Another sharp decline for MLS® home sales in November

The number of properties sold via the MLS® systems of real estate boards in Canada posted a second consecutive steep decline in November 2008, according to statistics released by The Canadian Real Estate Association (CREA). Seasonally adjusted residential MLS® sales activity numbered 27,743 units in November 2008, the lowest level for monthly activity since January 2001. While not as severe as the decline recorded in October, this is still down 12.3 per cent on a month-over-month basis. Seasonally adjusted activity was down from levels recorded in October in 85 per cent of Canadian housing markets. However, year-over-year declines in the MLS® average home price were reported in fewer than half of all markets. Lower activity and the decline in average prices in Canada’s priciest housing markets continue weighing on the overall national MLS® residential average price. The national average price of homes sold via the MLS® in November 2008 declined by 9.8 per cent from where it stood a year ago. The national decline reflects further declines in both activity and price in British Columbia, Alberta and Ontario. The price trend is similar but less dramatic for the weighted national MLS® average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. The weighted national MLS® average price dropped by 4.7 per cent year-over-year in November. The MLS® price trend in Canada’s major markets was similar to the national trend. The major market average home price declined by 9.9 per cent in November from a year ago. Year-over-year declines in average prices were limited to a handful of higher-priced major markets (Greater Vancouver, Victoria, Calgary, Edmonton, Oshawa and Toronto). The weighted major market average price declined by a more modest 3.0 per cent year-over-year in November. “The housing market reflects the economic reality in Canada,” says CREA President Calvin Lindberg. Based on research done for CREA that measures economic benefits of MLS® sales, the decline in housing activity for the year to date translates into $2.8 billion less in spin-off consumer spending. “But we should not lose sight of the fact the World Economic Forum labeled Canadian Banks as the soundest banks in the world, and remember that Canada is the only country of the G8 not running a deficit,” the CREA President added. Seasonally adjusted dollar volume for MLS® sales totaled $7.9 billion in November 2008, down 11.7 per cent from the previous month and the lowest level since January 2004. British Columbia, Alberta, Ontario and Quebec account for more than 90 per cent of the monthly decline in dollar volume. Seasonally adjusted dollar volumes for MLS® home sales in major markets declined by 10 per cent in November from the previous month. Some 95 per cent of the monthly decline in major market dollar volume was due to weaker volumes in markets located in the four provinces accounting for the bulk of the monthly national decline in dollar volume. “These changes in the Canadian housing market reflect a broader and weakened picture of both the economy and buyer sentiment,” said CREA Chief Economist Gregory Klump. “National sales activity and price trends will continue reflecting increased cautiousness on the part of lenders and buyers, as the economy works its way through and out of the current recession.”