No Obstacle is Too Small for This Business!
Written by Oxana Tsirelman, Online Editor
The North American house market has always been in high demand. That’s hardly surprising considering how many people are moving out and renting, buying, leasing. It’s as though houses are growing on trees and are popping out of the snow like daisies!
According to the Teranet-National Bank of Canada, “Buoyed by strong demand and low interest rates, Canadian house prices continue to rise. In the year to end-June 2011, the national house price index rose by 4.52% (1.37% inflation-adjusted)”.
That’s not nearly the half of it though: the Canadian Real Estate Association cited that the price of average homes sky rocketed up to 9.3% to $361,181 Canadian dollars and $369,068 American dollars.
“Prince Edward Island (13.1%) and Yukon (11.7%) saw the highest annual house price rises during the year to end-July 2011. They were followed by Ontario (10.4%) and British Columbia (10%). The Northwest Territories was the only region which experienced a house price fall during the period (27.6%)”, reported the Global Property Guide. “The Canadian housing market is projected to remain stable during the remainder of the year, but with the average MLS price rising modestly” they added.
The American house market will continue to decline due to large inventory of homes with delinquent mortgages.
Norbord cited that housing, including multifamily homes steadily rose to around 3% in 2011, but single family homes fell 9%.
However, everything has its weakness, and this includes North America’s house market! After all, as they say, the higher they climb, the harder they fall. Gregor MacDonald reports that, “Of the many asset classes to be victimized by the end of cheap energy, residential real estate is perhaps the most vulnerable. A call option on future wage growth, and, leveraged to our liquid-fuel based transport system, housing in North America is currently making its way back to the stable, but barely appreciating asset it once was. However, having started this journey only recently there is still a long way to go. A long way in price that is, for housing to fall.”
In spite of all the gloom and doom in that prediction, house prices haven’t “bottomed out”! Even so, Freddie Mac from the Global Property Guide estimates that the American house market will continue to decline due to “large inventory of homes with delinquent mortgages.”
Lastly, in spite of the hard times that the house market has temporarily encountered, the rental market is expanding. Not only that, according to the United States’ Federal Reserve Board, the mortgage delinquency rates has dramatically dropped from 11.17% to 10.53%! These achievements barely scratch the surface of how strong and resilient North American housing market is in the face of strives and struggles. This just goes to show how reliable and resilient North American business is…we have a tremendous amount of faith. We simply put one foot in front of the other, and keep our eyes on the prize.
Business News with BITE.
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