Lakefronts are selling!

It has been very active along the Lake Huron Shoreline this past month with good prices and lots of activity. September has been a little slower with the kids going back to school and everyone kind of busy, we are hoping that it will pick up again soon! This lakefront property only took a week to sell and the new owners are really excited to start living the cottage life.

CREA reports that Home Resales are up in Aug.

The Canadian Real Estate Association reported that sales of existing homes in Canada in August rose 4.1 percent from July, the first monthly increase since March, 2010. The industry group said 32807 homes changed hands in August, with most of the monthly gains concentrated in the two biggest markets, Ontario and British Columbia, a reversal from the previous month.

U.S. Housing Starts Rise Sharply in August

Housing starts in the U.S. posted a sharp 10.5% increase in August to an annualized pace of 598K units, greatly surpassing expectations for a small 0.7% gain going into the report. The increase represents the second consecutive monthly gain and the largest since November 2009. As well, encouraging news was also conveyed by building permits which rose 1.8% to an annualized 569K and compared to an anticipated 560K. Today’s report suggests that the housing market is starting to show signs of stabilizing, however, it does little to alter the fact that the level of activity is still indicative of depressed housing market conditions. The weakness in the sector over the summer can partly be attributed to the first-time home buyer’s rebates that ended in April that brought sales forward from the traditional selling season. This is a report from RBC Economics.

Great Canada Parade in Grand Bend

The Grand Opening of Grand Bends' Main Street was on July 1st and besides the ribbon cutting there was a car show with everything from model Ts to Hot Rods and everyone had a great time. Plus the weather was perfect. Photos by Lynda Hillman-Rapley

Canada Day is here in Grand Bend

The weather is sunny and the beaches are crowded here in Grand Bend for the Canada Day Celebrations. We are busy getting ready and making sure our Canadian flag is up and flying. Have a safe and happy holiday

Applying the HST

The new Harmonized Sales Tax (HST) takes effect on July 1, 2010 and will affect certain agreements , such as the purchase of new homes that close after July 1st. HST will generally apply to the same tax base as the current GST does and therefore resale and resort homes will not be affected. Realtors commissions will be subject to the HST at the rate of 13 percent, instead of the GST rate of 5%. I have had some people ask if this new HST is on resale homes and Thankfully it is not.

U.S.-Style Home Price Correction Unlikely in Canada

The Canadian Real Estate Association (CREA) released a new report today indicating that home prices will stabilize, and will remain stable for some time. This means that Canadian homeowners are unlikely to experience a U.S.-style decline in the value of their homes. “The relationship between average price and income has recently been cited as portending a U.S.-style correction in Canadian home prices,” said Gregory Klump, Chief Economist, CREA. “However, such warnings ignore the longer-term relationship between prices and income, and disregard typical Canadian housing market cycle dynamics.” Home prices tend to rise in cycles, characterized by periods of sharp growth and periods of stability. By contrast, income generally follows an orderly upward trend over time. For home prices to keep pace with incomes, they must rise faster during housing booms to make up for periods of little or no price growth. Canadian home prices were stagnant throughout most of the 1990s, while incomes continued rising, making housing more affordable. Over the past decade, home prices have climbed sharply as mortgage interest rates declined. Klump adds: “The Canadian housing market is now widely thought to be at, or very near, the top of a cycle, and the ratio of home prices to incomes is currently high. This ratio will revert to its long-term average as it always does as part of a normal housing market cycle. History suggests, however, that it will not do so by means of a significant correction in home prices. The more likely scenario is that home prices will stabilize, giving incomes a chance to catch up again.” The bursting of the U.S. housing market bubble has sparked fears that Canadian home prices may share a similar fate. However, according to Klump, “warnings to this effect ignore solid Canadian mortgage market trends.” Conservative lending practices in the mortgage industry combined with prudent borrowing and accelerated payments among Canadian mortgage holders have been seen throughout the recent housing market cycle. Accelerated accumulation of home equity will provide options for the small proportion of homeowners who may face financial difficulty when their mortgage is renewed at a higher interest rate. These trends are expected to help Canada avoid a U.S.-style housing crisis. The correction in U.S. home prices is set against a massive oversupply of homes due to distress sales, combined with a drop in housing demand due to unemployment. The unwinding of the housing boom in Canada will be more orderly, characterized by softening sales activity and stable prices.