A recent Financial Post article highlights the latest figures released by the Teranet-National Bank home index, and according to those November 2009 numbers, national home prices strengthened year-over-year. Okay, so maybe that’s nothing shocking, in light of recent news. But what is interesting is that certain markets are definitely affecting the overall bottom-line. And some markets haven’t recovered as much as you might think.
For instance, kind of like the way Jupiter or the Sun massively influence what’s around them, thanks to their size and gravitational pull, there are several centres that are doing their share of affecting the greater-whole. Thus, while national home prices rose by nearly 3%, from Nov ’08 – Nov ’09, the majority of that growth (year-over-year) was due to growth in major centres like Vancouver, Toronto & Montreal.
By conrast, Calgary home prices remained negative, year-over-year, with home prices down just over 2% from the period of Nov ’08 to Nov ’09. And while this statistic may suprise some of you (and make others yawn) it’s important to remember just how high home prices were – as recently of Aug ’08, before tumbling dramatically during the economic downturn.
Now, this article in particular doesn’t address the Nov ’08/’09 numbers for other larger centres like Edmonton, Winnipeg, Ottawa, Halifax, Hamilton etc. And as is typical with media, the article leaves a general impression that because of noticeable gains in only Vancouver, Toronto & Montreal we can assume that all of Canada can expect sustainable growth in the housing market. Well this kind of blanket statement can, as always, be a forecast at best – simply because each market is unique.
If you really think about it, the state of our national housing market is still calculated on a case-by-case basis. And while the news is definitely positive, it’s important to remember how influential (or hindering) certain markets can be when it comes to evaluating the greater whole.
And here’s more food for thought: “The Teranet-National Bank index is based on prices in land registries of homes that have been sold at least twice.” So in this case, we’re comparing data that is based on certain, specific, criteria as well. Another study may use different data altogether.
Regardless, the overall feeling is one of renewed optimism for most. And I think this will continue into the spring and summer months of 2010.
What do you think? Send me your comments.
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By Pjrowbot, February 10, 2010 @ 8:01 pm
Any comments on the recent large uptick in the absorption rate for calgary? Do you figure this is a seasonal thing or are quite a few more people putting they’re houses on the market now?
To be honest I have not been tracking the absorption rate lately as much as I was during the crisis so I am not certain where it is right now. I do know that I have been told that supply has been coming on steadily and will likely come on even more in the spring due to the recession lessening it’s hold on some people. As long as it is tempered and steady the additional supply will balance the market nicely. If it comes on in spades, and demand stays tempered then we may seem a price adjustment. For what it’s worth I see a balancing act.
Greg