Wednesday, April 15, 2009

First Time Buyers Keep it Moving

There's Good News in parts of the Real Estate Market especially for 1st time buyers. Read the following from
Kristine Owram, The Canadian Press on April 15
April 15, 2009 Kristine OwramThe Canadian Press
Real estate experts say low mortgage rates and more affordable homes in many markets are drawing out first-time home buyers in droves, but one independent analyst says the correction in Canadian home prices hasn't been nearly as dramatic as some believe.
Phil Soper, chief executive of Brookfield Real Estate Services, which operates under the Royal LePage banner, said prices are falling and lenders are lowering their rates, making the market more attractive to people looking to buy their first home.
"The uptick in first-time home buyer purchases across the country is quite astonishing,'' said Soper, speaking yesterday at a BMO conference on Canada's housing market.
"Affordability in places like Vancouver has improved for the first time in a very long time.''
BMO senior economist Sal Guatieri said the average mortgage payment has fallen by one-third, or $600, a month from its peak, while average resale home prices have fallen 14 per cent from their highs.
Guatieri said he expects resale prices to fall "moderately further'' this year for a cumulative decline in prices of approximately 20 per cent.
But Peter Norman, a consultant with independent real-estate adviser Altus Group, said the dramatic drops in home prices seen in places like Vancouver, Edmonton and Calgary are the exception rather than the norm.
"This is not a housing adjustment period in Canada,'' Norman said in an interview.
"Certainly, housing demand has slowed down because the economy is the pits, but housing supply has slowed down a lot as well as a result.
"Outside of a couple of submarkets, there hasn't been much of a downward adjustment on price.''
Still, other changes in the market are making this a good time to buy a first home -- as long as the buyer can afford it, Norman said.
"There are a lot fewer of those stories of really rapidly selling houses, bidding wars, all that kind of stuff, so I think it can be a bit more of a sane market for somebody who's trying to buy right now,'' Norman said.
"It may take away some of the anxiety or it may help you make a better decision.''
And most important, overall affordability in the housing market has improved.
"If it wasn't for the recession and the aversion to financial risk that people have right now, it would probably be a very active market and a very good market,'' Norman said.
The Canadian Real Estate Association reported that house prices and sales continued to slide across Canada in February -- the latest month for which data are available -- compared with the same time last year, but activity was up for the first time since September.
The association said resale home prices fell 9.2 per cent across Canada in February to an average of $281,972, while sales fell 31 per cent to 25,373 units, the smallest year-over-year decline since October 2008. Seasonally adjusted sales fell 26.8 per cent.
Meanwhile, the number of homes that traded hands on the multiple listing service, or MLS, was up 8.6 per cent above seasonally adjusted levels in January.

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