Thursday, June 25, 2009

Arrears... in arrears

The sad state of the news media really hit home this week... literally it seems for me. I've been pointing out how the real estate groups have been plastering their ads all over the place, and also seem to get some to get more then their fair share of favourable press as a result.

Well, it isn't just real estate that gets such treatment.

I usually try to watch the six o'clock local CTV news, or at least have it in the background. Well, Monday I was surprised to see an ad for the Town of Westlock displayed prominently. Normally such things may have gone overlooked, but as I grew up in the area, this caught my attention.

And what do you know, the very next night, the CTV news had a great big puff piece on the Town of Westlock. So, that's about as much circumstancial evidence as I need to convict on charges that buying ad time is all one needs to do to get your ass kissed publicly.

Not that Westlock isn't a wonderful town, it is... if you're looking to score drugs. So yeah, it's a bit of a shithole, but I say that with love... and just to show I haven't forgotten my roots, it's not half the shithole Barrhead is!

Ahh... the pathetic state of main stream media. Anyway, enough babbling, on to the real show.

So, as my faithful readers already know, I've been tracking the mortgage in arrears figures for a few months now. Usually I'm right on top of it... and usually there release if greeted with a great big 'Meh' from the media.

Of course, this has been the month from hell at work for me, so while I did mention these numbers last week in the comments I didn't get around to doing a full post until tonight... and because of Murphy's Law, earlier this week suddenly Alberta having the highest arrears rate in the country was of course suddenly news... even despite our knowing this two months ago... and now to all the googlers out there now I look like a follower, those farkin' sneaky bastages!

Alberta Arrears
As has been the trend, arrears rates in Alberta continue to shoot up at a rather high pace. As of April the rate stood at 0.54%, up from 0.50% in March and 0.24% a year earlier.

As mentioned, this is the highest in the nation, and by a growing margin, Atlantic Canada in the next highest region coming in at 0.45%. Nationally the rate is 0.40%, and Saskatchewan has the lowest rate at 0.21%.

It is worth noting that apparently only about 60% of lenders are represented in these arrears figures, and are typically the more established outlets... so the actual figures are probably a bit higher as many of the higher risk outlets are not represented. That said, this data is still pretty good, and should be fairly representative historically.

We've been over this before, so if you're that interested you can search the archives. This month I'm going to do a comparison of how arrears relate to foreclosures.

Alberta Foreclosures
This is a four month moving average of foreclosures in Edmonton and Calgary from Yeah, it's pretty erratic. If I have time I'll do it with a moving average and that will clean it up a bit. They do their measure weekly, so some months get four weeks, others five, and it makes things a bit jagged.

Regardless, we can clearly see there was a BIG spike come the 4th quarter of 2008. Now lets compare this to the number of mortgages falling in arrears over the same period. That's mainly what we'll be looking at. Oh, and that's not really an 'Alberta' number, that's just Edmonton and Calgary combined... but it's late and I'm not gonna fix it, so just keep that in mind. In any case, it's more the relative values we're concerned with anyway, and insofar as that goes, this is fine.

Though, it is interesting to note how Calgary is having significantly more foreclosures then Edmonton. Historically Calgary was proportionately higher, but now they're damn near double. They had largely tracked together, and that they suddenly decouple in the second quarter of 2008 only to resume tracking but at a much lower level... this makes me suspicious of the Edmonton numbers from then on. Very odd, especially considering the market conditions.

Alberta Foreclosures vs Arrears
Obviously one would expect a correlation, as a mortgage falling three months into arrears will signal the beginning of the foreclosure process. We can see that the upward trend for both started in a small scale in the second half of 2007... no surprise, as that's when the prices started to fall.

But it wasn't until 2008 that arrears really started to take off, and decoupled with foreclosures. It's interesting that while arrears climbed steadily, foreclosures leveled off in the winter of '09 and then declined in the spring... only to itself rocket up in the fall.

We should probably be wary of this observation (re: foreclosures) in light of our earlier one of Edmonton's numbers suspiciously dropping at that time, which would account for the drop. Now, if my suspicions are valid, intuition would suggest that the foreclosure level probably would have remain somewhat flat over this time while arrears were still rising... only to eventually shoot up themselves.

