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Housing Starts Trend or Merely a Pause?


April 2008 Housing Starts in Metro Moncton

  • The Moncton CMA is the only New Brunswick area recording lower year to date housing starts with 59 singles and 83 multiples recorded.

    However, new homes sales reported on the GMREB MLS® are up 13% to the end of April, from 124 in 2007 to 141 in the first four months of this year.

    And there is currently over 200 new construction homes for sale although that inventory could dry up in the next four months.

    Will metro Moncton housing starts catch up in the next four months?
    I predict that they will.



    (preliminary figures provided by Canada Mortgage and Housing Corporation)


Year to Date April
 

225-
-
202.5-
-
180-
-
157.5-
-
135-
-
112.5-
-
90-
-
67.5-
-
45-
-
22.5-
-
0-
Saint John Moncton Fredericton Other

2008

2007


Larry Estabrooks is an independent real estate agent in Moncton, New Brunswick, Canada

LarryEstabrooks.com

contact information: www.LarryEstabrooks.com/contact/

Real Property Assessment Reality

If there were to be a real property assessment freeze or cap in New Brunswick, what might the rules look like?

First, don't expect that it will apply to any type of commercial or industrial property.

And it surely wouldn't apply to non residents of New Brunswick.

Next, don't expect that it would apply to recreational, seasonal, and secondary properties like camps or cottages.

Of course the assessment for a newly constructed home could not be frozen until after it is assessed for the first time. An unwanted side effect of this could place new houses at an assessment / property tax disadvantage compared to existing houses.

Then don't expect that it will apply to any type of residential rental property. This leaves out landlords (both for profit and not for profit) and by extension their tenants. Approximately one third of New Brunswick households rent.

The remaining 66% of New Brunswick households might benefit from a freeze or cap. However who benefits most from an assessment freeze or cap? The New Brunswick household living in a modest bungalow assessed at $125,000 or the one living in executive two story assessed at $250,000? The real beneficiaries of an assessment freeze or cap will be the 33% of New Brunswick households that own their principal residence which is assessed above the median assessment value.

And what about renovations? Will the real property assessment still be frozen or capped if a major home renovation is carried out? Or will renovations trigger a re-assessment? Will this encourage the underground economy in home renovations?

And what about if the current owner sells? Will the "frozen" assessment be transferred to the new owner? Not likely. The real property assessment would then be brought up to date. Will the "frozen" assessment be transferred with the current household? What if the household is dissolved? Who would benefit from transferable frozen assessment?

Picture this. For whatever reason a homeowner wished to downsize. They want to sell the big home and get into a smaller, less expensive one. But guess what. Doing this may negate the "freeze" the homeowner has enjoyed. The property taxes on the smaller home could be more than the current taxes on the larger home.

First time homeowners and new house buyer would pay more property taxes than long time homeowners. Anyone who relocates, either within New Brunswick or into New Brunswick or would be subject to higher real property assessments and property taxes.

And what about the day when the freeze ends? Will real property assessments be returned to "real and true value"? Will everybody be happy with a sudden dose of reality?

And speaking of reality. Even if assessments are frozen, what if municipal spending still goes up? Let's say because of higher energy costs like fuel and electricity. The real property tax rate will have to go up to compensate. So what's the point of an assessment freeze if property taxes may have to go up anyway?

Does a real property assessment cap or freeze really make sense?

City of Moncton Leads the Province

I posted this on April 1, but it's worth repeating!

Now that the New Brunswick numbers are released for residential sales in the first quarter of 2008, the City of Moncton shines as the star of the Province.  The number of residential properties reported sold through the four major real estate boards in New Brunswick declined 15% from the first quarter of 2007.

But not in the City of Moncton where sales advanced 3.8% in the first quarter.
Now that's quite a spread. So start spreading the news Moncton.
 
(I've had a peek at the numbers for April thus far and I'm confident Moncton will do it again in April.)

