I found this article recently by the Financial Post and thought it was worth posting…..
I’ve been hearing a lot of soothing sounds of late coming from the real estate and construction industries. “All is well,” they seem to say. “Don’t panic,” they encourage.
Two days ago, the Canadian Home Builders’ Association, a lobby group, insisted “there is absolutely no merit” in drawing a parallel between the U.S. real estate meltdown and the “cooling” market we are currently experiencing.
In mid-December, meanwhile, the Canadian Real Estate Association announced that national averages aren’t down as much as previously thought, and that it would be changing the methodology by which it calculates home prices, taking into greater account the rural homes that haven’t depreciated as quickly.
Taken at face value, these recent press releases might suggest that now was a great time to buy a house — a convenient conclusion for home builders and real estate agents.
But don’t you believe them. Maybe it’s appropriate that the CREA is changing its methodology to be more inclusive, but now seems to be an awfully convenient time to be doing so. And while it’s true that the Canadian housing boom was not propelled by the loose lending practices and low interest rates seen in the U.S., that doesn’t mean our boom was any less heated. In Canada, housing prices skyrocketed alongside a commodities boom that brought enormous wealth, in particular to western provinces.
So what do you suppose might happen when such a commodities boom crashes down to earth, as has happened over the last four months? If you’re still not convinced, take a look at the numbers below. They show six years of annual housing prices, leading up to their respective peaks, in the United States, as well as four Canadian cities. Also included are the most recent prices, to give you a sense of how far we’ve come down so far. Numbers are from the U.S. Census Bureau and the CREA — before they decided to revise their methodology.
United States
March 2002 – US$227,600
March 2003 – US$233,100 (2.4%)
March 2004 – US$262,900 (15.5%)
March 2005 – US$288,500 (26.8%)
March 2006 – US$305,300 (34.1%)
March 2007 – US$322,100 (41.5%)
Vancouver
May 2003 – $319,783
May 2004 – $370,545 (15.9%)
May 2005 – $418,757 (31%)
May 2006 – $518,176 (62%)
May 2007 – $591,722 (85%)
May 2008 – $624,639 (95.3%)
Most recent – $510,465
Calgary
July 2002 – $196,472
July 2003 – $209,932 (6.9%)
July 2004 – $220,978 (12.5%)
July 2005 – $245,704 (25.1%)
July 2006 – $357,831 (82.1%)
July 2007 – $436,739 (122.3%)
Most recent – $384,243
Toronto
April 2003 – $292,783
April 2004 – $321,131 (9.7%)
April 2005 – $342,032 (16.8%)
April 2006 – $366,683 (25.2%)
April 2007 – $379,025 (29.5%)
April 2008 – $398,687 (36.2%)
Most recent – $368,582
Montreal
July 2003 – $190,402
July 2004 – $218,313 (14.7%)
July 2005 – $222,972 (17.1%)
July 2006 – $253,420 (33.1%)
July 2007 – $263,018 (38.1%)
July 2008 – $277,703 (45.9%)
Most recent – $263,734
Many people don’t realize that selling a home is a complicated, time-consuming process. With numerous factors to consider such as open houses, advertising, pricing, negotiating and handling the numerous kinds of inquiries, it can be very exhausting and even worse – unfruitful. Many homeowners report the familiar grief after an open house: “I got lots of people, but most were just looking.” “They wanted it for next to nothing.”
hope for that qualified buyer to walk in your door. I have found in the past few months many FSBO’s have had a lot of inquiries about Rent to own options. This sometimes is possible and works for the seller, but not often.