Canada's existing-home sales via the Multiple Listing Service reached their highest quarterly level on record in the first quarter of 2006, according to statistics released by The Canadian Real Estate Association.
A seasonally adjusted total of 125,142 homes were sold through MLS in the first quarter of 2006, up 2.4 percent from levels recorded in the fourth quarter of last year, and two-tenths of a percentage point above its previous quarterly record set in the third quarter of last year. New quarterly records were set in Alberta, Nova Scotia, Prince Edward Island, and Newfoundland.
"MLS home sales are running strong, reaching the highest level of any quarter on record for both the number of units sold and total dollar volume in the first quarter of 2006," said Alan Tennant, president of The Canadian Real Estate Association. "Housing markets are in good shape overall, and there continues to be high consumer demand for resale housing right across the country."
On a seasonally adjusted monthly basis, some 41,552 homes traded hands via the MLS in March 2006, representing the sixth-highest monthly level for sales activity on record. It was a decline of 1.4 percent from the second-highest level for monthly activity recorded in February 2006.
The monthly decrease in sales was largely the result of declines in British Columbia, Alberta and Ontario. By contrast, sales activity in Quebec, New Brunswick and Nova Scotia was up from February levels. In fact, monthly sales in Nova Scotia set a new record in March.
Seasonally adjusted new residential listings on MLS numbered 195,341 units in the first quarter of 2006 – an increase of 3.3 percent from the fourth quarter of 2005, and just 0.5 percent below its highest quarterly level ever, posted 15 years ago. New listings reached their highest quarterly level on record in the first quarter of 2006 in Quebec, New Brunswick and Newfoundland.
Seasonally adjusted new listings numbered 65,378 in March, virtually unchanged from the 65,252 units listed in February. With sales activity having dipped by a little more than new listings this month, the resale housing market in Canada became slightly more balanced in March compared to February.
The national MLS residential average price rose by 12.4 percent year-over-year to $274,163 in March – its largest year-over-year gain since May 2004. Average price in the first quarter of 2006 climbed 12.1 percent compared to the same quarter in 2005 to $267,744, representing its biggest year-over-year growth in quarterly average price since the 1980s.
Average price reached its highest monthly level on record in March on a national basis, and in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, and Prince Edward Island. Average price also reached its highest quarterly level on a national basis, and in all provinces except Quebec.
"Rising household incomes and upbeat consumer confidence are keeping resale housing activity on a tear, even with rising home prices and interest rates," said CREA Chief Economist Gregory Klump. "Alberta continues to lead the way, with sales activity having accounted for almost three-quarters of the national increase."
"Interest rates are widely expected to near their peak," added Klump. "The continued ability to negotiate a discount off advertised mortgage rates is also helping keep sales activity high by keeping monthly payments down and affordability reasonable."
CHARLOTTE, N.C. -- Doug Duncan, chief economist at the Mortgage Bankers Association, has a knack for making people feel secure and optimistic about housing's future.
The key to understanding house prices, Duncan said at a real estate journalism conference Saturday, is population movement and jobs.
"The housing market is normalizing," Duncan said, predicting that purchase mortgage originations this year will be back at levels seen in 2003.
House-price growth will slow to a 6 percent-7 percent range, he said, and price appreciation may fall in some local markets but will rise nationally.
Duncan's 2006 forecast released at the end of 2005 calls for 6.79 million existing-home sales and 1.22 million new-home sales this year with the median price for existing homes at $218,100 and the median price for new homes at $240,600. According to the forecast, mortgage originations are expected to reach $2.26 trillion in 2006, with rates on the 30-year fixed-rate mortgage reaching 6.6 percent.
Duncan also expects delinquencies on home loans to increase this year, but he said it will not be a "macro issue," meaning that the overall market will not feel a major pinch.
Loan age and the growth in high-risk market lending will add pressure to loan delinquencies. "Over half of all loans out there are less than 3 years old," Duncan said. "Loans tend to peak in probability of delinquency in 3-5 years of their life."
Also, the largest growth area for mortgage lenders is lending to those who have lower credit quality, he said, and that puts more pressure on delinquencies.
