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It’s been ‘hard to sell’ in many housing markets across Canada. Here’s why

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Slowing housing markets in many parts of Canada are pushing some home sellers to make hard-fought concessions on price — or delay their plans to sell until next year — in the wake of higher rates.

Real estate experts who spoke to Global News say patience and price flexibility are key to landing a sale in today’s market, and that waiting until spring in hopes of a better deal is far from a sure thing.

October sales figures from the Canadian Real Estate Association (CREA) released this week showed a “sizable decline” in activity in most of the country’s biggest markets.

Sales volumes dropped 5.6 per cent from September, according to CREA, with chair Larry Cerqua saying that buyers might’ve entered an early “hibernation” as higher interest rates limit buying power across the country.


Click to play video: 'October real estate report'
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October real estate report

 


Lorna Willis, an agent with Re/Max Finest Realty in Kingston, Ont., says that the number of homes sold in that city was down nine per cent year over year in October, with average prices down 5.3 per cent annually.

The main thing that’s changed in the region is how long it takes to sell a home, according to Willis. While the average days on market in Kingston now stands at 24 days, she says it can take between three and six months to land a sale now.

CREA noted that the national sales-to-new listings ratio hit a 10-year low of 49.5 per cent in October.

“It’s definitely been a shock for sellers, what’s changed,” Willis tells Global News.

The Greater Vancouver Area is also experiencing a slowdown, says Realtor Elliott Chun at The Partners Real Estate.

While sales volumes in the market rose both month over month and year over year in October, he notes the market is still almost 30 per cent below the 10-year average for the month.

The number of buyers in the market has “tapered off” since the spring and summer, he says, and multiple-offer situations are increasingly rare and reserved for top-tier homes.

Not every market is facing a deep chill: sales in Calgary are still elevated, notes Hanif Bayat, CEO of the financial analysis platform WOWA.ca. Calgary’s housing supply is still tight and sales of relatively affordable condos are boosting activity in the city, according to the local real estate board.

But Bayat tells Global News that sellers in Ontario and B.C. are facing steep challenges and longer waits trying to sell their homes in the higher interest rate environment. Buyers here are facing steeper affordability challenges amid typically elevated home prices and higher cost of living.

Fewer buyers are able to qualify for mortgages at today’s high rates, at the same time as sellers with mortgage renewals coming up are struggling to meet their monthly payments, Bayat says.

Sellers feeling the stress — particularly investors whose income from rental units is no longer covering their mortgages — are trying to offload properties when demand has been stifled by higher borrowing costs, he says.

“We have more sellers and less buyers. And typically that means that it’s hard to sell,” Bayat says.

 

Sellers have to be ‘sharp’ on price

Despite signs that some jurisdictions are shifting into — or may already be in — a buyers’ market, Bayat says sellers are not “adjusting their price as fast.”

In Ontario, he says many sellers are still accustomed to the market of a year or even six months ago when they held more negotiating power in the face of fervent buyer demand.

“The sellers are not used to this environment … they don’t know that they don’t have that power that they had before,” he says.

Chun in Vancouver also says there’s a feeling of “FOMO” out there in the market — a seller’s fear that they don’t want to miss out on the price their neighbour got a month ago. He cautions that having this mindset can lead to a “stale listing” with 30 days or more on market without significant traffic.

“Putting the prices of yesterday aside, you can only control what’s in front of us, and that’s the current market condition and what a buyer’s going to pay,” he says.

Chun has recently found some sellers willing to negotiate — he cites one property listed close to $1.4 million where the sellers dropped their asking point to $1.25 million before his buyers made an offer and were able to haggle the price even a little lower.

The reason for selling has a big impact on whether a seller is willing to negotiate on price, he says.

“I think the clock is ticking for a lot of sellers out there, especially investors,” he says.

In Kingston, Willis says homes are selling at an average of 97 per cent of asking price. That’s “low” by historical standards, she says, and indicates that there’s room for buyers to negotiate.

