The number of home sales in St. John’s increased in November to 477.  This is up 30% from November 2010.  There was a fair amount of activity this month compared to the previous months.   Listings were up only 2% and expired listings dropped back to 10%, but it was the 30% gain in sales for November made a huge difference to our market place.  It’s good to see expired listings  slowly dropping to normal levels.   With lots of buyers in the market place we should see a fairly active beginning to 2012 in St. John’s.

RE/MAX released their Canadian Housing Market Estimates for 2012 and prices for a house in St. John’s and surrounding area is estimated to increase by 5% in 2012.

Don’t forget to contact us for a free market evaluation on your home.

Total # of MLS Listings [November] = 754 (based on residential stats)

Total # of Sales [November] = 477

Number of Active Listings in the NLAR MLS System (ALL of Newfoundland) = 3600

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

St. John’s Real Estate: Listings = 144   Sales = 114 Sales/Listings Ratio = 79%

Average sale price for a home in St. John’s: $292,747 for the month of November and the 12 month average $290,428

Mount Pearl Real Estate: Listings = 18 Sales = 23  Sales/Listings Ratio = 128%

Average Sale Price (12 month average): $260,357

Paradise Real Estate: Listings =38 Sales = 45 Sales/Listings Ratio =118%

Average Sale Price (12 month average): 325,088

East Extern Real Estate: Listings = 33 Sales = 20  Sales/Listings Ratio = 61%

Average Sale Price (12 month average): $313,363

Conception Bay South Real Estate: Listings = 37   Sales = 32  Sales/Listings Ratio = 65%

Average Sale Price (12 month average): $273,702

Driven by the threat of higher interest rates down the road, first-time buyers are contributing to strong upward momentum in residential housing markets across the country, according to a report released by RE/MAX.

The RE/MAX First-Time Buyers Report, highlighting trends and  developments in nineteen major Canadian centres, found that low interest rates and balanced market conditions have provided significant impetus in 2011, particularly at lower price points.  Just over 30 per cent of markets are reporting sales in excess of 2010 levels as a result, while almost 70 per cent have experienced an upswing in average price.  Leading the country in terms of percentage increases in the number of homes sold are Western Canadian markets, including Saskatoon (up close to 15 per cent), Greater Vancouver (up close to 12 per cent), and Winnipeg (up just over 11 per cent).  With an average price hike of close to 20 per cent year-to-date (February), Greater Vancouver continues to show unprecedented strength, followed by Hamilton-Burlington (eight per cent), Quebec City (seven per cent), Winnipeg (close to seven per cent), Greater Toronto (five per cent), and Greater Montreal (five per cent).

Despite homeownership rates approaching 70 per cent, there is clearly room for growth as entry-level buyers make their moves from coast-to-coast, undeterred by higher housing values and changes to lending criteria.  Many purchasers intent on realizing homeownership are scaling back on expectations or are willing to sacrifice location, quality and/or size to make their dream a reality – not unlike generations before them.

Inventory levels, while tight in several larger centres, are more balanced overall, giving first-time buyers a good selection of housing product from which to choose.  Not surprisingly, condominium apartments and town homes have become the first step for many entry-level purchasers, especially in Greater Vancouver, Victoria, Kelowna, Edmonton, Calgary, London-St. Thomas, Hamilton-Burlington, Greater Toronto, the Island of Montreal, and Halifax-Dartmouth where average prices have risen unabated in recent years.

With the Canadian economy on firmer footing overall, residential real estate is well-positioned moving into the traditionally busy spring market.  Consumer confidence is climbing in conjunction with economic performance, and concerns over a secondary recession fade with each passing day.  The mood is cautiously optimistic, as first-time buyers enter the market.

Changes to recent financing criteria have not created the anticipated run up in activity in most markets.  From a financial standpoint, most rookie home buyers remain quite prudent.  Those making the leap are not doing it lightly, buying within their means.  While this most recent round of policy tightening will likely have a negligible effect on demand, the message is getting across.

