Posted By Peggy Hill on November 7th, 2011
The Fall housing market outlook for the remainder of 2011 and into 2012 was released on Friday from the Canadian Mortgage & Housing Corporation (CMHC). The general consensus is that the housing Market will remain balanced and that there will be a shift in the mix of new housing starts.
Looking at buying a New home?
The mix of new home starts this year has shifted. The bulk of new home starts in the Barrie area have traditionally been single-detached homes but due to land availability and economic uncertainty the bulk of new home starts have now shifted to more rows and apartments. According to the CMHC this is due to the caution of buyers as they are sure not to over-extend themselves and the affordability of rows and apartments compared to single detached homes. This shift of new housing starts will continue into 2012 with new construction growing in the end of 2011 and then tapering off gradually in 2012
If you’ve been thinking of buying a newly constructed single detached home now might be the right time. Price growth for these types of homes will slow this year compared to 2010 and then recover in 2012.
Looking at buying a Resale home?
According to CMHC the end of 2011 and beginning of 2012 will see existing home sales plateau as slower job growth and uncertainty in the economy cause consumers to act cautiously. The Barrie market will settle for first time home buyers as most have purchased in the last year before the mortgage rate changes. Second and third time buyers will then dominate activity in the housing market for the remainder of 2011 and into 2012. Resale home sales will remain flat for 2011 with some moderate growth in 2012.
The growth in home sales will be concentrated in the spring and summer months as first time buyers are enticed back to the market with more choice, low mortgage rates and modest price gains. Over all existing home sales in the Barrie market will remain close to the same levels as those in 2010.
Looking to list your home?
The CMHC forecasts that listings in 2011 overall will decline from the levels seen in 2010 and then recover in 2012. However listings are expected to increase in the fourth quarter of 2011 and into 2012. Levels of supply (listings) and demand (buyers) look to remain fairly balanced into the end of 2011 and beginning of 2012. Meaning that the market will be neither a buyers or a sellers market.
What about Mortgage rates?
The Bank of Canada has announced that the current target overnight interest rate of 1.0% will remain unchanged for some time. If you’ve been thinking about re-financing your mortgage it might be a good time to do so. Mortgage rates (particularly short-term and variable mortgages) will remain at historically low levels. Posted mortgage rates will remain flat into 2012 with one year rates expected to be between 3.4 and 3.8% and five year rates between 5.2 and 5.7%.
What about the Barrie economy?
Barrie’s recovery from the economic downturn has been quite positive. The CMHC predicts that employment growth, which has allowed many looking for work to find full-time work, will come in at the end of 2011 at 4%. With the recent uncertainty in the global economy employment rates in Barrie will continue to grow in 2012 but a slower pace than 2011, resulting in a decreasing overall unemployment rate. Older and more mature households will be responsible for the bulk of migration into the Barrie area for the remainder of 2011 and 2012.
Feel free to contact me anytime for more information on the Barrie real estate market and be sure to forward this blog article on to any family or friends who may find it interesting.
Sincerely,
Peggy Hill
