The 2010 Housing Forecast seminar hosted by the REALTORS Association of Edmonton was really good and beyond my expectation. It was my first time attending this event. There were 1000 people in attendance and features speakers like:
The overall attitude toward the 2010 economy and real estate market is optimistic. To start, Mr. Pollock introduced what Canadian Western Bank was all about and is positioned for future moderate growth. He predicts that interest rates will raise and economy will be a slow gradual recovery while gas prices will remain low, Canadian dollar will be on par backed by our strong commodities.
Mr. Gilbertson, CEO of EEDC addressed 8 areas which included income/GDP, retail sales, unemployment, insolvency, office vacancy, housing, air service and inflation. He had rated each areas either an A, B, C or D where A was the best. His ratings were as follows:
He went on with his short to medium term outlook and illustrated where the world oil prices is at and as of December 2009 the prices were at a level where it can be profitable again. But, on the other hand natural gas prices were well below the level of profitability. He went on to illustrate that Edmonton will lead the country in annual GDP growth and Asia will be the driver to take the world out of the recession.
He concluded with his overall status of Edmonton:
Mr. Germain from CHBA presentation was that of a caution optimism. He went on to illustrate what was hot in building trends. For example: build green, sustainable wood flooring, wide hardwood floorboards, grey paint, wall paper, glass tiles, two tone cabinets, white cabinets, high-tech kitchen and dog showers… YES, dog shower is becoming a hot trend.
Angus Watt from National Bank Financial was my favorite speaker. A quick recap of some of it:
Mr. Goatcher from CMHC had quite a bit of graphs but to recap some of it:
Things that stood out from Mr. Westergard presentation from the REA were:
I hope you enjoyed my summary and your feedback would be very much appreciated. I look forward to next years event.
Vacancies Peak in 2009
Apartment vacancy rates across Greater Edmonton will continue to trend upward in 2009, but landlords should see a turnaround in 2010 provided economic conditions improve. CMHC’s April 2009 Rental Market Survey found a Metro-wide apartment vacancy rate of 4.7 per cent compared with 3.4 per cent a year prior. While seasonal factors often lift the vacancy rate in the spring survey, CMHC does not anticipate much tightening for the remainder of 2009. Expect a vacancy rate of close to four per cent this October, well above the 2.4 per cent rate captured in the October 2008 survey and representing the highest fall vacancy rate since 2005. Vacancies have been trending upward due to rising unemployment, an increase in homeownership demand and a steady influx of condominium units that have been purchased by investors and injected into the rental market. In 2010, a reduction in apartment completions combined with strengthening demand should allow vacancies to move down toward the 3.5 per cent level by the fall.
Rental Rates Increases Return in 2010
Rather than reduce posted rents to help maintain occupancy levels, many landlords are offering incentives such as one month’s free rent, decreased security deposits and move-in allowances. While our April 2009 rental survey reported some year-over-year upward movement in apartment rents across the region, we expect this fall’s survey to show rents are largely unchanged from the levels reported in October 2008. With vacancy rates starting to subside in 2010, property owners will be looking to raise rents to offset rising operating costs, in particular utilities and property taxes. A typical two-bedroom apartment will rent for close to $1,070 by October 2010, for an increase of around $35 per month on average compared to October 2009.
For the complete report click here.
CMHC - Fall 2009
Buying a house is likely the biggest financial investment you are going to make. The last thing you want is for some dastardly fraudster to get their hands on it.
"You're sitting in your property, minding your own business and all of a sudden you get served with a letter saying you're in default of some mortgage that you've never even heard of, because a fraudster stole your identity, went to the bank and got a mortgage on your property," says Kathleen Waters, president and CEO of Lawpro and former vice-president of TitlePlus.
While it is not compulsory in Ontario, Lorne Shuman, director of legal services at First Canadian Title, says that more and more homebuyers are taking out title insurance to protect themselves - for a premium of only a few hundred dollars - against losses related to title or legal ownership of their property, including fraud.
"Title insurance is essentially a product that protects homeowners against a number of possible defects: title problems, survey problems and fraud," says Mr. Shuman. "It's a one-time premium that lasts as long as you own the house. Typically, you obtain it through your lawyer when you buy the house and it lasts for as long as you own the house." (Title insurance products are also available for existing homeowners, to protect them for just such situations as identity theft leading to a fraudulent mortgage placed on your home.)
A range of policies exist, so you and your real estate lawyer will need to check which one suits your needs. Prior to obtaining the insurance, your lawyer (who cannot work for the title insurance company) must issue an opinion on the title of the property to ascertain whether the title is clean or if there are risks such as unclear record of transfer of ownership (in which case the insurer may exclude them from your policy).
The Financial Services Commission of Ontario notes that a residential title insurance policy may protect you from unknown title defects as well as existing liens against the property's title such as an unpaid mortgage, utility or condominium charges. And if there's no survey to be found, a policy with survey coverage may be accepted by lenders instead of a new survey or Real Property Report (which sets out lot lines, structures, rights-of-way and the like).
