The Canada Mortgage and Housing Corporation has released the results of its 2007 Renovation and Home Purchase Survey.

Across these 10 major centres, (estimated) renovation spending in 2007 was up $2 billion from the previous year, to $19.7B.  That's an average of $12,800 per household!

In Toronto, we see intentions for 2008 are down from last year.  Of those households surveyed, 6% responded that they intended to purchase a home as their primary residence in 2008 -- that's a decline  from the 9% surveyed last year who also stated their intent to buy a home.

Similarly, the percentage of households intending to spending more than $1000 on renovations this year is down slightly to 41% from 43% last year.

The profile of the first-time home buyer is largely unchanged from last year:

• prospective first-time home buyers represented 42% of those intending to buy a home in 2008
• the majority of first-time buyers are between the ages of 25 and 34, with an annual household income between $40K and $60K

Source: Renovation Spending Across 10 Major Centres Up by $2 Billion in 2007 (CMHC)

Mid-month numbers have been crunched and it's a mixed bag of news from the Toronto Real Estate Board, although one could argue that there's a positive spin to it.

In the GTA, compared to the first half of May 2007, the first half of this month saw a 12% decline in the number of sales.  However, strong prices (average price is up 6% from the same last year) may fuel optimism that the 2nd quarter will be an improvement over Q1 '08.  (A breakdown of the 416 and 905 shows similar percentage declines and increases.)

However, we're now seeing an 11% increase in listings and 35 days on market (up from last year's 28, and last month's 27 days on market).

A Call for Buyers.  The increase in listings is being trumpeted as offering a higher quantity (and implicitly, higher quality) of listings; last year, buyers were "challenged" by limited selection.

Details here:  GTA Resale Housing Market Moderate in May (Source: TREB)

It's  a simple question with no one simple answer.  The state of the market depends on what you're comparing it to:  yesterday, last week, the previous month, the same month a year ago, year to date vs the same period last year, etc.  2007 was unquestionably a phenomenal year (lots of records broken). 

Tip: present the person asking with relevant macro and micro perspectives of the market.

Lies, damn lies, and statistics.  Among the junk mail marketing material I receive (i.e., I live in a newer subdivision being farmed by several agents), there's a team that sends out periodic market reports for the subdivision.  One of my concerns with the report, though the fine print discloses, is that the time period changes (atypically) with each report (i.e., the trailing number of months being considered).  Is there a bias in the report in selecting the best answer to the question, "is this a good time to sell my home?"  Is the goal to paint a rosier picture by discarding (excluding a weak month) or averaging out unfavorable data (i.e., a recent month showing weakness)?

Tip: don't manipulate statistics for a specific purpose.  Be consistent when presenting statistics.  Let the person asking draw their own conclusions.

A great visual tool is illustrating trends in a graph and we all love upward trends.  But as we're seeing in the U.S., we can't ignore the possibility of a reversal or so-called "market corrections" (retracements).  Optimism and enthusiasm should be moderated by consideration of risk and externalities.  This is especially important when the overgeneralization that "real estate is a <insert positive adjective here> investment" is used.

Tip: add a disclaimer (typically found in equities/commodities/forex markets) that past performance is a clue/indicator, not a predictor of future performance.

Also, real estate is just one component of our economy.  How do we frame real estate market reports in the context of the overall economy?  There's an abundance of economic numbers (e.g., unemployment, construction permits, interest rates, ...), seasonal adjustments, leading vs trailing indicators, etc.

Tip: leave forcecasting to the experts (i.e., economists).

On this last day of REALTOR Quest, I attended a couple of green housing (residential) seminars -- "Green Housing 101" and "Tips on Greening a Fixer-Upper" -- presented by Mark Salerno (with CMHC) and Chris Chopik (with Bosley Real Estate).  While there's some overlap in material, there's a lot of information to take in.  With increased awareness, there's increased interest, and thus, increased demand for supply, with REALTORS playing a role in the supply chain.  (Hmm...I see Chris will be presenting a 3 hr seminar in June at TREB, "Green Market Opportunities for REALTORS".)

I also squeezed in a TREB session, "Working with Statistics in TorontoMLS".  The included workbook is the content for a (hands on?) course being offered by TREB's Education Department later this summer.  (That will likely be a $40 course.)  Lots of ideas for incorporating statistics into your marketing materials and websites, and practical tips (e.g., screen captures, creating charts) for the uninitiated.  And there was a cursory overview of other sources of statistics (e.g., CMHC, banks, etc.).