Affordability remains a growing concern in most markets, and—aside from first-time purchasers—no one is more in tune with that than housing planners and developers.  In fact, the growing demand for reasonably-priced product is creating a shift in the country’s housing mix.  That trend is expected to gain traction in coming years, as builders look to create greater options for those seeking to realize homeownership.    In recent years, builders have helped ease the move to homeownership by concentrating on intensification—condominium buildings with smaller suites and small-lot subdivisions offering detached, compact homes at a fraction of the cost of a traditional single-family home.   On the flip side, the affordability factor is also breathing new life into tired older neighbourhoods, and that, in turn, is contributing to rising values.

As prices escalate, first-time buyers are indeed spending more—some out of necessity, but others are simply in a position to do so.  Unlike in years past—a greater percentage of today’s first-time buyer pool is comprised of dual-income, college or university-educated couples with solid earnings.  They’re spending close to average price or slightly more to secure—in most cases—a better location or a home that will grow with them.   Yet, the fact remains that those on a tighter budget can get in for considerably less, with reasonable choices in every major market across the country.   While some may feel discouraged by eroding affordability levels, the underlying confidence in the concept of homeownership is rising.

While market conditions are one thing that influences first-time buyers, few things trump the fundamental belief in homeownership.  Today’s entry-level buyers are steadfast in their mindset.  They know they have to live somewhere, but they simply don’t want to pay someone else’s mortgage.  Savvy or practical, they remain a driving force.  The bottom line is that the demand for entry-level product will remain steady.  The role of starter homes in the marketplace is becoming ever more vital.

Full RE/MAX Media Release can be viewed here.

CMHC’s Housing Now publications was just released for Newfoundland and Labrador outlining January’s housing starts for the St. John’s real estate market.  Below is the outline of the press release.  For the full PDF file click here.

ST. JOHN’S, February 8, 2011 – Housing starts in the St. John’s region were flat during the month of January, according to preliminary released today by Canada Mortgage and Housing Corporation (CMHC).  January’s housing starts totaled 105 units throughout the St. John’s area compared to 104 units in January of 2010.  There were four additional starts  recorded outside the St. John’s area, for a total of 109 provincial urban housing starts compared to 113 last January.

“An 18 per cent increase in single-detached housing construction was offset by lower multiple unit starts activity  during January,” said Chris Janes, senior market analyst with CMHC in Newfoundland and Labrador. “While starts activity is expected to come off record highs, continued growth in employment, income and population will remain supportive of the local housing market this year,” added Janes.

In urban centres across Canada, total housing starts recorded in January were down six per cent to 9,773 units compared to last year’s total of 10,438. Single-detached starts declined 28 per cent to 3,463 units, while multiple starts increased 13 per cent to 6,310 units in January. In the Atlantic region, 480 new units were started in January compared to 441 units during the same period in 2010.

Mississauga, ON (December 3, 2009) – In the midst of one of the most tumultuous economic periods in recent history, residential real estate has proven to be a safe harbour, with sales and average price expected to post gains in most major Canadian cities in 2009, according to a report released today by RE/MAX.

The RE/MAX Housing Market Outlook for 2010 examined residential real estate trends in 23 markets. The report found that sales are forecast to recover in almost all major centres by year-end 2009, led by an anticipated 45 per cent increase in Greater Vancouver. Two markets — Ottawa and Quebec City — are expected to hit historic highs in the number of homes sold. Average price should post new records in 65 per cent of markets surveyed this year. As economic performance ramps up across the country, so too will residential real estate. Eighty-three per cent of markets (19/23) are expecting sales to increase over 2009 levels while housing values are forecast to escalate in 91 per cent (21/23) of Canadian centres in 2010. The remaining markets will match 2009 levels.

Approximately 465,000 homes are expected to change hands nationally in 2009, a seven per cent increase over one year ago. Canadian housing values are forecast to close the year at $318,000, up five per cent from $303,594 in 2008. By year-end 2010, the number of homes sold is predicted to climb another two per cent to 475,000 units. The average price of a home is also expected to experience an uptick, rising two per cent to $325,000 – the highest level in Canadian history.

