In this issue, I'm sharing useful articles that will help you gain an understanding of today's real estate market. Here's the rundown:

• The Canadian real estate market has perseverance. "Canada's Savvy Spending Pays Off" explains why we are recovering from the recession and why America is still unable to get back on its feet.


• It's out with the new and in with the old. "Clearance Sale: New Homes" looks into the low demand for new homes. * Looking toward the future?


• "Two Experts Forecast the Real Estate Market" features pros who really know their stuff, so you'll want to take a look at what they think lies ahead in realty.

New terrain is being tread in today's real estate market. Together, we can help you succeed in your real estate adventure.

Best Wishes,

Catherine Miranda
Realtor
cell: XXX-XXX-XXXX
email: xxxx@xxxx.com

America and Canada both went into a recession, yet the Canadian real estate market was able to make a quick recovery.

Why?

National Bank Financial says the U.S. and Canadian markets are very different. Canada's quick turnaround may be attributed to its:

• Better lending options
• Lower real estate prices,
• More structured real estate market and
• Savvy spending

Savvy, how?

Canadian homebuyers generally inherit more responsibility when they incur a loan.

When loans were easily obtained, Americans incurred more debt than they could feasibly manage. As the economy plummeted, U.S. homeowners were forced to foreclose.

Here, most homebuyers sign a personal guarantee when they get a home loan. Unlike American buyers, they can't just "walk away." Although the recession did affect the housing market, Canadian homeowners were more able to wade the hot water, allowing for a quicker recovery from the recession. Many Americans have bitten off more than they could chew, while Canadians were able to keep nibbling. So, it turns out, Canada's stricter loan management paid off.  

They say that sometimes the old is better than the new. It seems to ring true in today's Canadian real estate market; New home prices are dropping while old homes are bearing heftier price tags.

Thanks to low lending rates, postponed purchase decisions and other market factors, the average home value has increased. According to the Canadian Real Estate Association, the average value of a home has increased 13.6 percent since September of last year (that's a 63 percent increase from the January bottom!)

So, why the price gap?

Growth after a recession typically begins in urban cities, as is the case now. Big-city homebuyers are purchasing older homes because that is what is available in their desired location. Space for new cityscape construction is limited.

Will new homes catch up?

Most likely, urban growth will ripple to surrounding areas, starting with neighboring suburbs. As older homes in the hearts of cities fill up - causing their values to escalate even higher - urban homebuyers will begin looking to the suburbs for available and more affordable homes. Eventually, new developments in the suburbs will gain momentum as a conventional solution for city lovers. 

The Canadian real estate market has made a strong rebound from the recession. But what does the future hold? Let's look at the latest forecasts from two expert sources, the Bank of Canada and the Canadian Real Estate Association (CREA), as they weigh in on the present and future of Canada's real estate market.

BANK OF CANADA
The Bank of Canada has released statements that the market's current state of growth is most likely temporary. As the recession comes to its close, the Bank of Canada speculates that it may rebalance monetary policy.

In his opening statement to the House of Commons Standing Committee on Finance held 27 Oct. 2009, Mark Carney, Governor of the Bank of Canada, stated: "The current strength in the dollar is expected, over time, to more than fully offset the favourable developments since July." Despite less than optimistic predictions, the bank still stays committed to keeping low interest rates until 2010.

Canadian Real Estate Association (CREA)
In its news blog on Oct. 15, CREA released its latest predictions about the future of Canada's real estate market. The association's predictions are in-line with the Bank of Canada's forecast. Although the market has gained momentum, CREA Chief Economist Gregory Klump said that real estate sales activity "may be starting to plateau." Sound like a familiar tune?

Klump goes on to say that the price increases should encourage sellers to jump back in the market. As more homes enter the market, competition will contain price increases.