Archive for November, 2009

MLS® home sales forecast revised

Published November 16, 2009 1 Leave a Comment

OTTAWA – November 16, 2009 – Monthly MLS® home sales activity continues to run strong, with new monthly records set in July, September, and October. This has prompted The Canadian Real Estate Association to revise its MLS® home sales forecast for 2009 and 2010.

CREA now forecasts national activity will reach 460,200 units in 2009, up 6.6 per cent from last year. CREA’s previous forecast issued in August had annual sales this year about even with 2008 levels. The new sales forecast for 2009 puts activity about on par with annual activity in 2004, but below levels reported for the years 2005 through 2007.

British Columbia and Ontario are still forecast to post annual increases in activity this year, but the forecast has been lifted as a result of recent record level activity in both provinces. In addition, Alberta, Saskatchewan, Quebec, and Prince Edward Island are also now forecast to post an annual increase in activity in 2009. Forecast declines in annual activity have been trimmed for Manitoba and Nova Scotia, and are little changed for New Brunswick and Newfoundland and Labrador.

National MLS® home sales activity is forecast to rise seven per cent to 492,300 units in 2010. This is a slightly larger rise in activity than previously forecast. This would make 2010 the second highest year on record for sales, putting activity below the peak reached in 2007, and slightly above the 2005 and 2006 figures. New annual records are forecast for Manitoba and Quebec in 2010.

The forecast increase in activity for 2010 reflects significant weakness in activity recorded in the first quarter of 2009. Monthly activity in 2010 is expected to trend downward from recent heights, but the sharp drop inactivity recorded in the in the first quarter of 2009 is not expected to repeat in 2010.

New listings began declining in the third quarter of 2008, as many sellers took their home off the market pending an improvement in housing market conditions. CREA’s previous forecast suggested that average price increases in the second half of 2009 would likely result in mild a rebound in listings. In the third quarter of 2009, the number of new listings did post the first quarterly increase in more than a year, which coincided with the return of strong average price increases. New residential listings are expected to continue trending upward.

The national MLS® average home price is forecast to climb 4.2 per cent in 2009, reaching a record $317,900. This is an upward revision from the 1.5 per cent gain in CREA’s previous forecast, and reflects the high degree to which the national average price was skewed downward last year by a significant decline in activity in Canada’s priciest markets, and then upward by the rebound in activity.

Alberta remains the only province with a forecast decline in average price in 2009 (-3.0 per cent). Average prices are forecast to rise in all other provinces, with gains ranging from a low of 1.5 per cent in British Columbia to 13.1 per cent in Newfoundland and Labrador.

Average prices are forecast to climb a further 4.7 per cent in 2010. Much of the annual increase reflects weakness in the average price in first quarter of 2009, which is not expected to repeat in 2010. Average sale prices are forecast to rise in every province in 2010.

The price trend is similar but less dramatic for the weighted national MLS® average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. The weighted national MLS® average price is forecast to climb 2.9 per cent in 2009, with a further 4.0 per cent rise in 2010. CREA previously forecast that the weighted national average price for MLS® homes sales would hold steady from 2009 to 2010.

“Pent-up demand built in late 2008 and early 2009, as many buyers moved to the sidelines pending an improved economic outlook,” said CREA President Dale Ripplinger. “With the economic outlook having improved since then, the release of that pent-up demand will boost activity over the rest of the year and in 2010.”

“Significant weakness in activity and average prices seen in late 2008 and earlier this year is not expected to repeat in 2010, so 2010 will look a lot better by comparison,” said CREA Chief Economist Gregory Klump. “The raised outlook for MLS® sales activity in 2010 still puts annual activity below the pre-recession peak recorded for 2007.”

For the complete release:

http://www.crea.ca/public/news_stats/pdfs/mlsForecast_nov09.pdf

October a record breaking month for MLS® resale housing market

Published November 16, 2009 1 Leave a Comment

According to The Canadian Real Estate Association, sales activity reached the highest level ever for the month of October.

Residential sales activity via the Multiple Listing Service® (MLS®) of Canadian real estate boards numbered 42,288 units. This is up 41.5 per cent compared to October 2008, when news of the global financial crisis hammered consumer confidence. New records for the month were reported in about one-fifth of local markets, including Toronto, Montreal, and Ottawa.

Seasonally adjusted national MLS® home sales totalled 45,818 units in October 2009. This is two per cent higher than the previous record set in May 2007, and 74 per cent above the recent low in January, when activity fell to the lowest level in a decade. New monthly records for activity were set in British Columbia, Ontario, and Quebec, which reflect record level activity in Greater Vancouver, Toronto, Ottawa, Montreal and Quebec City.