Sellers have to be “sharp” on pricing, she says, because buyers are not willing to overpay in the current market.

For those who have a particular dollar figure in mind that they need to hit, Willis advises “patience.” That’s also affected the order of operations for many sellers, she adds.

“During the pandemic, our advice was, your home will sell in a hot minute, so go find the one you want to buy because they’re more rare,” Willis says. “Now it’s flipped that we don’t know how long it’s going to take to sell your home, but there are a lot of homes on the market.”

Both Willis and Chun says conditions for financing and inspections are commonplace in the market, as are conditions for the client’s home to sell first before the deal closes. Chun notes this can create a chain of conditional offers on the sale of a single home as buyers seek to get their own home offloaded before closing.

 

Will spring be better for sellers?

When a client comes to Willis to sell their Kingston home, the first question she asks them is: why do you need to sell?

If someone isn’t on a deadline and can wait to get the price they want, she’s recommending they wait “until the market’s more friendly for them.”

Willis expects that the typically busier spring market could coincide with signs that the Bank of Canada’s interest rates could be set to fall. While the central bank has warned that its policy rate might still need to rise further to tame inflation, some economists have forecast rate cuts could begin by mid-2024.

When buyers have that “stability,” Willis expects demand will return to the market, which could in turn drive prices higher again.

While many buyers are boxed out of the market at the moment because of those higher rates, both Chun and Willis say buyers who are able to qualify today have their pick of listings and can negotiate solid deals for themselves.

Sellers may be anxious if their home has been sitting on the market for a while, Chun says, and may be grateful to get a sale of any kind before the holiday rush and the new year turns over.

“Some of the best deals I’ve secured for buyers have been from sellers that are just really just ready to go and happy to receive offers when the market is quieter,” he says.

Bayat is less convinced that sellers will be able to get better prices in the spring.

Canada’s economy has shown clear signs of cooling in recent months. Bayat says that if cracks continue to form in the labour market and the unemployment rate rises, buyers experiencing a loss of income might be pushed back to the sidelines in the spring.

Rising mortgage stress could also drive more sellers into the market, he says — adding more supply to a dwindling set of buyers and driving sale prices further down.

“I think the smart thing is to accept the reality that the market has changed,” Bayat says, arguing homeowners thinking about selling ought to do so “sooner than later.”

Chun, too, is wary of banking on higher prices in the spring. Real estate prices are shaped by a lot of forces outside the control of buyers and sellers, so better to work around whatever schedule is right for your household, he argues.

“Timing the market is really difficult and a lot of people get it wrong and I try to avoid that,” he says.

“I tell people, go do what’s best for you. And if that day is now, let’s do it.”

— with files from Global News’s Nivrita Ganguly

 

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STD epidemic slows as new syphilis and gonorrhea cases fall in US

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NEW YORK (AP) — The U.S. syphilis epidemic slowed dramatically last year, gonorrhea cases fell and chlamydia cases remained below prepandemic levels, according to federal data released Tuesday.

The numbers represented some good news about sexually transmitted diseases, which experienced some alarming increases in past years due to declining condom use, inadequate sex education, and reduced testing and treatment when the COVID-19 pandemic hit.

Last year, cases of the most infectious stages of syphilis fell 10% from the year before — the first substantial decline in more than two decades. Gonorrhea cases dropped 7%, marking a second straight year of decline and bringing the number below what it was in 2019.

“I’m encouraged, and it’s been a long time since I felt that way” about the nation’s epidemic of sexually transmitted infections, said the CDC’s Dr. Jonathan Mermin. “Something is working.”

More than 2.4 million cases of syphilis, gonorrhea and chlamydia were diagnosed and reported last year — 1.6 million cases of chlamydia, 600,000 of gonorrhea, and more than 209,000 of syphilis.

Syphilis is a particular concern. For centuries, it was a common but feared infection that could deform the body and end in death. New cases plummeted in the U.S. starting in the 1940s when infection-fighting antibiotics became widely available, and they trended down for a half century after that. By 2002, however, cases began rising again, with men who have sex with other men being disproportionately affected.

