National Home Sales Increase Slightly in March 2014
By Lucas on Apr 22, 2014
Recently, the Canadian Real Estate Association (CREA) released its March 2014 statistics for national home sales. Compared to the same period last year, Canadian home sales increased slightly.
From February to March, Canadian home sales increased by just 1%, but compared to March 2013, sales jumped 4.9%. This may seem like a significant gain, but March’s sales figures still come in 8.2% lower than the 10-year average.
“Sales in many housing markets continue to recover from winter’s deep freeze,” said CREA President Beth Crosbie. “At the same time, activity softened in some of Canada’s West Coast housing markets. This shows how local and national housing market trends can be very different. Talking to your local REALTOR® is your best bet to understand how the housing market is shaping up where you currently live or might like to in the future.”
The provinces with the largest sales gains in March 2014 were British Columbia, Alberta, and Ontario. The most successful urban markets in these provinces were Greater Vancouver, Calgary, and Greater Toronto.
National average sale price and inventory levels
The national average sale price jumped 6% to $401,419 in March 2014 compared to the same period last year. A better way to gauge price trends is the MLS Home Price Index (HPI) because it is not affected by the changes in sales activity like the average price. The HPI was up 5.2% compared to March 2013.
“There’s little doubt that winter’s icy grip prompted many potential home buyers to put off house hunting,” said Gregory Klump, CREA’s Chief Economist. “That said, we’ll have to wait and see what happens in April because while overall sales improved in March, there was little evidence of a flood of pent-up demand being released.” Klump also points out that the high number of bidding wars and amount of homes selling for more than the asking price is proof that supply is lacking.
It’s important to note the number of months of inventory when gauging the balance between supply and demand (how many months it would take to liquidate the existing inventory at the current rate of sales). In January 2014, there were 6.5 months of inventory; in February there were 6.4 months, and in March, there were 6.3 months. Supply is clearly not keeping up with demand.
As Klump stated, it will be interesting to see what happens in April. Spring is a busy season for homebuyers; over the next few months, we will either see inventory levels respond to the strong demand, or the supply with decrease drastically.
What do you think is going to happen?
To read the full report, click here.