“2009 was without question the year of the house,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “Real estate not only defied industry and analysts’ predictions in 2009 — it’s performance went well beyond the realm of expectation by boosting consumer confidence levels and ultimately kick starting the national economic engine. While low interest rates were a principle factor driving home buying activity, no one can discount the value that Canadians place in owning a home.”

Download the complete press release

With the worst of the recession over, residential real estate markets in major Canadian centres are poised for growth in the final quarter of 2009, according to a report released today by RE/MAX.

The RE/MAX Bricks and Mortar Report found the bounce back that began in early Spring has made this recession one of the shortest on record for real estate. Low interest rates, pent-up demand, and improved affordability levels have all played a role in the recovery now well underway. Percentage increases in sales from January to August 2009 were led by Vancouver, (up a substantial 14 per cent to 23,158), Victoria (up 7.4 per cent to 5,266), Edmonton (up 6.2 per cent to 13,691), Regina (up five per cent to 2,597), Ottawa (up 2.4 per cent to 10,830) and Toronto (up 1.8 per cent to 58,421).

Housing values are already ahead of record-breaking 2008 levels in seven of the 11 markets surveyed, including Newfoundland-Labrador (18.1 per cent year to $203,584), Regina (6.4 per cent to $244,088), Halifax-Dartmouth (3.5 per cent to $239,633), Winnipeg (3.5 per cent to $207,006), Ottawa (3.3 per cent to $301,684), and Toronto (up 0.3 per cent to $385,978). Nationally, average price hovers at $312,585, up 0.5 per cent over one year ago.

“Markets are heating up across the country,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “Purchasers are clearly taking advantage of affordable prices and rock bottom interest rates. Those who missed the boat in years past have found that sitting on the sidelines can be a costly move. Prices are on the upswing and inventory levels are tightening, so the push toward home ownership is expected to continue throughout the Fall and possibly into early 2010.”

The recovery of Canada’s resale housing markets speaks to the tremendous value Canadians place on the importance of owning a home. The number of Canadians overall who own a home has increased since 1981 from 62.1 per cent to 68.4 per cent, with some markets posting even higher homeownership rates — Calgary (74.1), St. John’s (71.5), Regina (70.1), and Edmonton (69.2). Significant gains have also been made over the same period in markets such as Ottawa — where homeownership levels rose from 51.4 per cent to 66.7 per cent — and Toronto, where levels rose fro m 57.3 to 67.6 per cent.

Here is a snippet straight from Royal Bank’s March Provincial Outlook outlining where Newfoundland & Labrador stand during this harsh global economic times.

“The Newfoundland & Labrador offshore oil industry celebrated a milestone in January with the production of its one billionth barrel of oil. This was yet another reminder of the long road traveled by energy developments off the province’s coast and their tremendous contribution to the transformation of Newfoundland & Labrador into a dynamic economy. Nonetheless, the nosedive in energy prices since last summer and declining production at the province’s maturing production wells have cut any festivities short. The real cheers might have to wait until late this year or early next when the White Rose project expansion enters into operation, giving the industry — and the provincial economy — a shot in the arm. In the meantime, decreasing oil output and lower-than expected crude prices will be a substantial drag on economic activity in the  province, and the main reason for our projected decline in real GDP in 2009 (down 1.2% following estimated growth of 1.3% last year). Further contributing  to the weakness will be an expected drop in mineral production (partly the result  of market-related downtime), as well as the recent closure of the Abitibi Bowater  newsprint mill in Grand Falls.

Despite the challenges, the mood in the province remains relatively upbeat.  Huge investment projects — including the C$2-billion hydromet nickel processing  facility in Long Harbour — are still going ahead and the provincial government recently announced a significant increase  in spending on infrastructures.

