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CREAstats – National:

Canada’s MLS ® housing market balance stabilizes in third quarter

OTTAWA – October 15th, 2008 – The number of properties listed via the MLS® systems of Canada’s major markets was down from its peak in the third quarter of 2008, according to statistics released by The Canadian Real Estate Association (CREA). This caused the balance of sales-to-new-listings in the market for resale homes to tighten on a quarter-over-quarter basis for the first time since the beginning of 2007.

New MLS® residential listings in Canada’s major markets numbered 146,637 units on a seasonally adjusted basis in the third quarter of 2008. This is 3.3 per cent below the highest level on record, set the previous quarter. New listings eased most in Edmonton and Calgary in the third quarter, followed by declines in Vancouver and Montreal.

The balance between sales and new listings has stabilized in many major resale housing markets in recent months. The trend stands out most in Edmonton and Calgary, where a sharp drop in new listings and rising sales activity has firmed up the resale housing market considerably since the beginning of the year.

“Informed buyers and informed sellers look at the facts. And the facts right now indicate the real estate resale market is stabilizing in many markets,” says Calvin Lindberg, the President of The Canadian Real Estate Association.

“There have also been a number of initiatives that will have an impact going forward, including the government’s decision to invest $25 billion in insured mortgage pools, the recent drop in the Bank of Canada rate, and the new rules reducing the maximum amortization to 35 years instead of 40,” the CREA President adds. Those new mortgage rules go into effect October 15th. “The third quarter MLS® statistics and these developments are more factors showing the Canadian market is not following U.S. housing trends.”

Seasonally adjusted MLS® residential home sales in Canada’s major markets edged 1.5 per cent lower on a quarter-over-quarter basis to 76,391 units in the third quarter of 2008. The small decline in activity reflected fewer sales in Vancouver, which more than offset a rebound in activity in Edmonton and Calgary.

Seasonally adjusted transactions rose on a month-over-month basis in the majority of major markets in September 2008. Some 25,680 homes traded hand via the MLS® systems of Canada’s major markets on a seasonally adjusted basis in September, an increase of three per cent from levels recorded in August. The increase may reflect an influx of buyers prior to the elimination of mortgage insurance availability for those with less than a five per cent down payment.

Unadjusted (actual) sales activity was on par with September of last year, but remains below levels one year ago in some of the Canada’s most expensive housing markets . Lower sales activity in higher priced markets pulled the overall major market MLS® residential average price down by 6.2 per cent year-over-year in September, despite year-over-year average price gains in 17 of 25 major markets.

Lower activity in some of Canada’s pricier markets has weighed on the overall average price trend this year due to a decline in their weight in the average price calculation compared to last year . The price trend is similar but less dramatic for the weighted average price, in which the proportion of privately owned housing stock in each market is taken into account.

“Price declines in some of Canada’s more expensive housing markets will outweigh further price gains in other markets and continue pulling the national average price lower over the rest of the year and into 2009,” said CREA Chief Economist Gregory Klump. “Global financial market turmoil and the resulting slowdown in global economic growth will continue weighing on Canadian exports and economic growth.”

“As the Canadian housing market and pricing environment cools, the number of days on market for sales is likely to rise. By and large, Canadian home sellers are under no financial duress to sell, and a number may decide to take their home off the market should it remain unsold when the listing expires. The resulting decline in listings limits the extent to which the balance of sales and new listings will realign. Canadian homebuyers should not expect to see the kind of price correction that’s underway in the U.S., where overly indebted homeowners are selling into a housing market where foreclosures and the number of newly constructed unoccupied homes are increasing.”

MLS® Major Market Residential Summary:
Third Quarter 2008

	(Seasonally Adjusted Data)				(Unadjusted Data)
	Third Quarter 2008	Second Quarter 2008	% change		Third Quarter 2008	Third Quarter 2007	% change
Dollar Volume ($ millions)	24,668.0	25,946.5	-4.9		23,984.2	28,237.5	-15.1
Unit Sales	76,391	77,516	-1.5		74,958	83,947	-10.7
Average Price ($)					319,969	336,373	-4.9
New Listings	146,637	151,573	-3.3		151,269	142,039	6.5

MLS® Major Market Residential Summary:
September 2008

	(Seasonally Adjusted Data)				(Unadjusted Data)
	September 2008	August 2008	% change		September 2008	September 2007	% change
Dollar Volume ($ millions)	8,243.6	8,021.0	2.8		7,567.3	8,087.2	-6.4
Unit Sales	25,680	24,937	3.0		23,988	24,046	-0.2
Average Price ($)					315,461	336,321	-6.2
New Listings	48,870	47,426	3.0		54,675	48,666	12.3

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.

MLS ® is a co-operative marketing system used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 98,000 REALTORS® working through more than 100 real estate Boards and Associations. CREA’s primary mission is to represent members at the federal level, and to defend the public’s right to own and enjoy property.

This report is published by the Communications Department of The Canadian Real Estate Association (CREA). Further information can be found at www.crea.ca. Please note a podcast by CREA President Calvin Lindberg dealing with the differences between the Canadian and U.S. housing markets is also available on the website.