Here is an outline of their report:

RESIDENTIAL MARKET
Strong demand with less supply results in higher prices

The residential market just keeps on rolling! Demand remains strong and supply remains tight for well located and appropriately priced homes. The underlining drivers for this strong demand appears to be the fear of having to pay more in the future, easy access to favourable financing and strong employment throughout the region. A substantial increase in land values over the past year spurred new home construction cost and more than offset a slight softening in the sub-trades. Anticipated higher borrowing cost in late 2010 may serve to increase demand in the first half of 2010; however, could weaken demand in the second half. Pending an unforeseen increase in listing inventory, further price increases is
anticipated.

MULTI-RESIDENTIAL/CONDOMINIUM SECTOR
Effective full occupancy

With the apartment complexes at effective full occupancy and no new inventory on the horizon, rental rates should continue to increase. Not surprisingly in light of these trends, investor interest remains strong. A number of older apartment buildings in the university area have been purchased, renovated and converted to condominium units. Market activity also remains strong in the small scale 2-6 unit projects as entry level investors compete for limited supply.
Prices/demand continues to strengthen in condominiums at all price points. Escalating construction costs and an aging population will stimulate condo demand and values in the coming year.

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

On the real estate front, the Newfoundland Government released their take on Newfoundland housing market conditions. While most of their data is from CREA and previously discussed earlier on this blog, I thought it important to “cut and paste” the PDF of the real estate section from the Economic Research and Analysis website as it recapped and touched on a number of important areas and facts.

Housing market conditions were robust in 2008. Housing starts increased to a level not seen since the early 1990s. Residential sales activity and prices reached record levels. Other capacity indicators like rental vacancy rates are at, or remain near, historical lows. Increased housing demand stemmed from strong economic performance, low interest rates, optimism about future major projects, and household formation.

Housing Starts

During 2008, housing starts totalled 3,261 units, up 23.1% compared to 2007. This was in contrast to activity in the Maritimes and Canada, where starts declined by 7.9% and 7.6%, respectively. While urban areas account for approximately two thirds of housing starts in the province, both urban and rural areas recorded significant gains in 2008. Urban housing starts were up 22.1% to 2,229 units and rural starts were up 25.2% to 1,032 units. Total housing starts are expected to fall to 2,648 units in 2009 as the global recession and slumping housing market in the rest of Canada weakens local consumer confidence. Since 1989, housing starts have averaged 2,333 units per year. Therefore, even with the decline expected this year, housing starts will be at relatively high levels for the local industry.

Residential Sales and Prices

Residential sales activity and prices increased to record levels last year. The number of residential properties sold in the province through the Canadian Real Estate Association’s Multiple Listing Service® (MLS®) during 2008 was 4,695, an increase of 5.0% from 4,471 in 2007.  This performance was in contrast to the national residential market. MLS® sales decreased by 17.1% in Canada and 8.9% in the Maritime provinces during 2008. According to CREA, the number of MLS® sales in the province is expected to decline by 14.8% in 2009 to 4,000.
Strong demand for housing, especially during the summer months, created a buying frenzy in 2008. The average number of active MLS® listings in the province (a measure of housing availability/supply) declined by 38.3% to 1,495 from 2,423 in 2007. Homes were being purchased as soon as they hit the market and sellers were receiving multiple offers — sometimes well above the asking price. As a result of increased demand, housing prices increased. During 2008, the average MLS® residential price was $178,477, an increase of 19.6% compared to 2007. The fourth quarter average MLS® residential price surged 27.2% over the fourth quarter in 2007, representing the only growth market in Canada.
Increased housing demand in recent years is the result of employment and income growth; household formation; low mortgage rates; and a positive business environment, facilitated in part by continued optimism surrounding a number of future major projects. In addition to these factors, industry indicated that demand for residential units was also being fuelled by expatriates living in other provinces and from residents who commute to other provinces for work purchasing property for personal use and/or investment purposes.

