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Commentary                           2
          Released:
                        The Numbers That Drive Real Estate   3
        December 2011
                        Special Report                       9




Brought to you by:
KW Research
Commentary
 The national housing market remains strong and steady, despite continued discussion of
 weakening economies in Europe. According to Gary Morose, CREA president, the increased
 concern about global financial market volatility in the news “doesn’t appear to have damped
 homebuyers’ spirits.“

 Gregory Klump, CREA chief economist, goes on to say, “Headline news about economic
 uncertainty has put only minor dents in consumer confidence. How confidence evolves
 depends on how global turmoil plays out over the coming months. Should global economic
 headwinds weigh more heavily than expected on Canadian economic prospects, the federal
 government and Bank of Canada have made it clear they stand by ready to take flexible and
 measured responses as appropriate.” He cites the foundation of this strong confidence as the
 fiscal and monetary policy responses during the last recession that helped pull Canada back
 into positive growth quickly.

 A well-balanced housing market provides level playing field with opportunities for both buyers
 and sellers. Interest rates remain historically low and present buyers with extremely favourable
 financing so the time to act is now, because as global recovery regains its footing, rates will
 likely rise to keep inflation in check, resulting in a higher monthly housing payment for
 homebuyers.

Sources: CREA, Royal Bank of Canada                                           KW Research 2
Home Sales       4
  The Numbers That     Home Price       5

   Drive Real Estate   Inventory
                       Mortgage Rates
                                        7
                                        8




Brought to you by:
KW Research
Home Sales
    In Thousands
Resale housing activity ticked up slightly by 1.4%, although still falling in line with
long term averages—this is the highest level of sales since January. Although it
largely reflects a gain over the weakened activity one year ago, this marks the fifth
time since April 2010 that sales were up year-over-year. Moving forward, sales are
expected to remain stable.




                                                                                                         38.8
                                                                                               37.3 38.3
                                      39.3                  38.3
36.1
                                                                               20-Year Average: 32.0




    Oct        Nov         Dec         Jan         Feb      Mar    Apr   May     Jun     Jul    Aug    Sep    Oct

Data released on October 15, 2011
Sources: The Conference Board, CREA, Royal Bank of Canada
                                                                                                   KW Research 4
Home Price
    In Thousands
  The average home price in October stood at $362,899—up 2.9% from last
  month, and up 5.5% over last year. Earlier this year, elevated sales of higher-end
  homes skewed the national average price higher. The drop in average
  price, compared to earlier this year, is more a result of sales in the most expensive
  markets coming back in line with normal levels, rather than a depreciation of overall
  home values. This should have a minimal, if any, effect on buyers and sellers.


                                                            $371               $373
                                                                                                           $363
                                     $344                                                   $350
$344       October’10-’11

        October ’09-’10




     Oct        Nov        Dec         Jan        Feb       Mar    Apr   May   Jun    Jul   Aug     Sep     Oct

Data released on October 15, 2011
Sources: The Conference Board, CREA, Royal Bank of Canada
                                                                                                   KW Research 5
Home Prices by Province and Territory
11 out of 12 provinces and territories experienced an increase in home prices



                                                           National Average: $362,899
                                                               Home Price Direction
 YT                                                              (Year-Over-Year Change)
$308K
             NT                                                                 Prices Increased
                              NU
            $451K
                             No Data                                            Prices Decreased

  BC                                                                      NL & LB
            AB                                                             $250K
 $536K
           $356K
                     SK      MB
                    $264K                               QC
                            $235K       ON
                                                       $266K
                                       $375K                           PE $140K

                                                                          NS $202K

                                                               NB $154K




                                                                                KW Research 6
Inventory –                Number of homes available for sale
             Sales-to-New Listings Ratio

 The national housing market remained balanced in October, and marked six
 consecutive months of sales-to-new listings ratio between 52-53%. 60% of local
 markets were balanced. Of the remaining 40% of local markets, more were in
 seller’s markets than buyer’s markets. Balanced inventory indicates a greater
 likelihood of a steady and stable market in the coming months, which is a good sign
 for the housing market moving forward.

                                                                                                             Seller’s
                                                                                                             Market
 2009–2010




                                                                                                             Balanced
                                                                                                             Market
 2010–2011




                                                                                                             Buyer’s
                                                                                                             Market
             53%   56%      55%       55%        54%        56%   52%   52%   52%   52%   52%   53%   53%

             Oct   Nov    Dec        Jan        Feb         Mar   Apr   May   Jun   Jul   Aug   Sep   Oct

Data released on October 15, 2011
Sources: The Conference Board, CREA, Royal Bank of Canada
                                                                                                  KW Research 7
Mortgage Rates
   Average for 25-Year Amortization, 5-Year Term

  Low interest rates and stabilizing home prices are bringing home ownership within
  reach for an increasing number of Canadians. When widespread global recovery
  gains a stronger footing, rates are expected to increase to keep inflation near the
  2% target. The Bank of Canada has lost urgency for additional rate hikes, given the
  increasing concerns over debt levels in Europe and weakening economic indicators
  in the United States. The low rates offer increased affordability for home buyers.


