"Wild Card" props up Canadian housing markets over past decade

TIghter inventory levels heped to make the last decade one of the healthiest periods on record for Canadian real estate, insulating markets in major centers from the peaks and valleys characteristic of past decades, according to a report released by RE/MAX.

The RE/MAX Housing Barometer Report measured monthly sales-to-new listings ratios in 18 major centers across the country from January 2000 to December 2010.  The report found strong seller's/balanced conditions prevailed for much of the time frame, prompting significant gains in housing values.  However, few listings served to offset diminished demand and provided greater stability.

While population growth, pent-up demand and strong economy also contributed to the run up in activity, inventory played a major role in price growth.  The recent recession was case in point.  Supply remained largely in check, keeping prices on the upswing despite softer demand.  That is expected to continue, given an improved global economic picture, lower employment rates and rising consumer confidence - all of which have buoyed home buying activity since November.  While sales figures are expected to be slightly off 2010's heated pace, housing values are forecast to continue to climb in Canadian real estate markets in 2011 - with most a direct result of lower listing levels.

Inventory has always been the wild card.  Its influence is remarkable, but a number of other factors will  serve to bolster Canadian real estate moving forward incude land scarcity, intensification, immigration, continued infrastructure and capital spending improving money markets and the rebounding economy.  The threat of rising interest rates and the changes to mortgage lending may also prompt a flurry of activity affecting price growth in the weeks ahead.  Yet, overall, gains in 2011 will be moderate than those noted in the past decade.

There's no question that price growth has been solid over the past decade, but history tells us that exceptional growth supported by sound fundamentals is healthy.  By all accounts, Canada's real estate market measures up to conventional wisdom, and the faith to homeownersip has not been misplaced.

While the statistics are impressive, they alone cannot tell the tale.  The gains realized over the past decade speak to the tremendous resiliency of the Canadian residential housing market.  Considering catastrophick events, both natural and man-made, that occurred throughout period - SARS, forest fires, ice storms, 9/11, a recession -- the performance of the real estate sector proved that much more significant.  It remained a consistent bright spot supporting economic growth and ancillary spending, and subsequently helped lead the nation out of the greatest downturn in recent memory -- it's hardy nature heightening it's appeal as a long-term investment.

(RE/MAX of Western Canada)

Closer look at what's happening at home......Okanangan Mainline Real Estate Board statistics for the Central Okanagan.....

JANUARAY 2010 compared to JANUARY 2011

282 vs 208 Number of sales by month

$480,082 vs $436,913 Residential average house price

$439,438 vs $410,000 Residential median house price

1,019 vs 861 Number of units listed

ACTIVE LISTINGS CENTRAL OKANAGAN

1,227 Residential

855 Condominiums

185 Mobiles

651 lots

RESIDENTIAL SALES BY PRICE year-to-date 2010 compard to 2011

1 vs 4 $0 - $239,999 price range

5 vs 9 $240,000 - $319,999 price range

38 vs 32 $320,000 - $399,999 price range

39 vs 20 $400,000 - $479,999 price range

25 vs 17 $480,000 - $559,999 price range

24 vs 11 $560,000 - $999,999 price range

2 vs 1 $1 million and over price range

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