The new report found cases of syphilis in their early, most infectious stages dropped 13% among gay and bisexual men. It was the first such drop since the agency began reporting data for that group in the mid-2000s.

However, there was a 12% increase in the rate of cases of unknown- or later-stage syphilis — a reflection of people infected years ago.

Cases of syphilis in newborns, passed on from infected mothers, also rose. There were nearly 4,000 cases, including 279 stillbirths and infant deaths.

“This means pregnant women are not being tested often enough,” said Dr. Jeffrey Klausner, a professor of medicine at the University of Southern California.

What caused some of the STD trends to improve? Several experts say one contributor is the growing use of an antibiotic as a “morning-after pill.” Studies have shown that taking doxycycline within 72 hours of unprotected sex cuts the risk of developing syphilis, gonorrhea and chlamydia.

In June, the CDC started recommending doxycycline as a morning-after pill, specifically for gay and bisexual men and transgender women who recently had an STD diagnosis. But health departments and organizations in some cities had been giving the pills to people for a couple years.

Some experts believe that the 2022 mpox outbreak — which mainly hit gay and bisexual men — may have had a lingering effect on sexual behavior in 2023, or at least on people’s willingness to get tested when strange sores appeared.

Another factor may have been an increase in the number of health workers testing people for infections, doing contact tracing and connecting people to treatment. Congress gave $1.2 billion to expand the workforce over five years, including $600 million to states, cities and territories that get STD prevention funding from CDC.

Last year had the “most activity with that funding throughout the U.S.,” said David Harvey, executive director of the National Coalition of STD Directors.

However, Congress ended the funds early as a part of last year’s debt ceiling deal, cutting off $400 million. Some people already have lost their jobs, said a spokeswoman for Harvey’s organization.

Still, Harvey said he had reasons for optimism, including the growing use of doxycycline and a push for at-home STD test kits.

Also, there are reasons to think the next presidential administration could get behind STD prevention. In 2019, then-President Donald Trump announced a campaign to “eliminate” the U.S. HIV epidemic by 2030. (Federal health officials later clarified that the actual goal was a huge reduction in new infections — fewer than 3,000 a year.)

There were nearly 32,000 new HIV infections in 2022, the CDC estimates. But a boost in public health funding for HIV could also also help bring down other sexually transmitted infections, experts said.

“When the government puts in resources, puts in money, we see declines in STDs,” Klausner said.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

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World’s largest active volcano Mauna Loa showed telltale warning signs before erupting in 2022

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WASHINGTON (AP) — Scientists can’t know precisely when a volcano is about to erupt, but they can sometimes pick up telltale signs.

That happened two years ago with the world’s largest active volcano. About two months before Mauna Loa spewed rivers of glowing orange molten lava, geologists detected small earthquakes nearby and other signs, and they warned residents on Hawaii‘s Big Island.

Now a study of the volcano’s lava confirms their timeline for when the molten rock below was on the move.

“Volcanoes are tricky because we don’t get to watch directly what’s happening inside – we have to look for other signs,” said Erik Klemetti Gonzalez, a volcano expert at Denison University, who was not involved in the study.

Upswelling ground and increased earthquake activity near the volcano resulted from magma rising from lower levels of Earth’s crust to fill chambers beneath the volcano, said Kendra Lynn, a research geologist at the Hawaiian Volcano Observatory and co-author of a new study in Nature Communications.

When pressure was high enough, the magma broke through brittle surface rock and became lava – and the eruption began in late November 2022. Later, researchers collected samples of volcanic rock for analysis.

The chemical makeup of certain crystals within the lava indicated that around 70 days before the eruption, large quantities of molten rock had moved from around 1.9 miles (3 kilometers) to 3 miles (5 kilometers) under the summit to a mile (2 kilometers) or less beneath, the study found. This matched the timeline the geologists had observed with other signs.

