Housing market fires up

Momentum may be building in the London-area real estate market, with June sales up 5% over the same month last year.

Sales had not been in positive territory since last September and bottomed out last November -- when they were 41% below the same month in 2007.

But last month, the London and St. Thomas Association of Realtors (LSTAR) said, 946 detached homes and condominiums sold in June, up from 903 in June 2008.

Year-to-date sales for 2009 are still down about 20% compared to the first half of 2008.

LSTAR president Joe Hough said consumer confidence has been steadily improving and low mortgage rates and federal government incentives are drawing more and more buyers into the market.

Hough noted St. Thomas had an especially good month in June, with 90 sales in the city -- an increase of 32.4% over the same month last year

"I'm feeling very positive. Every month, we're gaining a bit of steam."

A few months ago buyers were gaining the upper hand as the number of homes listed jumped about 25%.

But Hough said the market is getting more balanced and there have even been bidding wars.

"We have seen a few here. When a property is priced right, people recognize that," Hough said.

He said the market is still weighted toward modestly priced homes.

There was more improvement in prices last month. The average year-to-date house price was $211,584, down just 0.7% from the first six months of 2008.

The average price bottomed out in January when it was 2.8% below the same month last year.

The London-St Thomas area is following a national trend with sales and prices showing signs of revival in major markets across Canada.

"Sales activity is now closer to the pre-recession peak than it is to the recent low point reached last January," said Dale Ripplinger, president of the Canadian Real Estate Association (CREA).

Hough said homes sales act as economic stimulus. CREA has calculated each home sale generates $32,000 in spinoff spending on furniture, appliances and renovations.

Hough said the revival in resale homes would eventually filter through to the new home construction market as overall demand for housing builds.

"This is going to help everything. I don't think we will see a buying frenzy again but we will see a more stable market."