SHIFTING IN MARKET

Photo by Jason's Travel Photography

Concern for North America house prices
Garry Marr, Financial Post

Published: Tuesday, December 30, 2008


House prices continue to plummet in the United States but consensus in Canada is the impact of the downturn will not be as severe here.
Home prices in 20 major U.S. cities are now falling faster than at any point on record, hit hard by increasing foreclosures and slumping sales.
The S&P/Case-Shiller index declined 18% in October from a year ago after dropping 17.4% in September. The gauge has fallen every month since January, 2007.
House prices have been falling fast in Canada, as well. The Canadian Real Estate Association, which represents 100 real estate boards across the country, said this month that average price of a Canadian home sold in November was down 9.8% from a year ago.
Canadian housing sales also hit a seven-year low last month, according to CREA. It said there were 27,743 sales in November on a seasonally adjusted basis, the lowest monthly level since January, 2001. It was a 12.3% decline from a month earlier.
Michael Gregory, senior economist with BMO Capital Markets, said despite the slowdown in Canada "we won't even come close" to what is happening in the United States.
He pointed to stronger employment numbers and income growth here as well as banking system that "continues to make mortgages" available to Canadian consumers.
But he cautioned if unemployment numbers rise in Canada, there will be a larger fallout for the Canadian housing market. "Anyway you slice it, if you don't have a job, you can't get a mortgage and you can't buy a house."
How bad the market in Canada is depends on who you talk to. Some Canadian commentators have called for the creation of a S&P/Case-Shiller index here. It is based on tracking repeat sales of single family homes.
CREA has said the Canadian number is skewed by the fact houses are not selling as fast this year as in 2007 in some of the more expensive markets like Vancouver. Using a weighted national average price for sales on the Multiple Listings Service, it said prices fell only 4.7% last month.
Ted Zaharko, who owns Royal LePage Foothills Real Estate Services in Calgary, says Canadians are following the U.S. too closely and expecting the same market conditions to happen here.
While prices and sales continue to fall in Calgary, he figures the market has bottomed out in the city which surpassed Toronto as the second most expensive place to buy a home during this housing cycle.
"We have people putting ridiculous offers in on a home and nobody is selling. People are saying 'l'll wait for prices to drop.' It's not going to happen," says Mr. Zaharko. Prices were down 4.2% in Calgary in November from a year ago, according to CREA.
The U.S. survey found all 20 cities with decreasing prices in October, led by a 33% drop in Phoenix and a 32% in Las Vegas. The 20-city index is down 23% from its 2006 peak.
"We're seeing a shift to a housing market that is driven by a poor economy rather than a housing market that's driven by oversupply," said Guy Lebas, chief economist at Janney Montgomery Scott LLC in Philadelphia. "The credit problems that hit in October exacerbated the speed of it."

TAKING NOTICE WHERE NOTICE IS DUE

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He adds new projects as they are completed so watch regularly if you are as big of a fan as I.

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A RETURN TO LONG-TERM AVERAGES

Housing affordability improves as prices ease

By Mario Toneguzzi

Calgary Herald

December 9, 2008

The housing markets in both Calgary and Edmonton are expected to retreat even further in 2009 as concerns mount about the economy, "spurred by the sharp drop in energy prices that sent shivers down homeowners' spines," says a report released Monday by RBC Economics.
The affordability measure report said Alberta's housing conditions have softened since prices peaked in 2007 with declining prices restoring some of the affordability lost during the boom. However, affordability measures are still high, suggesting the province's housing markets remain overvalued, at least relative to household income.
In Alberta, "as stiff headwinds blow on the provincial economy and erode consumer confidence, homebuyers will be reluctant to step into play until affordability improves more significantly," said Robert Hogue, senior economist at RBC. "The province's housing affordability conditions still have a fair way to go before returning to long-term averages."
On a national level, the report said that as a sluggish economy threatens income growth and makes households "much more skittish" about major financial commitments, issues of affordability are coming to the fore.
"While the Canadian housing sector is undoubtedly entering a cyclical downturn, the risk of experiencing a U. S.-style meltdown is remote," said the report.
The RBC affordability measure for Alberta, which captures the proportion of pre-tax household income needed to service the costs of owning a home, improved across all home segments with the benchmark detached bungalow dropping to 43 per cent, the standard townhouse to 32.1 per cent, the standard condo to 28.2 per cent, and the standard two-storey home to 46.4 per cent.
RBC's affordability measure for a detached bungalow for Canada's largest cities is as follows: Vancouver 74.8 per cent, Toronto 53.3 per cent, Calgary 47.3 per cent, Ottawa 43.3 per cent and Montreal 40.4 per cent.

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BRIDGELAND - WHERE would you like to EAT?

Featured in this month's WHERE magazine is a page dedicated to eateries in Bridgeland. I spent the weekend in the area and definitely will be back to sample more from this great list. CLICK ON THE IMAGE TO READ AND SAMPLE A TASTE OF THIS GREAT COMMUNITY.

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Optimists Rule

Optimists still rule on real estate
Canwest News Service Published: Saturday, November 22, 2008

Canadians are still in a mood to mortgage. Nearly four in 10 Canadians still think that now is a good time to buy a house, even though the proportion who expect home prices to fall further has soared, according to a recent survey by the Canadian Association of Accredited Mortgage Professionals. Attitudes toward local conditions in the mid-October survey have shifted only slightly, with 38% of Canadians believing now is a good time to purchase a house -- still outweighing the 32% who believe it is a bad time. Meanwhile, only 0.28% of mortgages are in arrears, a proportion that is not only low but also steady, the organization said. Still, the proportion expecting home prices to fall has more than doubled from last fall to 35%. That's especially the case in British Columbia, where 48% expect prices to fall. Jim Murphy, association president, notes that anticipated mortgage credit growth would slow, but remain relatively strong.

HOT OR NOT?

Your home: hot or not?
Financial Post Published: Saturday, November 22, 2008

Can your home weather the financial storm? Don R. Campbell, a real estate analyst and author of Real Estate Investing in Canada, gives a dozen ways to analyze your property's exposure to a downturn.
First, it's vital to remember that property markets are not national; they are regional, local and even vary widely from neighbourhood to neighbourhood in the same city.
That being said, there will always be hot real estate markets and others that are cold, but national and provincial figures are too generalized to be used by Canadian homeowners and investors to make sound decisions on their most important asset.
The 12 questions below will help you decide if your area and personal property are poised to go up, stay flat or collapse.
The more "yes" answers you get, the better the market will perform.
But overall, to dramatically reduce your risk, the most important thing to remember is: Don't fall in love with your property.
12 ESSENTIAL QUESTIONS
1 Is your area's average income increasing faster than the provincial average? 2 Is your area's population growing faster than the provincial average?
3 Is your area creating jobs faster than the provincial average?
4 Does your area have more than one major employer? 5 Is real estate booming in the surrounding region more than where you're looking?
6 Will the property values benefit from a major new development nearby?
7 Has the local and provincial political leadership created a growth atmosphere?
8 Is the region's economic development office helpful and proactive?
9 Is the neighbourhood located in an area of renewal or gentrification?
10 Is there a major transportation improvement occurring nearby?
11 Is the area attractive to Baby Boomers?
12 Is there a short-term perceived problem (negative stories, short-term layoffs) that will disappear?
In fact, there are 13 major influences on the long-term value of property. Underlying the local analysis of your property market you need to consider the outlook for Canada generally.
The Canadian economy and real estate are relatively well-positioned to withstand the economic storms that are buffeting property values in many other countries.