MLS® Residential Sales Up in Third Quarter

• MLS® sales increased 12.8% to 1,493 compared to 2010’s third quarter sales of 1,323
• July, August and September MLS® sales were 499, 551 and 443, respectively
• Third quarter average MLS® residential house price climbed 6.5% to $253,755 compared to $238,285 during the third quarter of 2010

Buyers’ Market Conditions

• There were a 2,658 new residential listings during the third quarter compared to 2,356 during the same period last year, an increase of 13%
• Active listings or inventory averaged 2,750 a month from July to September versus 2,442 a month during Q3 of 2010
• The sales-to-active listings ratio indicated that 18% of listings sold in July, 20% in August and 17% in September, and averaged 18% during the quarter, unchanged from the third quarter of 2010

Active Listings Increase

• Active residential listings or inventory increased approximately 13% during the quarter
• Active listings for July, August and September were 2,816, 2,807 and 2,628, respectively
• With inventory increasing on par with sales, housing market conditions favoured buyers during the whole third quarter

The Canadian Real Estate Association (CREA) has revised its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations for 2011 and 2012.

Overall, sales activity and prices remained stronger than expected in the second quarter. Sales momentum was also better than expected heading into the third quarter. As a result, the 2011 national forecasts for sales activity and average price have been raised slightly.
Here are some of the key points from the news release

• National sales activity is forecast to reach 450,800 units in 2011, up less than one per cent from levels in 2010.
• British Columbia’s 2011 sales forecast revised slightly higher, (home sales there appear to have bottomed out sooner than expected)
•  Stronger than expected activity in Ontario offset slightly softer than anticipated demand in Quebec, Manitoba, and Newfoundland in the second quarter of 2011.
• Ontario sales forecast for 2011 has been raised, while the outlook for activity in Quebec, Manitoba, and Newfoundland has been revised lower.
• National sales activity in 2012 is forecast to ease seven tenths of a percentage point to 447,700 units
• The national average home price is forecast to rise 7.2 per cent in 2011 to $363,500.

Demand for housing in St. John’s remains healthy, particularly among first time buyers, despite a decline in year-to-date sales.  Buyer’s market conditions and the best choice of product in years have buoyed the entry-level segment, along with wage gains, economic growth and rising consumer confidence levels. Affordability continues to be  favourable, with increased earnings offsetting the more moderate price growth of late.  Most young home buyers are now active from $200,000 to $250,000.  Those buying new construction will have to ante up more—typically between $230,000 and $280,000 to start—as the  price of new construction has risen at a greater rate.  Those on a tight budget will find that homes listed below $200,000 are few and far between and tend to sell for close to full price, if listed at fair market value.  Some even generate a rare multiple offer.

To illustrate the supply issue, only 34 homes have sold year-to-date under $175,000, accounting for just 10 per cent of all sales, and only 39 listings under that price point are currently available. Given that, buyers at the lowest end of the price spectrum will have to act more quickly.  The housing mix in St. John’s continues to favour the single detached home, particularly in the first-time buyer segment.

Of the 34 homes sold under $175,000, only three were condominiums. Entry-level condominium product remains limited in St. John’s, as builders continue to focus on the mid-range—units priced between $250,000 and $350,000. While condominiums are gaining traction with younger buyers, they remain only a small portion of entry-level sales. Condominiums now start from $165,000 to $175,000 for an  older, 650 to 750 sq. ft. walk-up unit on Thorburn Rd., Dalton Ave., and in Pleasantville.

With the current oversupply of homes listed for sale in St. John’s, buyers remain in the driver’s seat. That, along with historically low interest rates, continues to serve as a significant  impetus.

Detached homes can be found from $169,000 for an older bungalow requiring work, located on the peripherals. Older homes are most popular. Most sought-after are properties priced between $210,000 and $250,000 in established neighbourhoods such as Cowan Heights, Mount Pearl and Paradise. Most buyers are realizing their choice location, with little need to compromise.  Those that must choose are opting to spend a little more, if necessary.

Solid demand among first-time purchasers is expected to carry over in to the spring market, with new financing criteria expected to have little impact. In fact, look to sales in the entry-level segment to prompt greater activity in the move-up range in the months ahead. February year-to-date sales were 11 per cent off year-ago levels, with 359 sales recorded, while average price continued its ascent at $255,512, up just over five per cent.

