8 replies to this topic

[ogm]

http://lfpress.ca/ne...478982-sun.html


Red-hot housing moves toward record
Sat, September 8, 2007
By HANK DANISZEWSKI, SUN MEDIA



This London home's for sale sign boasts a pool.

The London-area's real-estate market is still sizzling, chalking up its second-best August for home sales ever.

And if the momentum continues, there's a good chance last year's overall sales -- a record -- could be smashed.

The London and St. Thomas Association of Realtors said 871 units sold last month, just behind the August 2005 sales record.

"We are on track to sell several hundred more homes in 2007 than were sold in record-setting 2006," said association president Mike Carson.

The hot market has made it likely 2007 will surpass, even smash, last year's sales record of 8,916 properties, he said.

For the first eight months of the year, 7,009 detached homes and condos sold, up 7.9 per cent to the same point in 2006.

The market is tightening, spurring a runup in prices.

The number of active listings in the London-St. Thomas market for detached homes and condos is down 3.6 per cent compared to last year.

The average price of a detached home has jumped to $216,632, up 7.2 per cent on a year-to-date basis.

Carson expects the dollar value of home sales this year should top 2006 by more than $200 million.

Carson said each home sale is estimated to generate another $33,000 in economic spinoffs, such as furniture sales and renovations, pumping another $30 million into the local economy.

While prices are climbing, Carson said London homes are still a relative bargain compared to other major Ontario centres or the skyrocketing prices in Western Canada.

The average price of a detached home in Toronto is $373,000, in Calgary $414,500 and a whopping $564,000 in Vancouver.

Along with affordability, Carson credits reasonable mortgage rates and consumer confidence for bolstering the market.

He said north London appears to be the hottest neighbourhood, but entry-level homes under $150,000 are in high demand citywide.

Carson said Canada has been spared the market meltdown in the U.S., triggered by a wave of defaults in the sub-prime mortgage market.

"The market we are seeing in the U.S. is not indicative of ours at all. We are confident that our more prudent lending practices and absence of heavy speculation will keep our market stable," said Carson.

Edited by ogm, 08 September 2007 - 09:18 PM.

[pdx5]

Ogm, Your title is misleading in that the article is talking about London, Ontario and not London, UK. I do not know which other countries lowered interest rates as low as Greenspan did to create a credit/housing/asset bubble in the USA. I know of only 1 major country where interest rates were very low....Japan....and we all know what the outcome was there. First they had the real-estate bubble and then after a decade plus they are still flat in economic growth.

[Trend-Shifter]

Regarding the UK....business week, page 68, September 17th edition reads... BRITAIN'S COMING CREDIT CRISIS Steep housing prices and dependency on financial services makes it's economy vulnerable.

[ogm]

Ogm,

Your title is misleading in that the article is talking about
London, Ontario and not London, UK.

Should've said London But the title was misleading for sure
Actually UK real estate isn't doing that bad either.


On the other hand.... We have Doom and Gloom covering the major headlines in spades....

Danger: Steep drop ahead
Even if the credit crunch passes without a major catastrophe, the prices of stocks, bonds and real estate have a long way to fall.

http://money.cnn.com...50262/index.htm

Edited by ogm, 08 September 2007 - 09:43 PM.

[NAV]

Ogm,

Your title is misleading in that the article is talking about
London, Ontario and not London, UK.

Should've said London But the title was misleading for sure

Don't panic

[Tor]

As for |London, prices have risen a lot more based on multiples of earnings than almost anywhere. Yet, the long feared crash slump or otherwise never occured, nor do I think it will. It will correct through time. In the US the situation is different due to oversuply, YET I expect it to resolve in the same way, Ie no crash. Why? People like cramer and others say "all these people will lose their homes due to the higher cost of carry", but where did these people live before? A lot of these are second homes. This is why I am soooooo bullish looking further out, for equities that is.

[qqqqtrdr]

I spent two weeks in England last month. The housing market bubble in the US is hot news over there. There is a perception in Britan that the US is very irresponsible with money. With that being said, most Britans are in the same boat with large house payments, and are completely in debt. Over supply of housing in Britan is not so much of an issue due to most land is sectioned so it cannot be built upone, but many are house poor, so there is not a lot of extra money to spend. Barry

[Data]

UK extended their housing bubble by proliferating shared equity arrangements. New homebuyers become part-owner and part-renter in their new homes. A second party, which may be a private investor or the government ,owns 25 percent or more of the property.

[HoseB]

"...
This is why I am soooooo bullish looking further out, for equities that is.

We all have to be bullish on equities for nominal prices. (When the Dow is 150,000, the $USD will be <10... that's how a money-pump, inflationary bull market works.) We'll all be pauper $Bazillionaires.