping the overnight rate down to an unheard of half per cent. Canada's chartered banks then lowered their prime rate to 2.5 per cent and having been lowering other lending rates including mortgages.
March 12, 2009 | Permalink | Comments (9) | TrackBack