                         Type                  Rate
                         1-Year Mortgage      3.50%
                         3-Year Mortgage      4.05%
                         5-Year Mortgage      5.29%
                         Historical Average   9.78%




Source: Bank of Canada                                               KW Research 8
Special Report

Brought to you by:
KW Research
Deciding to Buy

 When first-time home buyers decide they are ready to buy, it is important for them to begin
 the process by carefully assessing their values, wants, and needs—both for the short and
 long term. This is a critical step since consultation sessions normally start with the buyers’
 values. Afterward, buyers can explore their wants and needs and, once defined, determine
 actual criteria.

 A recent study shows how important the following home-buying factors were to buyers:

         •    List Price: 72%
         •    Location: 69%
         •    Neighborhood: 55%
         •    Floor Plan: 37%
         •    Square Footage: 28%
         •    Schools: 22%

 By having the home-buying criteria in mind before walking into a consultation, buyers are off
 to a better start when meeting with their real estate sales professional. The consultation
 allows buyers to fill in any missing gaps within their values, wants, and needs.



Source: KW Market Navigator and KW Research                                     KW Research 10
Your Local Market

Although it is important to stay informed about what is going on in the
national economy and housing market, many different factors impact your
real estate market.


 Talk to your KW associate for assistance interpreting the
             conditions in your local market.


KW associates are equipped with the knowledge and information to help
navigate through the home-buying or selling process in any market.




                                                          KW Research 11
About Keller Williams Realty

 Keller Williams Realty is the second-largest real estate franchise
 operation in the United States, with 700 offices and more than
 80,000 associates in the United States and Canada. The
 company has grown exponentially since the opening of its first
 office in 1983, and continues to cultivate its agent centric culture
 emphasizing access to leading-edge education and promoting
 an economic model that rewards associates as stakeholders.
 The company also provides specialized agents in luxury homes
 and commercial real estate properties. For more information, or
 to search for homes for sale, visit Keller Williams Realty online at


   www.kellerwilliams.ca

                                                        KW Research 12
The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by
local and national media, local real estate agents and other expert sources. You should not treat any opinion
expressed in This Month in Real Estate as a specific inducement to make a particular investment or follow a particular
strategy, but only as an expression of opinion. Keller Williams Realty, Inc. does not guarantee and is not responsible
for the accuracy or completeness of information, and provides said information without warranties of any kind. All
information presented herein is intended and should be used for educational purposes only. Nothing herein should be
construed as investment advice. You should always conduct your own research and due diligence and obtain
professional advice before making any investment decision. All investments involve some degree of risk. Keller
Williams Realty, Inc. will not be liable for any loss or damage caused by your reliance on information contained in This
Month in Real Estate.




                                                                                                     KW Research 13

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This Month in Real Estate for Canada - December 2011

