DECEMBER 03, 2010
It's that time of the month again. We once again turn our eyes to the big realtor boards and dissect the sales, inventory, and price trends in their real estate markets.
Sales totaled 479, representing a rise over the previous few months, but remaining 21% lower than last year's numbers and standing at near decade lows.
There were 3723 active listings in November. This represents 7.8 months of inventory, down from last month's 8.7 months of inventory. In another sign of a joint buyer and seller strike, inventory dropped by 300 units in November, yet remained 25% above last year's numbers.
Average prices for single family homes were down about 15K from year ago levels and also fell 5K from month-ago levels.
Townhouses took a massive bath last month, falling almost 30K month over month, and falling 55K year over year.
Condos were the lone bright spot as they were up significantly year over year and month over month. Dying speculation perhaps? Given that condo sales were 26% lower than last year and registered among the lowest sales volume of the decade, it's hard to see how this trend will be sustained.
Sales continued to show surprising relative strength in November, with sales improving 7.4% over October. Despite carnage on the Island, the illusion dies hard in wet city. However, November's sales total remains 19% below year-ago levels registering at 2509, hardly boast-worthy.
In fact, despite their claims that totals came in near the decade average,this stat is highly misleading. Stripping out the credit crisis induced panic of 2008, we find that sales came in among the lowest of the decade and significantly below the decade average when the 2008 anomaly is removed. Hat tip to Sebastian Albrecht for this nifty chart.
Total active listings declined 12% from October but increased 12% from November 2009, sitting at 12,384. This gives a months of inventory reading of 5, down from 6 in October. Buyers are only slowly coming back to the table, but sellers are quickly yanking their homes from the market. And as you can see from the chart below, new inventory entering the market was the lowest in at least 6 years. Vancouver may well be in a classic buyer and seller standoff. The big question is whether the lack of inventory will be enough to restart the feeding orgy and get the animal spirits back into the bidding war game. We'll see.
Home prices remained firm, with the index up 4.1% year over year and sitting virtually unchanged since the early summer.
Home sales remained virtually unchanged month over month, but year over year stats told the real story. Single family home sales remained nearly 20% below last year's levels while condos were smacked down by 38%.
Said Diane Scott, president of CREB, "Indeed, the second half of 2010 has proven to be weaker than expected, and Calgary’s housing market is taking some time to re-gain traction"
Single family home prices were down 2% from year ago levels, with condos shedding 3% of their value.
Said Ms. Scott, "The good news is that we are seeing a downward trend on our overall inventory levels." Total inventory was up almost 22% from November 2009. I guess the rejoicing comes in the fact that new listings are trending downwards. We'll see how this trend plays out.
Total sales volume registered at 1239, down 29% from November 2009. Prices on aggregate remained flat, although...
"Compared to a year ago the price was down significantly by 2.5%. November condo prices also took one of the biggest drops this year with the average price down 2% to $229,603 month-over-month and just under 3% year-over-year."
Total listings remained high for the month, though they were down month over month and on par with last year's numbers.
Now for the big board. Sales improved in Toronto as home prices have now risen 5% year-over-year. Average sales price for November alone was up a mind-boggling 14% from November 2009 despite the fact that sales remained 13% lower than last year's totals for all subtypes. New inventory dropped 13%, though total inventory remained 14% above last year's levels.
Days on the market rose by a full 7 days to 33. This represents a 27% increase over last year's numbers.
Of all the major markets, this seems like the one experiencing the least fatigue, despite being ranked as 'severely unaffordable' by Demographia at over 5 times median price to median family income.
These Toronto numbers virtually assure that CREA's November numbers show a year over year price improvement....but we'll see.
Sales remain weak in all major markets, though signs of resilience can be found in the largest markets of Toronto and Vancouver. As is always the case, the illusion dies first in the periphery. Buyers and sellers both remain on strike, though the significant decrease in listings in Vancouver seems to have spurred some sheeple towards irrational bidding wars. Good luck with that!
The question of where the listings went from the past few months is one big cloud over the markets. While sales are starting to pick back up, the question of how long sellers can remain on strike is an important one.
Of note, the five year bond yield continues to move higher.
As it does, banks will continue to raise the 5 year fixed rate. This is problematic as it raises both the interest rates on fixed mortgages and also raises the interest rates upon which buyers seeking a floating rate must qualify under. This naturally means less total mortgage approval for new buyers.
In general, the gridlock remains. Nothing particularly exciting yet.