Here is the summary from a report from Gregory Klump, the Canadian Real Estate Association's chief economist, that was released today, May 26, 2010.
• Canadian home prices are unlikely to undergo U.S.-style correction.
• As part of a normal demand-driven housing market cycle, the price to income ratio reverts from its peak to its long-term average by way of income growth and stable prices.
• Homes purchased by retirees with accumulated wealth, not financed with income, may be upwardly skewing the British Columbia and national price to income ratio.
• Based on the longer-term relationship between price and income, the national price to income ratio will soon revert to its long-term average via increases in income, not sharp price declines.
• Warnings of a U.S.-style correction in Canadian home prices ignore solid Canadian mortgage market trends.
• Mortgage holders in Canada have borrowed conservatively and are accelerating mortgage repayment, providing options for the small proportion of homeowners that may face financial difficulty when their mortgage is renewed at a higher interest rate.
• Canada will avoid a massive oversupply of homes and a sharp drop in housing demand, so a U.S.-style correction in home prices is unlikely.
The information in this blog has been taken from a report provided by CREA and may not be appropriate for other purposes. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. The report contains economic analysis and views, including those on future economic and financial markets’ performance. These are based on certain assumptions, and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. Cyndi Polovina, Landmark Realty Mission Ltd., CREA and its member Boards and Associations are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered
Wednesday, May 26, 2010
Wednesday, May 5, 2010
Active Spring Market in the Fraser Valley
It is not uncommon for us to see a surge of listings in the Spring, but this year's number of active listings in April, in the Fraser Valley, was second only to the April of 1995. There is a huge volume of listings available from which Buyers can choose their dream home, which is definitely affecting home values.
As with anything from widgets to oranges, with higher supplies and lower demand come lower prices. Fortunately the demand in the Valley remains high, and this is keeping prices stable. Prices remain rather unchanged, over the last few months, although year-over-year, we have seen a rise in prices of about 10% in most areas in the Fraser Valley, across most housing types.
Before I start giving you benchmark statistics to show you how prices have changed in the past year in various areas of the Fraser Valley, I need to explain the "HPI benchmark home" briefly. The HPI (Housing Price Index) is akin to the CPI (consumer price index.) In order to compare apples to apples, so to speak, a "benchmark" home is defined in an area, as being indicative of an average home that is sold in a given area. In the Fraser Valley a "typical" or benchmark single-detached home is 15 years old with a lot size of 7405 sqft, nine rooms, two bathrooms, a fireplace and a one-car garage. The idea is that if we measure how the "typical" home has changed in price, we can know how prices in all segments of the market have changed in price. It also enables us to compare prices in Langley with prices in Mission, since we are comparing the same kind of home, but in a different area.
While the Fraser Valley as a whole saw the HPI rise 13% year-over-year, April 2009 to April 2010, in Mission, the rebound from the price declines of 2008 and 2009 hasn't been as quick or significant. The price of a benchmark home in Mission only rose about 2.3% year-over-year, compared to an increase of a benchmark Abbotsford home from about $395,000 to about $442,000, or almost 12%!
When you compare benchmark pricing of $354,307 in Mission to a benchmark Surrey Central home at $533,000, or a benchmark Langley home at $523,000, you can see that there is clear value in buying into the beautiful communities of Abbotsford and Mission.
With prices in Mission still being depressed compared to other areas, there is great value in buying a home in Mission, which is only about an hour's ride from Downtown Vancouver by the comfortable and affordable West Coast Express train. Mission is a fantastic, family community with many amenities and services. I am proud to call Mission home, and I would welcome the opportunity to show interested buyers why they should consider purchasing a home here, or in our neighbour city, Abbotsford.
As an area expert, and professional Realtor, I can advise you about area amenities and also advise you about what pitfalls to look out for whether you are buying your first home, retirement home, or your dream home. I look forward to helping you make you home buying experience a positive one!
As with anything from widgets to oranges, with higher supplies and lower demand come lower prices. Fortunately the demand in the Valley remains high, and this is keeping prices stable. Prices remain rather unchanged, over the last few months, although year-over-year, we have seen a rise in prices of about 10% in most areas in the Fraser Valley, across most housing types.
Before I start giving you benchmark statistics to show you how prices have changed in the past year in various areas of the Fraser Valley, I need to explain the "HPI benchmark home" briefly. The HPI (Housing Price Index) is akin to the CPI (consumer price index.) In order to compare apples to apples, so to speak, a "benchmark" home is defined in an area, as being indicative of an average home that is sold in a given area. In the Fraser Valley a "typical" or benchmark single-detached home is 15 years old with a lot size of 7405 sqft, nine rooms, two bathrooms, a fireplace and a one-car garage. The idea is that if we measure how the "typical" home has changed in price, we can know how prices in all segments of the market have changed in price. It also enables us to compare prices in Langley with prices in Mission, since we are comparing the same kind of home, but in a different area.
While the Fraser Valley as a whole saw the HPI rise 13% year-over-year, April 2009 to April 2010, in Mission, the rebound from the price declines of 2008 and 2009 hasn't been as quick or significant. The price of a benchmark home in Mission only rose about 2.3% year-over-year, compared to an increase of a benchmark Abbotsford home from about $395,000 to about $442,000, or almost 12%!
When you compare benchmark pricing of $354,307 in Mission to a benchmark Surrey Central home at $533,000, or a benchmark Langley home at $523,000, you can see that there is clear value in buying into the beautiful communities of Abbotsford and Mission.
With prices in Mission still being depressed compared to other areas, there is great value in buying a home in Mission, which is only about an hour's ride from Downtown Vancouver by the comfortable and affordable West Coast Express train. Mission is a fantastic, family community with many amenities and services. I am proud to call Mission home, and I would welcome the opportunity to show interested buyers why they should consider purchasing a home here, or in our neighbour city, Abbotsford.
As an area expert, and professional Realtor, I can advise you about area amenities and also advise you about what pitfalls to look out for whether you are buying your first home, retirement home, or your dream home. I look forward to helping you make you home buying experience a positive one!
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