Since the beginning of 2009, some 401,124 homes have traded hands via the MLS® System. This is 1.6 per cent above the same period last year, but below levels for this period in each of the previous three years.

“Low interest rates and upbeat consumer confidence continue to release the pent-up demand that built late last year and earlier this year,” said CREA President Dale Ripplinger. “The release of that pent-up demand has boosted national sales activity to new heights and is drawing down inventories.”

The national MLS® residential average price also reached new heights in October 2009. At $341,079, the average sale price was up 20.7 per cent from the same month last year. The increase reflects the high degree to which the national average price was skewed downward last year by a significant decline in activity in Canada’s priciest markets, and then upward by the rebound in activity.

The price trend is similar but less dramatic for the national MLS® weighted average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It set a record in October, rising 14 per cent on a year-over-year basis.

October also saw the MLS® residential average price in Canada’s major markets improve. At $373,095, the average sale price was up 22.1 per cent from the same month last year. As with the national counterpart, the price trend is similar but less dramatic for the major market MLS® weighted average price which rose 12 per cent on a year-over-year basis in October.

Seasonally adjusted new listings coming onto the MLS® Systems of real estate boards across Canada inched up on a month-over-month basis in October to 65,148 units. New listings peaked in May 2008 and declined sharply until March 2009. Since April 2009, new listings have held to within a range of 66,500 units, plus or minus 1,800 units.

The sharp rise in resale housing demand has increasingly shrunk inventories. There were 194,994 homes listed for sale on the MLS® Systems of real estate boards in Canada at the end of October 2009. This is 20.8 per cent below the peak reached in October of last year, and the sixth month in a row in which inventories are down from year-ago levels.

Nationally, there were 4.1 months of inventory in October 2009 on a seasonally adjusted basis, the lowest level in more than two years. The actual (not seasonally adjusted) number of months of inventory in October 2009 stood at 4.6 months, which is down slightly from the previous month (4.9 months), and among the lowest of levels this year. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

“New listings are still expected to rise in the coming months in response to headline average price increases,” said CREA Chief Economist Gregory Klump. “New supply dropped dramatically in December last year and earlier this year in response to a difficult pricing environment. Sellers who moved to the sidelines should be drawn back to the market as prices rise further over the rest of the year and in early 2010.”

To view the complete release:

http://www.crea.ca/public/news_stats/pdfs/Oct09rpt_e.pdf

Consumer Confidence continues to improve

Published November 10, 2009 1 Leave a Comment
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Canada
National consumer confidence continued to improve for the third consecutive quarter in the third quarter of 2009, according to the Conference Board of Canada’s index of consumer confidence. Consumer sentiment is up from the end of 2008, and now stands above pre-recession levels. The sharp rise in confidence resulted from improved sentiment about households’ budgetary outlook, job growth prospects, and major purchases.

Consumer confidence was down slightly in October 2009 after seven consecutive monthly gains, but remains well above where it stood in the third quarter of 2008.

The balance of sentiment about making major purchases, such as a home or a car, broke into positive territory for the first time since the first quarter of 2008. Sentiment was on par with upbeat levels last seen at the end of 2007.

The balance of sentiment about making major purchases edged lower in October, but stayed positive for the third consecutive month.

A positive balance of sentiment means more survey respondents said it was a good time to buy a big-ticket item, such as a home or car, than said it was a bad time to do so. This indicator is an important factor underlying the housing market.

Sentiment about job growth prospects continued to improve significantly in the third quarter of 2009, rising into positive territory for the first time since the first quarter of 2008. More survey respondents expect employment to pick up over the next six months, and fewer expect more layoffs.

The balance of sentiment about households’ budgetary outlook also rose in the third quarter. A positive balance of opinion means more households said they expect their household budget to improve in the next six months than said they think it will worsen.

British Columbia
Consumer confidence in British Columbia continued improving in the third quarter of 2009, with the Conference Board of Canada’s index of consumer confidence rising to the highest quarterly level since the first quarter of 2008.

Consumer confidence rose further in October, reaching the highest monthly level since May 2008.

Sentiment about making major purchases, such as a home or a car, rose in the third quarter, building on improvements in the previous two quarters. The balance of sentiment about major purchases now stands in positive territory for the first time since the third quarter of 2007.

The balance of sentiment about major purchases dipped slightly into negative territory in October.

A negative balance of opinion means more survey respondents said that it was a bad time to buy a big-ticket item, such as a home or car, than said it was a good time to do so. This indicator is an important factor underlying the housing market.

