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MEXICO – The evolution of the property market in México: moderation in 2009.

Housing sales at national level.  (thousands)

The global financial crisis, detonated by the housing American market, starts to have impacts on the real estate sector in México, closely linked to economic fluctuations in U.S.A. The slowdown of the sector has been shown since 2008, with significant adjusts in the house sales, although with different dynamics among their regions and segments.

The beach cities represent one of the most affected zones, where the strongest has been the impact to the real estate contraction. The less buying volumes of second home by the baby boomers side, and indirectly, the less tourist activity, have depressed the house buying volumes in these zone. On the other hand, a glance at the sales break down in these cities, by housing segment, proofs a sort of dynamism in sector "A” of social housing. As you can appreciate (Graphic 1), also in a national level this segment it’s the one that keeps showing a sort of dynamism.

This strength is explained in a good measure with the highest availability of the land offer to build this type of housing. In México, the house offer is very inelastic, not only because of the rigidity of its institutional acquisition scheme , but because the high costs of development in zones distant from the urban centers, or the ones that lack services as water, electricity, transportation, or security among others. With all, these elements put a pressure on the construction costs that restrict the housing developments of higher segments.

From the financing point of view, the development process of the mortgage market and above all from the certification process of the mortgage portfolio, that has represented an innovating factor in the region and has allowed an increase in the housing financing sources, has temporarily stopped. Since the financing crisis beginning stands out a remarkable increase in the expired portfolio of the Financing Societies of Limited Object ("Sofoles-Sofomes” in Spanish)

However, the mortgage types have had a relatively stable evolution, and it still exists a favorable joint for the innovation of instruments (inverted mortgage, collateralize mortgages with correlated assets) and for the deepening of the mortgage banking. These strengths will be an important factor in the recovery moment of the sector.

When the financing crisis is overcame, in the moment when the Net Internal Product (PIB in Spanish) grows in higher rates, the permanent employment in the economy’s formal sector will grow as well in an important way and the types of average interest will be stabilized and even will be reduced. In that moment, we can expect a turn of the banking credit for housing in a growing path.

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Graphic 1
National Housing Sales. (thousands)

*Projection, with numbers to the third trimester

Source: BBVA Bancomer with Softec data

BBVA Mayo 2009

CANADA: Recovery underway in key Canadian markets ends buyer dominance in resale housing, says RE/MAX

Kelowna, BC. (July 13, 2009) – Pent-up demand for residential housing has bolstered sales in Canada’s major markets—a clear signal that the housing sector has shifted into recovery mode, says RE/MAX.
 
More balanced market conditions have emerged, effectively ending the stronghold that buyers had on the market over the past six to eight months.  Canada’s largest markets, Toronto and Vancouver, led the charge—with June sales among the highest in history for both local real estate boards.  Close to 11,000 properties changed hands in Toronto, up 27 per cent over one year ago, setting a new record for sales in the month of June.  The figure was just slightly off the all-time peak of 11,146 units.   Residential sales in Greater Vancouver increased 75.6 per cent over one year ago, to 4,259 units, just short of the record breaking 4,333 sales, which occurred in June 2005.  Overall, major markets began to recover in March, posting escalating sales in April, May and June.  The impetus is expected to continue throughout the remainder of 2009, with most centres now forecasting year-end sales on par or ahead of 2008 levels.
 
"While sales are the leading indicator, there are other clear signals that recovery is indeed underway,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada.  "Renewed consumer confidence, albeit cautious, has been key, supported by improved economic news.  In addition, we’ve seen sale price-to-list price ratios climb across the country, rising as high as 105 per cent in some communities.  Vendor incentives have also come off the table, both for resale and new housing stock.”
 
The recent surge in resale activity can be attributed to three key factors—pent-up demand, low interest rates, and greater affordability.  The combination—in conjunction with declining inventory levels—has created heated market conditions in hot pocket neighbourhoods, prompting a resurgence in multiple offers in June.  Average prices are holding steady or climbing, days on market are down, and inventory levels continue to tighten, especially at entry-level price points.
 