Rental Market
Rental vacancy rates are at or near historical lows throughout Newfoundland and Labrador. Vacancy rates in urban areas have decreased from a high of 15.4% in 1997 to just 1.1% in 2008. During 2008, vacancy rates were lowest in the St. John’s CMA (0.8%) and Corner Brook CA (0.9%), followed by Grand Falls-Windsor CA (1.9%), Gander (2.6%), and Bay Roberts CA (4.0%). Although vacancy rates are low, rental prices remain the lowest in Atlantic Canada. In 2008, the average rent for a 2-bedroom apartment in Newfoundland and Labrador was $596 compared to $635 in New Brunswick, $660 in Prince Edward Island, and $795 in Nova Scotia. It is expected that improved labour markets, positive netmigration, higher housing prices, and a lack of new rental construction will keep vacancy rates low and place upward pressure on rental prices.

National MLS® home sales activity is expected to decline in 2009 before rebounding in 2010, according to a new residential housing forecast prepared by The Canadian Real Estate Association.

National MLS® home sales activity declined 17.1 per cent in 2008, and MLS® sales activity is forecast to fall an additional 16.9 per cent to 360,900 units in 2009. This would be the lowest level for national sales activity since the year 2000.  Sales activity is expected to decline from levels set in 2008 in every province, led by declines in British Columbia, Alberta and Ontario.

National MLS® home sales activity is forecast to rebound by 9.9 per cent to 396,600 units in 2010, marked by an acceleration in activity in the second half of that year. The rebound in activity in 2010 is forecast to be biggest in British Columbia and Alberta.

New listings on the MLS® systems of real estate Boards in Canada have been trending steadily lower since peaking in the second quarter of 2008, and that trend is forecast to continue. It is that combination of rebounding sales activity and fewer new listings that will stabilize the MLS® resale housing market in 2010.

“We are caught in a cycle where consumer confidence has been eroded because of job losses, and consumer confidence is an essential ingredient for housing sales activity,” says the President of The Canadian Real Estate Association, Calvin Lindberg of Vancouver. “And housing activity helps creates jobs.”

“The essential selling ingredients in today’s market are realistic pricing, marketing, and preparation. There are potential buyers making inquiries, but the barrage of economic news makes them much more cautious than before.”

The MLS® sales forecast developed by CREA Chief Economist Gregory Klump shows that fewer transactions in some of Canada’s more expensive housing markets, combined with reduced asking prices, will continue to put downward pressure on average MLS® sale prices.

The national MLS® average home price is forecast to decline eight per cent in 2009, with prices down most in Western provinces and Ontario. By contrast, the average home price in Newfoundland & Labrador is forecast to rise 4.8 percent in 2009. Prices are forecast to stabilize in 2010, with annual price increases of one per cent or less in five provinces.

The price trend is similar but less dramatic for the weighted national MLS® average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. The weighted national MLS® average price is forecast to decline 6.4 per cent in 2009, and hold steady in 2010.

“Increasingly cautious homebuyers and mortgage lenders means that active listings will take longer to sell in 2009 compared to previous years,” said CREA Chief Economist Gregory Klump.

“The national housing market is recalibrating due to weak sales activity,” said Klump. “Supply will take time to adjust to lower demand, but sellers unwilling to accept offers below their expectations will remove their home from the market,” he added. “Fewer active listings reduces buyer choice, and in time puts a floor under prices,” CREA’s Chief Economist added.

Click here for the full PDF version of this news release.
(CREA 09/02/09)

December is typically a slower month for real estate and the stats for this month show it.  Christmas, and the preparation for Christmas takes up most of the month.  For the most part, the buying and selling of homes is left to those that have no choice but to keep the house hunting active.

This month, Newfoundland’s Real Estate MLS housing price break down is showing a whopping 18% decrease in sales while listings this month show an increase of 16%.  Year to date, listings are up slightly by 3% and sales up 7% compared to this time last year.