Again in 2009, arrears continues to grow, while foreclosures have leveled off... so it will be interesting to see what happens in the second half of '09 with these figures. There appears that there could be some seasonal differences, while arrears keeps growing, banks for some reason appear less likely to foreclose in the spring... which are typically strong periods for sales and prices, as we've seen this year, and last, despite general downward trends.

It's an interesting observation that the strength of the market doesn't appear to have near the effect on the mortgage holders as it does the lenders. Mortgage holders appear as likely to fall behind at any time, whereas banks seem less likely to initiate foreclosure when the market is 'hot'.

It is worth mentioning that I believe these measures are calculated differently. Foreclosures are the numbers instigated over any given four week period... whereas arrears is more an accrued figure consisting of all mortgages that are between 3 months behind on payments or more but not yet foreclosed upon. In other words, a property in arrears may be counted as such for several months, whereas a property in foreclosure will only be counted once.

Friday, June 19, 2009

Rents and Incomes

Again I apologize for the lack of updates, but as I've said, I am swamped with actual work, so blogging has taken a back seat... and unfortunately there is no end in sight just yet, so, it is what it is.

I seem to be getting a lot of e-mail from people who have recently bought for some reason, often accompanied by a series of calculations of why it was a good idea. They seem to be looking for some kind of validation, so I say I'm happy for them and wish them luck.

They then reply saying that they though I was against buying now... to which I reply, I am, the fundamentals of the market are extremely poor, and as such they are exposing themselves to a great deal of market risk all for very little potential upside, that their calculations are flawed (and how)... but that it's their money, and if they're happy with their purchase that's all that should matter to them.

Most don't respond again after that point, though the one that did, did so with a very succinct "Fuck you"... not terribly clever, but I do appreciate brevity. I guess this must be just a small taste of what Garth Turner gets on a daily basis over on his blog.

Anywho, enough of the self-aggrandizement. Today I'm going to take a look at the relationship between rents and incomes in Edmonton. Just recently Statcan came out with their most recent Survey of Labour and Income Dynamics. Notably because as far as I can tell it's the only freely available source of historical market incomes in Canada. Unfortunately data is a year or two behind, but beggars can't be choosers. Here is a look at the household median numbers for Edmonton through 2007, real (inflation adjusted to 2009 dollars) and nominal.

Not surprisingly it was up over 2006, but not as far as many figured it would be. In inflation adjusted dollars it was up 5.3% year-over-year (from $62,750 to $66,100)... which would normally be quite impressive, but many had been prophetized these would be in the 10% range year-over-year (and even then it wasn't nearly keeping pace with home prices).

It should be noted, average household incomes actually were up by over 10%... jumping from $76,875 to $86,150 (a 12.1% increase). But, as most know, average isn't a great measure (as it tend to skew significantly), especially when the median is available. So, as per usual, we'll be sticking with the median whenever possible.

Getting back to the graph, it is worth noting that this is by far the highest real incomes ever seen in Edmonton. Historically they generally have resided in the $50,000-$60,000 range, and as of this measure they've eclipsed the $65,000 mark for the first time ever.

Going forward it will be interesting to what happens to incomes... depending on the methodology and timing of when the survey was done, and how it corresponded with that little economic hiccup that hit in the fall. So, if incomes don't drop for the 2008 SLID, I'd imagine they'll take a big hit by time the 2009 numbers come out... but we are a year and two away respectively from knowing those.

Incomes and Rents
Here we have the nominal incomes and average 2 bedrooms rents charted out...and before you say, 'but, but, but I thought you said averages suck?' They do, but this is one of those cases where it's the best measure we have, and for what it's worth, in the case of rents it probably doesn't tend to get skewed nearly as bad as averages for items like income would.

One would expect them to chart a similar pattern, and they appear to, but that could just be me cooking the scaling, so here's a scatter plot.

