With the first two weeks of March in the books, single family home (SFH) sales are up 8% and pending sales have fallen back in step with last year’s levels.
Sales (click to enlarge)
SFH Pending (click to enlarge)
SFH Weekly Sales (click to enlarge)
Condos sales were up almost 6% from the same time period in March 2010. The early momentum seen in the first week didn’t hold. (Sales were up 28% in the first week)
This is somewhat disconcerting as there was an expected rush to get in before the end of 35-yr amortizations. Either:
a) too much hype about the end of 35-yr amorts and prospective buyers aren’t very concerned with it decreasing
b) this is the rush 
Condo Pending Sales (click to enlarge)
Condo Weekly Sales (click to enlarge)
Buyers have until Friday before the rule changes so there is still some time and we may yet see a last minute surge by the end of the week.
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CREA February Report
Gains in house prices are likely to “recede” starting next month as shorter mortgage terms keep some buyers out of an already softening market, CREA said today after reporting on February’s numbers. (Source)
“When you take Vancouver out of the equation, the year-over-year increase in the national average price drops to 3.4 per cent,” said Gregory Klump, the association’s chief economist. “While that’s still stronger than in the past six months or so, national average price gains may recede after tighter mortgage regulations take effect in March.”
“The February data may be an early sign that existing home sales may be running out of steam,” said Pascal Gauthier, senior economist at TD. “Still, sales should continue to be well supported by a number of factors. These include a favourable backdrop in terms of employment and income gains, as well as the low interest rate environment. This last element will likely begin to weigh on sales as the Bank of Canada starts to raise its interest rate policy in the second half of this year, however.”
Calgary & Vancouver bucked the trend with sale increases in February, while two-thirds of the country saw sales decrease.
“Canada’s housing market is re-establishing its comfort zone after having experienced strong bouts of volatility over the last three years,” Mr. Gauthier said. ”Although sales are expected to ease in most parts of the country as interest rates rise – the Prairies could be the exception –, activity should be strong enough to provide a floor under home prices. By the same token, better availability of new and existing units will provide more balanced markets than seen in pre-recession years. This will make it hard for home values to outpace general inflation over the next couple of years.”
On the Calgary Herald message board for the CREA article is this comment from a reader:
If this reader cared to do any research they would see that CREA doesn’t include Country Residential or Rural Land in the Calgary CMA.
So let’s add this up:
CREB reports:
1967 total MLS, minus 44 Country Residential sales (acreages), minus 6 Rural Land sales, gives us a grand total of 1917 which is what the CREA report states.
Imagine that.
Don Campbell sure is bullish on Alberta real estate. Investors better jump in quick! (according to him)
Read the blog post in its entirety here
What annoys me with these pitches is:
-the blatant pandering and ego stroking. Those that listen and act on his advice are “savvy” and “sophisticated” investors.
-Limited time. Get in now.
-fear of missing out, appeal to greed “We all remember how things were going in Alberta for the years 2006- 2008″
-feigning objectivity. “I have nothing to gain from this” (except the hundreds of dollars in course and membership dues)
Jeepers, it’s difficult getting advice without the spin-doctoring.
I hope you all enjoy the stats Bob & I provide so you can make your own informed decisions.
Good post and follow up comments Mike. Thank you.
(no sarcasm used in writing this post)
Wow, that Construction Sector Council forecast looks like a real doozy. I wonder how that fits in with the “longer term world economic doldrum”? All will be revealed at ACRE…
RBC Drops Fixed Rates
With bond yields falling more than 30 basis points in two weeks, RBC is the first to make a move. The nation’s largest mortgage lender is cutting its 5-year fixed rates by 10 bps. The other banks shouldn’t be too far behind.
Read more at Canadian Mortgage Trends
Since October, the 5-year bond market has seen consistently increasing lows and highs. It looks like yesterday yields finally broke through the trading range to the downside. Today, yields are lower again (down over 2% today as of 7:45 am). It will be interesting if this is the start of a new multi-month trend, as lower posted rates will help cushion the between 7 and 8% loss in purchasing power for a fully leveraged borrower resulting from reduced amortizations. Interesting times.
This is the “rush” everyone was expecting. Too much of future demand was brought forward in the last few years. So much so that demand is drying (or dried) up. No question about it.
While it’s the individual agent that makes the difference, not the brokerage they work for, I have to applaud RE/MAX’s new ad. I loved it.
Little touches like the lockbox hanging around the guy’s neck on a chain were awesome.
With everything going on in the world, I really doubt that this huge rush to buy a house before March 18th will occur. I’d say that the amount of sales may slightly increase this year compared to the last two years (given that oil =jobs and will influence in-migration to Calgary) but we’re not out of the hole yet. This recession is not as typical as previous recessions and everything is still quite unstable…
Macleans latest issue has an article on commodities and the housing market.
Simon Côté at National Bank of Canada who devised the Teranet index cautioned that the price gains of the past decade should be taken in the context of Canada’s nominal GDP gains over the past half century. Here’s what he had to say:
“I think you may find that, yes house prices have increased a lot in the past 10-15 years, but the price increases since the 60s or 70s may be in line with the change in GDP, in other words houses prices might not have increased more than the overall wealth of Canadians.”
You can read more here including Robert Shiller’s thoughts on the Canadian housing market.
I’ll be stopping any further reference to Garth after this as he has lost whatever credibility he had with me. Instead of admitting he was off or that he has adjusted his viewpoint, he continues to deny, deny, deny. Today he wrote:
You can read some of his previous forecasts of non-crashes of 50% here (starts half-way down post) Some of those original posts are no longer available on his blog ever since “hackers” took down his website…
If I was a conspiracy buff, which I’m not. You gotta wonder if hackers actually took down his web site or maybe he’s just trying to cover his tracks and is using that as an excuse. With Garth I would be inclined to believe the latter.
PS: Now he probable won’t let me post on his site again. Dam
For those of you interested in monitoring the labour market, here is a link comparing Calgary’s employment rebound to Canada overall. There is an interesting comparisson between the current and previous recessions. In the previous recession, Calgary recovered quicker than Canada overall. This time, the recovery is slower in Calgary….
http://www.calgary.ca/docgallery/bu/finance/economics/labour_market_review/labour_review_2011_02.pdf
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Mike Fotiou says: Thanks for the link!