Full RE/MAX Media Release for the First Time Buyers Report 2011

CMHC just released their First Quarter 2011 edition of  Housing Now – Major Centres – St. John’s.  You can view the entire PDF release here http://www.cmhc-schl.gc.ca/odpub/esub/64199/64199_2011_Q01.pdf

Here are some of the highlights:

- High prices and an increasing inventory of unsold new and existing homes saw  housing market activity continue to slow during the fourth quarter of 2010

- During the October to December period, both new home construction and resale market activity registered declines.

- Average prices,  however, advanced compared to 2009, but remained relatively unchanged on a  month-over-month basis

- Residential construction activity declined moderately

- Total housing starts were down approximately six per cent, with 488 starts versus 520 in 2009’s fourth quarter

- The overall average new house price for the St. John’s CMA was $326,954

- 50 per cent of all new single-detached homes sold for more than $300,000 during the quarter

- decline in sales and increased inventory, positioned the market as buyers again during the fourth quarter

- buyers had a much broader choice of homes because available inventory  increased approximately 40 per cent in the quarter, including a 56 per cent surge in December

- Listings remained on the market for an average of 65 days

- Despite higher inventory, offers came in at approximately 96 per cent of asking
price

- The average MLS® residential price in Newfoundland was $238,696 during the October to December period – an increase of 12 per cent.

With only a small rise in inventory in 2010, the growth in prices in the existing home market was higher than expected (approx 15% since 2009). For 2011, average house prices are forecast to increase across Atlantic Canada from a high of close to four per cent in Newfoundland and Labrador (NL), three per cent in Nova Scotia (NS) and close to one per cent in New Brunswick (NB). Prices in Prince Edward Island (PEI) are expected to rise less than one per cent in 2011. Existing home sales are expected to decline modestly.

Sales declines will vary across Atlantic Canada from one per cent in NS, close to four per cent in NB and NL and nearly eight per cent in PEI.

Although the economic forecast remains positive, recent concerns regarding the global outlook have tempered the possibility of stronger growth in 2011.

For Newfoundland and Labrador, energy and mining development will continue to be the main source of future growth. Several major capital projects will continue to  inject stimulus into the local economy and contribute to a positive outlook.

Growth in commodity prices has also provided a lift to mining companies in the interior of the province. Stronger income growth compared to the other three Atlantic provinces has also helped support the level of consumer spending, as well as the stronger than expected level of housing activity. The fishing industry will continue to pose a challenge for Newfoundland’s rural economies,  but population losses will moderate over the forecast period due to improving economic conditions in St. John’s.  Natural declines in offshore oil production will restrain GDP growth, although increased royalties received by the province will offset the effects of production declines on economic growth overall.

(source: CHMC)

ST. JOHN’S, Oct. 19 /CNW/ – The Royal LePage House Price Survey released today showed the largest year-over-year price gains for St. John’s real estate compared to all other major Canadian cities for the property types surveyed.

“St. John’s real estate has made incredible gains over the past few years,” said Glenn Larkin of Royal LePage Royal LePage Professionals 2000. “However, even though St. John’s has posted strong year-over-year gains, we are starting to see the real estate market stabilize from the previous quarter. So although homes are worth more, we are not selling at the same pace we were last year and multiple offers are not as common.”

The average price of detached bungalows in St. John’s increased significantly, up 14 per cent over last year to $228,025, while the average price for standard two-story homes rose 13.7 per cent to $313,775. Standard condominiums saw an average price gain of 12.3 per cent to $241,850.

“Currently the most active buyers are those looking to upgrade to the $350,000 range,” added Larkin.

Nationally, Canada’s residential real estate market saw year- over-year growth in the third quarter as fears of a double dip recession or a housing bubble faded. House price appreciation slowed to a more modest five per cent in the quarter, which is historically typical of balanced real estate markets.

“Most Canadian housing markets cooled in the third quarter. In fact, the year is unfolding much as we predicted, with the unusually active first half of 2010 giving way to slower markets in the later part of the year. Helped by very low rates in a competitive mortgage financing market, the third quarter was slightly stronger than anticipated, on new demand fuelled by improved affordability in many regions,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. Looking ahead, it is very unlikely that the period from now to year-end can keep pace with the activity levels posted in the overheated market of the final quarter of 2009.”

In the third quarter, the average price of a detached bungalow in Canada was up 4.6 percent to $324,531, compared to a year ago. Over the same period, standard two-storey homes rose 4.4 percent to $360,329 while standard condominiums rose 3.9 percent to $226,481.