Incomes and Rents
Unfortunately with rents only going back to 1990, this isn't a major sampling, but they do appear to follow a general pattern and the R2 value is fairly significant at 0.8955. There are a few plots that are off a bit, but they're all in the general area.

I didn't find either of these graphs to be overly relatable though, so I devised another measure to graph out.

Incomes and Rents
This is rent as a percentage of gross (before tax) income. Whether you want to think of it as monthly or yearly, the number remains the same. From 1990-2007, the average was 16.20% and the median 16.17%. So, for every $100 a person was paid, they would pay about $16.20 in rent.

As we can see there are three quite noticeable spikes. In 1992, 2002 and 2007... '92 being the highest, when it was over 18.5%. Going back to the first and second graphs, we can explain those spikes in '92 and '02. as a result of very noticeable and sharp drops in income... which looking at the general trend I would chalk up to aberrations in the survey results, thus incomes were probably reported a bit lower then they really were.

Incomes likely were dropping at those times, there were significant recessions those years, but I just suspect they didn't drop to the degree witnessed in the data. There does appear to be a fair bit of fluctuation in the numbers over the life of the SLID, so the incomes have made a very jagged pattern as many of the spikes are probably largely due to over/under-reporting, and it's really more the overall trend to pay attention to. So when the numbers on either side are relatively close, but the one in the middle is way high/low, it's probably largely an aberration.

It is interesting to note that for 2007 though, incomes were actually up a fair bit, yet rents increased even more. So this is very unlike the other two spikes, as this one was rooted in a disproportionate hike in rent. This will only become more evident when the 2008 numbers come out, as there was another big rent hike that year.

Using the long term average/median of 16.2%, and guesstimating a continued growth of incomes to $70,000 that would suggest rents in the $950 territory... while as we discussed last week, currently rents are around $1050 currently, though the rental market is becoming increasing soft here, and decreases have already been witnessed in Calgary.

Time will tell, but for now at least it appears that first real estate prices broke from incomes, then rents did, and they now both appear to be higher then market incomes would suggest they should be. It'll be interesting to see how it all plays out.

Anyway, I don't think there is anything ground breaking in this data, but it is good food for thought. If you have any questions or comments, fire away!

Friday, June 12, 2009

Rental market update

Sorry I couldn't get to this sooner, but June has been a busy month for me. Kind of doubting I'll be able to get in as many posts as I would like this month, so instead of posting tripe, I'll try to focus on quality instead of quantity.

After reading that last line, the girlfriend just laughed so hard she snorted, and said "not in the bedroom," really snide like. What could she possibly have meant by that?!

Anyway, CMHC released their spring rental market updates for the provinces this week. They just started doing these spring releases last year, and it's not as detailed as their annual reports (comes out in December), but lots of interesting stuff in there anyway.

Lets start with the high profile stat and get it out of the way first, rent.

Average Rents
I actually did a post that covered long term rents just a couple weeks back, and planning on doing another one on rent-to-earnings in the near future, so we won't go into rent too much.

It's interesting the 2-bedroom rents have actually continued to go up since October, but the overall average has went down slightly. In Calgary (and Alberta as a whole) rents were down across the board when compared to October.

It also goes against my personal experience, as I've seen my rent significantly reduced. Last summer it was actually supposed to go up from $1060 to $1210, but they axed that after sending the notice... then a few months after that I got it reduced down to $900, which is actually less then it was when I first moved into the place (September '06).

Rents were really taking off at that point, as vacancy rates were virtually nil. At first I figured I could get a decent place for $750-800, but pretty quickly clued in that wasn't going to happen... ended up getting a 2-bdrm for $910, which actually seemed like a helluva deal three weeks later when I moved in and noticed new tenants were then getting charged $1210.

That advertised rate stayed there for two years, and my rent was getting incrementally increased annually. But as time went on, vacancies in the complex slowly increased, and finally last fall they dropped the advertised rate to $1100, then $1050, and last time I checked it was $999. Established occupants can easily get it below that, even without a lease, as is my case.

As we took a look at in May, price-to-rent ratios are still very high, so it would be very unsettling to real estate prices if rents stopped growing, or even reduced as has been seen in Calgary.