Sentiment about job growth prospects continued improving in the third quarter of 2009, building on increases in the previous two quarters. The balance of sentiment about job growth prospects remains just shy of positive, but is up from levels recorded in the second quarter of 2008.

After turning positive in the second quarter, the balance of sentiment about the outlook for household budgets continued improving in the third quarter of 2009.

Prairie region
Consumer sentiment in the Prairie region improved for the second consecutive quarter in the third quarter of 2009, returning to pre-recession levels.

Consumer confidence was also up slightly in October 2009.

Sentiment about making major purchases, such as a home or a car, improved for the third consecutive quarter. The balance of sentiment about making major purchases entered positive territory for the first time since the first quarter of 2008.

The balance of sentiment about major purchases remained positive in October 2009, despite having softened compared to September. This is the third consecutive month in which the balance remained positive.

A positive balance of sentiment means more survey respondents said it was a good time to buy a big-ticket item, such as a home or car, than said it was a bad time to do so. This indicator is an important factor underlying the housing market.

Sentiment about the prospects for job growth continued to improve, building on the significant increase in the previous quarter. The balance of opinion about job growth has been positive for two consecutive quarters.

The balance of sentiment regarding the outlook for household budgets also improved in the third quarter, and is now on par with levels from the first quarter of 2008.

Ontario
Consumer confidence in Ontario climbed for the third consecutive quarter in the third quarter of 2009, according to the Conference Board of Canada’s index of consumer confidence.

Consumer confidence continued its steady ascent in October 2009, building on increases since the beginning of the year. Consumer confidence now stands at the highest level since the first quarter of 2008.

Sentiment about making major purchases, such as a home or a car, improved for the third consecutive quarter. The balance of opinion about making major purchases was positive for the first time since the fourth quarter of 2007, and stood just below levels from that quarter.

The upward momentum in the balance of opinion regarding major purchases continued into October. The balance of sentiment remained in positive territory for the third consecutive month, and reached the highest level since the fourth quarter of 2007.

A positive balance of opinion means more households said it was a good time to buy a big-ticket item, such as a home or car, than said it was a bad time to do so. This is an important factor underlying the housing market.

Sentiment about job growth prospects in Ontario has improved significantly, returning to pre-recession levels. The balance of sentiment was just shy of positive in the third quarter, and was equal to levels from the third quarter of 2007.

The balance of sentiment about the outlook for household budgets remained positive in the third quarter of 2009, after rebounding sharply in the previous quarter.

Quebec
Consumer sentiment in Quebec continued to improve in the third quarter of 2009, with the Conference Board of Canada’s index of consumer confidence back on par with pre-recession levels.

Consumer confidence levels edged lower in October 2009 from the peak in September, back on par with where it stood in August.

The balance of sentiment about making major purchases, such as a home or a car, improved significantly in the third quarter after having returned to positive territory for the first time in more than a year in the second quarter. A positive balance of opinion means more households said it was a good time to buy a big-ticket item, such as a home or car, than said it was a bad time to do so. This indicator is an important factor underlying the housing market.

The balance of sentiment about major purchases was down significantly in October, but remained positive.

The balance of opinion about job growth prospects improved significantly in the third quarter of 2009, coming to rest just shy of positive territory. This was the best result since the first quarter of 2008.

Sentiment about the outlook for household budgets over the next six months also improved in the third quarter, becoming more upbeat than in any other quarter since the fourth quarter of 2007.

Atlantic region
Consumer sentiment rebounded above pre-recession levels in the third quarter of 2009. Consumer confidence rose for the third consecutive quarter, according to the Conference Board of Canada’s index of consumer confidence for the region.

Consumer confidence levels held steady in October compared to the previous month, remaining above where they stood in the second quarter of 2008.

Sentiment about making major purchases, such as a home or a car, continued to improve in the third quarter. The balance of sentiment entered positive territory for the first time since the first quarter of 2008, building on increases from the previous two quarters.

The balance of opinion regarding major purchases as of October 2009 was down slightly from September, but remained positive for the second consecutive month.

A positive balance of sentiment means more survey respondents said it was a good time to buy a big-ticket item, such as a home or car, than said it was a bad time to do so. This indicator is an important factor underlying the housing market.

After improving for the third consecutive quarter, sentiment about job growth prospects was just shy of entering positive territory in the third quarter of 2009.

By contrast, sentiment about the outlook for household budgets over the next six months was down in the third quarter compared to the previous quarter, but remained in positive territory for the third consecutive quarter.

(CREA 10/10/09)

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