“House price growth now sits just below the long term annual average of approximately five per cent, but once this is adjusted for inflation, which is very low and expected to continue to be that way for some time, appreciation is right on track. Canadian homeowners will be pleased,” said Soper.

(Source: Canada Newswire)

Urban housing starts increased during the month of June, according to preliminary data released by Canada Mortgage and Housing Corporation (CMHC). June’s housing starts totaled 232  throughout the St. John’s area versus 183 starts in June of 2009. There were  53 additional starts recorded outside the St. John’s area, for a total of  285 provincial urban starts compared to 230 last June. “The number of new homes started in June represents a significant increase compared to June 2009. Year-to-date starts are up 25 per cent within the St. John’s region,  with 822 starts recorded during the January to June period,” said Chris  Janes, senior market analyst with CMHC in Newfoundland and Labrador. “Healthy economic and demographic trends have supported new home demand during the first half of 2010,” added Janes. In urban centres across Canada, total housing starts increased 31 per cent with 15,345 recorded in June compared to 11,686 during June of 2009. Throughout Atlantic Canada, there were 1,012 urban housing starts posted versus 904 the  previous June, an increase of 12 per cent.

Complete news release can be found here

Historically low mortgage rates, combined with strong economic and demographic trends, buoyed local demand for housing in the first quarter of this year.  January to March housing starts posted record results, while existing home sales and prices both continued to advance.

Overall, the St. John’s real estate market was supported by growth in  employment,  income and population, healthy consumer spending and on-going economic momentum spurred by the local oil sector.

Residential construction activity posted record results during the January to March period, due in part to an unseasonably mild winter.  New home prices also advanced in line with  the general market trend.  First quarter housing starts activity increased 15 per cent, with 246 starts versus 214 in 2009’s first quarter.  Single-detached starts increased by 23 units  or 20 per cent, with 199 starts recorded versus 166 during the first three months of last year.

The multiple starts segment was flat, with 47 starts during the quarter compared to 48 a year ago.  The only sub-market which reported increased construction activity was the St. John’s City submarket during the January to March period (104 starts compared to 88 a year ago), with Mount Pearl posting 15 starts versus 17 during 2009’s first quarter and Paradise recording 62 versus 65 a year ago.  Conception Bay South (CBS) recorded 22 starts in the first quarter, consistent with 2009’s first quarter while starts in Torbay remained flat after this first quarter with 14. In the remainder of the CMA, starts increased from eight in the first three months of 2009 to 29 this year.

Price growth continued, with the average new house price increasing in all submarkets. In fact, the average price of a new home surpassed the $325,000 mark in St. John’s City and the $350,000 mark in Torbay. Average sales price ($354,333) and average sales growth (26.4 per cent) were highest in the Torbay submarket of the St. John’s CMA. The average new single-detached house price for the overall St. John’s CMA increased nearly 20 per cent to a record $311,638 compared to $259,990 during the first quarter of 2009. CBS  posted the lowest average new house price of $248,328 during the quarter. Paradise had the second highest rate of new house price growth in the first quarter at 25.1 per cent to  $333,388.

Throughout the St. John’s area, approximately 47 per cent of all new construction activity fell within the $300,000 plus range during the quarter.  The largest growth in market share occurred in the $400,000+ segment.  Overall, new home price growth remained brisk throughout the quarter.

SOURCE: CMHC Housing Now St. John’s CMA

Canada Mortgage and Housing have released the First Quarter 2010 MLS Trends – Newfoundland and Labrador issue.  Below are the key points in the release.

Record MLS® Residential Sales during First Quarter

• „„MLS® sales increased 25.8% to a record 784 compared to 2009’s first quarter sales of 623 „„January, February and March MLS® sales were 240, 234 and 310, respectively.
• „„First quarter average MLS® residential house price climbed nearly 18% to $230,376 compared to $195,517 during the first quarter of 2009.

