Image: Salvatore Vuono / FreeDigitalPhotos.net
Choosing when to sell your home can be a difficult decision, particularly when you feel that you don’t have enough information. Examining the trends in home sales can be a powerful tool to aid in this decision.
The CREA’s most recent report offers some good news for sellers: according to them, house prices are continuing to rise. In December, the CREA reports that the national residential average price was $337,410. This was a rise of 19% from a year previous. Over the entire year of 2009, this was a 5% increase from 2008. The average price of homes rose to record levels in most of Canada’s local markets. The one exception was Alberta, which is still recovering from the highs of 2007.
Vancouver and Toronto remain the most expensive places to purchase homes according to the MLS. In October 2009, the average sales price for homes in Vancouver leapt above $600,000, and in Toronto, it rose above $400,000. Montreal also saw growth, but it remained a relative bargain. Homes in Montreal cost an average of approximately $280,000 in October 2009 – essentially equal to the average home price in Hamilton.
The reason for these rising prices is the continuing historically low interest rates, which are encouraging buyers to jump into the market. Also driving prices up is a dwindling inventory of units. New listings across Canada broke records in December 2009, rising 4.8% from the year previous. However, this has not yet begun to counteract the lack of new listings in late 2008 and early 2009.
Even more importantly, demand is outpacing the new supply. In December 2009, there were over 150,000 homes for sale, according to the MLS – a drop of 22% from the year previous. And nationally, there were (seasonally adjusted) 4.1 months of homes in the same month. This is a record low since the end of the last strong period in 2007. Developers have noticed this drop, and are responding: Statistics Canada reports that in December 2009, there was a strong increase in new home starts.
It will take some time for these new starts to begin re-stocking the depleted inventory, but when they do, they could have a profound effect on pricing. Therefore, if you are thinking of selling, consider doing it before this new housing stock arrives on the market, potentially depressing the price you could get for your home.
Heleen Jacobsen
Broker of Record with InfoMarket Group GMAC Real Estate
www.infomarketgroup.com
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