"The strength of the market, amid the most significant global recession in recent history once again underscores its relevance to the nation’s economic engine,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada.  "Canadians believe in homeownership --a fact best illustrated by the purchasers who ventured forward in recent months and snapped up some of the best real estate deals this market has seen in years.  Those who chose to sit it out on the sidelines are now facing a market in transition, characterized by the threat of rising interest rates, low inventory levels, and upward pressure on housing values.”  
 
Although the current pace may be unsustainable, all markers point to greater stability in the market, leading to healthier activity in the long run, with inventory levels a key variable influencing pent-up demand.  

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Market by market overview:

Greater Vancouver Area
Growing consumer confidence levels have prompted a serious upswing in home buying activity in the Greater Vancouver Area, with sales in June (4,259) the second highest on record for the local real estate board.  From White Rock to Vancouver, radiating out to the Fraser Valley, bidding wars are breaking out on well-priced product. In Kitsilano, an estimated 50 per cent of housing is selling in multiple offers.  Low interest rates and increased affordability – average price is still significantly lower than one year ago – have served to stimulate market activity.  Inventory levels have been on
the decline in recent months, placing greater upward pressure on values.  First-time buyers are driving freehold housing sales at the 0,000 price point, while those looking at more affordable alternatives are considering condominiums starting at substantially less.  Balanced market conditions prevail overall. Pent-up demand has also been building, with local purchasers and international investors both active in the market.  The upcoming Olympics, and the completion of the much anticipated Canada Line this Fall are expected to further bolster the cautious optimism characteristic of the Greater Vancouver market at present.  Home buying activity, as a result, is forecast to continue at a healthy pace for the remainder of the year, with year-end sales slightly ahead of 2008 levels.
 
Calgary
Balanced conditions have returned to Calgary’s resale housing market.  Strengthening momentum—residential sales at over 3,000 units were up in double-digit territory in June —has already begun to place upward pressure on prices in the entry level.  With increasing competition among first-time buyers, the supply of starter homes is tightening.   Buyers who moved in spite of doom and gloom forecasts in the Fall, Winter, and early Spring realized considerable savings, while those who hesitated are discovering it has cost them.  Multiple offers are re-emerging in a few choice neighbourhoods on well-priced product, although there are still a few good deals to be had in the mid-range. Prices on the whole, however, are stabilizing.  Signs of a transitionally stronger market include rising sales-to-new listings ratios, shorter days on market, and fewer incentives from vendors/builders. Activity is expected to remain better than average this summer, as those who paused over the past six months dive back in before interest rates rise.   Momentum will continue to build into the fall, with overall 2009 sales edging slightly ahead of 2008 levels by year-end.
 
Edmonton
The residential resale market is springing back to life in Edmonton, with sales setting a new record for the month (June) and the third best month for unit sales in MLS history.  While activity has been steadily improving in the second quarter, the heated momentum has yet to put any serious pressure on average price, which, although rebounding, remains down year-over-year.  The market has shifted, moving from buyer’s territory to more balanced conditions, prompted by the recent flurry in home buying and the slow return to more traditional inventory levels.  Stability will characterize Edmonton’s housing sector going forward, with low interest rates, rising consumer confidence levels and affordability the impetus behind healthy demand.  The frenzied climate of previous upswings will be conspicuously absent.  While multiple offers have re-emerged—particularly in the 0,000 to 0,000 price point—they will continue to be the exception rather than the rule, driving sales price close to, but not typically over, asking price.   Demand is expected to remain strong in the months ahead, bolstered by looming interest rate hikes and glimmers of positive news on the economic horizon, as consumers regain a cautious optimism.
 
Regina
Positive economic performance continues to bolster home buying activity in Regina.  Despite a 10 per cent decline in year-to-date sales (1,778 vs. 1,977 units) from levels reported January to June 2008, the gap is narrowing as purchasers move to take advantage of low interest rates and greater affordability.  Sales in May and June were up in double-digit territory over one year ago and momentum is building. First-time buyers remain the most active segment of the market, sparking sales under 5,000.  Inventory levels have been responsible for the steady upward pressure on housing values in the lower-end of the market.  Limited supply of starter product in Regina has most properties in good condition, in desirable communities, moving quickly – some in multiple offers.   The top-end of the market has also seen some bounce back, with sales between 0,000 and 0,000 up about 25 per cent over one year ago.
 
