Pasadena Home Values

Happily for Canada the real estate market did a u-turn out of the recession sooner than anyone thought. The decline reversed in the spring of 2009, and the sales numbers escalated through to summer. Another surprising bit of information, is that sales growth of amounts in excess of 100% were disclosed through the winter months. Not only did the figures bounce back but the average price exceeded the pre-crash figures.

Comparing the Canadian market against the rest of the world, looks like Canada doing much better and there are several points why. Speaking to the experts, most say that this recovery is mainly due to the low interest rates put in place by the Bank of Canada. When looking at the rates in the USA, although we see low rates as well, they didn’t have the same result as seen in the Canadian real estate market.

The Canadian mortgage area was not as damaged with sub prime mortgages as seen with the US market. Canada gave these subprime loans to between 5 and 10% of the borrowers, unlike the US who’s subprime loan market was a gigantic 22%.

The Canadian banks also have frequently satisfactory reviews, according to the World Economic Forum, Canadian banks are the solid in the world. Furthermore, the tough financial stand has also helped Canada avoid the subsequent credit crunch.

Since last summer our economy has seen jobs appearing so despite the fact we had a jump in unemployment like the US, it has improved quicker. In addition, Canada’s social setup helped to reduce personal bankruptcies.

In conclusion the Canadian real estate market is unquestionably very solid. Unfortunately with news this good people are starting to mutter about the prospect of bad news, in the not so distant future, for the housing market. I don’t think this is the way forward, for a number reasons.

Interest rates are being kept stable until at the summer, we were told by the Bank of Canada. Rates will rise as summer arrives and we have already seen some mortgage rates increasing a bit. We are also coming closer to the removal of the First-Time Home Buyers’ Tax Credit, which is in all likelihood going to have an impact on the real estate market. Since the autumn 2009 we have seen a shortage of new listings on the market; this is no longer the issue. Jay Banks of Vancouver Lofts notes: “There has been an enlarging influx of new listings over the last 2-3 months, which has helped to stabilize the inventory level.”

More levelled sales and prices of properties settling at reasonable figures, is probably going to be the outcome of all these points starting to come together.

What is so surprising is the real estate market in Canada bounded back quicker than expected. In the spring of 2009, Canada saw the about face of the real estate market, we noticed sales figures continuing to climb in the following months. When we look at the winter months we see an even greater increase with reports of over a 100% jump. Normal prices exceeded the pre-crash level of the fourth quarter 2009.

Scrutinizing the Canadian market against the rest of the world, sees Canada doing much better and there are several reasons why. Speaking to the professionals, many say that this recovery is primarily due to the low interest rates put in place by the Bank of Canada. This low rate supported the Canadian real estate market and even though the US tried to do the same thing, they didn’t see the same results:

High risk loans for mortgages was common in the US unlikeCanada. Canada gave these subprime mortgages to between 5 and 10% of the borrowers, unlike the US who’s subprime loan market was a gigantic 22%.

Canadian banks are regularly held up as as the most secure in the world by the World Economic Forum. In addition, the solid financial position has also helped Canada avoid the subsequent credit crunch.

Even though jobs were lost and the unemployment figures increased, the figures were not as terrible as they were in the US and recovery has been seen since Summer 2009. Personal bankruptcies are smaller due to the social order in Canada

To sum up, the Canadian real estate market is on a steady footing. It is so positive, in fact, that there are people in the background whispering of a new and more dangerous real estate bubble ahead. From my own thoughts of the real estate market I don’t believe this for a minute.

The Bank of Canada gave word to keep the rates of interest stable until summer 2010. Of course we have already seen mortgage rates starting to increase and many professionals say we will see the rates increasing as the summer approaches. The First Time Home Buyers’ Tax Credit is going to stop soon, despite there is no official date it finishes it can’t stay for ever. We also have seen, the shortage of new properties listed, which we have been enduring since the autumn of 2009, is slowly letting up. Jay Banks of Vancouver Lofts says: “Over the last few months, the real estate market has seen an jump of new listings on property agent’s books, which has steadied the situation.”

More levelled sales and prices of properties settling at tolerable figures, is probably going to be the outcome of all these points starting to come together.