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Thursday, March 3, 2011 - Edmonton City home prices enjoy minor warming trend


EDMONTON - Tighter mortgage rules coming in March aren’t causing a rush in Edmonton home sales, says the president of the Realtors Association of Edmonton.

On Wednesday, the group released Edmonton-area MLS figures showing 1,044 homes were sold in February.

That number shows an improvement over January, when 735 homes were sold, but that’s 20.6 per cent off the pace set a year earlier.

Across Canada, sales of existing homes rose in January to the highest level since April 2010, led by Vancouver, Toronto and Victoria, the Canadian Real Estate Association said last month.

CREA’s chief economist Gregory Klump attributed the sharp rise in sales activity to a cut in the maximum amortization period announced in January that takes effect March 18.

But Chris Mooney, president of the Realtors Association of Edmonton, says there’s no evidence the looming change is having any significant impact on local sales.

That’s unlike a year ago, when buyers surged into the market to beat tighter mortgage lending standards and anticipated interest rate hikes.

“In these numbers, it’s decidedly nonexistent,” Mooney said.

“The impact of the changes is nowhere near that which we saw, say, a year ago.

“The degree to which the changes affect the buyers is a lot smaller this time. You’re talking about five years on a 35-year amortization. The percentage of buyers impacted by that is quite small. And of that small percentage, you’re looking at an even smaller percentage that wouldn’t just buy a home that’s $20,000 less.”

In January, federal Finance Minister Jim Flaherty announced the government was reducing the maximum amortization period for government-backed mortgages to 30 years from 35 years. Buyers would also only be able to borrow 85 per cent of the value of homes, down from 90 per cent. In addition, the government would withdraw backing for lines of credit secured by people’s homes.

Meanwhile, Edmonton MLS home prices crept up in February from January, but they remain slightly below 2010 levels.

Single-family detached homes sold for an average of $359,934 in February, said the Realtors Association of Edmonton.

That is up one per cent from January, but down 3.1 per cent from a year earlier.

Condo prices were $230,911, a gain of 4.5 per cent from January but off 0.65 per cent year-over-year.

Duplexes and row houses sold for an average of $303,440. That’s up two per cent from January but down 5.6 per cent from a year ago.

The Realtors group said Multiple Listing Service prices in all residential categories resembled 2009 levels.

“Sales and prices in early 2010 were pushed up by the impending mortgage rate increases and qualification changes,” Mooney said.

“Now that the market is stable, price levels have returned to the 2009 levels.”

He said home-price increases from January are part of a slow upward trend that the Realtors group forecast at the start of the year.

The inventory of homes for sale rose 13.4 per cent in February to 6,389.

“I’m a little relieved. The 6,000-neighbourhood is healthy for this market,” Mooney said. “Buyers have more than ample choice and sellers don’t have too much competition.”

posted in General at Thu, 03 Mar 2011 07:32:37 -0700

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