Larry Estabrooks
"Your Local Expert"

Moncton

Month Average List Price Average Sale Price Sale to List Price Average List Duration Number Of Sales
MAR-2008 159883 154920 97% 89 days 100
FEB-2008 164353 158513 96% 107 days 90
JAN-2008 163545 157890 97% 85 days 55
Averages: 162347 156906 97 % 95 days 245
Month Average List Price Average Sale Price Sale to List Price Average List Duration Number Of Sales
MAR-2007 157529 152087 97% 91 days 90
FEB-2007 144120 139379 97% 86 days 84
JAN-2007 149969 144674 96% 87 days 62
Averages: 150770 145616 97 % 88 days 236

Municipal Elections and Property Taxes

Why blame property assessments when the assessment is just one part of a simple mathematical equation which results in the residential property taxes homeowners pay directly and tenants pay indirectly?

If a municipality in New Brunswick wishes to freeze, limit or reduce the property taxes it collects then it merely has to freeze, limit or reduce its spending! It's that simple.

A municipal council estimates spending for the coming year and also decides how much of that spending will come from property tax revenues, both residential and commercial. The amount thus decided is divided by an amount representing the "real and true" value of all real property in the municipality (municipal assessment base). This calculation results in a municipal tax rate which when applied to a specific property's assessment results in the amount of municipal property taxes for that particular property.

If there is no growth in amount of spending from property tax revenues and the municipal assessment base grows, the mil rate would be less and an individual property tax bill might not grow even though the assessed value of the property may grow. If a property undergoes major renovations or substantial additions, one would expect its "real and true value" (and its property taxes) to increase.

In a prosperous and growing municipality the assessment base grows with new construction and development. In a prosperous and growing municipality the assessment base also grows with the effect of supply and demand on the sale of real property on the open market. In a stagnant or declining municipality, the opposite occurs.

Municipalities are compared and measured by the growth or decline of their municipal assessment base.
Property assessments should not be unfairly manipulated.


In my next blog post I'll point out the inequities that can result from "freezing" property assessments.

Searching, searching, searching .....

You're searching for something specific in a property.

But nothing that comes up on the search matches.

You need help, and I can search the database and get the results that match your specific criteria.

  • Only log homes? No problem.
  • Only homes with a pool? No problem.
  • Only oil heat or only electric heat? No problem.
  • Only a certain age range? No problem.


Go ahead, let me try, click here to submit your specifications.

Smart Time to Buy a New Home

This time of year is a smart time to buy an already built new home in the Moncton area.

Here are just some of the reasons why I say this:

  • At this time of year builders want to move what's left of their inventory and get to work on this year's crop of new homes.
  • In the construction industry price increases in materials and labour usually occur at the beginning of the building season. New homes built and listed last year are often based on last year's pricing. Prices could be up this year making new homes built last year a better buy. Unless of course the builder has raised his pricing. If you have your own Buyer's agent (as opposed to the Agent for the builder), your agent should be able to research the pricing history to see if in fact the builder has raised the price to cover the builder's carrying costs.
  • New homes that were not complete on January first are only partially assessed, meaning the buyer will  have lower property taxes for the rest of the year.
  • The earth around foundations built and backfilled last year will have had an opportunity to settle. You will have all summer and fall to put your personal touch on the landscaping of you new home

As of this writing there are approximately 55 detached and 89 semi-detached new homes for sale in Moncton Riverview and Dieppe.

However before you call that builder's agent you should learn about the advantages of having your own agent.
Find out at MonctonGuide.com

2008 First Quarter Housing Starts

Housing starts in the Moncton CMA for the first quarter of 2008 are down 32% from last year's stellar numbers according to preliminary numbers released by the Canada Mortgage and Housing Corporation.

I'm not surprised given the winter we've endured thus far. The good news is that because of all the snow cover there's not much frost in the ground to hamper the excavation crews now that April is here.

I expect the number of starts to rebound in April and May. I predict the next quarterly report will show year to date starts equaling the 2007 numbers.

Agency is a Serious Matter

If you will be a consumer of the services of a real estate licensee,
Agency is a matter you should treat seriously.

I stumbled across a series of outstanding agency articles written for the consumer. 
The articles are on the Toronto Real Estate Blog and clicking each will open a new window:

I also address agency on my web page MonctonGuide.com

If you would like any help with the subject of agency,
please click "Add Comment" below or click here to send me a message.

