RBC – Quarterly measure of home affordability deteriorates in first quarter

June 22, 2012

The RBC reports that rising house prices were responsible for a modest deterioration in home affordability in the first few months of 2012 after two quarterly improvements, but warns that rising interest rates are the more pressing concern long-term.

“Strong buyer demand was a principal driver of the modest rise in home ownership costs. While the deterioration in affordability was felt to varying degrees across the country, it was mild in most cases.”

RBC’s affordability index for a detached bungalow stood at 43.1 per cent of income nationally in the first quarter, up 0.8 percentage points from the fourth quarter of 2011 and up 1.5 percentage points from the first quarter of 2011.

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Seattle among U.S. cities to see biggest rise in home prices

June 22, 2012

Home prices rose in March from February in most major U.S. cities for the first time in seven months. The increase is the latest evidence of a slow recovery taking shape in the troubled housing market.   The Standard & Poor’s/Case-Shiller home price index shows that prices increased in 12 of the 20 cities it tracks.

Three of the weakest markets reported signs of improvement. Prices increased in Tampa and Miami, while prices in Las Vegas were unchanged.  The biggest month-over-month increases were in Phoenix, Seattle and Dallas.  Prices dropped the most in Detroit, Chicago and Atlanta.

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USA Today: Service sectors grow in May, job growth slowing

June 22, 2012

The Institute for Supply Management said its index of non-manufacturing activity edged up to 53.7 last month from an April reading of 53.5.  The May reading was slightly below the long-run average for the index of 53.9. A reading above 50 indicates expansion.

Economists were happy to see that the new orders component of the index rose in May because that is a good sign that demand will be solid in coming months. But there was concern that the employment component, while remaining in expansion territory, slipped to the lowest reading since November.

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Toronto real estate still hot – Vancouver not

June 22, 2012

In a note Wednesday entitled Tale of two cities, Rosenberg said Vancouver real estate has cooled significantly and is now showing signs of turning into a buyer’s market.  Sales of existing homes in Vancouver sank 15.5 per cent from a year ago May, with the sales for the month coming in the lowest for any May since 2001.

At the same time, the active inventory backlog surged 16.8 per cent and new listings were up 14.4 per cent from a year ago.

“The supply-demand balance showed the increasing emergence of a buyer’s market taking hold, with average selling prices for single-family homes deflating year-on-year,” Rosenberg said.

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TD Bank: Toronto and Vancouver experiencing mild downturn

June 22, 2012

Vancouver and Toronto home prices will probably experience a relatively mild downturn — of about 15 per cent — in two to three years, but not the dramatic drop that hit the United States a few years ago, according to a report by the Toronto-Dominion banking group.

The bank’s analysis is consistent with other warnings that Vancouver and Toronto real estate is generally overpriced, but supported by low interest rates and a stable economy. That’s not likely to change this year unless there’s a major economic shock from outside the country, the TD report said.

In the meantime, TD says Vancouver’s real estate market is stabilizing after soaring last year and Toronto prices appear poised for a robust increase.

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International Sales Continue to Climb in U.S. Market

June 22, 2012

Due to low prices and the relative weakness of the dollar, international buyers continue to identify the U.S. as a desirable place to own property and make a profitable investment.

International buyers bought homes throughout the country, but four states accounted for 51 percent of the purchasesFlorida, California, Texas and Arizona.  Florida has been the fastest growing destination of choice, accounting for 26 percent of foreign purchases.  California was second with 11 percent and Texas and Arizona accounted for seven percent. Proximity to the home country, the presence of relatives and friends, the convenience of air transportation, and climate and location are all important considerations to prospective foreign buyers.

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Edmonton Sees Job Boom in May

June 22, 2012

After a slow start to the year, Edmonton’s economy has bounced back with huge growth in the May job market.

Eight thousand jobs were created in the city last month, close to the kind of increases seen in 2005 and 2006.

“This is a boom month,” said John Rose, the city’s chief economist. “These kinds of job growth numbers are not sustainable in the long run because we’ll run out of people.”

Alberta’s energy industry is playing a big part in the growth, with new projects in the oilsands increasing the demand for construction companies around Edmonton.

For many builders, it not only means scrambling to find new workers but also holding on to the ones they already have.

“Certainly from a retention perspective we’re looking at different strategies to try to retain our employees because theres so much more competition,” said Sue Melik, director of talent and acquisition for Ledcor.

Transportation, finance and healthcare also saw jobs created, most of them full time.

Alberta is showing the highest employment growth in the country and is tied with Saskatchewan for the lowest unemployment rate at below 5%.

Source: CBC