May 2010
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Commentary
Canada’s economy continues to benefit from the lack of the severe economic and financial turbulences that many other major national economies experienced over the past two years. The employment figures came in “shockingly good” with 108,700 jobs total - all in the private sector. The housing market moved in a robust but more balanced fashion.
The $1 trillion (USD) rescue loan program for Europe that was announced the second week of May has brought a sobering reminder that the world is not free and clear yet. The major economies around the world must get their debt levels under control in order for the global financial environment to stabilize in a truly sustainable manner.
While things continue to look up from a year earlier for Canada, it’s important to keep in mind that the commodity based economy leaves the country somewhat more susceptible to external forces such as global demand, currency rates, and commodity prices.
Housing Market
Home Sales
Existing home sales activity totaled 43,621 units in March, up 1.9% from last month and up 38% from last year. Sales for the first quarter of 2010 are slightly below the last quarter of 2009, likely due to the Olympics, but they remain at an historically high level.
Average Home Price
Low supply and strong demand continued to boost prices. The national average home price was $340,920 in March, up 17.6% from March 2009 and up 1.6% from February
.
Inventory
Sales-to-Listings Ratio
As new listings reached a record for the month of March, with 97,663 new homes entering the market, buyers are bound to have a wider variety of options. The uptick in new listings continues to draw the market back into balanced territory.
Mortgage Rates
Average for: 25-Year Amortization, 5-Year Term
In March, the 5-year conventional mortgage rate rose to 6.25%. With rates on the upswing indicating that the housing market is poised to slow to a more normal pace, the projected gradual softening of the market will add to a more sustainable long-term affordability level for many Canadians.
Sources: Conference Board, The Canadian Real Estate Association, Royal Bank of Canada, Canadian Mortgage and Housing Corporation, Bank of Canada
Notable News
Global Economic Events and Canada
Recent events in Europe and Greece have brought to light the global economic environment which, while on firmer footing from a year and a half ago at the height of the crisis, is still not fully out of the woods.
The European debt crisis began when Greece’s debt burden became too much for the country to handle and it sought assistance to prevent default. Fears that it could spread to other European countries including Spain and Portugal spurred action. The International Monetary Fund (IMF) came to the rescue with assistance for Greece and other European countries in need.
Canada’s economy is more susceptible to changes in the global economic conditions since it is based on commodities and exports. The events have caused the largest drop in the Canadian dollar since the fall of Lehman Brothers in the spring of 2008. Markets responded with resounding approval of the IMF’s measures, as seen by a significant upswing in stock markets around the world the day following the announcement and a 2% rebound in the Canadian dollar.
Sources: Financial Post, BusinessWeek
Timely Topics
Summer Maintenance Tips
Summer is almost here! Below are some summer home-maintenance tips to help protect your investment.
- Caulk exterior joints around windows and doors to help lower cooling bills.
- Clean lint from the entire clothes dryer vent system, from the dryer to the exterior vent cap. Lint is flammable and poses a fire risk.
- Repair cracks in concrete patios and driveways. For cracks less than 1/4" wide, apply concrete caulk. For larger cracks, use concrete to patch them.
- Wash the exterior of your house using ordinary garden-hose pressure and a mild detergent.
- Clean and seal your porch or deck.
Contact me,
your local real estate expert, for information about what's going on in our area.
Contents
1. Commentary
2. Housing Market
3. Notable News
4. Timely Topics for
Homeowners and
Buyers
For a report with additional graphs, please see the This Month in Real Estate PowerPoint Report. |