Condominium sales, however, have softened year-over-year, with an oversupply of product currently listed for sale.  Although conditions currently favour the buyer, the market is transitioning.  More balanced conditions are expected to emerge in the months ahead. Given a continuation of current economic fundamentals, the number of homes sold in Regina by year-end is expected to match 2008 levels.
 
Greater Toronto Area
Pent-up demand for residential housing continues to fuel home buying activity across the Greater Toronto Area.  The number of homes sold in June – at 10,955 -- came close to the historic record of 11,146 units set in May 2007, while pressure on average price is sending housing values higher than one year ago.  Although balanced market conditions prevail, there are those communities that have clearly transitioned into sellers markets.  Inventory is key, with the number of properties currently listed for sale down approximately 30 per cent from 2008 levels. Over the past six weeks,
momentum has been building, with demand strongest for homes priced between 0,000 and 0,000.  Multiple offers are once again commonplace, especially in the city’s coveted hot pocket neighbourhoods.  Affordability – in terms of low interest rates and housing values – has been the impetus for first-time buyers.  Luxury home sales have also experienced solid demand in recent months, with 291 homes changing hands over the million price point in June – a new record.  The threat of higher interest rates and home prices are expected to stimulate a flurry of home-buying activity in the months ahead.  By year-end, sales are forecast to exceed 2008 levels.
 
Ottawa
Solid economic fundamentals in the nation’s capital continue to prop up housing activity.  Year-to-date sales for January to June are slightly ahead of 2008 levels, with the number of properties sold in June (1,895) up 12.5 per cent over one year ago – the third consecutive record setting month.  Pent-up demand has been a major factor, with purchasers who put their home buying decisions on hold during the late fall and early winter now entering the market en masse.  As a result, the balanced market that prevailed in recent months is now shifting in favour of the seller.  Multiple offers are occurring on desirable properties in virtually every price range.  Inventory levels, which peaked in April, are now falling.  With less product on the market, certain segments are experiencing serious shortages—in fact, single family homes priced between 5,000 to 5,000 are few and far between. In the past four to six weeks, the upper-end has also started to rebound as all segments of the market work in tandem.  While the threat of an upcoming election will have some impact on the market, healthy sales activity is expected to continue throughout the remainder of the year, with sales ahead of 2008 levels.
 
Halifax-Dartmouth
Improved purchasing power, combined with the threat of rising interest rates, effectively spurred fence-sitters back into the resale housing market in June, halting the trend of double-digit declines in sales.  The number of homes sold was up five per cent to 805 units in June 2009, compared to one year ago.
 
Despite the increased momentum, buyers remain firmly in the driver’s seat, benefiting from increased inventory and negotiating muscle, as motivated vendors adjust pricing to position their homes more competitively.  Although sales remain down year-over-year, the gap is narrowing.  Affordability and the stability of Halifax-Dartmouth’s relocation market continue to prop up activity, and first-time buyers remain the driving force.  Opportunity exists for purchasers in the mid-to-upper price ranges, where demand and conditions have generally been softer.   Consumer confidence is strengthening once again.  With the upswing expected to extend into the fall, more balanced market conditions are forecast to emerge, and Halifax-Dartmouth may once again find itself a market in transition.
 
St. John’s
Strong consumer confidence, buoyed by a vibrant local economy and a healthy employment picture, has kept St. John’s real estate engine moving at a steady clip.  With billions of dollars in capital works projects planned or underway, in-migration remains positive and demand for resale housing continues to be solid.  Improving inventory levels have shifted the market slightly into buyers territory, giving purchasers the necessary traction to make their moves.  The threat of interest rate hikes has further stimulated home buying activity, pushing fence-sitters off the sidelines and into action.  Residential sales in June 2009 (354 units) are slightly ahead of June 2008 (351 units) figures. The year-to-date average price recorded a 24 per cent increase to 1,221, compared to 0,500 for the same time period last year, bolstered by greater momentum in the mid-range.  Corporate transfers have been a significant stimulus.  Entry-level homes, priced between 0,000 and 0,000, are being snapped up at an unprecedented pace given the sharp upswing in pricing. Listing inventory levels are higher and the upper-end continues to move well, supported by the relocation market.  Inventory will be a key factor influencing St. John’s housing sector in the months ahead.  The pace is expected to continue, with sales rounding out the year at or ahead of 2007 levels, but below record numbers reported in 2008.
 
