Most people who know me know that I have a real estate business, and that I’m involved in the housing market on a daily basis. Whether I’m helping people buy and sell residential real estate, or consulting with an investor about the direction to take their real estate investment portfolio in, I’m afforded an excellent view of what is happening to the real estate market on a local level; through real estate blogs and industry news sites, I’m able to keep up with trends worldwide (although mostly in North America). Naturally, people are always asking me what I think about the current market, whether we’re heading for a bubble/crash/continued rise of prices etc.
This is a Great real estate market, for a number of reasons, as Darin Persinger points out:
- Mortgage applications are up-great indicator that lookers are turning into buyers.
- Mortgage rates are close to a 40 year low. This makes monthly payments affordable.
- NAR reports pending home sales are up 4.3%.
- Unemployment has declined to 4.6% and the economy is expanding. (ed: This is a US stat, but our local economy/unemployment in Kitchener Waterloo is similar)
It is true that we’re no longer in a ‘seller’s market’ (which is where there are more buyers than sellers, and buyers ‘compete’ for homes), and are into a ‘buyer’s market’ (see here), but that doesn’t mean that are market has taken a turn for the worse. As Roma Luciw points out in the Globe and Mail (hat tip: Edmonton Real Estate Blog), we are trending towards a more balanced market, which is a good thing for everyone:
Signs that Canada’s housing market is in for a “soft landing” are building as the furious pace of activity in the housing market gives way to the most balanced conditions in more than five years, according to the Canadian Real Estate Association.
Although sales activity as measured through the Multiple Listing Service is easing, prices continued to shoot higher in September, with Edmonton displacing Calgary to take the top spot on the price gainers list.
The average price of a house in Edmonton reached $278,732 last month and $369,928 in Calgary. The Greater Vancouver area was by far the priciest place to buy at $527,504, while existing homes in Toronto sold for an average $349,149.
Prices actually fell in only four of the 25 major MLS markets: Newfoundland & Labrador, Windsor-Essex, Saint John and Durham Region.
Vancouver, Calgary and Toronto — the three most expensive cities in the country — experienced the largest drops in sales in the quarter, which helped average price increases slow to 9 per cent on a year-over-year basis from 11.3 per cent in August.
Sales activity in Edmonton and Thunder Bay rose to quarterly records in the third quarter.
CREA said the third-quarter numbers show that the housing market is becoming more balanced, spurring smaller price increases. The dollar value of existing home sales slumped 2.7 per cent in the third quarter from the previous quarter, although new listings climbed 3.8 per cent to 143,760.
“The quarterly decline in sales combined with an increase in new listings caused the resale housing market to become more balanced than in any other quarter in the past 5.5 years,” CREA said.
In the first nine months of the year, transactions are above year-earlier levels and rose 1.4 per cent. Sales are still on track to set a record in 2006.
Benjamin Bach is a Real Estate Consultant with Keller Williams Golden Triangle Realty in Kitchener Waterloo dedicated to building wealth for his clients through smart Real Estate investments, and helping people achieve success. If you are interested in how you can start your Real Estate portfolio, or have any questions and buying or selling a home, you can email Benjamin (benjamin AT benjaminbach.com) or reach him at 519 772 4376.