Canadian Housing Market Firming,
Government Support Remains Strong

While buyers absorb inventory and demand remains intact especially among first-time buyers, industry experts envision a continual shift to a more balanced market in the coming months. Home prices, which firmed in late winter, remained lower compared to last year but are showing clear signs of a potential rebound. With inventory levels still somewhat high, builders are proactively adjusting by slowing new residential construction starts, which now stand at their lowest level of the decade.

Spotlighting an interesting trend in the condo market, research suggests many of Canada’s older baby boomers and younger eco-boomers hold a preference for condos.

The low maintenance and smaller footprint are compelling points for the older generation, while the more affordable prices serve as an entry point for an aspiring younger generation of homeowners.

In a welcome surprise, April’s employment numbers showed an unexpected addition of nearly 36,000 new jobs compared to the anticipated loss of 50,000.

While this news is encouraging, the potential for future weakening in the labour market still poses a risk to overall housing demand.

Canada’s government remains firmly focused on supporting the housing market. The Bank of Canada cut the overnight rate to a record low and has made a commitment to keep rates at this level until mid next year. A commitment of this nature is unprecedented among central banks.

The Numbers That Drive Real Estate

1. Sales
2. Prices
3. Inventory
4. Mortgage Rates

According to the most recent data, existing home sales increased for the second month in a row. Home sales increased 7%, which built on the 10% gain the month before. The number of sold transactions now stands 18% above levels reported in January, when activity fell to the lowest level in a decade.

The monthly increases in activity were the most significant in British Columbia and Ontario. Sales were also up in the Northwest Territories, Manitoba, Quebec, and Newfoundland and Labrador.

Buyers are starting to take notice of lower prices, interest rates, and rising affordability conditions.

Average Home Price (in Thousands)

The pace of home price declines is tapering which is providing some glimmer of stabilization in the housing market. Home prices increased 2% from the previous month but is down 8% from the same time last year, which is the smallest year-over-year decline in six months.

The average home price currently stands at $288,641. The national average price continues to be skewed downward by lower activity in Canada’s more expensive housing markets, i.e., British Columbia, Alberta and Ontario which accounts for 67% of national activity. 7 out of 12 provinces and territories actually saw price increases.

Home Prices by Province
7 out of 12 Saw Increases

Inventory (Sales to Listing Ratio)

Market conditions moved toward balanced conditions due to increase in demand and fewer new listings. In the first quarter of 2009, there were 6% less homes entering the market compared to the previous quarter, which represents three consecutive quarters of declines in new listings.

Mortgage Rates

Average for: 25-Year Amortization,5-Year Term

Bank of Canada lowered its overnight lending rate to the lowest rate on record. As a result, mortgage rates decreased to 5.25% last month. Mortgage rates were 1.7 percentage points lower than the same time last year.

Recent Government Action

Bank of Canada Makes Historically Unprecedented Move

In an effort to stimulate the economy, the Bank of Canada has come to yet another historic cut in its interest rate policy on April 21. The Bank cut the overnight rate from .5 to .25%. This rate cut mostly influences traditional lending institutions but should also impact pricing in open markets as well.

The Bank has committed to keep rates as is until mid-2010. No known central bank has ever committed to anything of this nature, illustrating the Bank’s firm commitment to supporting the economy.

Recent reports of pending layoffs and job losses have a lot of people worrying about not being able to pay their mortgage. One amazing company, Genworth Financial, is doing something about those worries:

Click here to watch a short video on how they do this

Then give me a call for the rest of the details . . . 905-208-7002 or CLICK HERE to be instantly connected by phone from anywhere on the planet!

There’s an outline of the evaluation process here

Please, I beg you, don’t do it! Don’t make the same mistake that someone near and dear to me made this past week. Here’s what they did:

They renegotiated their mortgage from 5.69% to 5.39% AND they paid a $13,000 penalty for doing this AND the penalty was added on to the end of their mortgage!

This is someone close to me, and it makes me sick, because:

1. They didn’t call me for advice or help
2. The bank screwed the BIG TIME! Current rates are around 3.5%
3. The bank acted like they were doing them a favour
4. They think they done did good!

Please, people, don’t do this! No charge, no obligation, I will be pleased to negotiate your mortgage for you. Don’t let these scumbags rip you off like this, making you think they are doing you a favour. Please. I implore you!

Really. No Charge. No Obligation. Complete Confidentiality.

In the case above, the bank did a favour by screwing them out of $158 a month in pure interest, every month, for 5 years. That’s $9,480 in interest, plus the $13,000 in fees that is added on to the end of the mortgage. $22,000+ and they think the bank did them a favour!

The latest from Keller Williams Research . . . (best viewed full-screen; manually advance slides)

Uploaded on authorSTREAM by chrisnewell

The bungalow is back in a big way all across North America. No longer just a downsizing choice, it’s a housing form that’s finding more and more fans among families.

With casual layouts, a comfortable human scale and most of the space on one floor, time-strapped families have greater opportunity to gather together.

Read the full story here