CMHC’s 2009 Second Quarter Forecast

Canada Mortgage and Housing Corporation published the following forecast for the upcoming months:

Growth in house prices will slow as the housing market turns more balanced.

Existing home sales activity will decrease to 357,800 units this year, but will rebound to 386,100 in 2010 as economic activity becomes more positive across Canada.

The Canadian resale market was back into buyers’ market territory by the end of 2008. At present, markets in Canada can be characterized as balanced. For 2009, prices are expected to decrease by 6.8 per cent to $283,100 and remain at that average in 2010.

It was also suggested that, as economic struggle continues, multi-family housing will become more popular. Therefore, CMHC estimates that there will be a “positive growth in the construction of multiple-family units”.

Another benefit that we are experiencing due to the economic conditions is a drop in mortgage rates. The forecast from CMHC expects rates to remain stable throughout the end of 2009 before gradually increasing in 2010.

What does all this mean to prospective home buyers and sellers? While the market is balanced and mortgage rates remain low, now is the perfect time to buy or sell.

Quotes compliments of www.cmhc-schl.gc.ca. Check website for more information.

Each time a home changes hands in British Columbia, the transaction generates significant spin-offs, creates jobs and wealth and helps keep our communities growing.

When multiplied by the 24,626 homes that changed hands in the Real Estate Board of Greater Vancouver (REBGV) area in 2008, total spin-offs amount to $1.48 billion and 10,343 jobs.

What accounts for this difference?

Board realtors recorded 4,259 sales through the Multiple Listing Service in June, a 76-per-cent increase from the same month a year ago.

The inventory of unsold homes in the board's area declined 27 per cent to 13,252, compared with the same month a year ago.

“Many people who were reluctant to purchase a home last fall and earlier this year are returning to the market because they see conditions that appeal to their personal and financial needs,” board president Scott Russell said in a news release. “However, the current marketplace is such that buyers are more inclined to walk if they don’t like the terms of an offer.”

The benchmark price for a typical detached home was $701,384 in June, still down 8.4 per cent from the same month a year ago.

The benchmark price is a calculation based on the features of homes most typically sold in that category.

Fraser Valley realtors recorded their fourth busiest June on record racking up 1,982 sales during the month, a 40-per-cent increase from the same month a year ago, the Fraser Valley Real Estate Board reported Friday.

Buyers taking advantage of lower prices helps to partly explain the surge. The benchmark price of a typical detached home was $471,788, which is still down eight per cent from June 2008.

That price, however, is up 1.3 per cent from May when the benchmark was $465,939.

“We’re essentially seeing two markets right now," Paul Penner, president of the Fraser Valley Real Estate Board said in a news release.

"Sellers have the advantage when it comes to more affordable homes, but buyers hold more sway with higher-end properties.”

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