The real estate bulls out there have claimed that rents are just catching up to prices because rents are much stickier then prices, and thus prices really aren't out of line it's just lag... but rents reversing course would blow that contention out of the water.

Vacancy Rate
For the rest of this entry I'm going to focus more on another part of the rental market equation, supply and demand. Here we see vacancy rates and that they're spiked significantly since the fall. There may be some seasonality in the numbers though (last April also seemed to have an unusually high rate), so until we get more spring numbers I think it's too early to draw any definitive conclusions.

In any case, this will be a number we'll be keeping an close eye on. That it's quite high should be no surprise, as anyone even taking a quick look around can see there are tons of rentals on the market, and an ever increasing number of "accidental landlords" joining the ranks (not sure how/if CMHC accounts for them in these surveys).

Total Units
I also wanted to take a look at more of the hard numbers, so here are the total available apartment rentals. It's interesting to note that this number actually contracted over 10% from 2003 through 2008 (presumably condo conversions)... all during a time when the population was growing significantly.

This would indicate a big pinch of supply, and that would ring true though the end of 2006, as vacancy rates were at their lowest... though oddly it wasn't until 2007 that supply started to really contract, all the while vacancy rates were creeping up. This continued through 2008 too, supply kept shrinking, yet vacancy rates kept rising.

Occupied Units
We can see why in the occupied stats, obvious these numbers had to be dropping. The number of renters peaked in 2006, and has fallen off significantly since then. This is an interesting observation, as over this time the economy was booming and population growing.

One would assume the rate of renters in a population would stay fairly level, thus when the population grows the number of renters should also grow proportionately... but we saw the reverse.

Thus, I hypothesis that we witnessed an unusually high number of renters became buyers since 2006. Which in many ways would make sense... we experienced record sales tallies, and to do that you need record numbers of first-time-buyers.

This may actually also be something of a troubling realization though, as this would seem to indicate that a significant portion of future first-time-buyers were actually induced to convert earlier then normal, and thus it's leaving something of a void going forward.

That has been something of a popular theory amongst the bearish, and would seem to be backed up in these findings. Of the renting population there will always be a certain portion that cannot buy for whatever reason, those who could but won't and then there are those that will eventually buy as they come of age... but when a large number of the latter are induced early it might be great in the short term, but long term it can cause real trouble.

So, while a drop of 7,000 or so over two and a half years may not seem like much in a city the size of Edmonton... but in an average year there is only 16,000 to 20,000 sales in the city, and its those entry level buyers that grease the wheels so to speak.

If they aren't there, those currently holding entry-lever properties can't sell and move up-to mid-classed homes... and those people holders can't sell and move into high-end homes... etc, etc.

One first-time-buyer can spur two, three, even four subsequent sales up the property ladder. Without them, things seize up in a hurry... so any kind of future shortage would have significant consequences.

Monday, June 8, 2009

Of bonds, banks and mortgages

TUESDAY UPDATE: Reports are circulating TD is about to raise their 5-year fixed rates another 0.4%

We've been hearing lots about central bank rates being at historic lows, and it's influence over mortgage rates... but anyone following my Twitter feed the last while has no doubt noticed my little obsession with the bond market.

While on the surface there doesn't seem to be much reason for a site like mine to concern itself with such things, but in fact the bond market is very influential on mortgage rates, and thus has a very big effect on the real estate market.

Mortgages themselves are essentially bonds, in exchange for the banks money, the buyer agrees to pay it back over a specific time at a specific interest rate. The bond and mortgage back securities markets are closely tied, and thus so are mortgage rates (which are usually slightly higher then bond rates).

So today I'm going to take a look at the relationships between bond yields, bank rates and mortgage rates. Here is a look at these rates since 1981.

Bond yields, bank rates and mortgage rates
As we can see, all three tend to track quite similarly. Also of note, mortgage rates are usually the highest of the three. For the sake of this post we're going to be using Government of Canada 5 Year Bond Yields, and the average lending rate for 5-year fixed mortgages (as they are the most popular here in Canada).

