I have created a new format for the information, as there is an expanded amount of information available to me now. Through the MLS, we are now able to track the number of new listings that came on the market in a given time period, which we weren’t able to do in the past.

What this has allowed me to do is to show you how the market is trending in a much more complete picture, as you will see in the table below.

This time, I am only going to provide you with one table, as the new format will mean that all new graphs will need to be created, so that will begin with the next issue of the update.

You will note that there is a new column in the chart – ‘New Listings During Period‘ – this is the piece of information that was missing, and the one that completes the picture to a truly accurate overview of how the market is going. I have also re-named some columns, for ease of understanding.

My comments appear below the chart.

As you can see from the chart, the ‘Sold Ratio‘ is determined by adding the columns for ‘Active Listings’ & ‘New Listings During Period’, thus allowing the Sold Ratio to be drawn from all properties that Buyer’s had available to them during this period. Overall, this shows that, if your house was on the market during this time period, you had a 41.2% chance of it selling. That is pretty darned good!

In fact, according to the experts, any time you have more than a 15% chance of your house selling in any given month, we are in a Seller’s Market!

You can see that there was a good amount of activity across the price ranges, however, I feel it is my duty to advise that the properties that are selling for more than the list price are not a reflection of a market gone crazy, but they are a reflection of the poor marketing tactics used by some agents. A house selling over list price does not mean that there were multiple offers, nor does it mean that the sellers got the best price for their house. In fact, some companies are currently creating an atmosphere that prevents multiple offers, not only by their pricing strategies but also by their ineffectiveness at making a property available for showings, guiding their sellers in negotiations, etc. Professional courtesy (on my part) precludes me from saying more here, however you can ask many local agents and they will explain what I am talking about.

This will be an interesting market for the next few months, for sure, as people try to get their purchases closed before the HST comes into effect. Don’t miss the boat – if you are planning on selling, give me a call today at 905-878-4444.

Here’s the latest Canadian real estate news from the Keller Williams Real Estate Research Institute. The video and SlideShare presentations contain different information, so watch both.

January 2010

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Commentary

All around signs appear to be brighter than they were this time last year – banks are profitable, confidence is up, employment is on the upswing lately, and the housing market is moving. Ottowa’s Centre for the Study of Living Standards reports shows that consumption has grown in “leaps and bounds” from $30,000* per person in 1981 to $50,000* in 2008 adjusted. That’s per person, with the average Canadian family being 2.37 people. That brings consumption per family to $118,500 for the average family.

The upcoming Olympics are expected to provide a beneficial influx of money for Canada and for Vancouver. The small business sector in British Columbia has the most optimistic outlook of all provinces in the country, most likely due to the games. The dramatic 253% increase in home sales in the Greater Vancouver area could also be partly fueled by the Olympics.

The country appears to have traveled quite a distance over the past year – from the verge of the next depression last year to what appears to be an economy that’s found its way to firmer footing.  One example is that most consumers planned on spending more this year on gifts for the holidays this year than last year.

With some concerns that the housing market has rebounded too much, too fast; it is important to keep in mind is that year-over-year increases are compared to an unusually weak year.

* Adjusted for inflation to 2009 dollars and includes government spending

Housing Market

Home Sales

Sales activity remained upbeat in November. National resale housing activity had a record-breaking month with 46,450 units trading hands. This stands in sharp contrast to weak activity seen one year ago and is 76 percent above the decade low reached in January. Low interest rates, coupled with upbeat consumer confidence, continue to bolster national sales activity.

Average Home Price

The national average home price reached new heights in November, rising 19 percent to $337,231 from the same month last year. This year-over-year increase continues to underscore the sharp rebound in Canada’s priciest markets

Inventory

Sales-to-Listings Ratio

Strong rebounds in home sales activity and average price gains are beginning to draw more sellers back to the market. New listings fell 8 percent from November 2008 but rose 5 percent on a month-over-month basis to 69,110 units. Even with the uptick in new listings, the strong increase in housing demand continues to draw down inventories. Nationally, there were four months of inventory in November, the lowest level in more than two years. The sales-to-listings ratio was 67 percent, signaling a strong seller’s market.

Mortgage Rates

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

In November, the 5-year conventional mortgage rate edged down to 5.49 percent, 1.26 percent lower than this time last year. As the Bank of Canada reiterates its commitment to hold its benchmark overnight lending rate steady at 0.25 percent until the end of the second quarter of 2010 and with the overall risk to the inflation outlook tilted slightly to the downside, it suggests that the Bank could leave rates unchanged even longer than expected.

Sources: Conference Board, The Canadian Real Estate Association, Royal Bank of Canada, Canadian Mortgage and Housing Corporation, Bank of Canada

Notable News

Bank of Canada

In its most recent meeting, the Bank of Canada said that the recovery is becoming more firmly rooted and that it expects its growth forecasts to happen as pictured. The Bank of Canada once again held firm to its commitment to keep rates at their current 0.25 percent until mid-2010.  While a strong loonie still represents some risk, it has remained slightly below the Bank’s assumption.

