Earlier this month, the Canadian Real Estate Association (CREA) lowered its resale housing forecast for 2010 by a modest 4.9%. The decline is expected to reach 9% in 2011.
The revised forecast, which is based on the Multiple Listing Service’s (MLS) home sales activity, is due to less-than-stellar national economic growth. Factors such as slow job creation, shaky consumer confidence, and slowly rising interest rates are also playing a role.
However, the overall picture – especially in places like Alberta, which has a relatively strong and growing economy – is not grim. Really, the decline is a realistic correction in the marketplace, which saw massive, record-level activity in 2009 and into 2010. It’s still a “friendly” housing market according to the CREA.
“Interest rates are expected to resume their return to more normal levels next year, but will still be at levels that are friendly to the housing market,” commented CREA’s President Georges Pahud, “For the tenth year in a row, more than 400,000 homes are expected to change hands over the MLS Systems of Canadian real estate Boards and Associations next year.”
And while expectations of rising interest rates might seem like terrible news for would-be home buyers, the CREA suggests the opposite is the case:
“Housing demand and supply is stabilizing,” noted CREA Chief Economist Gregory Klump. “That’s good news for home buyers, who will feel less hurried to make an offer than they did when transitory factors ignited housing demand in early 2010.”
And the good news doesn’t stop there. Klump also feels that the stabilizing housing market is beneficial for sellers, who “will feel more confident about price stability now that the housing market has become balanced.”
Ideal Time for Buyers AND Sellers
All of this means that, right now, we have a rather unique “best of both worlds” scenario for both buyers and sellers. Buyers can choose from a healthy volume of inventory (i.e. houses available), and continue to access historically low – but slightly rising – interest rates. And sellers can confidently put their house on the market without worrying that they’ll potentially lose thousands, or even tens of thousands of dollars, based on whether they list their house this month or next month. That kind of gambling is better left for casinos and race tracks; not the housing market!
So if you’re in the market to buy or sell a home, then call me at 780-709-0811. Together, we’ll create a customized plan that ensures that you maximize your benefits – and minimize your risks – as you take advantage of today’s unique real estate market dynamics.