Home sellers rush to market in record numbers

Realtors pounded a record number of for sale signs into Canadian lawns last month, something that is expected to cool down the red hot housing market, the Canadian Real Estate Association said.

The Ottawa-based group, which represents more than 100 boards across the country, said there were 97,663 new listings in March, up 25% from a year earlier. For the first quarter, 233,402 new listings have hit the market -- the highest for any first quarter on record.

"Negotiations still favour sellers during the home buying process in a number of major Canadian housing markets," Georges Pahud, CREA's president. "The rise in new listings means that buyers may shop around more before making an offer."

Demand has come down slightly. There were 130,072 seasonally adjusted home sales on the first quarter, a 3.4% decline from a quarter ago but still a 46.7% increase from a year earlier.

New records for sale activity were set in Ontario, Quebec and

Newfoundland in the first quarter. However, units sales declined in British Columbia 16.7% from the fourth quarter and in Alberta 9.7%.

Prices also continue to rise, albeit at a slower pace. The average price of a home sold across the country reached $340,920 last month, a 17.6% increase from a year earleir and just $300 off the all-time peak touched in October, 2009.

Even with the strong number of new listings, home listed for sale across the multiple listing service were down 9% March from a year ago.

The number of months of inventory in the system, based on the present pace of actual sales, was 4.4 months in March. That figure was down from 6.7 months a year earlier.

"The erosion of housing affordability is crimping activity in some of Canada's priciest markets in the lower mainland

of British Columbia," said CREA chief economist Gregory Klump. "Higher mortgage interest rates and the rise in new listings may also soon reduce some of the urgency to purchase in

Toronto. Sales activity in British Columbia and Ontario is expected to ease over the second half of 2010 once the

HST comes into effect, pulling national activity lower. Rising supply and lower activity will take the steam out of the pricing environment following upbeat home sales this spring."

(prepared by Garry Marr/Financial Post/National Post)