Best Time to List is?

The simple answer is just before your home is ready to be placed on the market!

Historically the answer depends on where your house is located!

  • In metro June was clearly the highest sales month and with the "days on market"
     at 75 makes  March or April the best months to list.

  • In areas outside metro the least "days on market" indicates
    April, May or August the best months to list.

However strategic marketing can shorten your home's "days on market".

Please contact me to learn more - Larry Estabrooks - Your Local Expert

 (note: new construction is not included)

 Moncton, Dieppe & Riverview
 

Month Average Days on Market # of Sales
DEC-2007 104 days 57
NOV-2007 71 days 94
OCT-2007 65 days 100
SEP-2007 67 days 94
AUG-2007 67 days 125
JUL-2007 63 days 138
JUN-2007 74 days 168
MAY-2007 65 days 148
APR-2007 68 days 125
MAR-2007 66 days 108
FEB-2007 75 days 99
JAN-2007 84 days 78
Averages: 71 days 1334
 
Other areas outside Moncton, Dieppe & Riverview
 
Month Average Days on Market # of Sales
DEC-2007 174 days 27
NOV-2007 92 days 61
OCT-2007 123 days 62
SEP-2007 104 days 65
AUG-2007 92 days 71
JUL-2007 91 days 70
JUN-2007 128 days 64
MAY-2007 132 days 77
APR-2007 105 days 56
MAR-2007 142 days 57
FEB-2007 103 days 47
JAN-2007 146 days 29
Averages: 115 days 686

Moncton City Home Sales Still Strong

Metro residential sales retreat in the first quarter of 2008, except in the city of Moncton.

Although home sales in Moncton are indeed up, it was not enough to prevent a slide in the total number of residential unit sales in the metro area.
The average sale price increased in Moncton and Riverview but declined in Dieppe.
Larry Estabrooks
"Your Local Expert"

Moncton

Month Average List Price Average Sale Price Sale to List Price Average List Duration Number Of Sales
MAR-2008 159883 154920 97% 89 days 100
FEB-2008 164353 158513 96% 107 days 90
JAN-2008 163545 157890 97% 85 days 55
Averages: 162347 156906 97 % 95 days 245
Month Average List Price Average Sale Price Sale to List Price Average List Duration Number Of Sales
MAR-2007 157529 152087 97% 91 days 90
FEB-2007 144120 139379 97% 86 days 84
JAN-2007 149969 144674 96% 87 days 62
Averages: 150770 145616 97 % 88 days 236

Dieppe

Month Average List Price Average Sale Price Sale to List Price Average List Duration Number Of Sales
MAR-2008 152094 150816 99% 109 days 16
FEB-2008 179875 173742 97% 91 days 24
JAN-2008 187281 184211 98% 127 days 26
Averages: 176058 172308 98 % 110 days 66
Month Average List Price Average Sale Price Sale to List Price Average List Duration Number Of Sales
MAR-2007 167919 163963 98% 86 days 26
FEB-2007 185887 184267 99% 80 days 40
JAN-2007 218963 210994 96% 97 days 24
Averages: 189516 185529 98 % 87 days 90

Riverview

Month Average List Price Average Sale Price Sale to List Price Average List Duration Number Of Sales
MAR-2008 159032 155726 98% 63 days 19
FEB-2008 167750 163693 98% 79 days 28
JAN-2008 161625 158583 98% 69 days 12
Averages: 163697 160088 98 % 72 days 59
Month Average List Price Average Sale Price Sale to List Price Average List Duration Number Of Sales
MAR-2007 145417 140736 97% 94 days 36
FEB-2007 138310 132838 96% 82 days 21
JAN-2007 177566 172776 97% 125 days 17
Averages: 150785 145855 97 % 98 days 74

(I caution that average price information can be useful in establishing trends, but does not indicate home prices in municipalities comprised of widely divergent neighborhoods.)


Larry Estabrooks is a licensed independent real estate agent in Moncton, New Brunswick

www.LarryEstabrooks.com

www.MonctonGuide.com

email - larry@larryestabrooks.com 
for
more contact information: www.LarryEstabrooks.com/contact/