Economics

The Organization for Economic Coordination and Development (OECD) stated Wednesday June 24th that “the world economy is near the bottom of the worst recession in post war history” and that “it looks like the worst scenario has been avoided”. In fact all OECD countries are expected to see a growth of 0.7% in 2010; with a world growth rate of 2.3%.

The OECD goes on further to explain the worlds recovery from the current recession will be fragile and slow but the fact that the worst case scenario has been avoided  is a major achievement of today’s economic policies. 

Unfortunately, not all countries have promising prospects for the coming year.  The Eurozone, specifically the United Kingdom is predicted to see 0% growth in the economy in 2010. The areas lack of recovery is due to three main factors: the housing bubble; damage to the financial sector; and export set backs. If the United Kingdom expects to recover the government must develop a comprehensive and complete plan to reduce debt and reign in the rising public sector deficit.

Royal Bank of Canada has become the first of the country's major banks to officially predict the recession will end in the third quarter as fiscal and monetary stimuli begin to heal the economy.

With housing resales up, manufacturing declines slowing and the third quarter just two weeks away, Canada can look forward to better times ahead, the bank said.

But despite the return to growth, Paul Ferley, the assistant chief economist at RBC Capital Markets, said it would take until next year for the recovery to gain full momentum and for consumers to cast aside their caution.

RBC said Monday the Canadian economy would emerge from three quarters of decline with a mild, but nevertheless positive, annualized growth rate of 0.8% in the third quarter followed by 2.4% in the fourth quarter. At the same time, it predicts the United States to end its four quarters of malaise with growth of 0.5% and 2.6%, respectively.

The Canadian housing market has recorded an increasing number of sales in most areas around the country for a second month in a row.

Low interest rates and slightly lower home prices have resulted in increased momentum on a month-over-month basis; however, April sales remained lower than 2008 levels.

BC-Surrey

The Fraser Valley real estate market continues to show signs of rebalancing with the number of sales increasing for the third month in a row while the number of listings stayed relatively constant.

April 2008 - 1787 sales
April 2009 - 1293 sales (28% decrease from last year but 29% more than March 2009)
April 2008 - 4458 listings
April 2009 – 2477 listings (44% decrease from April 2008)

Many statistics, especially real estate statistics, seem to being thrown around in the media, by realtors, brokers, economists and the like, and particularly in this apparently declining market place. Since statistics can be strongly swayed from one view point to another depending on the time frames you use, currently, mainly because it ‘sells’, the majority of reports and conversations seem to be dwelling on the current economic crisis and how this has substantially impacted housing prices in a negative way.

I recently stumbled across an extremely useful, detailed and interactive spreadsheet that not only provides the user with the actual numbers behind the statistic but also allows you to analyze and gage the numbers to your specific needs and criteria. The spreadsheet incorporates the historical price data from the Edmonton Real Estate Board, EREB, and runs off the monthly trailing averages. Chris Davies, who has a great real estate blog that’s updated daily, then put all this data into a Google Docs spreadsheet for “cool investors like us to use” he says.