However, Ms. Waters says that homeowners must be aware that title insurance may only provide cash compensation and does not necessarily rectify all situations. For example, if you move in and discover that an existing deck encroaches on your neighbour's lot line, the title insurance will compensate you for the cost of removing and rebuilding it.
But as another example, "Let's say you only want to buy that property if you know for sure you can put a pool in the backyard or ... an addition on the back of the house," says Ms. Waters. "Your real estate lawyer would say to you ‘We'd better make sure your agreement of purchase and sale is conditional on giving us a period [to] do the necessary investigation with the municipality'." If you buy a property only to discover later that a pool is not allowed, you would negotiate a value of loss for which the insurer would then compensate you.
Mr. Shuman says it is crucial to work with your lawyer to make sure the policy meets your coverage needs.
"It is really important to look at the claims-paying ability of the title insurer," says Mr. Shuman. "The policy is only good if the company behind it is able to handle the claims fairly and efficiently."
A side-effect of title insurance may be that it simplifies the closing process for your lawyer, which could cut your costs.
"The standard of practice for lawyers on residential real estate deals used to be a bit extreme," says Ms. Waters. "I can remember, back in the 1980s, doing a Conservation Authority search on properties which may not even have been anywhere near Conservation Authority land, but the standard of practice said you had to do it." Ms. Waters says that having title insurance can reduce the need for some searches and streamline the real estate purchasing process.
Title insurance policies focus on legal issues, so it is vital to be aware of exclusions, Mr. Shuman says, and to work with your lawyer to make sure title insurance is for you and covers what you need. Environmental hazards and general wear and tear of your home are not covered, nor is needing to replace an old furnace six months after moving in; while it may be expensive and annoying, it is not a legal issue dealing with ownership, so there is no coverage for this type of situation under title insurance.
For more information, visit the Financial Services Commission of Ontario Information on Title Insurance site: fsco.gov.on.ca/English/PUBS/consumerbrochures/undstitins.pdf
National Post - November 12, 2009
Canadian home prices are on the road to recovery, but still haven't rebounded to pre-recession levels, according to a survey that shows while prices rose in August they are still down 3.4% from their peak in August 2008. The Teranet-National Bank house price index, which measures resale prices in six urban markets across Canada, shows that housing prices nationally rose by 2% in August, the fourth straight month-over-month increase. It was also the second month in a row that prices were up in all of the six markets. "This turnaround is consistent with an improvement in market conditions in the first half of 2009 --more homes have been selling and fewer have been coming on the market," said Marc Pinsonneault, a senior economist with National Bank Financial Group. In Montreal, Halifax and Ottawa, resale prices are actually higher now than they were at their pre-recession peak a year ago.
Financial Post - October 29, 2009
Housing starts are forecast to reach 141,900 in 2009 and rise to 164,900 next year, the federal agency said Monday in its quarterly outlook.
"We expect housing markets across Canada to strengthen leading into and over the course of 2010 as economic conditions improve," said CMHC chief economist Bob Dugan.
"Demand for existing homes has rebounded since the beginning of the year. In addition, lower inventory levels characterize both the new and existing home markets. As a result, stronger housing demand will be reflected in higher levels of housing starts in 2010," Dugan said.
Existing home sales are expected to reach 441,300 units this year and increase to 445,150 units in 2010, CMHC said in its report.
The average price is forecasts to be $312,950 in 2009 and $324,500 next year, it said.
Financial Post - November 2, 2009
Resale housing sales continued their strong trend through October with sales of all housing types through the Multiple Listing Service® in October at the second highest level on record (after October 2006). There were 1,535 residential properties sold in October; up 23% from 2008 but down almost 10% from last month which follows the normal seasonal trend of month to month sales dropping through the fall.
“The housing market in Edmonton and area is still robust,” said Charlie Ponde, president of the REALTORS® Association of Edmonton. “Homebuyers are confident about their future prospects and keeping an eye on the possibility that mortgage rates will rise. They can lock-in their housing costs for five years while rates are at historic lows if they buy in this market.”
Residential housing prices remained stable within typical ranges for seasonal fluctuations. Prices for single family dwellings were down 2.2%, on average* from last month but up marginally (0.12%) from last year. Condominiums were priced down 3.2% from September but the same price ($11 difference) as a year ago. Overall, the average residential price in October was $318,969, down 2.5% from last month but up a third of a percent from 2008. Single family dwellings sold for $363,694 and condos sold, on average, for $237,601.
There were 2,205 homes listed on the MLS® System in October with 1,535 sales for a sales-to-listing ratio of 70%. The total value of residential sales in October was $490 million and total MLS® System sales (including rural and commercial properties) is up over last year for the year-to-date to over $6.18 billion. Total available inventory was 5,530 homes which is a typical 3.5 month supply. Homes sold on average in 47 days (44 in September but 58 in October 2008).
