Dec 2010 21

Resale Housing Market Returns To Normal Levels

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picture by Leo Reynolds Arrow up by Leo Reynolds

According to CREA, national resale housing activity maintains its return to normal levels. In November 2010 it has risen for the fourth consecutive month.

Through Multiple Listing Service Systems of Canadian real estates Boards, seasonally adjusted national home sales activity got as high as 4.8 per cent in November 2010. Even though activity did not reach its record level of November 2009, seasonally adjusted sales now stand 19.5 per cent above this year’s low point recorded in July 2010.

CREA President, Georges Pahud, notes: "Sales activity rose in many local markets but eased in others, home buyers and sellers need to recognize that local and national market trends may differ, and for that reason, they would do well to consult their local REALTOR? in order to understand how the housing market is shaping up in their market.”

Including 8 of 10 Canada’s most active markets, seasonally adjusted activity was up from October levels in 2/3 of all local markets. Month-over-month increases were seen in Calgary (2.6%), Edmonton (6.9%), Fraser Valley (10.5%), London & St. Thomas (6.5%), Montreal (8.2%), Ottawa (4.2%), Toronto (6.0%), and Greater Vancouver (11.3%).

Steady improvement in national sales activity was being masked by the persistence of large year-over-year declines from last year’s record levels since July 2010, and a comparison of November 2010 sales activity to sales for November 2009 shows that activity is currently going through a slowdown.

What about new residential listings? The amount of new residential listings on Canadian MLS® Systems fell down 0.7% in November on a seasonally adjusted basis, although they remain 14.6% below their peak of April 2010.

Due to improving sales activity and a slowed rise in new listings, the national housing market has been firming up since July 2010, but remains balanced overall. 60% of local markets in Canada were in balanced market territory in November and of the remaining 40%, three-quarters of these markets have a sales to new listings ration consistent with a classification of a sellers’ market.

According to Gregory Klump, CREA’s Chief Economist "An increase in new listings is likely to return many sellers markets to balanced territory over the coming months. With sales activity having returned to better health and a firm floor under prices, sellers who previously shied away from putting their home on the market are expected to list their home in response to improved housing demand in recent months.”

The number of months it would take to sell current inventories at the current rate of sales activity is represented by the number of months of inventory and currently stands 1.4 months below the level reached in July 2010, what was this year’s highest level. The seasonally adjusted number of months stayed at 5.8 at the end of November.

The national average price for homes sold in November 2010 went up by 2% from November 2009, making the average price $344,268. Almost 2/3 of local markets reported year-over-year increase in average price. The national average price has been influenced by growing prices, but fewer sales in recent months.

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