House Sales In Canada Rise 7% In March Month Over Month

The Globe and Mail came out with this article today detailing a 7% rise in home sales for March which is the second straight month of improving sales. It is an interesting article but what you have to remember is that spring and summer are typically the busiest times of the year for home sales. In Kamloops, we have seen the real estate market pick up over the last month and that is to be expected as we head into spring and summer. The full article is included below.

The Canadian housing market appears to be stabilizing, with sales activity up in March for the second consecutive month as lower prices drew in more buyers, the Canadian Real Estate Association said Wednesday. Actual transactions were down 13.7 per cent, year over year. This was the smallest decline in six months, the association said. “Housing markets are starting to show signs of buyer interest because of lower prices and interest rates,” Regina real estate agent Dale Ripplinger, CREA president, said in releasing the March results. However, economists were reluctant to characterize the increased sales activity as the beginning of a recovery in the real estate market.

The March statistics were “certainly encouraging,” Toronto-Dominion Bank economist Millan Mulraine said. “Nevertheless, with the Canadian economy continuing to be in a very intense recession, and labour market conditions continuing to worsen at an alarming pace, we expect over-all housing market activity to remain soft in the coming months,” Mr. Mulraine said in a research note. “That’s why we are cautious about interpreting this as the beginning of a long-term trend,” he added in an interview.

A seasonally adjusted total of 31,135 existing homes changed hands in March. “This is an increase of 7 per cent from the previous month, and builds on the 10.3-per-cent activity gain in February,” CREA said in a news release. “The number of transactions in March stands 18 per cent above levels reported in January, 2009, when activity sank to the lowest level in a decade.”

The national average resale price was $288,641 in March, down 7.7 per cent from a year earlier – again, the smallest year-over-year decline in six months, the association said. The largest monthly increases in activity were in British Columbia, at 13.6 per cent, and Ontario, at 10.5 per cent, the association said.

CREA’s chief economist, Gregory Klump, said the sales reflected a “stronger-than-normal seasonal bounce” in a number of markets. “The story is that price reductions are working as intended. They are stabilizing the market and they are drawing buyers …who are taking advantage of improved affordability,” Mr. Klump said, adding that anecdotal evidence indicates that a lot of the buyers are first-time market entrants. “Looking back to economic recessions in the early 1980s and 1990s, national resale housing activity bottomed out before the job market or economy did,” Mr. Klump said. “It will take time for ample supplies of new and existing homes to be drawn down, but demand appears to be stabilizing.”

Bank of Montreal economist Robert Kavcic noted that, despite the recent improvement, sales activity is still down more than 30 per cent from the peak seen in May, 2007. “Still, the improvement in recent months is an encouraging sign that the Canadian housing market has crossed the halfway point for this downturn,” Mr. Kavcic said. “Affordability is the highest in about four years, which should help fuel a rebound in sales once the job market stabilizes,” he said in a research note.

Recent measures in the new federal budget, including an increase in the maximum withdrawal allowed under the Home Buyers Plan and the First Time Buyer Tax Credit, will also lend support to new buyers, Mr. Kavcic said. “While a continued gradual decline in new listings—down 10.9 per cent year-over-year in seasonally adjusted terms—will ultimately help restore the market to balance, the ratio of new listings-to-sales remained slightly elevated at 2.2 per cent in March. “Over-all price declines are still somewhat exaggerated by the changing sales mix (sharper declines in the most expensive cities and higher price ranges), and as such, weighted-average prices are down a more modest 4.7 per cent year-over-year. Still, a widespread 14 of 25 cities are reporting lower prices versus last year,” Mr. Kavcic wrote.

“Western Canada continues to face the most severe price pressure, with average home values still down more than 10 per cent year-over-year in each of Vancouver, Victoria, Calgary and Edmonton. Hard-hit manufacturing centres in Ontario are also posting double-digit declines, while Regina and St. John continue to lead the pack, up 16 per cent year-over-year and 13 per cent year-over-year respectively.” Mr. Kavcic said it remains a buyers’ market. “Further price declines and low mortgage rates will ultimately help trigger a recovery, but a reversal in the wave of job losses is one major pre-requisite still outstanding,” he said.

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Kamloops Mortgage Information: Advice For The First-Time Home Buyer

Introducing Brenda Colman. Brenda is a mortgage specialist with Invis here in Kamloops. She will share her knowledge and expertise on a monthly basis. If you have any questions for Brenda, please post them here or give her a call.