“Good looking homes in the average price range always sell quickly,” said Ponde. “Less desirable homes may take a little longer to find a buyer and home sales at the upper price ranges are steady. It is important to consult your REALTOR® to devise a strategy for buying or selling a home to ensure you get the latest market and neighbourhood information.”
October 2009 activity
Record forthe month*
% change fromOctober 2008
Total MLS® System sales this month
1,747
24.00%
Value of total MLS® System sales - month
$575 million
26.20%
Value of total MLS® System sales - year
$6.18 billion
1.60%
Residential¹ sales this month
1,535
22.70%
Residential average price
$318,969
0.37%
SFD² average selling price - month
$363,694
0.10%
SFD median³ selling price
$346,000
1.00%
Condo average selling price
$237,601
0.00%
Edmonton Real Estate Board – November 3, 2009
Following trends in Calgary by about six months, home prices in Edmonton took off in 2005-07, jumping from an average $200,000 to $350,000 in just two years. The overheated local economy has obviously taken a breather, as oil sands activity slowed, but it has nonetheless weathered the global economic storm better than generally thought. While the unemployment rate has more than doubled since last fall, it stood at an incredibly low and unsustainable 3.4% at the onset of the recession. Furthermore, the near 4 percentage points surge in the unemployment rate to 7.3% (as of August) has largely been due to unabated growth in the labour force (+3.0%) rather than a large drop in employment (-1.0%).
This is not to say that the local economic backdrop is positive for home sales and prices at the moment, but that it has compared favourably to Calgary and other parts of the province. The two cities share the fact that, after seesawing madly over the last two years, home sales have settled down in recent months around the more sustainable levels observed from 2001 to 2005. Another factor helping to support the relative outperformance in prices is that new listings have not yet started to trend upwards, leading to slightly tighter market conditions. One way to measure this is by looking at the sales-to-new listings ratio, whereby a lower figure indicates more slack in the market. Over the last 3 months of data (Jun-Aug), this ratio has averaged 0.63 in Canada, 0.68 in Calgary, and 0.71 in Edmonton. While at the height of the boom such ratios could touch 0.90 and higher, ratios of 0.60 and higher are generally supportive of real (inflation-adjusted) price gains.
Largely reflecting the legacy of last year’s buyer friendly market balance, 2009 will mark a second annual decline (-3.5%) in prices.
Nonetheless, after falling 10% from their peak, home values are slowly on the mend, and back in line with a more sustainable long-term uptrend. On an annual basis, price growth will resume in 2010 at the modest pace of 2.8% in 2010, netting roughly a 1.5% real (inflation-adjusted) gain.
As interest rates begin to reverse to naturally higher levels and the delayed impact of higher prices boosts supply while dampening demand, the Edmonton market should slacken in 2011. By that time, however, a more favourable economic backdrop should ensure against a further significant and sustained price correction. All said, we expect the tug of war between worsening affordability conditions and a better economy to translate into a muted 1.5% nominal price growth, essentially nil in real terms.
For the full report click here.
TD Economics Resale Housing Outlook - October 7, 2009
RBC Housing Trends and Affordability - Sept, 2009
Edmonton, October 5, 2009: Although sales were not at record levels in September, they compared favourably with sales levels last year and settled in for the third best September ever. Only sales in September 2006 of 1,844 residential units and last September (1,729) were better than the 1,704 sales pegged last month.
“We have experienced strong sales through the third quarter,” said Charlie Ponde, president of the REALTORS® Association of Edmonton. “At the end of the first quarter YTD sales were down over 21%, and after six months they were up almost 2%. The last three months have had strong buyer demand and year-to-date sales are up 5.3% over the same period last year.”
The strong sales also boosted prices of both single family and condominium properties. Prices dipped slightly in August after showing steady gains all year but bounced back to mid-summer levels in September. The average price of a single family dwelling was $371,947 and condos were priced on average at $245,546 (both up 1.4% over August prices). SFD prices are up over $20,000 from where they were on New Years Day.
Higher prices have not resulted in greater listing activity. 2,564 homes were listed in September resulting in a 66% sales-to-listing ratio as compared to September 2008 with over 3,100 listings and a 55% S/L ratio. The slower listing activity dropped inventory to 6,032 from 6,445 units last month but there is still almost four months of inventory at present sales volumes.
Duplex and row house properties sold on average for $299,964 and the combined Average Residential Price was $327,235 in September; up 2% from September 2008.
“Homes are selling slightly faster than last month and much faster than last year at this time,” said Ponde. “I expect that sales in this market will show continued strength through the fall and early winter.” The average days-on-market was 44 in September; down four days from August.
Edmonton Real Estate Board - October 5, 2009
Copyright © 2010 Alliance Realty Advisors Inc.Portions Copyright © 2010 a la mode, inc.Another XSite by a la mode, inc. | Admin Login| Terms of Use| Site Map
