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Contracts to buy U.S. previously owned homes fell unexpectedly in November as limited housing stock and lofty prices crimped activity, and the explosion of new coronavirus cases from the fast-spreading Omicron variant poses a risk to the housing market headed into 2022, a trade group said on Wednesday.
The National Association of Realtors (NAR) said its Pending Home Sales Index, based on signed contracts, fell 2.2% last month to 122.4. Pending home sales were lower in all four regions.
Economists polled by Reuters had forecast contracts, which typically become final sales after a month or two, would rise 0.5% in November.
Pending home sales dropped 2.7% in November on a year-on-year basis. Limited inventory has led to double-digit growth in home prices.
“There was less pending home sales action this time around, which I would ascribe to low housing supply, but also to buyers being hesitant about home prices,” said Lawrence Yun, NAR’s chief economist. “While I expect neither a price reduction, nor another year of record-pace price gains, the market will see more inventory in 2022 and that will help some consumers with affordability.”
Demand for housing shot up early in the coronavirus pandemic as Americans decamped from city centers to suburbs and other, less densely populated areas in a hunt for larger homes to accommodate online schooling and working from home.
The market cooled off in the first half of the year as limited inventory lifted prices beyond the reach of many would-be buyers. Also the rollout of vaccines fueled optimism that people would be able to return to work in offices in urban areas and other business districts.
Activity has picked up again in recent months, however. The combined annual sales rate of new and existing U.S. homes reached 7.2 million units in November, the highest since January.
Now, though, new variants of COVID-19 – first Delta and now Omicron – have swept across the country, forcing employers to retreat again on large-scale return-to-office plans. The U.S. coronavirus caseload has shot to a record in the last week, according to a Reuters tally, surpassing the previous peak set early this year.
NAR’s Yun said Omicron, the highly transmissible variant seen driving the latest surge in infections, poses a risk to the housing market’s performance, as buyers and sellers are sidelined, and home construction is delayed.
(Reporting by Dan Burns; Editing by Chizu Nomiyama)
Canada’s Real Estate Bubble Is So Big Even The Mother of All Crashes Can’t Fix It – Better Dwelling
Lack of listings pushes Alberta real estate into a sellers' market – Calgary Herald
Amid the success of the real estate market is a sore spot that could drive up prices more than expected, and that’s low inventory in the coming year, according to one national realty firm.
While the pinch of low supply is most acute in larger centres like Toronto and Vancouver, Alberta is also “feeling the inventory pinch,” says Rachel Rehkopf, spokesperson for Zoocasa Realty Inc. in Toronto.
She points to December total sales rising by 27 per cent in Alberta while new listings remained stagnant.
That “pushed the entire province into sellers’ market conditions.”
The province sits at 2.5 months of residential inventory. That essentially means if no new homes came to market over the next two and a half months, and current demand for housing continues, Alberta would have no more homes for sale.
It’s a scenario that’s unlikely to happen, of course, and the overall supply-demand picture is better in Alberta than other parts of the country, she adds.
In Ontario, for example, supply is 0.6 months while the metric is 1.7 months in British Columbia.
Yet Alberta’s supply is significantly lower than last year when it had four months of supply, she says.
Calgary is the tighter of the two large markets in the province with only 1.5 months of supply, while Edmonton actually added new listings in December, growing by about 10 per cent, year over year. Still, sales in Edmonton outpaced new listings, resulting in a 14 per cent decrease in inventory.
Overall, high demand in both cities paired with continuing low supply will likely drive prices higher in the year ahead, she notes.
Welcome to Real Estate Friday! – theberkshireedge.com
Here’s what we have for you this week in The Edge Real Estate section:
- Property of the Week – Janet Kain of TKG Real Estate offers the opportunity to live in a stunning home, lovingly cared for and perfectly located for year-round enjoyment of the Berkshires.
- Transformations – Designer Jennifer Owen and her clients imagined a calming space to relax while listening to the Boston Symphony Orchestra Live from Tanglewood on the radio!
- Weekly real estate transactions for Berkshire County, Northern Litchfield County and, now, Columbia County
- Market Perspective – Updated this week: The 2021 year-end real estate report from the Berkshire Board of REALTORS. What does it tell us?
- The Self-Taught Gardener – How does Joan Didion’s approach to life and to her art inform our Self-Taught Gardener on how to garden?
- Gardener’s Checklist – The holidays are over and the winter doldrums have set in. What’s a gardener to do to lift his spirits in these dark days?
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