The Bank also heeded caution about the level of debt that consumers are taking on, reminding them to keep the long term in mind since rates will not stay low forever. Those who are taking out adjustable rate mortgages must particularly keep this in mind. As rates increase, their payment will as well.  The bank and the finance minister reminded buyers to ensure they are in a financial position to handle increases.

Source: The Financial Post

Exports Jump – Move to Trade Surplus

The Canadian economy heavily depends upon trade, particularly on exporting. Due to its close proximity, most of the exports find their way south of the border into the United States. With a hard-hit U.S. economy over the past year, demand from the United States for Canadian products dropped off. Given a better economic climate in the U.S. recently, last month’s demand was up and pushed Canada back up into positive trade surplus territory for the first time in four months.

Much of the economic activity over the past few months has come from domestic demand – Canadians are taking advantage of low interest rates and the banks that will make loans and buying Canadian products with it. So far, this has helped fuel the recovery. While it is too early to know if the increase in exports will become a trend, it is a positive sign. A sustained increase in exports would help take some of the pressure off domestic demand and add additional fuel to the fire in arriving at a truly sustainable recovery.

Source: The Financial Post

Job Postings on the Rise

Indicating that employment will likely be on the rebound over the coming months, the help-wanted index for November was up for the fourth consecutive month.

Most provinces, excluding only Newfoundland and Labrador, saw a rise in job postings. The Conference Board of Canada, the author of the index, stated that this suggests that labour markets across the country have possibly hit bottom.

November’s employment numbers overwhelmingly beat forecasts of 15,000, coming in at 79,000 new jobs. Most of those jobs were concentrated in the services sector. The rise in the help-wanted index could point to a continued trend of increasing employment throughout the country.

Source: Canwest News Service, The Conference Board of Canada

Timely Topics

Salary Freezes Expected to Thaw in 2010

According to a survey by Towers Perrin, half of the firms they interviewed froze salaries in 2009, but only 11 percent are expecting to in 2010. This is great news for your average consumer – they can now put the extra from the salary bump toward savings or spending on the many great opportunities with low interest rates, including a new home.

Senior executives, however, may need to wait a little longer as one in five are expected to continue to have their salaries frozen. It’s unclear yet if salaries for the highest earners are readjusting to a new norm or if this will be temporary.

Most salaries are expected to regain much of the ground they lost in 2009. Median salary increases are expected to be 2.5 percent.

Source: The Financial Post

Oh my gosh, I neglected to complete my posts of market updates over the past 2 weeks! I compiled the data into the usual charts, then got busy with Holidays, and only just today realized I had not done the actual posts. In the sake of expedience, I’m going to just present the charts, without any of my usual pithy commentary for those two weeks – I’ll insert the charts at the bottom of this post.

So, how has the market been so far in 2010? SLOOOOOOOOW might be one word for it! That’s okay though, because there’s still nothing much in the way of inventory, interest rates went up this past week, so everyone will get off that splintery fence soon enough!

Here’s the weekly Total Market Overview:

And the Annual Summary of Activity:

And, finally, the Absorption Rate:

Absorption Rate Chart December 25th, 2009

Absorption Rate Chart December 31st, 2009

Absorption Rate Graph December 25th, 2009

Absorption Rate Graph December 31st, 2009

Total Market Overview December 25th, 2009

Total Market Overview December 31st, 2009

Annual Summary of Weekly Activity December 25th, 2009

Annual Summary of Weekly Activity December 31st, 2009

‘Tis the season to be jolly, fa-la-la-la-la-la-la-la.

This is such a fun time to be in the real estate business in Milton! I say that because homeowners now, almost more than ever, need a local expert who knows what is really going on in the market in order to maximize the value that they have in their house.

What you as a homeowner do not need is someone who wants to make themselves look good by listing the house too low and hoping for multiple offers. Sure, multiple offers can be a good thing. However, they can also be a not-good thing. Might you want to know why pricing low is not necessarily in your best interests? Call me and we’ll sit down together and talk about it.

Meanwhile, here’s this week’s Total Market Overview:

I think of my friends in real estate in the USA, and how they would love to have a market where 25% of the available inventory sells in a week; yes, we are blessed indeed. And yet, even though real estate agents are negotiating record high prices for sellers, and even though a seller listed with an agent will net approximately $10,000 more than when they sell privately, I still see all these private sellers out there. I guess they haven’t been introduced to the idea that they can make more money by listing their house with an agent, and avoid most of the hassles and time-wasting at the same time.

Here’s the Annual Summary Table – scroll up and compare this week and the same week last year:

25% of the available listing inventory compared to last year; 3-times the number of sales compared to last year. Same song as the last few months. Where will it go from here?

Here’s the same information in a graph:

And here’s the Absorption Rate information:

So, based on the information above, if no other homes come on the market, there will be no homes left for sale in a mere 4 weeks! Anytime that number is less than 20 weeks, we are in a Seller’s market; when it is more than 28 weeks, we are in a Buyer’s market.

Here’s the Absorption Rate in a graph: