Categories
Monthly Stats

September numbers are in….

The September numbers were released today, and after a cooling in August sales held in September. Up slightly from month-over-month and down slightly year-over-year. So, interest rates are continuing to spur spending, which is fine as long as the status quo remains.

On the price front, averages were up a couple ticks across the board, while SFH median held. So, we were continuing to see increasing action in the higher price ranges. In the next week or so I’m hoping to do another update on the sales mix for the price ranges.

As I mentioned earlier, we’re also starting to see YoY increases by this time last year prices started dropping, and interest rates this year have proved to be a game changer and created a sense of affordability which has led to a price rebound. Time will tell how sustainable these gains really are.

With the seasonal decline in inventory starting to hit and sales holding, absorption rate went down slightly from August to 3.54 from 3.85. Still in the buyers range, but there seems to be a lot of disparity between different sectors. Certain types of property sell very well, but others are very slow.

As always, here are the hard goods:

Sales = 1,704
Since two years ago = +635% (+662)
Since one year ago = -1.4% (-25)
Since last month = +1.9% (+31)

Active Listings = 6,032
Since two years ago = -39.2% (-3,886)
Since one year ago = -31.5% (-2,776)
Since last month = -6.4% (-413)

Single Family Homes Median= $349,900
Since peak (May ’07) = -12.5% (-$50,100)
Since one year ago = +1.3% (+$4,400)
Since six months ago = +4.8% (+$15,900)
Since last month = -0.0% (-$100)

Residential Average = $327,235
Since peak (July ’07) = -7.7% (-$27,483)
Since one year ago = +0.7% (+$2,330)
Since six months ago = +5.9% (+$18,203)
Since last month = +2.8% (+$8,914)

Single Family Homes Average = $371,947
Since peak (May ’07) = -12.7% (-$54,081)
Since one year ago = +2.7% (+$9,850)
Since six months ago = +6.4% (+$22,231)
Since last month = +1.4% (+$5,159)

Condo Average = $245,546
Since peak (July ’07) = -9.7% (-$26,362)
Since one year ago = -2.7% (-$6,687)
Since six months ago = +6.5% (+$15,077)
Since last month = +1.5% (+$3,511)

Townhome Average = $299,964
Since peak (Oct ’07) = -18.5% (-$68,000)
Since one year ago = -5.0% (-$15,726)
Since six months ago = +8.4% (+$23,188)
Since last month = +2.0% (+$5,957)

Categories
Monthly Stats

August numbers are in…

The August numbers were released this morning, and the market looks like it’s cooling after a blistering late spring/early summer on the sales front. Inventory was down slightly, but because of the large drop in sales the absorption rate has climbed back up into ‘buyers market’ territory. Average prices were also down across the spectrum.

As I mentioned, average prices were down in all categories, but the SFH median did hold from July. The SFH average dropped $5,953 from July, condos and townhomes were both down about $2,250, and the residential average dropped $6,526.

As the drop in residential average was larger then for any of it’s components, that suggests we’re seeing a shift in activity back toward condos. Not a surprising move though, as with the record low interest rates it allowed people to ‘go big’ so to speak, and there was a disproportionate amount of activity in the detached market.

In coming months it will be interesting to watch prices, as the global markets are not showing any signs of recovery, I’d expect bond yields to stay down, which in turn will keep interest rates down likely going into 2010. This could keep prices up, and we could actually see some year-over-year increases even with month-over-month softening as it was around this time last year prices fell off the table before rallying a bit this spring.

Of course that will likely all come undone once rates do start climbing, but in the mean time if you’re looking to sell you don’t need to feel rushed just yet.

After consecutive record months, August was much more in the ‘average’ range for sales. Inventory has dropped a bit, but is largely holding. Interesting the pattern inventory makes this year is something of a mole hill compared to the mountains 2007 and 2008.

Though, I suspect it would be more severe if it wasn’t for the low interest rates, which has made the speculative/shadow inventory very cheap to carry in hopes of prices returning to boom levels. A risky move IMNSHO, but it’s not my money.

And finally, here is a look at absorption rates for August over the years. Down from the last two years obviously, but much higher then we normally are historically. It’s also climbed back above 3.5 and into a ‘buyers market’ after getting as low as 2.66 in June. Such movement is quite normal for this time of year though, as sales tend to drop off more while inventory holds.

As always, here are the hard goods:

Sales = 1,673
Since two years ago = +28.8% (+374)
Since one year ago = +8.6% (+132)
Since last month = -26.5% (-604)

Active Listings = 6,445
Since two years ago = -29.8% (-2,740)
Since one year ago = -32.9% (-3,167)
Since last month = -2.2% (-147)

Single Family Homes Median= $350,000
Since peak (May ’07) = -12.5% (-$50,000)
Since one year ago = -0.7% (-$2,500)
Since six months ago = +4.5% (+$15,000)
Since last month = No Change

Residential Average = $318,321
Since peak (July ’07) = -10.3% (-$36,397)
Since one year ago = -3.3% (-$10,886)
Since six months ago = +3.0% (+$9,351)
Since last month = -2.0% (-$6,526)

Single Family Homes Average = $366,788
Since peak (May ’07) = -13.9% (-$59,240)
Since one year ago = -0.7% (-$2,402)
Since six months ago = +5.6% (+$19,479)
Since last month = -1.6% (-$5,953)

Condo Average = $242,035
Since peak (July ’07) = -11.0% (-$29,873)
Since one year ago = -3.6% (-$9,013)
Since six months ago = +6.7% (+$15,178)
Since last month = -0.9% (-$2,230)

Townhome Average = $294,007
Since peak (Oct ’07) = -20.1% (-$73,957)
Since one year ago = -6.8% (-$21,433)
Since six months ago = -4.9% (-$15,173)
Since last month = -0.8% (-$2,277)

Categories
Monthly Stats

July numbers are in…

Another big month in July sales wise, setting a record even. Amazing what record low interest rates can do even in a recession. Prices were more mixed, as we’ve seemed to have turned the corner into the summer and the traditional cooling of the market.

Obviously sales were strong for July, but were down month-over-month. That is quite typical though as usually sales peak in May or June then cool through the winter, and start amping back up… 2003 being the exception when they actually peaked in July.

Inventory dipped a bit in response to the increased activity, but remains very high by historical measures.

Prices as I mentioned were a mixed bag. SFH median was about the same, SFH average and townhomes were up a point or two, while the residential average and condos were both down a tick.

As everything but condos were up, but the residential average was down, that would suggest there were a whole lot of condos sold last month… which I think could signal the return of the speculator to the market. Which would be consistent with a couple friends of mine behaviour as they’re into the house flipping game, and the last couple months have been suddenly emboldened and dusted off their cheque books. Time will tell whether that pays off.

Obviously with sales down from June, absorption rate went up a bit. Again this is quite typical for this time of year, as sales start to drop off faster then inventory. Expect that to continue for the next few months.

So, the executive summary for July, sales were strong but are falling with typical seasonality, prices are about the same, and speculators may be returning judging from increased activity in the condo market.

As always, here are the hard goods:

Sales = 2,277
Since two years ago = +45.5% (+712)
Since one year ago = +27.6% (+493)
Since last month = -10.8% (-275)

Active Listings = 6,592
Since two years ago = -19.4% (-1,591)
Since one year ago = -37.2% (-3,909)
Since last month = -2.8% (-193)

Single Family Homes Median= $350,000
Since peak (May ’07) = -12.5% (-$50,000)
Since one year ago = -3.3% (-$12,000)
Since six months ago = +6.1% (+$20,000)
Since last month = +0.1% (+$500)

Residential Average = $324,847
Since peak (July ’07) = -8.4% (-$29,871)
Since one year ago = -3.1% (-$10,253)
Since six months ago = +2.5% (+$7,798)
Since last month = -1.1% (-$3,452)

Single Family Homes Average = $372,741
Since peak (May ’07) = -12.5% (-$53,287)
Since one year ago = -1.7% (-$6,483)
Since six months ago = +5.7% (+$20,052)
Since last month = +0.8% (+$2,882)

Condo Average = $244,265
Since peak (July ’07) = -10.2% (-$27,643)
Since one year ago = -3.8% (-$9,585)
Since six months ago = +2.4% (+$5,730)
Since last month = -1.1% (-$2,806)

Townhome Average= $296,284
Since peak (Oct ’07) = -19.5% (-$71,680)
Since one year ago = -6.5% (-$20,548)
Since six months ago = -1.0% (-$2,938)
Since last month = +1.8% (+$5,213)

Categories
Monthly Stats

June numbers are in…

And she was a big’uns sales wise… highest June tally on record, and third highest monthly at least as far back as I have stats for. So there is no arguing buyers were out in full force.

While increasing month-over-month sales are the norm during the spring, it should be noted that the gains seen here go well beyond expected seasonality. Over the last six months we’ve went from well below seasonal sales, to well above. That interest rates dropped to all time lows over this period is quite likely no small coincidence, and convinced the all important first-time-buyers to make the plunge.

Inventory dropped a fair bit, which is understandable considering sales were very strong but prices haven’t shot up much… if prices weren’t high enough to bring out the spec sellers earlier, they have no reason to change now.

Prices crept up a bit too as would be expected. Curiously the SFH median was up the most month-over-month, while the averages were only up 0.4-1% (year-over-year everything is obviously still down). Normally one would expect the averages to be the more reactive, but perhaps this is suggesting increased activity at the lower price levels… which are the biggest trouble spot for the market as there had been a great deal of speculation and overbuilding at those levels during the boom.

No surprise absorption rate is down as sales are up and inventory down. Still a tad high by historical measures even with record sales, so obviously there is a lot of inventory out there yet, not even figuring in the dreaded shadow inventory.

So, it’ll be an interesting summer and fall to fallow the market. Will interest rates go up? Will prices hold? Will inventory erode? Will Kevin ever have free time again and get back to blogging more? In any case, it’s fascinating to watch… well, other then perhaps that last one.

Here are the hard numbers as always,

Sales = 2,552
Since two years ago = +15.8% (+349)
Since one year ago = +37.8% (+700)
Since last month = +18.1% (+391)

Active Listings = 6,785
Since two years ago = +6.6% (+418)
Since one year ago = -37.3% (-4,032)
Since last month = -9.0% (-668)

Single Family Homes Median= $349,500
Since peak (May ’07) = -12.6% (-$50,500)
Since one year ago = -4.2% (-$15,500)
Since six months ago = +5.9% (+$19,500)
Since last month = +2.0% (+$7,000)

Residential Average = $328,229
Since peak (July ’07) = -7.4% (-$26,419)
Since one year ago = -3.8% (-$13,077)
Since six months ago = +405% (+$17,325)
Since last month = +0.6% (+$1,967)

Single Family Homes Average = $369,859
Since peak (May ’07) = -13.2% (-$56,169)
Since one year ago = -3.0% (-$11,525)
Since six months ago = +5.1% (+$17,989)
Since last month = +0.6% (+$2,817)

Condo Average = $247,071
Since peak (July ’07) = -9.1% (-$24,837)
Since one year ago = -5.8% (-$15,294)
Since six months ago = +5.5% (+$12,785)
Since last month = +1.0% (+$2,337)

Townhome Average= $291,071
Since peak (Oct ’07) = -20.9% (-$76,893)
Since one year ago = -7.0% (-$21,952)
Since six months ago = -0.6% (-$1,822)
Since last month = +0.4% (-$1,117)

Categories
Monthly Stats

May numbers are in

Sorry I didn’t get to report this earlier in the day, unfortunately I had to do some actually work. Bummer, I know, but believe it or not, communicating my worthless ideas to literally threes of people, free-of-charge, doesn’t pay the bills.

Anyway, the local numbers for May were released today, and it seems that with the aid of all-time low interest rates, spring has sprung. Best sales tally they’ve had since the boom, and actually ignoring the boom years, it was the best May sales total in at least a decade.

The spring bounce also arrived for prices, averages were up around 4% (excluding townhomes) over April. The SFH median was up as well, but only 1.6%, so that would indicate sales are particularly strong at the high end of the market. Further reinforced by the residential average being up more then it’s components.

Year-over-year though, prices remain down, 4-6.2% for the most part, though townhomes are down over 12%. Like I’ve said in prior posts, townhomes are such a small segment that it’s more vulnerable to fluctuations.

Inventory continued to hold, and is extremely high by historical measures. Typically this time of year inventory is fairly stable through the summer, while sales will start to decline either in June or July.

It seems the low interest rates have gotten a fair number of buyers into the market. It seems though that it’s allowing first-timers to spend more and many are skipping a rung so to speak and going straight into mid-sized homes rather then typically entry level properties like condos, or smaller bungalows.

So while increased sales is certainly welcome news in any market with an inventory glut, it could be better in our case if more sales were in the entry level segment. It is these smaller units where our primary inventory problem is, as there was a great deal of speculation in that market during the boom (both with flippers and builders).

This is evident in the absorption rate, where SFH’s are currently well into balanced territory currently at 2.5, while condos are still well into a buyers market at 4.2 (FYI, the overall residential rate is standing at 3.45, which is just in balanced market range, though still very high for May).

So, while the SFH market appears to returning to normal range, condos are still a very soft market. So while it may not be good for the overall market that condo sales are proportionally a little low, it’s probably better for the individual buyers that they bought into a more stable segment.

As I’ve been saying, real estate is prone to a lot of seasonality, and spring in particular is known to be very strong, so it’s really the rest of the year that tells us the overall direction of the market. This spring in particular has also benefited greatly from the huge drop in interest rates… but those interest rates also present problems going forward, as they now have nowhere to go but up.

They may have already started their climb as yesterday RBC lifted their 5-year fixed rates by 0.2%. BMO and TD have since followed suit, and the rest of the major lenders are expected to as well. This has been caused by yield increases in the bond market over the last two weeks, and while it’s too early to say whether that is more then an aberration, if they continue trending up, mortgage rates will soon follow.

It’s something of a double edged sword for real estate, because if you want sales now you need to keep rates low… but for the long term health of the market it needs the overall economy to improve, and once it starts to improve bond rates go up, and with them interest rates, which hurts sales in the short term.

It’s an interesting time. Many western nations are really keen to keep rates low and spur spending through measures like quantitative easing… but China has told them to watch their step, and they being many nations largest creditor, particularly of the US, they have some stroke.

It’s something of an economic Mutually Assured Destruction as the US has the money presses primed and their cursor over the ‘Print’ icon, and China has their cursor over the ‘Sell’ icon. If either one presses the button, all hell will break loose.

Anywho, enough of that, here are the hard numbers.

Sales = 2,161
Since May ’07 = -23.9% (-678)
Since May ’08 = +18.7% (+340)
Since last month = +17.3% (+318)

Active Listings = 7,453
Since May ’07 = +66.2% (+2,968)
Since May ’08 = -32.3% (-3,553)
Since last month = -1.1% (-86)

Single Family Homes Median= $342,500
Since peak (May ’07) = -14.4% (-$57,500)
Since one year ago = -6.2% (-$22,500)
Since six months ago = +1.6% (+$5,500)
Since last month = +1.6% (+$5,500)

Residential Average = $326,332
Since peak (July ’07) = -8.0% (-$28,386)
Since one year ago = -4.2% (-$14,167)
Since six months ago = +2.4% (+$7,744)
Since last month = +4.6% (+$14,205)

Single Family Homes Average = $367,672
Since peak (May ’07) = -13.7% (-$58,356)
Since one year ago = -4.0% (-$15,495)
Since six months ago = +1.4% (+$4,915)
Since last month = +4.0% (+$14,286)

Condo Average = $244,734
Since peak (July ’07) = -10.0% (-$27,174)
Since one year ago = -6.2% (-$16,103)
Since six months ago = +5.7% (+$13.203)
Since last month = +3.7% (+$8,714)

Townhome Average= $289,954
Since peak (Oct ’07) = -21.2% (-$78,010)
Since one year ago = -12.3% (-$40,497)
Since six months ago = -8.2% (-$25,859)
Since last month = -0.4% (-$1,114)

Also included this month is a new feature. One of our readers has been tracking the median MLS asking prices, and I figured I’d start including them in our monthly updates.

CM Median Asking Price Index
Central Edmonton: $252,200
NE Edmonton: $369,900
NW Edmonton: $349,900
SE Edmonton: $375,000
SW Edmonton: $568,800*
West Edmonton: $464,000

*SW number is for 2-story detached homes only, all others are for all residential units in the area

Categories
Monthly Stats

April numbers are in

It’s that time of the month again… okay, well, not that time of the month… or perhaps it is that too… you know what, never mind. The EREB released their final April resale stats today. There, we’ll go with that.

I guess the big story this time around would be sales, April saw a rebound back into their normal range for the month, coming in at 1,843. Which is up 1.1% over last April, which is the first time we’ve seen that in 2009.

Ultra low interest rates seemed to finally draw out the buyers. I just hope for their sake that they aren’t leveraging themselves to the max, cause you have to figure rates are going to be going back to 6%+ eventually.

Though Mark Carney tells us they’ll be this low for at least another year or so… but back in February he was also screaming from the rooftops not to worry and to expect 3.8% growth in 2010… and walked away from that prediction soon after.

Ultimately Carney will just follow whatever the US does… if they hold them, we’ll hold ours… if they jack theirs, we’ll jack ours… and if they go negative, we’ll go negative.

Whodathunk that last possibility would have ever existed even just a few months ago?!

Back to the Edmonton resale situation. Inventory and prices for the most part stayed the same, going up about a point each. Condos a bit more, at 2.4%. Compared to last year though they’re all down between 7-10%.

Obviously with sales increasing and inventory holding we’re seeing the absorption rate go down, and is now at 4.1. Still considered a buyers market, but the lowest we’ve seen it since the inventory explosion of 2007 when over six months it went from 1.09 to 9.52. So it’s getting back into the normal range, but 4.1 is still very high for April.

Finally, as always, here are the hard numbers.

Sales = 1,843
Since April ’07 = -24.5% (-598)
Since April ’08 = +1.1% (+20)
Since last month = +33.6% (+463)

Active Listings = 7,539
Since April ’07 = +139.3% (+4,388)
Since April ’08 = -28.9% (-986)
Since last month = +0.8% (+63)

Single Family Homes Median= $337,000
Since peak (May ’07) = -15.8% (-$63,000)
Since last April = -9.5% (-$35,000)
Since six months ago = -1.7% (-$5,750)
Since last month = +0.9% (+$3,000)

Residential Average = $312,127
Since peak (July ’07) = -12.0% (-$42,591)
Since last April = -7.4% (-$24,804)
Since six months ago = -1.8% (-$5,657)
Since last month = +1.0% (+$3,095)

Single Family Homes = $353,386
Since peak (May ’07) = -17.1% (-$72,642)
Since last April = -8.5% (-$32,647)
Since six months ago = -2.7% (-$9,888)
Since last month = +1.0% (+$3,670)

Condos = $236,020
Since peak (July ’07) = -13.2% (-$35,888)
Since last April = -8.1% (-$20,927)
Since six months ago = -0.7% (-$1,570)
Since last month = +2.4% (+$5,551)

Townhouses = $291,068
Since peak (Oct ’07) = -20.9% (-$76,896)
Since last April = -7.9% (-$24,997)
Since six months ago = -5.2% (-$16,110)
Since last month = +5.2% (+$14,292)

Categories
Monthly Stats Personal Finances

Mortgages – Fixed Rate Mechanics

Some of you may recall a month ago I did an entry on why weekly and bi-weekly payments really were not as good as they were cracked up to be. Today I’m going to be my second piece in the mortgage series, this time looking at fixed rate mortgages and their mechanics.

Despite homes being the largest purchases most people make, and mortgages often being a households largest monthly expense, I’m never ceased to be amazed at how many people really don’t have a sound understanding of how they work. So this is my little attempt to shed some light on them.

We’re not going to get into the whole buying high/low thing today, just examine the basic structure of mortgages and how they work.

A lot of people are likely familiar with graphs like the one above if they’ve taken out a mortgage… at least I’d hope they would be, at the very least your bank or mortgage broker should have tried to explain one to you regardless of what type of mortgage you have.

It shows you how over time your equity builds exponentially, while your principle owing correspondingly decreases. The values of these and the proportions paid off can change substantially depending on the variables, but the general pattern remains the same.

The basic gist is that it shows you how little equity you make up in the early years, but as time goes by, more and more of your payments go toward equity rather then interest. Just from this example you can see you make up more equity in the last 9 years then you do in the first 16.

While it’s a pretty pattern, the only number in there that matters to me is the amount owing. The equity really doesn’t mean a lick. All that matters is what you owe.

When your mortgage comes up for renewal, at that point it matters what the bank thinks your place is work matters in relation to what you owe… or if you are selling it matters what someone is willing to pay for it… but the rest of the time, what you think your home is worth, or what your neighbours house sells for, or what the cities median price is, really doesn’t mean a damn thing.

Alright, end of rant. Now lets get on to how 5 year fixed rate mortgages work, and I think the best way to do that is to work through an example. So lets say we purchased an “average residence” in Edmonton in January of 1988, with a conventional 25 year amortization, 5-year fixed terms. These a probably the most popular type of mortgages in Canada.

In January 1988 we bought a house, and paid $77,792 for it, which was the residential average at the time. In reality we would have needed a significant down-payment, but for the sake of this example we’re going to ignore that and say we financed the entire thing. Down-payments are really not material for what we’re doing here today.

So we walk into the bank, finance $77,792 at the going rate for a 5-year fixed of the day at 11.73%. Which result in monthly payments of $804 for the next 5 years… at which point our mortgage comes up for renewal.

Here is a graph kind of incorporating the first two graphs. We have the monthly payments and we see the amount owing declining, telling us what we owe the bank as of each January. We now find ourselves in January of 1993, and owning the bank $74,271… which means we haven’t made up a whole lot of equity in the first five years, less then 5% in this example.

This doesn’t give us all the variables needed to give us our next payment though (ignoring that you can already see in on the chart), for that we need the interest rates…

If the interest rate in 1993 was still 11.73% like it was five years earlier we would still be paying $804 a month… but fortunately for us, interest rates came down!

Now the 5-year fixed rate is 9.47%, we owe the bank $74,271 and now our amortization is down to 20 years… so for the next five years our payments will be $691 a month.

Skip ahead to 1998, our term is up and we do it again, we owe $66,274, rate are down again, now at 6.9% and amortization is 15 years… so we’ll pay $592 a month.

Do it all again in 2003, $51,213 at 6.26% over 10 years… equals $563 a month.

Finally we get to 2008, only five years left, the last renewal! $29,272 owing, the rate actually rose slightly to 6.81% so we’ll be paying slightly more, $577 a month…. but come 2013, that house will be entirely paid off.

What I want to show in the graph is that with our style of mortgages, even with fixed rate ones, every five years your payments will change depending on the going mortgage rate of the time. In our example we were very fortunate in that interest rates just kept on going down, so the monthly payments kept dropping for the most part.

What the fixed rate mortgage shields you from is upward fluctuations of interest rates. As you can see from the graphs, the only interest rates that mattered to us were in the shaded areas, but outside of that they shot up and down quite a bit.

Just take our first renewal for example… if it hadn’t came up until 1994, we would have saved even more since rates dropped over 2 points in that year… but if it had came up in 1995 we would have paid even more since rates spiked that year. So, it can kind of be luck of the draw when your mortgage comes up for renewal, but over time it tends to even out.

The advantage of fixed rate mortgages is that you know what you’ll be paying every month, you don’t have to worry about your payments swinging as they would with a variable rate. The drawback is that you often pay a premium of a point or two more for this stability when you lock in.

So, should interest rates shoot up, at least your protected until your next renewal… should they stay about the same, you lose out because you’re paying a premium for the fixed rate… and should rates go down, you really lose out because you’re not only paying a premium, but you’re paying it on top of a higher rate.

Over the last quarter century we’ve seen rates consistently dropping, which have made variable rate mortgages very attractive… but today, the thing to keep in mind that that we’ve reached a point where rates really cannot get any lower… which means they can only go up, and it’s when rates are rising that fixed rate mortgages are not only safer, but often cheaper.

So it really depends on what you’re comfortable with, and whether you feel the premium you pay is worth it.

The last thing I want to touch on is the differences between Canada and the US when it comes to fixed rate mortgages. As mentioned before, traditionally 25 years has been the normal amortization period, and 5-year fixed the most popular terms.

South of the border, it’s a little different. There, 30 year amortizations are the most common period, and 30 year fixed the most common term. That’s right, with one of those you know exactly what you’ll be paying the entire life of your mortgage.

So using the purchase from our example above, and the going rate for 30-year fixed mortgages in January of 1988, we would have been paying $715 a month (for a better apples-to-apples idea, if the term was 25-year fixed it would have been $737 a month).

So, as you can see, by doing it with traditional Canadian 5-yr terms, we saved a lot of money… but this is because interest rates were dropping. If rates were going up, we would have done a lot worse. Basically it just boils down to that we’re more exposed to market fluctuations here in Canada, and that can be both very beneficial, or very detrimental.

One interesting thing you may have noted is that in 1988, the US 30-year fixed rate is actually lower then the Canadian 5-year fixed rate. This seems counter-intuitive as generally when you go into a bank, the longer the term you ask for, the higher the rate.

TD for example, their current advertised rates are 5-yr fixed at 5.45% and 10-yr fixed at 6.7%. Pretty typical.

Same actually also holds true in the US… this is really more a statement about the rates in the US just being more competitive, cause today you can get a 30-yr fixed from Wachovia for 4.75%… lower then our 5-yr fixed. So if you didn’t think it was bad enough that they can deduct mortgage interest from their taxes, they also get much better interest rates. So, if you’ve ever wondered why our banks are so profitable, there is a big part of the answer, Canadians pay a whole lot more interest.

Categories
Monthly Stats

March numbers are in

The EREB came out with their March numbers this morning, and all things considered, they were remarkably unremarkable. Sales and inventory are pretty much right on the money considering seasonality, and prices more or less stayed about the same. Though compared to last years sales and prices are down about 10-12% across the board.

Does not seem like there is any underlying explosion of sales or listings to come this spring, the 1,380 sales is right in line with what seasonality would suggest considering the January and February figures. Also true for the 7,476 currently in inventory. I’ll be doing a post in the next couple days discussing seasonality, so that might be interesting to some of you, I’ll also include a few projections just to see how I do.

So the bulls will probably be disappointed there is no ground swell of demand bubbling under the surface… and I’m going to have to stick a fork in my earlier thought that inventory might reach or even surpass last years. Sales will continue to rise through May before falling off, and Inventory start to clear out until September. We’ve barely entered spring, but given the stats through three months and all numbers staying well within their standard deviations, I’m not thinking there are any surprises likely to come on the sales and inventory front.

Prices on the other hand are not following their typical season paths (typically up 4-6% over January prices in March), though that is no surprise, seasonality really doesn’t apply to prices when dealing with bubbles. Things held pretty tight month-over-month but are everything is down about 10% year-over-year.

Condo’s come in slightly lower at -12.4% year-over-year (about $32,000), but actually saw a small uptick over February… thought that shouldn’t really be surprising since they took such a dive in February, dropping almost 5%. It’s not unusual to have a small bounce after such a sharp drop.

Speaking of sharp drops, townhouses really fell off the face of the earth in March, dropping a remarkable $32,404, or 10.5%. These make up a very small protion of the total residential picture though, so they are more prone to big swings… I had also mentioned last month that their prices had oddly held year-over-year… not anymore.

Anywho, here are the hard numbers:

Sales = 1,380
Since March ’07 = -41.5% (-797)
Since March ’08 = -11.4% (-177)
Since last month = +28.4% (+305)

Active Listings = 7,476
Since March ’07 = +190.4% (+4,902)
Since March ’08 = -21.0% (-1,988)
Since last month = +5.3% (+379)

Single Family Homes Median= $334,000
Since peak (May ’07) = -16.5% (-$66,000)
Since last March = -9.7% (-$36,000)
Since six months ago = -8.6% (-$21,764)
Since last month = -0.3% (-$1,000)

Residential = $309,032
Since peak (July ’07) = -12.9% (-$45,686)
Since last March = -10.1% (-$34,728)
Since six months ago = -4.9% (-$15,873)
Since last month = +0.0% (+$62)

Single Family Homes = $349,716
Since peak (May ’07) = -17.9% (-$76,312)
Since last March = -9.8% (-$37,916)
Since six months ago = -3.4% (-$12,381)
Since last month = +0.7% (+$2,407)

Condos = $230,469
Since peak (July ’07) = -15.2% (-$41,439)
Since last March = -12.4% (-$32,554)
Since six months ago = -8.6% (-$21,764)
Since last month = +1.6% (+$3,612)

Townhouses = $276,776
Since peak (Oct ’07) = -24.8% (-$91,118)
Since last March = -10.4% (-$32,132)
Since six months ago = -12.3% (-$38,914)
Since last month = -10.5% (-$32,404)

Categories
Monthly Stats

February numbers are in

The EREB announced their monthly tallies for February today, after a little bounce last month prices again took a tumble.

The big stories would probably be the divergence of condo and townhome prices. Condos had actually defied gravity for a couple months, took a huge fall of 4.9% from January. They are also down over $37,347 (14.1%) from a year ago, and $45,054 (16.6%) the peak.

Townhomes were the exception to the rule, actually having it’s second straight very strong month, up $9,958 (3.3% from January). They are also up $14,400 (4.9%) from last February, though it should be noted that last February’s figure was abnormally low, and townhomes are prone to a bit more pronounced variations because of their smaller sample size (only about 5% of the total marketplace). In any case, their prices are higher then they were at any point last winter.

Here is a look at the rest of the picture. I’m continuing the tweak this presentation as I go along, so the appearance of these has evolved a bit month to month. I’ve put the three most pertinent numbers (IMNSHO) up top for your viewing pleasure.

Sales = 1,075
Since February ’07 = -43.0% (-811)
Since last February = -15.5% (-212)
Since last month = +47.3% (+345)

Active Listings = 7,097
Since February ’07 = +234.8% (+4,977)
Since last February = -14.3% (-1,187)
Since last month = +8.0% (+524)

Single Family Homes Median= $335,000
Since peak (May ’07) = -16.3% (-$65,000)
Since last February = -9.4% (-$34,900)
Since six months ago = -5.0% (-$17,500)
Since last month = +1.5% (+$5,000)

Residential = $308,970
Since peak (July ’07) = -12.9% (-$45,748)
Since last February = -8.7% (-$29,377)
Since six months ago = -6.1% (-$20,237)
Since last month = -2.5% (-$8,079)

Single Family Homes = $347,309
Since peak (May ’07) = -18.5% (-$78,719)
Since last February = -9.1% (-$34,656)
Since six months ago = -5.9% (-$21,881)
Since last month = -1.5% (-$5,380)

Condos = $226,857
Since peak (July ’07) = -16.6% (-$45,054)
Since last February = -14.1% (-$37,347)
Since six months ago = -9.6% (-$24,191)
Since last month = -4.9% (-$11,678)

Townhouses = $309,180
Since peak (Oct ’07) = -16.0% (-$58,784)
Since last February = +4.9% (+$14,400)
Since six months ago = -2.0% (-$6,260)
Since last month = +3.3% (+$9,958)

Other then townhome prices, no other surprises here, averages were down significantly year-over-year for everything else (though SFH median did post a small gain in the face of the decline in average SFH price). The pumpers have been left with little more then month-over-month comparisons to make their headlines… which left them with only sales to tout from February.

Though sales did accomplish, or rather avoid, one rather dubious distinction. After decades worst November’s, Decemeber’s and January’s, they did manage to avoid doing it last month. February ’09 was only the second worst February since Y2K, coming in a whole 13 sales above the February ’00 tally.

Calgary and Edmonton kind of swapped places from a month ago, as last month prices inched up in Edmonton while falling down South. This month the opposite was true, as prices rose slightly in Calgary, while Edmonton sunk. This is of course in month-over-month figures, as year-over-year both were well into the red.

I guess one thing that could be a light at the end of the tunnel for the real estate bulls out there, is that active listings are down 1,187 units from a year ago. Though it’s still well above even the high water mark for pre-boom levels, and with sales being low that still leaves a big glut, and an absorption rate above six.

Categories
Monthly Stats

January numbers are in

The EREB hasn’t put the January numbers up on their site yet, but the Journal had an article quoting most of the pertinent numbers for January, so I’ll work with those, and when the EREB put up the full set I’ll include those then.

EDIT: They updated their site the next morning, so here is a complete run down

Sales = 730
Since peak (May ’07) = -74.3% (-2,109)
Since last January = -40.5% (-497)
Since six months ago = -59.1% (-1054)
Since last month = +20.1% (+122)

Residential = $317,049
Since peak (July ’07) = -10.6% (-$37,669)
Since last January = -4.5% (-$15,002)
Since six months ago = -5.4% (-$18,051)
Since last month = +2.0% (+$6,075)

Single Family Homes = $352,689
Since peak (May ’07) = -17.2% (-$73,339)
Since last January = -7.1% (-$26,878)
Since six months ago = -7.0% (-$26,535)
Since last month = +0.2% (+$819)

Condos = $238,535
Since peak (July ’07) = -12.3% (-$33,373)
Since last January = -7.5% (-$19,421)
Since six months ago = -6.0% (-$15,315)
Since last month = +1.8% (+$4,249)

Townhouses = $299,222
Since peak (Oct ’07) = -18.7% (-$68,742)
Since last January = -0.8% (-$2,534)
Since six months ago = -5.6% (-$17,610)
Since last month = +2.2% (+$6,329)

Year over year though prices were down for all categories though, to the tune of 7% or more for condos and single family homes. Edmonton actually had prices creep up slightly across the board from December, with the exception of median price for SFH’s, which remained the same.

The big story carries over from last month though, that being the dismal sales totals, worst January tally since the 90′s, third worst monthly since the turn of the century (December last being the worst, and December ’00 coming in second).

Inventory also nudged up a bit as expected, now at 6,573 and the average days on the market continues to reach new heights, now at 68. So even the few that are selling, are not selling fast.

Seems at least in Edmonton sellers are holding to their guns price wise a bit more then our neighbours to the south, as in Calgary prices were down from December, but they shared Edmonton’s dismal sales numbers.

The Journal also had another article today about the rental market… worth a quick look, but remember Mah is something of a pusher when it comes to anything real estate, so take his articles with a grain of salt.