Resale housing market continues to recover in April

MLS® home sales activity increased for the third time in as many months in April 2009, according to statistics released by The Canadian Real Estate Association (CREA). The national average price also rose in April, to within short reach of the record levels reached one year ago.

Seasonally adjusted national home sales activity climbed 11.2 per cent in April 2009 compared to the previous month. This is the largest month-to-month increase in activity in more than five years. MLS® home sales activity reached its highest level in seven months, with 34,838 units trading hands nationally via the MLS® in April on a seasonally adjusted basis.

The increase in April builds on gains of 10.3 per cent in February and 7.7 per cent in March. Seasonally adjusted activity now stands 32 per cent above the lowest level in a decade that was recorded in January 2009.

Seasonally adjusted sales were up from March levels in 70 per cent of local markets, with gains in Toronto (10 per cent), Vancouver (30 per cent), Montreal (15 per cent), and Calgary (31 per cent) contributing most to the overall increase in monthly activity.

Actual (not seasonally adjusted) MLS® home sales totaled 43,473 units in April 2009, down 11.8 per cent from the same month one year ago. Year-over-year declines have been shrinking since dropping a record 42.2 per cent in November 2008.

“REALTORS® know that several factors have led to this market situation,” says Regina Broker Dale Ripplinger, President of The Canadian Real Estate Association. “First, price adjustments in some markets have helped affordability. Second, lenders do have money for people and properties that qualify, although some are being more stringent. The third factor involves consumer confidence, which has risen in the housing market through the Spring.”

The last factor, CREA’s President adds, is that sellers have realized that realistic pricing is key, and that is very much driven by local factors. “Homes are only worth what a buyer is willing to pay.”

The national MLS® residential average sale price in April ($306,366) stands 3.2 per cent below April 2008, when it reached its pre-recession peak. The MLS® residential average price broke all previous monthly records in Saskatchewan, Manitoba, Quebec, and Nova Scotia.

The supply of homes coming onto the MLS® market continued trending downward in April. Seasonally adjusted MLS® residential new listings edged lower by 1.8 per cent from the previous month to 66,843 units, the lowest level since June 2006. Seasonally adjusted new residential listings in April were 16.4 per cent below the peak reached in May 2008.

With sales activity rising strongly and new listings trending downward, the balance between supply and demand is firming up in British Columbia, Alberta, Ontario, and Quebec. As a result, in April 2009 national sales as a percentage of new listings reached the highest point since February 2008.

The residential dollar volume for MLS® sales climbed 12.3 per cent from the previous month to reach $10.2 billion. This is the biggest increase since December 2001, and first time since September 2008 that dollar volume surpassed $10 billion.

“If the trend for MLS® sales activity over the past few months persists, the number of transactions in May could surpass the pre-recession levels of September 2008,” said CREA Chief Economist Gregory Klump. “In the recessions of the early 1980s and 1990s, sales activity bottomed out before the job market or even the economy did. Improved affordability may result in Canadian existing home sales leading the economic recovery this year.” (CREA 14/05/09)