Is the doom and gloom in the housing market over? The answer appears to be yes, at least for Canada.
While the US housing market is still struggling with foreclosures and falling housing prices, the markets in Canada are experiencing an upswing. The housing market blues, which began in early 2007 with monthly sales dropping from a high of 45,000 seasonally adjusted sales in May 2007 To 26,000 monthly seasonally adjusted sales in January 2009.
The first two quarters in 2009, however, have experienced a growth in both sales and prices. The seasonally adjusted prices have climbed back to $310,000 in June 2009 from a low of $283,000 in January 2009.
The reasons behind recovery in Canada are manifold. First, the Canadian consumers stayed away from bingeing on debt. Unlike their American peers, Canadian domestic borrowers kept their expenses in line with their incomes. Furthermore, the well regulated banking and mortgage sectors in Canada have maintained a moderate growth in the housing market, even when the credit river was flooding the global markets.
The graph below presents the recovering housing market in Canada where sales, listings, and prices are on the upswing.