December's number continue a trend that has held up for several months now, of double-digit sales declines coupled with prices remaining essentially flat or sometimes adding a few percentage points.
One new wrinkle in the story of Canada's housing market is a decrease in the number of listings. The supply of new homes for sale has now declined for three straight months, bringing the national number of listings to its lowest point since March 2011.
"The decline in new supply may reflect purchase offers below asking price that are made to sellers who are under no pressure to sell. Instead, they choose to take their homes off the market once their listing expires," CREA's chief economist Gregory Klump said.
As has been the case for much of the year, a slowdown in Canada's two largest housing markets, Toronto and Vancouver, is dragging the national average lower than where it would have been otherwise.
What I like about the CBC articles the most is not the pieces themselves but the comments which are rated by readers. All top rated comments share the theme of a bubble or a crash underway. Above is the number one rated comment.
From the Daily Beast
So the mystery remains: why no bubble in Canada? Why no banking crisis? My best working theory was that their banking system was run by Canadians, who are a very sensible people. Yes, I admit that this theory is a little hard to test, but I can offer some supporting evidence: they also sat out the Great Depression, and the Panic of 1907.
Over the last year or so, however, another possibility has been emerging: they didn't avoid the crisis. They're just getting it on tape delay.
A slight digression: those of you who watch HGTV may have noticed a lot of Canadian accents on the shows. As I understand it, that's because HGTV's Canadian operation must have a lot of local shows; by law, about half of all television programming must be "Canadian content", filmed or otherwise created in Canada. Since Americans don't care, you might as well film the stuff in Canada and air it in the US. When you see shows studiously avoid mentioning where they take place--an odd choice for a real estate network--it's a pretty safe bet that they're happening somewhere in Canada.
Over the last few years, this has offered an interesting insight into the Canadian housing market. To whit: it's gotten hella expensive. I live in one of the most expensive urban housing markets in the nation, and the prices that these couples will pay for tiny, undistinguished row homes in outlying areas are often enough to make my eyes pop. It's like watching a rerun of 2002-2006 in America. The young couples buy brand-new construction with ample square footage and sleek fixtures, while an astonishingly high percentage of the families are shopping in the mid-to-high six figures. Every renovation generates more than enough home equity to cover the cost, because prices go nowhere but up.
I completely agree that Canada’s housing bubble was simply delayed due to environmental factors, just like the fact that the warmest month of the year in San Francisco is September due to the bay. The timing in both cases may be off, but that doesn’t make both immune to the cycles.
Also did you know that half of all the episodes of Buying & Selling with the Property Brothers have been filmed at Austin, Texas? I stumbled upon that fact a few weeks ago after watching the show, and seeing huge mansions with soccer field sized backyards getting sold for $350,000. I immediately thought that it can’t be anywhere in Canada, and I was right.
From Toronto Star
With prices up an average 1.6 per cent across Canada in December year over year — six per cent in Toronto — housing experts are looking to the spring market, the busiest time of year for home sales, as the best barometer of where the housing market is ultimately headed.
So far it is “defying gravity and logic,” says Queen’s University real estate expert John Andrew.
“It appears that sellers are refusing to drop their prices, clinging to the elevated home prices they have grown accustomed to,” while buyers have headed for the sidelines, anticipating that interest rates will remain stable but house prices drop.
What is really defying gravity is the lack of logic by this university real estate expert as it is well documented that before prices start dropping substantially, there is always a period of reduced sales. For example, Phoenix and Miami.