  • 1. Commentary 2 Released: The Numbers That Drive Real Estate 3 December 2011 Special Report 9 Brought to you by: KW Research
  • 2. Commentary The national housing market remains strong and steady, despite continued discussion of weakening economies in Europe. According to Gary Morose, CREA president, the increased concern about global financial market volatility in the news “doesn’t appear to have damped homebuyers’ spirits.“ Gregory Klump, CREA chief economist, goes on to say, “Headline news about economic uncertainty has put only minor dents in consumer confidence. How confidence evolves depends on how global turmoil plays out over the coming months. Should global economic headwinds weigh more heavily than expected on Canadian economic prospects, the federal government and Bank of Canada have made it clear they stand by ready to take flexible and measured responses as appropriate.” He cites the foundation of this strong confidence as the fiscal and monetary policy responses during the last recession that helped pull Canada back into positive growth quickly. A well-balanced housing market provides level playing field with opportunities for both buyers and sellers. Interest rates remain historically low and present buyers with extremely favourable financing so the time to act is now, because as global recovery regains its footing, rates will likely rise to keep inflation in check, resulting in a higher monthly housing payment for homebuyers. Sources: CREA, Royal Bank of Canada KW Research 2
  • 3. Home Sales 4 The Numbers That Home Price 5 Drive Real Estate Inventory Mortgage Rates 7 8 Brought to you by: KW Research
  • 4. Home Sales In Thousands Resale housing activity ticked up slightly by 1.4%, although still falling in line with long term averages—this is the highest level of sales since January. Although it largely reflects a gain over the weakened activity one year ago, this marks the fifth time since April 2010 that sales were up year-over-year. Moving forward, sales are expected to remain stable. 38.8 37.3 38.3 39.3 38.3 36.1 20-Year Average: 32.0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Data released on October 15, 2011 Sources: The Conference Board, CREA, Royal Bank of Canada KW Research 4
  • 5. Home Price In Thousands The average home price in October stood at $362,899—up 2.9% from last month, and up 5.5% over last year. Earlier this year, elevated sales of higher-end homes skewed the national average price higher. The drop in average price, compared to earlier this year, is more a result of sales in the most expensive markets coming back in line with normal levels, rather than a depreciation of overall home values. This should have a minimal, if any, effect on buyers and sellers. $371 $373 $363 $344 $350 $344 October’10-’11 October ’09-’10 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Data released on October 15, 2011 Sources: The Conference Board, CREA, Royal Bank of Canada KW Research 5
  • 6. Home Prices by Province and Territory 11 out of 12 provinces and territories experienced an increase in home prices National Average: $362,899 Home Price Direction YT (Year-Over-Year Change) $308K NT Prices Increased NU $451K No Data Prices Decreased BC NL & LB AB $250K $536K $356K SK MB $264K QC $235K ON $266K $375K PE $140K NS $202K NB $154K KW Research 6
  • 7. Inventory – Number of homes available for sale Sales-to-New Listings Ratio The national housing market remained balanced in October, and marked six consecutive months of sales-to-new listings ratio between 52-53%. 60% of local markets were balanced. Of the remaining 40% of local markets, more were in seller’s markets than buyer’s markets. Balanced inventory indicates a greater likelihood of a steady and stable market in the coming months, which is a good sign for the housing market moving forward. Seller’s Market 2009–2010 Balanced Market 2010–2011 Buyer’s Market 53% 56% 55% 55% 54% 56% 52% 52% 52% 52% 52% 53% 53% Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Data released on October 15, 2011 Sources: The Conference Board, CREA, Royal Bank of Canada KW Research 7
  • 8. Mortgage Rates Average for 25-Year Amortization, 5-Year Term Low interest rates and stabilizing home prices are bringing home ownership within reach for an increasing number of Canadians. When widespread global recovery gains a stronger footing, rates are expected to increase to keep inflation near the 2% target. The Bank of Canada has lost urgency for additional rate hikes, given the increasing concerns over debt levels in Europe and weakening economic indicators in the United States. The low rates offer increased affordability for home buyers. Type Rate 1-Year Mortgage 3.50% 3-Year Mortgage 4.05% 5-Year Mortgage 5.29% Historical Average 9.78% Source: Bank of Canada KW Research 8
  • 9. Special Report Brought to you by: KW Research
  • 10. Deciding to Buy When first-time home buyers decide they are ready to buy, it is important for them to begin the process by carefully assessing their values, wants, and needs—both for the short and long term. This is a critical step since consultation sessions normally start with the buyers’ values. Afterward, buyers can explore their wants and needs and, once defined, determine actual criteria. A recent study shows how important the following home-buying factors were to buyers: • List Price: 72% • Location: 69% • Neighborhood: 55% • Floor Plan: 37% • Square Footage: 28% • Schools: 22% By having the home-buying criteria in mind before walking into a consultation, buyers are off to a better start when meeting with their real estate sales professional. The consultation allows buyers to fill in any missing gaps within their values, wants, and needs. Source: KW Market Navigator and KW Research KW Research 10
  • 11. Your Local Market Although it is important to stay informed about what is going on in the national economy and housing market, many different factors impact your real estate market. Talk to your KW associate for assistance interpreting the conditions in your local market. KW associates are equipped with the knowledge and information to help navigate through the home-buying or selling process in any market. KW Research 11
  • 12. About Keller Williams Realty Keller Williams Realty is the second-largest real estate franchise operation in the United States, with 700 offices and more than 80,000 associates in the United States and Canada. The company has grown exponentially since the opening of its first office in 1983, and continues to cultivate its agent centric culture emphasizing access to leading-edge education and promoting an economic model that rewards associates as stakeholders. The company also provides specialized agents in luxury homes and commercial real estate properties. For more information, or to search for homes for sale, visit Keller Williams Realty online at www.kellerwilliams.ca KW Research 12
  • 13. The opinions expressed in This Month in Real Estate are intended to supplement opinions on real estate expressed by local and national media, local real estate agents and other expert sources. You should not treat any opinion expressed in This Month in Real Estate as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. Keller Williams Realty, Inc. does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind. All information presented herein is intended and should be used for educational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. All investments involve some degree of risk. Keller Williams Realty, Inc. will not be liable for any loss or damage caused by your reliance on information contained in This Month in Real Estate. KW Research 13