I'd say this year was better than last year's event.  That said, I'm already looking forward to next year's...

I'm back from day one of REALTOR Quest 2008.  Wasn't that fun?

Tod Maffin was this year's keynote speaker -- entertaining, energetic, and full of Web 2.0 evangelism in his presentation, "Future of Technology in the Real Estate Business".  Among his many messages:

• marketing has evolved from broad advertising, to market segmentation, to participation/interaction
• you must now be everywhere
• social networks have the advantage of economy of trust
• productivity tools should simplify and correct
• hire a keener (which I translate as a virtual assistant or tech savvy cheap labor)
  

(And as a side note, Tod ruffled fewer feathers than last year's keynote speaker.)

Similarly, Dustin Luther led a session on "Understanding Your Online Competition", and presenting the 5 C's:

• Competition for traffic / eye-balls comes from many sources
  
• Consumers are publishers
• Companies making gains offer comprehensive data, insider info, and/or high quality data
• Communication tools include blogs, vlogs, social networks (like Facebook and Myspace), jott, and feed readers
• Community participation (e.g., ActiveRain was notably mentioned on more than one occasion)

Resales activity for April '08 was described as "moderate" by the Toronto Real Estate Board in its latest market report, but looking at the numbers, we see:

• number of transactions down 7% from April '07 overall
• in Toronto, the number of transactions was down 10%
• outside Toronto, the number of transactions was down only 5%

The bright side is that this still being described as a seller's market because:

• prices are up 5 to 6% over the same period last year
• while listing inventory is up 7% from a year ago, days on market is shorter (27 vs 30)
• lastly, the market saturation ratio has been trending down since the beginning of the year (translation: demand outpacing supply, from 3.14 months of inventory to 2.8 months of inventory).
  

Reference (for all the gory details):

• GTA resale housing market moderate in April, but prices up

As analysts have increasingly speculated or expected in recent weeks, the Bank of Canada lowered the benchmark overnight rate target by half a percentage point, from 3.5% to 3.0%.

Driving the rate cut announcement, the central bank cited the weakening global enconomy, the sharp slowdown in the U.S., and the ongoing "dislocations" in the financial markets.

Also, the Bank projected a "deeper and more protracted U.S. slowdown", and acknowledged the spillover effect with only moderate growth in the Canadian economy through 2010.

In terms of future rate cuts, the Bank's outlook hints that further monetary stimulus is likely, but that the timing will depend on the ever-changing global economic situation.

Source:

• Bank of Canada lowers overnight rate target by 1/2 percentage point to 3 per cent (Bank of Canada)
  

Mid-month figures have been released and the numbers point to another consecutive month decline in the Greater Toronto Area -- and this time, the weather can't be blamed.  First, the bad news:

• Overall, the GTA saw a 5% decline over the same period in April 2007.
  
• The 416 (Toronto) saw an 11% decline over the same period a year ago.
  
• While, the 905 (surrounding areas) saw a 1% decline over the same period a year ago.

However, on the bright side (i.e., the obligatory "good news") is that:

• prices are up 7% overall from a year ago
• 10% in the 416
• 6% in the 905

The sentiment is that the market is "still healthy" with encouragement from listing inventory that is up only slightly, days on market for solds that's shortening, and a rising average sold to asking price ratio.

Source:

•  GTA resale housing market down but still healthy (Toronto Real Estate Board)
  

In February, new housing prices continued to increase but at a slower pace from the previous two months.  Nationally, the index was up 6.2% over February 2007 with higher material costs, labour shortages (thus, higher labour rates), and land development costs cited as factors.

In Ontario, the year over year increases for new homes were moderate:

• Toronto - Oshawa: up  4.4%
• Hamilton: up 3.6% 

compared to double digit increases in Saskatoon (58.3%), Regina (28.6%), Edmonton (14.8%), Winnipeg (14.5%), St. Johns (12.2%), and Halifax (11.4%).

References:

• New Housing Price Index (StatsCan) 

For the first quarter of 2008, Ontario posted a 3.1% quarterly gain in non-residential construction (2nd only to Alberta) with investment rising to $3.8B.  Toronto and Hamilton led municipalities in investment growth (by dollar value) at $1.9B and $166M, respectively.  Investment in terms of components, provincially:

• commercial/office up 1.9% to $2.2B (largely attributed to growth in retail and wholesale trade)
  
• industrial up to $600M
  
• institutional up 5.0% to $1.0B (mostly in health care facilities)

References:

•  Investment in non-residential construction (StatsCan)