Housing Market Update

The latest US Unemployment rate held steady last month at 5.50%, however; year to date they have lost 438,000 jobs. Their Housing Crisis is not over and you can expect more gloomy news over the next few months.

Canada had some good news in April, reporting modest Economic growth. This gives us some hope that Canada will avoid a Recession. In Europe, the Central Bank recently increased interest rates by a quarter point to ensure their Inflation stays in control.

The Western provinces of Canada have much different economies than in the Eastern provinces, and at this point in time are in a good position to weather the surrounding economic storms quite nicely. That should translate to our housing markets in the West staying stronger than in the East, as our unemployment levels remain at extremely low levels, thus bolstering consumer confidence.

In the June 27, 2008 Real Estate Weekly for Mission, it was noted that the Canada Mortgage and Housing Corporation said that the seasonally adjusted annual rate of housing starts rose 3.5 per cent to 221,300 units in May from 213,900 in April. It attributed the increase to a rise in single-family home starts, which in April had reached their lowest level since May 2001. BMO economist, Doug Porter, was quoted to have said "It just shows that things are not deteriorating rapidly and continue to not disappoint: The Canadian housing market, after all, is still holding up relatively well." But he also noted that he believes there will be some slowdown in activity later this year.

The CMHC is forecasting around 214,000 to 215,000 home starts for 2008, as rising incomes, low unemployment and low mortgage rates boost home ownership. This number is slightly down from 2007, but still strong by historical standards. Economist Pascal Gauthier notes anything above 200,000 is fairly robust. "There's nothing that suggests construction activity is going to come off the tracks," Gauthier said. "It is really just a gradual cooling."

If you are considering a Real Estate move this year, I would be happy to offer a second opinion about your decision, with relation to what the market is currently doing. Feel free to give me a call or drop me an e-mail at the contact information noted on this page.

Best regards, Cyndi Polovina