Prices are up?

This is a difficult picture to explain. Comparing April 2008 to April 2009 it appears that prices have increased by 2%. Volume is still down 21% reflecting a market that does not believe in itself. Many are having difficulty selling their home and afraid to offer on another with a "sale of property" condition. Look how uneven it is. Prices are down 12% in Niagara-on-the-Lake, but Niagara Falls, Thorold, Pt. Colborne, and Pelham are doing well. I have no explanation.

Residential Sales	2008		2009			Comparison
	# of Listings	Average Sale Price	# of Listings	Average Sale Price	Volume Change		Price Change
NIAGARA-ON-THE-LAKE	22	355,649	18	311,667	82%		88%
NIAGARA FALLS	131	178,668	108	190,735	82%		107%
FORT ERIE	61	180,526	46	160,699	75%		89%
ST.CATHARINES	212	195,595	142	194,576	67%		99%
THOROLD	30	190,467	27	202,848	90%		107%
FONTHILL/PELHAM	23	262,696	26	284,388	113%		108%
WELLAND	87	172,190	58	168,260	67%		98%
PORT COLBORNE/WAINFLEET	35	147,817	37	170,468	106%		115%
LINCOLN/WEST LINCOLN	27	269,306	31	255,132	115%		95%
Totals	628	195,684	493	198,941	79%		102%

Volume and prices continue down

This is interesting news. Look at the overall decrease in the number residential properties sold in March 2009 from March 2008. It 83% of what it was last year. And prices are down 10%. Amazingly Niagara Falls was slightly higher in price. I have a listing of a retirement style bungalow townhouse where there are 19 current St. Catharines listings in its broad price range ($200,000 to $300,000). Just one in that range has sold since January 1, 2009. This is not a great time for sellers.

MARCH Residential	2009		2008
District	# Sold	$ Average Sale Price	# Sold	$ Average Sale Price	Volume Sold	Inc./Dec. of Avg. $
NIAGARA-ON-THE-LAKE	10	308,650	25	392,388	40%	79%
NIAGARA FALLS	85	196,442	98	195,396	87%	101%
FORT ERIE	36	163,914	42	181,213	86%	90%
ST.CATHARINES	125	181,984	161	201,462	78%	90%
THOROLD	27	175,593	20	190,238	135%	92%
FONTHILL/PELHAM	8	256,375	16	242,838	50%	106%
WELLAND	59	153,092	61	170,625	97%	90%
PORT COLBORNE/WAINFLEET	15	119,567	24	181,129	63%	66%
LINCOLN/WEST LINCOLN	19	265,089	16	266,831	119%	99%
	384	185,124	463	206,738	83%	90%

Note that in smaller markets, like Fonthill, where total numbers are small, a few large sales can make the numbers look quite better than other areas.

Fewer are Moving

Interesting stuff from Richard Florida. In the US fewer people are moving. The implications for real estate sales is ominous – and likely the same for Canada. Moving companies must be suffering also. I wonder what the stats are for Home Depot, where renovation instead of moving becomes the preference.

Fewer Americans are moving than at any point in the past six decades (since the Census Bureau started tracking mobility). Fewer than 12 percent (11.9 percent) of Americans moved in 2008 compared to more than 20 percent in 1984-85. This is the result of the economic crisis and the housing slump which has essentially locked Americans in place. Brookings Institution demographer William Frey told the The New York Times:

“It represents a perfect storm halting migration at all levels, since it involves deterrents in local housing-related moves and longer distance employment-related moves. … [T]he U.S. population, often thought of as the most mobile in the developed world, seems to have been stopped dead in its tracks due to a confluence of constraints posed by a tough economic spell.”

The Economist makes much the same point arguing that housing has turned from “shelter” to “burden” - noting that “the social benefits of home ownership look more modest than they did and the economic costs much higher.”

The Best Value is Downtown

Linked here is an interesting article by Todd Litman from Planetizen discussing smart growth and the impact on affordability. For years we have put our social housing at the edge of urban development believing that avoiding infill NIMBYism was essential to achieving the housing at all. That was possibly true, but not as true today.

Right now I’m consulting on an AHP project located at the bleeding edge of new development. I regret the decisions that were made not to further pursue a downtown site after our initial effort. Hindsight is great and in retrospect government imposed timing conditions, project size, and the path of least resistance put us on that site. But in the long run we may have not done our residents a favour, especially as transportation costs rise.
That is a rental development, but for ownership – equity building suburban developments, the negative impacts are likely worse. It seems counter intuitive but the case made in this article is persuasive. Litman summarizes saying, “a typical household is likely to be a hundred thousand dollars wealthier in a decade if they choose a smart growth location over automobile-dependent sprawl.”

If we are going through “the great reset” as Richard Florida calls it, toward a new economy and new priorities, the Niagara Growth Strategy needs to be strengthen, not diluted by the pressures of old habits, to ensure we create the right conditions for good transportation options in our urban cores, and between the municipalities. Appreciation for high density urban living, by necessity, will evolve to be the new paradigm. Affordable rental housing efforts need to be there, involving smaller developments, multiple sites, and mixed with and in ownership housing.

Formaldeyde and New Homes

This is from Green Building Elements and repeats a story that is missed over and over again. As bad as asbestos may be - and is as I have two cousins with mesothelioma - formeldehyde is much more common. It is in far to many products and is not labelled.