Delinquency problems associated with Hurricane Katrina will also factor into the overall increase, he said.
Delinquencies on residential mortgage loans in the fourth quarter 2005 increased, while the percentage of loans in the foreclosure process fell, according to the mortgage trade group's latest delinquency report released in March.
The delinquency rate for mortgage loans on one-to-four-unit residential properties was 4.7 percent at the end of the fourth quarter, up from 4.38 percent in the fourth quarter of 2004 and 4.44 percent in the third quarter of 2005, according to the fourth-quarter report.
The percentage of loans in the foreclosure process was 0.99 percent at the end of the fourth quarter, a drop of 16 basis points from the previous year and an increase of 2 basis points from the third quarter of 2005, according to MBA. The seasonally adjusted rate of loans entering the foreclosure process was 0.42 percent in the fourth quarter, down 4 basis points from the previous year and up 1 basis point from the previous quarter.
Duncan on Saturday pointed to the condominium segment of the market as a leading indicator for the rest of the nation's housing, though the condo segment tends to have the most volatile price movements. The current supply of condos on the market is at about seven months, Duncan said, up from the 3-months supply average the market saw a few years ago, and price appreciation has fallen more rapidly with condos than with other homes.
"Is it a bad story? No, it's a normalizing one," Duncan said.
And as part of the "normalizing" story, he expects more borrowers will switch to long-term mortgages from short-term, adjustable ones.
Economists, including Duncan, expect mortgage interest rates to continue to rise from historic lows this year.
However, Duncan points out that 34 percent of all U.S. households own their homes with no debt, and another 48 percent-50 percent of homeowners have a fixed-rate mortgage. That means that 82 percent-84 percent of households are not interest-rate sensitive.
Many housing economists agree that the market will slow this year, but that a bursting bubble is not likely.
David Seiders, chief economist for the National Association of Home Builders, at a conference last week said he expects new-home sales to drop 12 percent this year compared with a record 1.28 million units in 2005.
And Michael Moran, chief economist at Daiwa Securities America Inc., said, "The housing sector is going through an adjustment, not a collapse."
Mark Zandi, chief economist for Moody's Economy.com, said that "builders have done a pretty good job of matching supply and demand" and that "nationally, house prices and supply will go flat in 2006, 2007 and 2008," which implies that there will be some price declines in key markets and that markets are going to "correct, not crash."
New site is among a growing list
Tuesday, May 02, 2006
AgentLine allows consumers to rate real estate agents
New site is among a growing list
Tuesday, May 02, 2006
A new Web site, which has launched in beta form, allows home buyers and sellers to issue ratings on the performance of their real estate agents.
AgentLine.com assigns a rating – from zero stars to five stars – based on consumer responses to five questions. Each question has seven possible responses, from "extremely dissatisfied" to "extremely satisfied."
The site asks consumers, "How satisfied were you with … agent performance in the following areas: The marketing and preparation of selling your home? Negotiating the price of your home? Handling and communication of all details from beginning to end? Providing you the knowledge needed to make a decision? Honesty, integrity and trustworthiness?"
Consumers can search for real estate agents at the site by agent name, company name, city, state or ZIP code.
"Our mission is to give real estate agents the recognition they deserve by giving their clients a voice and a platform in which consumers can read reviews from others' experiences," said Steve Nickerson, AgentLine president and CEO, in a statement.
"All consumer postings are validated online and past history with an agent is required. AgentLine is committed to providing accurate and verified information to its users," according to a company announcement today. "In addition, a strict dispute resolution procedure is in place in order to protect agents from fraudulent postings."
There are other sites, too, that allow consumes to rate or offer comments about real estate agents. Examples include: Brokerate.com (see Inman News article), HomeThinking.com (see Inman News article), RealtyRators.com (see Inman News article), Realty Baron (see Inman News article). Another company, Quality Service Certification (see Inman News article), works with real estate brokerage companies to survey consumers about customer satisfaction following real estate transactions.
Based in Howell, Mich., AgentLine is affiliated with Nationwide Homes Network Inc., a real estate information company. Nationwide Homes Network is also the parent company of HomeRoute.com, an umbrella site for Relocate-America.com and Relocate-Canada.com
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