Brenda Colman Invis Kamloops Mortgage SpecialistInterest rates touching historic lows and more attractive house prices in parts of the country have added up to better affordability for first-time home buyers. The federal government’s recent budget has added more reasons for Canadians who aren’t yet homeowners to consider entering the Kamloops real estate market this year. Under the new federal budget, first-time home buyers can qualify for a $750 tax credit, to help with closing costs, such as appraisal or legal fees.  Also, home buyers can now withdraw up to $25,000 from their RRSP under the Home Buyers Plan for a down payment – up from the previous limit of $20,000. Couples can access an extra $10,000 from their RRSPs under the plan.

For those who are feeling secure about their income and want to take advantage of low rates and a more affordable market, the new federal budget provisions could make an enormous difference in terms of the properties they can afford, We’re now seeing more first-time buyers seriously considering making the jump into the Kamloops market this spring.

Here are some tips to help first-time home buyers:

Start the process early.
A mortgage consultant can help you with getting the right documentation in place, such as proof of income and down payment. A consultant will also check your credit history to avoid any unpleasant surprises and ensure you can meet the lender’s requirements. If you are thinking about a home purchase, consulting a mortgage specialist is critical to navigating the mortgage process.

Know your price range.
If you want to buy a home within the next few months, getting a mortgage pre-approval will help you determine the right price range of homes to shop for. Many lenders will also guarantee a rate for up to 120 days when pre-approving potential borrowers for a mortgage.

Don’t rush your decision.
A buyer’s market means that you now may have the leeway to negotiate more with sellers on the price as well as other terms of the transaction such as the possession date and extras to be included in the purchase.

Accelerate your payments – early and often.
A mortgage is the largest debt that most consumers will ever take on, and paying it down faster can mean large savings on interest costs over the long term. Get in the habit of making lump sum payments whenever possible, and consider making bi-weekly payments as a way to decrease the life of the loan.

Know your goals.
Choose a mortgage that accommodates the present state of your finances but also fits your long-term goals. Similarly, don’t just buy because it’s a buyer’s market – choose a home that fits your lifestyle as well as your family’s needs in the years ahead.

Brenda Colman, Mortgage Consultant, Invis Kamloops
P. 250-318-8118  E. ac.sivninull@namlocadnerb W. www.BrendaColman.ca

Report On Kamloops 2009: Uplifting View Of The Downturn

This was published by the Kamloops This Week in their 2009 Progress Report that was distributed March 29, 2009. Peter Milobar, the Kamloops City Mayor wrote this piece in the publication calling for residents to take a “realistic and positive” view on the economy in Kamloops. He does put some of the facts about the recent downturn in building permit values and real estate house values into perspective. Read below for the full story.

Peter Milobar Kamloops Mayor 2009

Peter Milobar Kamloops Mayor

Over the next year, keeping things in perspective will be critical as it seems we are being inundated daily with stories of economic ruin. While times are undoubtedly changing quickly and the overall economy is slowing, keeping the numbers we see in perspective is important.

Headlines highlight drops in building permit values or house values seem bad at first, but let’s put some perspective to those numbers. This year, our development services department is anticipating building permit values of around $140 million. Now one could say, based on the 2008 number of $208 million, this year will see a 30 per cent drop in values. Technically, that is correct, but does it mean the construction industry is on life support? To put some perspective to the numbers, you would see 2008 was the third consecutive record year for permit values. Yet a closer look to the projected 2009 numbers will show both 2003 and 2004 actually had lower permit values and in fact, $140 million is the 10 year average for Kamloops. So any drop from a record year would seem big. When you consider many of the projects in the 208 permit value numbers will actually be constructed this year and the fact builders were having trouble finding workers under the record setting years, the construction employment numbers should stay strong.

Two other bright lights right now are the B.C. Lottery Corporation and Thompson Rivers University. Locally, the BCLC is currently undergoing not only significant renovations, but are also in the process of hiring 60 new employees. TRU and the newly announced Faculty of Law are continuing to help make Kamloops an even more diversified economy. Domtar and their announcement of new capital improvements for their boilers is also a good indicator of the long-term viability of the Kamloops and regional economy. Capital re-investment provides not only much needed dollars into the economy, but – perhaps more importantly – provides reassurance to the many employees and suppliers of Domtar.

We have been hearing for some time now about the impending labour shortage heading our way into the next three to five years. Slowing economy or not, people will still be getting older and as RRSP accounts start to recover, retirements will pick up, resulting in new job opportunities.

None of the above is meant to make light of the situation the world economy is in and are only examples of how, when most forms of business are coming off record years of growth, some contraction is inevitable. Moving forward, there are two ways to have a realistic view on the economy – a realistic and positive view or a realistic and negative view. My choice is the realistic and positive view. What view will you chose over the next year?

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