Despite a summer housing market surge, home sale activity slowed in December – sparking a trend back to moderation that is expected to carry into 2014.
“Activity has gradually eased back from stronger than expected levels last summer and is now roughly in line with the ten year monthly average,” said CREA President Laura Leyser. “We’ll likely continue getting mixed signals in the months ahead, with positive year-over-year comparisons for sales masking the recent moderation in the monthly sales trend.”
National home sales fell 1.8 per cent in December over November despite jumping 12.9 per cent above December 2012’s tally. December marked the third straight monthly decline as activity fell a total of 5.2 per cent following September’s peak.
2014’s sales forecast may depend on potential mortgage rule changes, with CREA Chief Economist, Gregory Klump, believing 2014 may benefit from steady job growth.
“National sales activity has softened in recent months and is expected in 2014 to remain down from levels reached last September,” said CREA Chief Economist Gregory Klump. “That said, absent further mortgage rule changes, sales in 2014 may surpass the annual total for 2013 if demand holds steady near current levels as strengthening economic and better job growth offset the impact of further expected marginal mortgage interest rate increases.”
Current homeowners will likely rejoice, with the national sales price rising 10.4 per cent year-over-year. The national price of sold homes in December was $389,119.
However, according to MLS, the Home Price Index is a better indicator of price trends “because it is not affected by changes in the mix of sales activity the way that average price is.” The “Aggregate Composite MLS HPI” rose 4.31 per cent year-over-year.
“Year-over-year price growth in the MLS® HPI was mixed across housing markets tracked by the index, led by Calgary (+8.74 per cent) and Greater Toronto (+6.31 per cent),” the report stated.
“Greater Vancouver recorded a second consecutive year-over-year increase (+2.13 per cent) following more than a year of declines between late 2012 and late 2013.”