October 6, 2015

Not A Market For Speculation And Overpricing

The Globe and Mail reports from Canada. “Real estate buyers in Toronto appear to be treading more cautiously into the fall market – especially compared with the excessive bidding that took place in the city last spring. Chander Chaddah, a real estate agent with Sutton Group-Associates Brokerage Inc., listed two houses recently; one sold on offer night and the other didn’t. The one that didn’t sell is a three-storey semi-detached house, which has an asking price of $1,249,900, is the type of large, renovated family home that often attracts a crowd of bidders, he says. ‘The offer date came and went,’ he says, adding that several other houses in the same area remained on the market after the official deadline for bids.”

“Diana Petramala, an economist with Toronto-Dominion Bank, says some of the momentum has come out of the Bank of Canada’s interest rate cuts, which fuelled so much of the buying in the spring. ‘There’s little left in the form of a driver for housing demand,’ Ms. Petramala says.”

The Langley Advance. “The craze for housing in Langley began this summer with bidding wars for houses, and it wound down with people camping out for more than a week to catch coveted condos. Most of the people there were hoping to snag a condo for themselves, or for a family member. But others were there as paid placeholders. Calvin Adams had just moved to the Lower Mainland from Prince George when he spotted an ad on Craigslist looking for someone to sit in line for $200 a day for four days to secure a spot. ‘They don’t line up for anything up there, especially not a condo,’ said Adams.”

The Global News. “Home sales in Saskatoon were sluggish during September, according to the Saskatoon Region Association of Realtors (SRAR). Sales were off 16 per cent compared to a year ago and are down 12 per cent for the year. SRAR CEO Jason Yochim was optimistic, but he offered a word of caution. ‘This is not a market for speculation and overpricing.’”

“The drop in sales compared to listings has tilted the landscape from a balanced to a buyer’s market, making it more challenging for sellers to see offers close to their asking price. Inventory levels remain elevated, with just over 2,000 properties available. Many are new homes and condo units and Yochim expects to ’see vacant condo units hit the rental market.’”

The Calgary Herald. “Calgary MLS residential sales fell well below five-and 10-year averages through September. CREB president Corinne Lyall said while inventory levels are elevated, the number of properties on the market remains well below the highs of the previous economic downturn in 2008/09. ‘There is no question that we have seen a shift in our local housing market conditions, but it needs to be put in perspective,’ she said.”

“The average number of days it is taking to sell homes has risen from 31 last year to 40 this year. Ann-Marie Lurie, CREB’s chief economist, said a sales to new listings ratio of 50 per cent implies that for every 10 new listings five are being sold.”

The Edmonton Sun. “House sales are trending down in Edmonton but it’s not a complete horror story — more of a Goldilocks tale. Geneva Tetreault, chair of the Realtors Association of Edmonton, said those looking to downsize from larger homes, as well as growing young families in need of more space than a condo, have looked to the mid-level homes and have found a relative glut of choices.”

“‘In the boom, when we saw a lot of new construction, we saw a lot of that style of home being built and since then we’ve seen that continue. So those homes are now becoming available for resale as well,’ said Tetreault.”

“For Canadians who already own property in the U.S. Sunbelt, their accommodation expenses are fixed, but many other related expenditures are not. Steve and Liz McQuaid (they’ve asked for pseudonyms, not wanting to advertise that their Southwestern Ontario home sits empty for months each year) are reminded of this when they pay their Florida condo fees each quarter. ‘It takes more and more Canadian money to pay the U.S. fee,’ says Mr. McQuaid.”

“The United States is already seeing a decline in the number of houses sold to international buyers. According to the 2015 Profile of Home Buying Activity of International Clients report, published by the U.S. National Association of Realtors, there has been a 10-per-cent decline in homes sold between 2014 and 2015. Seventy-five per cent of Realtors reported to the NAR that the strong U.S. dollar has had an impact on their sales numbers.”

Bits Bucket for October 6, 2015

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