According to Statistics Canada’s P&PI survey, non-residential capital expenditures in Newfoundland & Labrador are set to increase the fastest among all provinces in 2009 (up by almost 13%). Residents who had departed the province earlier are flocking back . This stimulates demand for housing and consumer goods and services. Housing markets have been very tight until recently, and prices continue to show among the strongest year-over-year increases in the country. Home building is expected to remain relatively steady this year, with housing starts forecast to move a touch above last year’s 19-year high of 3,200 units. Such relatively robust domestic activity is expected to persist next year and be the dominant factor returning the provincial economy back into positive growth once oil production is stabilized by White Rose’s expansion.”

St. John’s, Newfoundland lead the charge for residential real estate in Canada in 2008, with an anticipated 11 per cent increase in unit sales over 2007, followed by Saint John, New Brunswick and Winnipeg.  Housing values are forecast to remain stable or climb in almost all markets in 2008, with the biggest gains expected in Regina (39 per cent), Saskatoon (24 per cent), Winnipeg (22 per cent), St. John’s (21 per cent), Saint John (19.5 per cent), Sudbury (14 per cent), and Montréal (12 per cent).

Housing market performance will clearly be contingent on economic performance at a local, provincial, and national level in 2009. Issues affecting the overall economy are impacting housing markets across the country and the situation is not expected to be remedied until consumer confi dence is restored. If inventory levels remain stable, pent-up demand kicks into gear, and lower interest rates stimulate home-buying activity, we could see a bounce back as early as spring.

Mississauga, ON (December 3, 2008) – Global economic uncertainty weighed heavily on residential real estate activity in most major Canadian centres during the latter half of 2008. Although the forecast for 2009 promises more of the same, most markets are expected to weather the storm, says RE/MAX. “Housing market performance will clearly be contingent on economic performance at a local, provincial, and national level in 2009,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “Issues affecting the overall economy are impacting housing markets across the country and the situation is not expected to be remedied until consumer confidence is restored. That said, we could see a bounce back as early as spring – if inventory levels remain stable, pent-up demand kicks into gear, and lower interest rates stimulate home-buying activity.”

Click here for the RE/MAX Press Release

Newfoundland urban housing starts soared during the month of May, according to preliminary data released today by Canada Mortgage and Housing Corporation (CMHC). May’s total housing starts soared 49 per cent, with 230 posted within Newfoundland compared to 154 a year ago. A total of 224 of the 230 starts were within St. John’s metro versus 124 last May, a record increase of 81 per cent.

Year-todate, there have been 471 new homes started across the province versus last year’s total of 395 homes during the same period. A total of 456 of these starts occurred within St. John’s metro, for a year-to-date increase of 33 per cent.

“With pent-up demand for newly built homes within the local housing market, May’s notable increase in housing starts is an example of the impact that a limited supply of current listings available for sale can have on residential construction activity,” said Chris Janes, Senior Market Analyst with CMHC in Newfoundland and Labrador. “With a buoyant sellers market, the current supply of active listings is approximately 50 per cent lower than a year ago, so buyers are shifting to new homes, simply because they cannot find a suitable existing home in the resale market,” added Janes.

RBC Economic & Financial Market Outlook

Debt load rising, but so are asset values

Household balance sheets remain in fair condition with the ratio of debt-to assets remaining within the range of the past 40 years. Still, with debt service costs high relative to personal disposable income, the recent tightening in credit conditions does present some downside risks for the outlook for consumer spending this year. Mitigating this, however, is the strong growth in asset values — house prices have recorded gains of about 10% for six years running and the TSX posted a decent 7.2% return in 2007 despite a soggy fourth quarter. However, if the weakness in equities evident late last year and early this year persists, it would present a clear downside risk to household spending during the forecast period.