We recently tested several new homes for formaldehyde in the air. The newest home, advertised as a “green” home, had 300 ppb of formaldehyde. Children in homes with only 30 ppb can have decreased lung function. Between 60 ppb and 120 ppb, children are more likely to have asthma and chronic bronchitis.
At 100 ppb, most adults experience eye, nose, and throat irritation.
Of homes that were less than 2 years old, every home we tested had at least 100 ppb of formaldehyde. The newer homes had 200 - 300 ppb. The 300 ppb concentration we found in the newest home is equal to the 15-minute Short Term Exposure Limit (STEL) for occupational exposures. A worker in that home should wear a respirator to remain inside the building for more than 15 minutes. An employer that exposes workers to 300 ppb of formaldehyde should have a Hazard Communication Program to inform workers about chemical hazards and ways to avoid illness.

OREA fails the leadership test

It is sad to see my own people opposing a law that will significantly reduce green house gas emissions. This is a quote from the Ontario Real Estate Association article in their March 2009 Queens Park Plus newsletter. Get with the program folks. Show some leadership.

On February 23, the Government of Ontario introduced Bill 150 the Green Energy and Green Economy Act (GEA), 2009. Included in Bill 150 is a provision that will require all home owners to provide an energy audit report to prospective buyers. Currently, the bill is in the second reading stage of the legislative process. To read Bill 150 in full click here.

While OREA supports the principles of energy conservation and environmental stewardship that are enshrined in the GEA it opposes any policy that imposes unnecessary costs on homeowners and delays on real estate transactions. Instead, OREA supports the existing government program that encourages homeowners, through rebates, to assess the energy efficiency of their home voluntarily.

Prices down 5% in Niagara

Here is proof that the recession has become real in Niagara. The volume of sales is way done comparing January 2008 and 2009. Prices are down 5%

The Spend/Save Paradox

What to do? Spend! Save!

What?

There was recently a very good article at the Town Square blog on the mixed messages of economists as well as the problem we individually face in ensuring our own future. The message to spend essentially says that it is your patriotic duty to get out and stimulate the economy. OK. And buy what? Go to the Dollar store where nothing purchased effectively stimulates the the local economy? Go to Best Buy and purchase a flat screen TV (made in Korea)? I think not. If we want to stimulate the economy effectively then stop doing what we have done for years. Stop buying the cheapest item and buy something that will give your neighbour a job. It is good for your neighbour and ultimately good for you.

It is also good for the planet as the resources are not shipped to Korea or China and then shipped back as a finished product. From the Town Square blog:

The solution to the Paradox (spend/save) is to demand, consume and produce the local and renewable. Keep whatever shrinking wealth we might have within sight, build local economic muscles, protect local jobs, and begin to construct a sustainable region and home place.

The problem is we don't have an easy understanding of what is made locally. Until we demand and attain meaningful identification of the origin of products we don't have much of a choice.
(editorial cartoon by Tom Toles, Washington Post)

Housing Price Changes in Canada

In Canada, the average price of homes sold via the MLS in November fell 9.8 per cent from the same month in 2007. The diversity around the country is amazing. The December numbers will be interesting as the effect of the downturn will be more evident.
St. John's: +30.8%
Saint John: +5.5%
Halifax-Dartmouth: +12.6%
Ottawa-Carleton: +7.3%
Toronto: -6.3%
Kitchener-Waterloo: +2.2%
Hamilton-Burlington: +6.3%
London-St. Thomas: +1.6%
Windsor: +3.4%
Winnipeg: +1.8%
Saskatoon: +10.9%
Regina: +27.6%
Edmonton: -2.0%
Calgary: -6.0%
Victoria: -12:4%
Vancouver: -11.6%
UNITED STATES: -18%

— SOURCE: BMO Nesbitt Burns,Standard & Poor's/Case-Shiller Housing Index

Are We Really Happier as Owners?

The great dream of all is to own your own home. It supposedly is a sign of a successful life. Now with the economic downturn, maybe its time to see if that was ever really as good as it seemed. According to the Wharton School’s Grace Wong in a study of those who own their own homes. Those who own are actually less happy than those who rent.

I find little evidence that homeowners are happier by any of the following definitions: life satisfaction, overall mood, overall feeling, general moment-to-moment emotions (i.e., affect) and affect at home… They are also more likely to be 12 pounds heavier, report lower a lower health status and poorer sleep quality. They tend to spend less time on active leisure or with friends. The average homeowner reports less joy from love and relationships… Contrary to popular belief, I do not find significant differences in family-related time use patterns, family-related affect, number of normal work hours, indicators of stress or measures of self-esteem and perceived control of life by homeownership …

Homeowners are happier on average only on an unadjusted basis. Once household income, housing quality and health are controlled for, they are no happier than renters. What’s more, they report to derive more pain from both the neighborhood and their house and home. This positive pain gap remains stable and robust when health, neighborhood characteristics and financial stress are controlled for. As for the most frequently cited channels of a positive impact by homeownership, namely self-esteem, stress, health and family life, again there is very little supporting evidence in my data… [H]omeowners spend less time on active leisure activities or with friends, which have been documented as some of the most enjoyable affective experiences.