RE/MAX is Canada’s leading real estate organization with over 17,000 sales associates situated throughout its more than 677 independently-owned and operated offices across the country.  The RE/MAX franchise network, now in its 36th year, is a global real estate system operating in more than 70 countries.  Over 6,700 independently-owned offices engage nearly 100,000 member sales associates who lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral, and asset management.
 
Source:
RE/MAX Mainstreet System – Marie Selby
RE/MAX of Western Canada
Elaine Langhout
Eva Blay/Charlene McAdam
Point Blank Communications

USA - Record Streak Continues for Pending Home Sales - Washington, October 01, 2009

Pending home sales have increased for seven straight months, the longest in the series of the index which began in 2001, according to the National Association of Realtors®.

The Pending Home Sales Index,* a forward-looking indicator based on contracts signed in August, rose 6.4 percent to 103.8 from a reading of 97.6 in July, and is 12.4 percent above August 2008 when it was 92.4. The index is at the highest level since March 2007 when it was 104.5.

Lawrence Yun, NAR chief economist, said not all contracts are turning into closed sales within an expected timeframe. "The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules,” he said. "No doubt many first-time buyers are rushing to beat the deadline for the ,000 tax credit, which expires at the end of next month.”

The Pending Home Sales Index in the Northeast jumped 8.2 percent to 85.3 in August and is 12.0 percent higher than August 2008. In the Midwest the index rose 3.1 percent to 90.8 in August and is 7.6 percent above a year ago. In the South, pending home sales increased 0.8 percent to an index of 104.6 and is 8.2 percent above August 2008. In the West the index surged 16.0 percent to 130.5 and is 22.3 percent above a year ago.

"There is likely to be some double counting over a span of several months because some buyers whose contracts were cancelled have found another home and signed a new contract to buy,” Yun explained. "Perhaps the real question is how many transactions are being delayed in the pipeline, and how many are being cancelled? Without historic precedents, it’s challenging to assess.”
Yun also noted that the data sample coverage for pending sales is smaller than the measurement for closed existing-home sales, so the two series will never match one for one.

NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth, said first-time buyers need to act now. "Potential first-time buyers must make a contract offer very soon to have a reasonable chance of qualifying for the tax credit,” he said. "Congress needs to extend and expand this program because it’s stimulating the economy and reducing inventory close to price stabilization points.”
McMillan said a sizable number of homebuyers already in the pipeline could be let down because of the tight deadline. "We know there is a pent-up demand because sales are below normal levels for the size of our population. The faster we absorb excess inventory, the sooner we’ll turn the corner on home prices, prevent additional families from becoming upside-down in their mortgages, and give Wall Street the confidence to extend credit to other sectors,” he said. "Each home sale pumps an additional ,000 into the economy through related goods and services, so the benefits of extending and expanding the tax credit far outweigh the costs.”

Yun said the forecast for home sales and prices depends very much on whether a tax credit is extended. "All we can say for certain is sales will decline when the tax credit expires because we are not yet on a self-sustaining recovery path. It also raises a risk of a double-dip recession,” he said. "Extending and expanding the tax credit is the best tool in our arsenal to encourage financially qualified buyers to stimulate the economy and help reduce the budget deficit.”

The National Association of Realtors®, "The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity from 2001 through 2004 parallels the level of closed existing-home sales in the following two months. There is a closer relationship between annual index changes (from the same month a year earlier) and year-ago changes in sales performance than with month-to-month comparisons.

An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined as well as the first of five consecutive record years for existing-home sales.

Existing-home sales for September will be released October 23; the next Pending Home Sales Index will be on November 2.
Information about NAR is available at www.realtor.org. This and other news releases are posted in the News Media section. Statistical data, tables and surveys also may be found by clicking on Research.

© Copyright NATIONAL ASSOCIATION of REALTORS® | Headquarters: 430 North Michigan Avenue, Chicago, IL 60611
DC Office: 500 New Jersey Avenue, NW, Washington, DC 20001-2020 I 1-800-874-6500

NATIONAL ASSOCIATION of REALTORS®

Existing Home Sales

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