Stretched affordability to exert modest downward pressure on housing market

The rise in house prices has stretched affordability. RBC’s housing affordability index showed that conditions were the worst since early 1990 for homebuyers in last year’s fourth quarter.  Our view that the Bank of Canada will continue to lower interest rates, with attendant easing in credit market tightening, and that the pace of house price increase will slow this year both point to a modest improvement in affordability. There were 227,000 new homes started in Canada last year, marking the sixth year that starts were greater than 200,000 units. The erosion in affordability and uncertain global economic environment will likely result in slower housing market activity in 2008, although, with interest rates declining, the weakening is likely to be relatively modest.

Bank of Canada to cut rates to mitigate impact of trade drag

The Bank of Canada cut the policy rate by 25 basis points at each of its December and January fixed action dates, concluding that “further monetary stimulus is likely to be required in the near term” to mitigate the downside risks coming from the widening in credit spreads and the weakening U.S. economy. The Bank picked up the pace of easing in March to 50 basis points, sending the overnight rate down to 3.50% as concerns about the U.S. economy escalated. Continuing concerns about the downside risks to growth will send this policy rate down to 2.75% by mid-2008.

U.S Housing recession to continue in 2008; market to stabilize in 2009

The U.S. housing market is showing little sign of recovery. The stock of homes available for sale stands very close to record-high levels and, as a result, new residential construction continues to contract.  In February, the level of housing starts was 54% below the recent peak level and the pace of new and existing home sales was the slowest since the mid-1990s. The inventory overhang and slow sales pace point to construction activity contracting at a double-digit annualized pace for at least the first half of 2008. We estimate that the decline in residential construction spending will trim slightly under one percentage point from the 2008 growth rate. Weakening demand will continue to push prices lower, pointing to a mild deterioration in housing-related net worth in the quarter.

Why not put your rent money into an appreciating asset instead of in your landlord’s pocket?

Do you cringe every month when it’s time to write that monthly rent cheque? Like many other renters, you probably wish that your hard earned money was being put towards something that has potential payback but haven’t explored your options because you don’t think homeownership is within your reach. If you are currently renting you may be surprised to learn that there have been recent mortgage product innovations such as a minimal down payment (0%-5%) and extended amortization that can make owning your first home more than a pipe dream.

This is a great time to get into the St. John’s housing market. House prices are expected to appreciate by 12% in 2008 according to Remax. 2-apartment homes and condos are in demand but when it comes to first time buyers, many renters hesitate because they are concerned about two things. The first is that they may not have enough for a down payment. The second is that they are afraid that they may not be able to carry their monthly mortgage payments. Today, these concerns can be addressed with the minimal down payment and extended amortization options that are available to first time home buyers. Renters can now buy their first home with very little down and also not have to worry about high mortgage payments.

With minimal or zero down payment products, many financial institutions will provide you with 100% financing for the purchase price of the house. Some lenders may also let you borrow close to 100% in financing and offer you a small percentage back as cash. You are able to borrow 95% of the purchase price to put towards your down payment, closing costs, or other costs associated with purchasing a home. Do keep in mind that with minimal down payment you will most likely need to purchase insurance and also have to commit to a longer mortgage term.

Remember that if you do have money set aside for a down payment or have RRSPs you should still consider putting a larger down payment because this does lower your total mortgage amount and ultimately the amount you will pay in interest.

If on the other hand you are concerned that you will not be able to make your mortgage payments, then you should consider extended amortization products that lower your monthly payment amount. This is done by having the mortgage paid back over an extended period of time. Your monthly payments on a 35 or 40 year mortgage will be lower than the payments on a traditional 25 year mortgage.

You should note that with extended amortization products, you will be paying more interest over the long run but there are definite benefits to getting into a hot housing market early. Plus, you always have the option of decreasing your amortization period by exercising your prepayment options or by increasing monthly principal and interest payments.

A valuable resource for information on homeownership is the Canada Mortgages and Housing Corporation (CMHC) website. You will find publications such as Bringing Home Ownership Within Reach.

Given the availability of these new options and the resources to support tomorrow’s homeowners, it’s easy to see why many renters may be switching their rental payments to equity building mortgage payments within the next year.

Credit: www.newcanada.com