The last time Mauna Loa erupted was in 1984. Most of the U.S. volcanoes that scientists consider to be active are found in Hawaii, Alaska and the West Coast.

Worldwide, around 585 volcanoes are considered active.

Scientists can’t predict eruptions, but they can make a “forecast,” said Ben Andrews, who heads the global volcano program at the Smithsonian Institution and who was not involved in the study.

Andrews compared volcano forecasts to weather forecasts – informed “probabilities” that an event will occur. And better data about the past behavior of specific volcanos can help researchers finetune forecasts of future activity, experts say.

(asterisk)We can look for similar patterns in the future and expect that there’s a higher probability of conditions for an eruption happening,” said Klemetti Gonzalez.

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The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Science and Educational Media Group. The AP is solely responsible for all content.

The Canadian Press. All rights reserved.

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Waymo’s robotaxis now open to anyone who wants a driverless ride in Los Angeles

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Waymo on Tuesday opened its robotaxi service to anyone who wants a ride around Los Angeles, marking another milestone in the evolution of self-driving car technology since the company began as a secret project at Google 15 years ago.

The expansion comes eight months after Waymo began offering rides in Los Angeles to a limited group of passengers chosen from a waiting list that had ballooned to more than 300,000 people. Now, anyone with the Waymo One smartphone app will be able to request a ride around an 80-square-mile (129-square-kilometer) territory spanning the second largest U.S. city.

After Waymo received approval from California regulators to charge for rides 15 months ago, the company initially chose to launch its operations in San Francisco before offering a limited service in Los Angeles.

Before deciding to compete against conventional ride-hailing pioneers Uber and Lyft in California, Waymo unleashed its robotaxis in Phoenix in 2020 and has been steadily extending the reach of its service in that Arizona city ever since.

Driverless rides are proving to be more than just a novelty. Waymo says it now transports more than 50,000 weekly passengers in its robotaxis, a volume of business numbers that helped the company recently raise $5.6 billion from its corporate parent Alphabet and a list of other investors that included venture capital firm Andreesen Horowitz and financial management firm T. Rowe Price.

“Our service has matured quickly and our riders are embracing the many benefits of fully autonomous driving,” Waymo co-CEO Tekedra Mawakana said in a blog post.

Despite its inroads, Waymo is still believed to be losing money. Although Alphabet doesn’t disclose Waymo’s financial results, the robotaxi is a major part of an “Other Bets” division that had suffered an operating loss of $3.3 billion through the first nine months of this year, down from a setback of $4.2 billion at the same time last year.

But Waymo has come a long way since Google began working on self-driving cars in 2009 as part of project “Chauffeur.” Since its 2016 spinoff from Google, Waymo has established itself as the clear leader in a robotaxi industry that’s getting more congested.

Electric auto pioneer Tesla is aiming to launch a rival “Cybercab” service by 2026, although its CEO Elon Musk said he hopes the company can get the required regulatory clearances to operate in Texas and California by next year.

Tesla’s projected timeline for competing against Waymo has been met with skepticism because Musk has made unfulfilled promises about the company’s self-driving car technology for nearly a decade.

Meanwhile, Waymo’s robotaxis have driven more than 20 million fully autonomous miles and provided more than 2 million rides to passengers without encountering a serious accident that resulted in its operations being sidelined.

That safety record is a stark contrast to one of its early rivals, Cruise, a robotaxi service owned by General Motors. Cruise’s California license was suspended last year after one of its driverless cars in San Francisco dragged a jaywalking pedestrian who had been struck by a different car driven by a human.

Cruise is now trying to rebound by joining forces with Uber to make some of its services available next year in U.S. cities that still haven’t been announced. But Waymo also has forged a similar alliance with Uber to dispatch its robotaxi in Atlanta and Austin, Texas next year.

Another robotaxi service, Amazon’s Zoox, is hoping to begin offering driverless rides to the general public in Las Vegas at some point next year before also launching in San Francisco.

The Canadian Press. All rights reserved.

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