Home Sales Will Still Increase in 2010

In the surest sign yet that the economy is beginning to truly repair itself, the Canadian Real Estate Association has improved its forecast for house sales on existing real estate properties this year. The level of house sales is expected to rise to the point they were at last year just before the recession took hold, and although overall 2009 is set to show falling numbers as compared to last year, the fall will be much less than initially forecast. The experts base this optimism on a second quarter which showed much better results than expected, with sales climbing through the spring months and into July.

The numbers forecast stand at a total of 432,600 for the year. Admittedly this represents a fall on the overall resales in 2008, but only a 0.4 percent drop when we had been led to expect a much steeper fall. The Canadian Real Estate Association had previously forecast a very dramatic fall in the region of fifteen percent. The turnaround sees house sales almost hold to 2008 levels, which represents a much better result than we could possibly have expected. In addition, looking at the price of house sales, the average is expected to increase by 1.5% on last year.

The big winners on house resales would appear to be residents of British Columbia, with an increase this year on their numbers in 2008 of 5.2% (a projected total of 72,500 sales). This is a strong performance in any year, but in a twelve-month period which has contained a long spell of recession in the national and global economies, any increase is impressive. An increase of more than five percent is to be considered nigh-on miraculous. In other provinces, with the exception of Ontario (looking at a half of a percent rise), the numbers are still expected to fall on last year’s numbers, but the scale of the fall-off has now been revised dramatically.

There is some good news for determined pessimists, if you like that kind of thing. the projected sales increases for 2010, which were made around the same time as the previous figures on resales for the year 2009, have been revised downwards. A sign that the recession is going to stick around in some capacity? Probably not. The reason given by the Association is that a number of prospective home buyers are now bringing their plans forward in the light of more positive news. Sales will still increase in 2010, all things being equal, just by a more shallow factor than previously expected.

The projected rebound for 2010 now sits at 5.3% for the year. In any year, this is still a healthy performance, and some commentators are sure to point to the fact that this recovery is now looking more like a steady, shallow recovery as opposed to a steep bounce. In any economy, steady improvement is always preferable to stratospheric increases as the performance is easier to sustain and any retracement much easier to deal with. Overall, the news is positive, and that is news we all wanted to hear.

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