Bank rate and mortgage rates
We will start by looking at the relationship between the central bank rate and mortgage rates. As we can see here, there is a significant relationship between the bank rate and mortgage rates (these are through December of 2008), with an R2 value of 0.9064, the pattern is also obvious from the chart.

We've been hearing lots of late about how Mark Carney has been pledging to keep the Bank of Canada's key policy rate at 0.25% until next June. Which from the trendline equation would suggest a mortgage rate of about 3.25%, which was never quite realized as 5-year fixed rates never got much lower then 3.95%, but that is certainly within the expected range.

The issue though is that even despite the assurance that the bank rate will not change, mortgage rates have started to creep up, advertised rates went up to 4.15% last week with suspicion it could be headed higher shortly... why is this? Well, the simple answer is we've been seeing a lot of upward movement in the bond market (and a huge jump in US T-Notes).

Bond yields and mortgage rates
As we can see from this graph, there is an even stronger relationship between mortgage rates and bond yields then there was between mortgage rates and bank rates. This is evident in how the plots more tightly hug the trendline, and the R2 value of 0.9647, which is extremely high (1.0 would be a perfect relationship).

So while the bank rate may not change, if the bond yields rise it would appear that we should expect mortgage rates to rise as well. Especially since at this point the bank rate is being intentionally depressed, thus a short term decoupling would not be unexpected as the other two are still largely at the will of market forces.

Bond yields and bank rates
Finally, we'll do a scatter plot for bank rates and bond yields. The relationship of these two appear to be very similar to that the bank rate and mortgage yields, complete with a similar R2 value of 0.9046. Which is again a very strong relationship in its own right, but not as significant as bonds and mortgage rates share.

So, while the bank rate is expected to stay low for the foreseeable future (though we are hearing increasing reports that it will be heading up by year end, well before next June as initially promised), that is no promise that mortgage rates will stay down. For a better idea of where mortgages are headed, keep a close eye on the U.S. Treasury Note market, and Bank of Canada bonds (though they largely follow T-Notes).

If bond yields continue to rise, mortgages will follow. Which in turn will force the governments hands when it comes to quantitative easing (which is aimed at keeping bonds and financing rates down, but is intensely disliked by most debt holders).

Friday, June 5, 2009

Boom and bust... the rise and fall of ComFree?

Private sales, or For-Sale-By-Owner (FSBO for short) have been around for as long as there has been something to sell. Though in real estate private sales kind of fell out of favour as sales people and agencies became specialized and by pooling resources started offering levels of exposure that private sellers couldn't match.

With the emergence of the internet though, the game changed. As more and more people were going online for information, conventional media advertising was no longer the only game in town.

The establishment soon started adjusting to this by bringing the MLS online, but a major barrier to entry had been removed as the costs of operating online were far lower then buying advertising in the conventional media. Now a person with a little bit of html know-how could effectively showcase their property in detail they never could before.

It also paved the way for new entrants to come in and unite the traditionally highly fractional private sellers, and offer a low cost do-it-yourself service alternative to selling through a realtor. Here in Edmonton we've seen the emergence of ComFree.

ComFree actually started in 1996 in Winnipeg, six years later they made their first major expansion coming to Edmonton in the fall of 2002. They've since established themselves throughout the rest of Alberta and much of BC, as well as Australia. They basically carved themselves out a niche by offering sellers the basic tools to complete a sale and exposure on their website, for a flat rate that is a fraction of what one would pay a realtor in commission.

It's a fairly basic but effective business plan, very low overhead, everything is very standardized. The seller pays their money, ComFree gives them their package and from there the onus is on the seller. Their only real significant costs is marketing, as staffing and website costs would be very basic.

This model worked out quite well, they were largely the first mover in the market and established themselves quickly. They were also fortuitous in that from 2002 onward, the real estate market kept picking up momentum. By 2004/2005 the market was on fire, and 2006/2007 was just ridiculous... and ComFree was enjoying the ride.

ComFree Sales
In the spring/summer of 2006 they were averaging about 450 sales a month, and tallied 4,375 for the year. If you combined MLS and ComFree sales, ComFree had a 16.6% marketshare for the year for sales.

