this month in real estate for canada - december 2011

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  • 1.Commentary 2Released:The Numbers That Drive Real Estate 3December 2011Special Report 9Brought to you by:KW Research

2. Commentary The national housing market remains strong and steady, despite continued discussion of weakening economies in Europe. According to Gary Morose, CREA president, the increased concern about global financial market volatility in the news doesnt appear to have damped homebuyers spirits. Gregory Klump, CREA chief economist, goes on to say, Headline news about economic uncertainty has put only minor dents in consumer confidence. How confidence evolves depends on how global turmoil plays out over the coming months. Should global economic headwinds weigh more heavily than expected on Canadian economic prospects, the federal government and Bank of Canada have made it clear they stand by ready to take flexible and measured responses as appropriate. He cites the foundation of this strong confidence as the fiscal and monetary policy responses during the last recession that helped pull Canada back into positive growth quickly. A well-balanced housing market provides level playing field with opportunities for both buyers and sellers. Interest rates remain historically low and present buyers with extremely favourable financing so the time to act is now, because as global recovery regains its footing, rates will likely rise to keep inflation in check, resulting in a higher monthly housing payment for homebuyers.Sources: CREA, Royal Bank of Canada KW Research 2 3. Home Sales 4The Numbers That Home Price 5 Drive Real Estate Inventory Mortgage Rates78Brought to you by:KW Research 4. Home SalesIn ThousandsResale housing activity ticked up slightly by 1.4%, although still falling in line withlong term averagesthis is the highest level of sales since January. Although itlargely reflects a gain over the weakened activity one year ago, this marks the fifthtime since April 2010 that sales were up year-over-year. Moving forward, sales areexpected to remain stable. 38.8 37.3 38.339.338.336.1 20-Year Average: 32.0OctNov Dec Jan FebMarApr May Jun JulAugSepOctData released on October 15, 2011Sources: The Conference Board, CREA, Royal Bank of Canada KW Research 4 5. Home PriceIn ThousandsThe average home price in October stood at $362,899up 2.9% from lastmonth, and up 5.5% over last year. Earlier this year, elevated sales of higher-endhomes skewed the national average price higher. The drop in averageprice, compared to earlier this year, is more a result of sales in the most expensivemarkets coming back in line with normal levels, rather than a depreciation of overallhome values. This should have a minimal, if any, effect on buyers and sellers.$371 $373 $363 $344 $350$344 October10-11October 09-10 OctNovDec JanFeb MarApr May JunJul Aug Sep OctData released on October 15, 2011Sources: The Conference Board, CREA, Royal Bank of Canada KW Research 5 6. Home Prices by Province and Territory11 out of 12 provinces and territories experienced an increase in home prices National Average: $362,899 Home Price Direction YT(Year-Over-Year Change)$308K NT Prices IncreasedNU$451K No DataPrices DecreasedBCNL & LBAB $250K $536K $356K SKMB$264K QC$235K ON $266K $375K PE $140KNS $202K NB $154KKW Research 6 7. Inventory Number of homes available for sale Sales-to-New Listings Ratio The national housing market remained balanced in October, and marked six consecutive months of sales-to-new listings ratio between 52-53%. 60% of local markets were balanced. Of the remaining 40% of local markets, more were in sellers markets than buyers markets. Balanced inventory indicates a greater likelihood of a steady and stable market in the coming months, which is a good sign for the housing market moving forward. Sellers Market 20092010 Balanced Market 20102011 Buyers Market 53% 56%55% 55%54%56% 52% 52% 52% 52% 52% 53% 53% Oct NovDecJanFeb Mar Apr May Jun Jul Aug Sep OctData released on October 15, 2011Sources: The Conference Board, CREA, Royal Bank of CanadaKW Research 7 8. Mortgage Rates Average for 25-Year Amortization, 5-Year TermLow interest rates and stabilizing home prices are bringing home ownership withinreach for an increasing number of Canadians. When widespread global recoverygains a stronger footing, rates are expected to increase to keep inflation near the2% target. The Bank of Canada has lost urgency for additional rate hikes, given theincreasing concerns over debt levels in Europe and weakening economic indicatorsin the United States. The low rates offer increased affordability for home buyers. TypeRate 1-Year Mortgage3.50% 3-Year Mortgage4.05% 5-Year Mortgage5.29% Historical Average 9.78%Source: Bank of Canada KW Research 8 9. Special ReportBrought to you by:KW Research 10. Deciding to Buy When first-time home buyers decide they are ready to buy, it is important for them to begin the process by carefully assessing their values, wants, and needsboth for the short and long term. This is a critical step since consultation sessions normally start with the buyers values. Afterward, buyers can explore their wants and needs and, once defined, determine actual criteria. A recent study shows how important the following home-buying factors were to buyers: List Price: 72% Location: 69% Neighborhood: 55% Floor Plan: 37% Square Footage: 28% Schools: 22% By having the home-buying criteria in mind before walking into a consultation, buyers are off to a better start when meeting with their real estate sales professional. The consultation allows buyers to fill in any missing gaps within their values, wants, and needs.Source: KW Market Navigator and KW Research KW Research 10 11. Your Local MarketAlthough it is important to stay informed about what is going on in thenational economy and housing market, many different factors impact yourreal estate market. Talk to your KW associate for assistance interpreting the conditions in your local market.KW associates are equipped with the knowledge and information to helpnavigate through the home-buying or selling process in any market.KW Research 11 12. About Keller Williams Realty Keller Williams Realty is the second-largest real estate franchise operation in the United States, with 700 offices and more than 80,000 associates in the United States and Canada. The company has grown exponentially since the opening of its first office in 1983, and continues to cultivate its agent centric culture emphasizing access to leading-edge education and promoting an economic model that rewards associates as stakeholders. The company also provides specialized agents in luxury homes and commercial real estate properties. For more information, or to search for homes for sale, visit Keller Williams Realty online at www.kellerwilliams.caKW Research 12 13. The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed bylocal and national media, local real estate agents and other expert sources. You should not treat any opinionexpressed in This Month in Real Estate as a specific inducement to make a particular investment or follow a particularstrategy, but only as an expression of opinion. Keller Williams Realty, Inc. does not guarantee and is not responsiblefor the accuracy or completeness of information, and provides said information without warranties of any kind. Allinformation presented herein is intended and should be used for educational purposes only. Nothing herein should beconstrued as investment advice. You should always conduct your own research and due diligence and obtainprofessional advice before making any investment decision. All investments involve some degree of risk. KellerWilliams Realty, Inc. will not be liable for any loss or damage caused by your reliance on information contained in ThisMonth in Real Estate. KW Research 13