April 2012 Market Update

Commentary

The national housing market remains steady and strong and is expected to stay on this stable course for the mid-term.

Economic indicators continue to show signs of strength in the Canadian that are tempered primarily by external forces. Household net worth increased by $58 billion in late 2011. The fact that asset values increased by considerably more than household debt, helps to mitigate some of the concern about rising debt levels. Businesses are also feeling stronger, as shown by an expected increase of 8% in private enterprise investment spending. This is a good signal for continued improvements in employment and the economy.

The Bank of Canada has left the interest rate steady, where it has been for the past 18 months. If the external factors, including recovery in the United States and stability in Europe, continue to improve at the current pace, the next rate hike is expected in early 2013. Given that core inflation is rising more than expected, if improvement accelerates in the United States and abroad, that rate hike could be seen sooner.

A well-balanced housing market provides a level playing field with opportunities for both buyers and sellers. Interest rates remain historically low and present buyers with extremely favourable financing. The time to act is now, because as global recovery regains its footing, rates will likely rise to keep inflation in check, resulting in a higher monthly housing payment for home buyers.

 

 

Housing Market

Home Sales
in thousands

Resale housing activity rose 1.4% month-over-month, recouping one-third the monthly decline from December to January. The relatively stable number of sales is a continued sign of strong fundamentals.

 

Average Home Price
in thousands

The average home price in February stood at $373,749 — up 2% from where it was this time last year. There has been a preference recently for single family homes, which tend to be more expensive, and this has skewed home prices upward. This should have a minimal, if any, effect on buyers and sellers.

 

 

Inventory
Sales-to-Listings Ratio

The national housing market remained balanced in February. The sales-to-new listings ratio has ranged between 52%–54%, for 9 out of the past 11 months. The overall picture remains balanced and that indicates a greater likelihood of steadiness and stability in the coming months, which is a good sign for the housing market moving forward.

 

 

Mortgage Rates

 

Low interest rates and stabilizing home prices are bringing home ownership within reach for an increasing number of Canadians. When widespread global recovery gains a stronger footing, rates are expected to increase to keep inflation near the 2% target. For now, the low rates offer increased affordability for home buyers.

 

 

Sources: Conference Board, The Canadian Real Estate Association (CREA), Royal Bank of Canada, Canadian Mortgage and Housing Corporation, Bank of Canada.

Special Reports

Home buying is often exciting, but packing up and moving is almost always stressful. Below are a few tips to help make the move a smooth one.

  • Special Boxes for Special Items. Dish barrels help protect dishware, and long flat boxes help protect artwork. Wardrobe boxes, which have a metal bar to hang clothes on, can simplify and speed up packing your closet.
  • Paper, the Secret Weapon. Packing paper, or unprinted newsprint, can be used several different ways. Use it to protect fragile items or crunch it up to use as padding. Remember, ink on regular newspaper can rub off and stain. Use Bubble Wrap for extra- delicate items.
  • Tape It Securely. Masking and duct tape don’t stick to cardboard as well as brown packing tape.
  • Tape It Quickly. Tape guns help you assemble boxes faster.
  • Mark It Clearly. Clearly label boxes. Marking the sides instead of the top is best as the tops are covered when boxes are stacked.
  • Protect the Big Items. Protect furniture with pads and put mattresses in plastic bags to prevent damage during the trip.
  • Lighten the Load. The help of a dolly or handcart can save your back and speed up the moving process.

 

 

The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources. You should not treat any opinion expressed on This Month in Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Keller Williams Realty, Inc., does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind. All information presented herein is intended and should be used for educational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. All investments involve some degree of risk. Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information contained in This Month in Real Estate.

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