This Month in Real Estate - September 2010

8/8/2019 This Month in Real Estate - September 2010

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Brought to you by:

KW Research

Commentary 2

The Numbers That Drive Real Estate 3

Special Reports 9

Topics for Home Buyers, Sellers, and Owners 11

Released:

September 7, 2010


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Commentary

Canadas housing market is back in balance with home sales and prices, continuing to fall

back in line with historical trends. The outlook for the Canadian economy, employment,

and mortgage market remains positive, but tempered from earlier this year.

Canada will continue to be somewhat susceptible to global economic movements, andthe Bank of Canada intends to monitor this closely as it makes further decisions about

interest rate increases. Because the normalizing of the housing market has quelled fears

of a housing bubble, some experts believe the Bank could be less likely to continue rate

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es.

The strong fundamentals of the financial system continue to bode well for the future. The

Royal Bank of Canada was honored with a spot in the Top 10 safest banks in the world,

while 6 Canadian banks made the Top 10 list for North America.

Overall, the outlook remains cautiously optimistic, but it is widely recognized that theCanadian economy remains strong, resilient, and stable compared to other major

economies.


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KW Research

Home Sales 4

Home Price 5

Inventory 7

Mortgage Rates 8

The Numbers That

Drive Real Estate


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Home SalesIn Thousands

Existing home sales activity totaled 31,536 units in June, down 6.8% from the

previous month, as sales trend back toward the 20-year average. Experts consider

this departure from the seasonal norm to be due in large part to the effects of

changes to mortgage regulations and rising interest rates, which caused buyers toact in April when they would have otherwise done so at a later date.

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42.0

44.6

43.4 41.5

31.5

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

Data released on August 15, 2010

Sources: The Conference Board, CREA, Royal Bank of Canada

Sales back at

historical markers

July 09-10

July 08-09

20-Year Average: 31.3


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$326.9

$341.2$347.0

Home PriceIn Thousands

The national average home price slid 3.6% to $330,351 in June from a month earlier,

but still remains 1.1% above year-ago levels. Now that home prices have fallen back

in line with 30-year historic appreciation, economists and industry experts expect

prices to increase at a slower rate as the market balances.Home Price previous year

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$328.7 $330.4

Jun '09 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun '10

Data released on August 15, 2010

Sources: The Conference Board, CREA, Royal Bank of Canada

Jul '06 Jul '07 Jul '08 Jul '09 Jul '10

Home Price - past 5 years

enlarged above


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NT

$404K

YT

$284KPrices Increased

Prices Decreased

Home Price Direction(Year-Over-Year Change)

Home Prices by Province and Territory10 out of 12 provinces and territories experienced an increase in home prices

National Average: $330,351

No Data

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BC

$492KAB

$355KSK

$249K

MB

$219K ON

$329K

QC

$251K

NL $237K

NS $99K

NB $160K

PE $145K


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Inventory Sales-to-New Listings Ratio

Number of homes available for sale

The new supply of homes continues to mirror the number of buyers in the market.

This balance of supply and demand provides an environment suited for home

price stability. The market is solidly back in balanced territory as seen by sales-to-

new listings ratios close to 50% for the past four months. This is a good indicatorfor a sustainable housing market.

Sellers

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63% 64% 67% 68% 66% 63% 60% 58% 55% 52% 49% 48% 48%

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

Buyers

Market

Balanced

Market

Market

June

09-

10

June

08

-09


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Mortgage RatesAverage for 25-year amortization, 5-year term

Mortgage rates fell to 5.39% for the month of August from 5.79% in July. Aside from

February, which was the last time the interest rate hit 5.39%, this was the lowest since May

2009. Low rates provide an excellent opportunity for savings on monthly payments every

1% change in interest has the same effect on monthly payments as a 10% change in price

on a 30-year amortizing loan. As recovery gains a firmer footing, rates continue to beexpected to increase in order to keep inflation in check.

35-year average: 9.94%

KW Research 8Source: Bank of Canada

5.25%

5.85% 5.84%

5.49%

5.39%

6.25%5.89%

5.39%

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

August 08-09


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Brought to you by:KW Research

Special Reports Canadians Purchase MostU.S. Property 10


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Canadians Purchase Most U.S. Property

Last year, Canadians purchased more property in the United States than residents of any other

country. Of all the property purchased by non-U.S. citizens, Canada weighed in at 23%, followed

by Mexico at 10% and the United Kingdom at 9%. China and Germany followed closely behind.

Given the strong Canadian currency, the low interest rates, and the reduced home prices in

some of the sunniest and warmest winter states its understandable why. Some of the warmest

states; including Florida, Arizona, and California; also have higher levels of distressed properties,

which could mean further savings for savvy buyers.

KW Research 10Source: TheGlobeandMail.com

The following are a few things to keep in mind for those who decide to spend substantial time

south of the border:

1. Taxes. If you spend more than 4 months in the United States each year, you might be

considered a citizen for tax purposes. Fill out an IRS Form 8840 to let the U.S. government

know you are a Canadian citizen.2. Automatic Payments. Set up automatic payments for bills while youre gone. Make sure

your drivers license and insurance will not expire while youre away.

3. Health Insurance. Not having health insurance while in the United States could cost you

serious money. Plan ahead and secure insurance before heading south.


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Topics for Home Buyers,

Sellers, and OwnersFinancial Fitness 12


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Is homeownership a key component to being financially sound?

Financial FitnessHow Homeowners Compare

According to a survey sponsored by Genworth Financial Mortgage Insurance

Company, homeowners are the most financially fit.

The following are some of the key findings:

65% paid off their credit card balances every month; thats 12% more than

KW Research 12Source: REM online.com, newswire.com

non- omeowners

25% have made additional payments on their mortgages in the past year

44% of homeowners were able to save some money after paying their

monthly bills

About half of homeowners surveyed made down payments of 20% or more 13% said they are in great financial shape

Compared to the same survey 3 years ago when the economy was booming,

there was a 5% increase in those who say their financial fitness is good


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Although it is important to stay informed about what is going on in the

national economy and housing market, many different factors impact the real

estate market in your own area.

Your Local Market

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conditions in your local market.

KW associates are equipped with all the knowledge and information to help

navigate you through the home-buying or selling process in any market.


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About Keller Williams Realty

Founded in 1983, Keller Williams Realty, Inc., is an international real estate

company with more than 77,000 associates and 677 offices located across

the United States and Canada. The company began franchising in 1991, and

following years of phenomenal growth and success, became the third-largestU.S. residential real estate firm in 2009.

The company has succeeded by treating its associates as partners and shares

its knowledge, policy control, and company profits on a system-wide basis.

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Focusing on helping associates realize their fullest potential, Keller WilliamsRealty is known as an industry leader in its family culture, unmatched

education, profit sharing business model, phenomenal coaching program,

and technology offerings.

www.kw.com


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The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and

national media, local real estate agents and other expert sources. You should not treat any opinion expressed on This Month in

Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of

opinion. Keller Williams Realty, Inc., does not guarantee and is not responsible for the accuracy or completeness of information,

and provides said information without warranties of any kind. All information presented herein is intended and should be used for

educational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own

research and due diligence and obtain professional advice before making any investment decision. All investments involve some

degree of risk. Keller Williams Realty, Inc., will not be liable for any loss or damage caused by your reliance on information

contained in This Month in Real Estate.

This Month in Real Estate - September 2010

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