Market Conditions Fluctuated

• „„There were approximately 1,850 new residential listings during the first quarter compared to 1,500 during the same period in 2009 „„Active listings or inventory averaged 1,500 from January to March and around the same during Q1 of 2009.
• The sales-to-active listings ratio dipped into buyers territory, but hit 18.9% in March and averaged 17.3% during the quarter versus 13.8% in the first quarter of 2009

Active Listings Remain Low

• „„Despite the surge in new listings, record first quarter sales caused active residential listings to remain relatively low
• „„Active listings for January, February and March were 1,369, 1,503 and 1,644, respectively
• „„Although inventory was similar to 2009’s first quarter level, the 25.8% increase in sales resulted in balanced market conditions during most of the quarter

Buyers are taking advantage of favourable real estate market conditions around St. John’s and areas….sellers too are reaping the rewards. Multiple offers are a factor in our marketplace once again, with well-priced listings—especially around the $200k to $260k  price range. Properties priced at market value will likely sell quickly for top dollar. The overall pressure on sales and price is significant across the board – and it’s not likely to subside unless more inventory comes on-stream.  The Bank of Canada released today that it will keep it’s interest rate “as is” but hinted at the fact it will most likely increase in June/July due to Canada’s higher then expect latest GDP numbers.

Total # of new MLS Listings [Feb] =567 (based on residential stats)

Total # of Sales [Feb] = 259

Number of Active Listings in the NLAR MLS System (ALL of Newfoundland) = 2650 (residential only)

Here is a break down by area for the month of February

St. John’s Real Estate: Listings = 117   Sales = 66 Sales/Listings Ratio = 56%

Average Sale Price is St. John’s: $270,742 for the month of February and the 12 month average $240,470

Mount Pearl Real Estate: Listings = 13 Sales = 7  Sales/Listings Ratio = 54%

Average Sale Price (12 month average): $218,063

Paradise Real Estate: Listings =64 Sales = 18 Sales/Listings Ratio =28%

Average Sale Price (12 month average): $268,980

East Extern Real Estate: Listings = 37 Sales = 14  Sales/Listings Ratio = 38%

Average Sale Price (12 month average): $259,371

Conception Bay South Real Estate: Listings = 48   Sales = 19  Sales/Listings Ratio = 40%

Average Sale Price (12 month average): $225,728

Lack of inventory will be the greatest challenge facing housing markets across the country this Spring, according to a report released by RE/MAX.

The RE/MAX Market Trends Report 2010, which examined real estate trends and developments in 16 markets across the country, found that unusually strong activity during one of the traditionally quietest months of the year has led to a sharp decline in active listings in 81 per cent of markets surveyed. The threat of higher interest rates, tighter lending criteria, and in British Columbia and Ontario, the introduction of the new Harmonized Sales Tax (HST) have clearly served to kick-start real estate activity from coast-to-coast, prompting an unprecedented influx of purchasers. As a result, 87.5 per cent of markets posted an increase in sales in January. Average price appreciated in 81 per cent of markets surveyed.

There have never been so many motivating factors in play at once. We’re in for a heated Spring market that will, in all probability, spill over into the summer months, as the window of opportunity draws to a close. The supply of homes listed for sale has been drastically reduced, housing values are once again on the upswing, and banks and governments are moving in unison toward stricter lending policies.

Markets experiencing the tightest inventory levels include Toronto (- 41 per cent); Kitchener-Waterloo (-33 per cent); Ottawa (- 30 per cent); Victoria (- 30 per cent); Greater Vancouver (- 27 per cent); Halifax-Dartmouth (- 19 per cent); London-St. Thomas (- 18 per cent); Regina (- 16 per cent); and Winnipeg (- 13 per cent). Conditions were still balanced, but starting to tighten in Calgary, Edmonton and Saskatoon, particularly in the single-family detached category.

The highest year-over-year sales gains were reported in Greater Vancouver (152 per cent), Kelowna (121 per cent), Greater Toronto (87 per cent), Victoria (69 per cent), Hamilton-Burlington (58 per cent), London-St. Thomas (55 per cent) and Calgary (47 per cent). Western Canadian cities dominated the list of centres with the highest increases in price appreciation. These included Victoria at 25.5 per cent, Kelowna at 22 per cent, Greater Vancouver at 19.5 per cent, and Winnipeg at 17 per cent. St. John’s (23 per cent) and Toronto (19 per cent) were also among the frontrunners for price growth.

Affordability is the catalyst for the vast majority of purchasers in today’s housing market. While homeownership is still within reach in many major centres, levels are slipping. There is a growing sense, on both sides of the fence, that the time to act is now.

While buyers are taking advantage of favourable conditions, sellers too are reaping the rewards. Competing bids are a factor in the marketplace once again, with well-priced listings—especially at the entry-level price point—experiencing multiple offers. Properties priced at fair-market value will likely sell quickly for top dollar. The overall pressure on sales and price is significant across the board – and it’s not likely to subside unless more inventory comes on-stream.