2007 proved to be a startlingly good year for the Canadian housing market. Month after month, the prices of homes in many areas of Canada experienced consistent growth spurts. During the first 6 months of 2007, sales activity reached unprecedented levels. Though the rise in house prices in Canada has slowed slightly in 2008, many potential buyers are asking themselves "Is now the right time to ?" Below, we'll take a brief look at what the current state of the Canadian real estate market means to you.
Market Forces In The U.S. And Canada
The real estate market in Canada is experiencing an interesting dynamic. The U.S. (Canada's largest trading partner) is currently going through a housing slump as rising unemployment, low consumer confidence and a portfolio of sub-prime mortgages that has been slowly imploding threatens to shake the nation into a recession. While the economies (and by extension, the housing markets) in both countries are connected, some experts suggest the problems in the U.S. could boost the housing market in Canada.
Gregory Klump, the chief economist of the Canadian Real Estate Association, has suggested that a recession in the U.S. could prompt the central bank in Canada to lower interest rates. These lower interest rates, combined with the strong dollar and record employment rates, could make buying a home more affordable.
What The Current Market Conditions Mean To You
The growth in the Canadian housing market has started to attract investors from abroad. People from England and the U.S. have begun looking at Canada for real estate investment opportunities. This could propel home prices even higher. The housing market conditions in the U.S., the possibility of lower interest rates in Canada along with increased interest from foreign investors may suggest that there is plenty of growth ahead for Canadian residential real estate.
If you're planning to , now may be the time to act. While the housing market has enjoyed explosive growth during the past year, worldwide and regional economic conditions seem to imply there is plenty of growth potential left.
The Standard & Poor's/Case-Shiller U.S. National Home Price Index posted a record annual decline of 3.2% in the home price growth rate. The data from the revised results for the 2nd quarter of 2007, published in June, reveal a declining growth rate in the prices of single family homes in most of the top 20 metro areas indices. The S & P/Case-Shiller Home Price Index tracks the value of typical single-family homes in the U.S. for the 20 U.S. metropolitan areas listed below.
This year's 2nd quarter results are the lowest of price declines in the 20-year history of the National Home Price Index. According to Robert J. Shiller, Chief Economist at MacroMarkets LLC, the June revised data of June shows the declining annual growth rate in 17 of the 20 metro areas, adding two more metros from what was reported in May.
Out of the 17 metro areas that registered a year-over-year home price decline, Detroit had the maximum growth rate decline of 11%. Of the metros that have registered price gains, Seattle stood at the top spot with 7.9% price growth, followed by Charlotte with 6.8% and Portland with 4.5% price growth since last year.
Boston had improved its annual rate of price decline slightly in June to -3.9% from -4.3% reported in May. This is significant given the fact that Boston was the first metro area to go overboard, being the first to report a negative year-over-year growth rate.
The following are the revised results of June 2007 showing the percent of change in home values over the last year for the top 20 metropolitan areas.
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