Like the rest of the resale market, ComFree stayed hot through the first half of 2007, raking up over 500 sales a month from March through May, topping out at 556 (May). In the first half of the year they had 17% market share.

ComFree Market Share
Then the music stopped... and as hard as it hit MLS, it hit Comfree even harder. For the second half of '07 their market share dropped to 12.9%... for '08 it was just 10.5%, and where a year earlier they were setting records with spring sales of over 500 a month, they were now only managing about 200. It's only gotten worse in '09, with just 241 sales through April... a mere 4.6% of the resale market.

Like the MLS, ComFree has witnessed an erosion of prices, and explosion of inventory... in December of '07 they had an absorption rate of over 33, with an inventory of 3,026 to just 91 sales.

ComFree Prices
Also like MLS, they have also witnessed a major wave of delisting, last April they had 3,329 properties listed... this April just 856, a drop of 2,473. Obviously not all sold, as they've only had 1,536 sales since then (all the while 3,330 "new listings" came on board too).

So why has ComFree wilted so much worse then MLS? There are several reasons, but I think it mainly comes down to exposure, and service. In a hot market, homes were selling themselves, buyers were clamouring for more so they were actively seeking listings, they're beating a path to the sellers door.

Then the frenzy ended... now suddenly, ComFree isn't as effective and is losing market share rapidly. We're in a stage where homes need all the exposure they can get because there is a massive glut of inventory, buyers are no longer biting on the "buy now of get priced out forever" line, and the speculators haven't just disappeared, but now are trying to unload their own flips gone wrong.

Before you could pretty much slap a price tag on anything, hold an open house and welcome the bidding war. Now you actually have to show the place, likely several times. As much as most feel commissions are too high, it's situations like this where it's a lot less hassle to go through an agent. Buyers can just submit a list and let the agent schedule all the showings.

With ComFree the buyer has to do the legwork themselves and deal with the seller directly... which speaking from personal experience, is something of a pain in the ass. I know when I was looking at places last summer, I tried to look at a few ComFree listings and it was a nightmare or phone tag, last minutes cancellations... and these were the ones nice enough to actually return my calls.

And often from the buyers perspective the prices really aren't any better then the MLS listings, it's just the seller is pocketing the difference rather then paying a commission.

Obviously there is no need for a toe-tag with ComFrees name on it, largely because they have very low fixed costs. They make their money by getting people to list, not on the sale itself (though, more sales would certainly help them get more listings via word of mouth). Their only real cost is marketing, and can likely rest on their laurels for awhile if need be. So they're probably doing just fine.

The real issue with FSBO at this time is for the seller. Services like this would be quite effective in a hot market... but in cool to balanced ones, it's a tough row to hoe. I don't want this to sound like an advertisement for realtors either, but I think I've gotten in my fair share of licks on them already, and pride myself as little if not an equal opportunity detractor.

Tuesday, June 2, 2009

May numbers are in

Sorry I didn't get to report this earlier in the day, unfortunately I had to do some actually work. Bummer, I know, but believe it or not, communicating my worthless ideas to literally threes of people, free-of-charge, doesn't pay the bills.

Anyway, the local numbers for May were released today, and it seems that with the aid of all-time low interest rates, spring has sprung. Best sales tally they've had since the boom, and actually ignoring the boom years, it was the best May sales total in at least a decade.

The spring bounce also arrived for prices, averages were up around 4% (excluding townhomes) over April. The SFH median was up as well, but only 1.6%, so that would indicate sales are particularly strong at the high end of the market. Further reinforced by the residential average being up more then it's components.

Edmonton Prices
Year-over-year though, prices remain down, 4-6.2% for the most part, though townhomes are down over 12%. Like I've said in prior posts, townhomes are such a small segment that it's more vulnerable to fluctuations.

Inventory continued to hold, and is extremely high by historical measures. Typically this time of year inventory is fairly stable through the summer, while sales will start to decline either in June or July.