Total # of New MLS Listings [Dec] = 357

Total # of Sales [Dec] = 312

Number of Active Listings in the NLAR MLS System = 2065

The average price of a home in the St. John’s Real Estate market is now $195,970  2008.  Compared to $173,844 YTD for 2007.  Note this is for ALL Newfoundland (nlar.ca)

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

St. John’s Real Estate: Listings = 73  Sales = 5 Sales/Listings Ratio = 7%

Average Sale Price: $202,896

Mount Pearl Real Estate: Listings = 11 Sales = 0% Sales/Listings Ratio = 0%

Average Sale Price: no sales for this month so $190,662 is YTD

Paradise Real Estate: Listings =29 Sales = 2 Sales/Listings Ratio =7%

Average Sale Price: $273,850

East Extern Real Estate: Listings = 14 Sales = 3   Sales/Listings Ratio = 21%

Average Sale Price: $225,674

Conception Bay Real Estate: Listings = 15   Sales = 1  Sales/Listings Ratio = 7%

Average Sale Price: $201,814

The yard to date sales/listings ratio is 54%

As in most years, it’s difficult to predict.  Last year CMHC predicted 6% and RE/MAX stated at least 12%.  I remember saying after the first quarter we’ll see much higher then 12%.  The final tally for 2008 is not yet in but should be close to 23% in my opinion.

Now….where do I see the St. John’s real estate market for 2009.  Currently my mind is set at a 5% increase from 2008.

How can I say this with the US housing market expecting to drop even more, Canadian markets are predicted to lower in some areas, and the UK, no real direct relation, but the world housing market seems to be taking a hit right now.  It all boils down to consumer confidence, the provincial economy and a balanced market.  All three we are seeing in Newfoundland currently.

There are still a lot of sale pendings left over from 2008 that will help keep the numbers up for unit sales in 2009, but there is clear evidence that it’s no longer a seller’s market.  With mortgage rates still at VERY low levels, as well as increased inventory in new construction and pre-existing homes, this will leave more choices for buyers.

Personally I do not see the market going into the negative numbers, but I do see houses sitting longer on the market and “price reduced” signs being more familiar then “sold signs”.

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.

Click here for the RE/MAX Press Release

One point to note:  I’ve notice a big decrease in the properties sold in the $100,000 to $200,000 range and a large increase in properties sold over the $200,000 mark.  Particularly the $260,000 to $349,900 range.

Total # of New MLS Listings [Aug] = 758

Total # of Sales [Aug] = 595

Number of Active Listings in the NLAR MLS System = 2675

Our Real Estate system is not showing the stats for my normal monthly Newfoundland MLS housing price break down by real estate area.

What I can report is for all of Newfoundland, the average sales price is $170,482 year to date for 2008.  Compared to $147,201 for 2007.  Remember this is for ALL Newfoundland (nlar.ca)  Prices are closer to the $200,000 average in St. John’s, Mount Pearl and surrounding areas.

Asking $199,900

Well maintained registered 2-apt home in Mount Pearl off Ruth Ave. Large landscaped lot backing on greenbelt. Large 2 car detached garage with rear yard access. New vinyl windows, new electrical.  Basement apartment has 2 bedrooms and is currently rented.  Great investment property. Call Fraser or Stephen Winters for more information or a private viewing.

The breakdown in ownership is Chevron Corp. which owns 28 per cent, Exxon Mobil Corp. the largest shareholder with 37.5 per cent, Petro-Canada and Norway’s state-owned StatoilHydro ASA own the rest. The province of Newfoundland will receive a 4.9 per cent equity stake in the project.

So far this year St. John’s Real Estate has jumped about 20% with a projected 15% increase in 2009. In the beginning of the year CHMC went on record saying 7 – 8% increase in housing prices while Remax was deemed highly optimistic with their 12% projection for 2008.

With this impending news release, how will the real estate market react? When will the oil companies start moving people into the St. John’s and start buying up properties? Is too much of a good thing too fast good for Newfoundland Real Estate?