I read this article and couldn't help commenting on it's absurdity...
Canada resale home prices fall in April: survey
TORONTO (Reuters) - Repeat sale prices for Canadian homes fell for a fifth straight month in April, dropping 6.7% from the same month a year earlier, a report on Wednesday showed.
The Teranet-National Bank National Composite House Price Index, which measures the rate of change of prices for single-family homes in six metropolitan areas, also showed prices were down 8.9% nationally from the peak hit in August last year.
"On the whole, the report offers a sobering assessment on the state of the Canadian housing market as it suggests that the correction in home prices has continues unabated, and is in fact accelerating," sad Millan Mulrain, economics strategist at TD Securities, in a note.
Mulraine points out, however, that the Teranet-National data is at odds with some other statistics such as the Canadian Real Estate Association's latest figures.
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I shouldn't get upset with media reporting since the experts change their story on a weekly basis and are, in fact, commenting on what is already past. It's non-news yet some of the statements are astounding.
Mr. Mulraine actually stated that the "truth" lies somewhere in the middle of what this Teranet report and the Canadian Real Estate Association reports say however, that fact was nowhere to be found in the Rueters snippet.
Here's some street meat:
Since the beginning of the year my real estate sales team has been involved in 11 multiple offer situations with buyers competing to buy well priced homes at extremely low interest rates.
May statistics, produced from actual sales in the communities I am quoting show that Brooklin, Ontario for instance, posted a 5% increase in average resale price between the period May 2008 and May 2009. Sales in number of units sold increased a whopping 54.5% in that same period. The number of Sales to New Listings Was An Unheard of 77.27% in May vs. 18.52% in December. Doom and gloom??
In Oshawa, one of the hardest hit manufacturing cities in Canada, this same period between May 08 and May 09 produced an increase in resale price of 1.7%. The Average resale price was up 10% from November of 2008.
Just last week The Toronto Real Estate Board reported a 19% increase in the resale homes in the first two weeks of June in the GTA (number of units sold) over the same period last year.
So how, then, does the above report substantiate their statement that the correction in housing prices in Canada continues "unabated" and in fact, is accelerating?
This type of reporting and statistical analysis by people who fail to do their homework properly is completely irresponsible. The economist (that's the first red flag) is reporting a conclusion from a single report that, at best, admits it's at odds with established industry standards. So why report it?
I have no argument with the bleeding obvious: yes, home prices have softened (a good thing), the manufacturing sector has been hard hit and on and on. We know all the stories by now.
At the same time, while unemployment remains high, the number of people working is still well above 90%, interest rates are at all time lows, the first time buyers market and move up buyers markets are so good that it's now getting tough to find inventory in some communities (just ask some of my clients who continue to wait for the right home to come onto the market), housing affordability is the best it's been in a decade and there is growing consensus the worst is over.
I do not see housing price corrections continuing unabated at an accelerating pace. In fact, I was urging buyers to buy back in January through March. That was the best time period to negotiate price. That part is over.
Yes, homes need to be priced well at that means 5% to 6% off last years price, but when those homes are priced right and show well there is often competition for them.
That's the reality from where I sit...but I'm not an economist.