Edmonton Sales and Inventory
It seems the low interest rates have gotten a fair number of buyers into the market. It seems though that it's allowing first-timers to spend more and many are skipping a rung so to speak and going straight into mid-sized homes rather then typically entry level properties like condos, or smaller bungalows.

So while increased sales is certainly welcome news in any market with an inventory glut, it could be better in our case if more sales were in the entry level segment. It is these smaller units where our primary inventory problem is, as there was a great deal of speculation in that market during the boom (both with flippers and builders).

Edmonton Absorption Rate
This is evident in the absorption rate, where SFH's are currently well into balanced territory currently at 2.5, while condos are still well into a buyers market at 4.2 (FYI, the overall residential rate is standing at 3.45, which is just in balanced market range, though still very high for May).

So, while the SFH market appears to returning to normal range, condos are still a very soft market. So while it may not be good for the overall market that condo sales are proportionally a little low, it's probably better for the individual buyers that they bought into a more stable segment.

As I've been saying, real estate is prone to a lot of seasonality, and spring in particular is known to be very strong, so it's really the rest of the year that tells us the overall direction of the market. This spring in particular has also benefited greatly from the huge drop in interest rates... but those interest rates also present problems going forward, as they now have nowhere to go but up.

They may have already started their climb as yesterday RBC lifted their 5-year fixed rates by 0.2%. BMO and TD have since followed suit, and the rest of the major lenders are expected to as well. This has been caused by yield increases in the bond market over the last two weeks, and while it's too early to say whether that is more then an aberration, if they continue trending up, mortgage rates will soon follow.

It's something of a double edged sword for real estate, because if you want sales now you need to keep rates low... but for the long term health of the market it needs the overall economy to improve, and once it starts to improve bond rates go up, and with them interest rates, which hurts sales in the short term.

It's an interesting time. Many western nations are really keen to keep rates low and spur spending through measures like quantitative easing... but China has told them to watch their step, and they being many nations largest creditor, particularly of the US, they have some stroke.

It's something of an economic Mutually Assured Destruction as the US has the money presses primed and their cursor over the 'Print' icon, and China has their cursor over the 'Sell' icon. If either one presses the button, all hell will break loose.

Anywho, enough of that, here are the hard numbers.

Sales = 2,161
Since May '07 = -23.9% (-678)
Since May '08 = +18.7% (+340)
Since last month = +17.3% (+318)

Active Listings = 7,453
Since May '07 = +66.2% (+2,968)
Since May '08 = -32.3% (-3,553)
Since last month = -1.1% (-86)

Single Family Homes Median= $342,500
Since peak (May '07) = -14.4% (-$57,500)
Since one year ago = -6.2% (-$22,500)
Since six months ago = +1.6% (+$5,500)
Since last month = +1.6% (+$5,500)

Residential Average = $326,332
Since peak (July '07) = -8.0% (-$28,386)
Since one year ago = -4.2% (-$14,167)
Since six months ago = +2.4% (+$7,744)
Since last month = +4.6% (+$14,205)

Single Family Homes Average = $367,672
Since peak (May '07) = -13.7% (-$58,356)
Since one year ago = -4.0% (-$15,495)
Since six months ago = +1.4% (+$4,915)
Since last month = +4.0% (+$14,286)

Condo Average = $244,734
Since peak (July '07) = -10.0% (-$27,174)
Since one year ago = -6.2% (-$16,103)
Since six months ago = +5.7% (+$13.203)
Since last month = +3.7% (+$8,714)

Townhome Average= $289,954
Since peak (Oct '07) = -21.2% (-$78,010)
Since one year ago = -12.3% (-$40,497)
Since six months ago = -8.2% (-$25,859)
Since last month = -0.4% (-$1,114)

Also included this month is a new feature. One of our readers has been tracking the median MLS asking prices, and I figured I'd start including them in our monthly updates.

CM Median Asking Price Index
Central Edmonton: $252,200
NE Edmonton: $369,900
NW Edmonton: $349,900
SE Edmonton: $375,000
SW Edmonton: $568,800*
West Edmonton: $464,000

*SW number is for 2-story detached homes only, all others are for all residential units in the area