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Canada's housing market both vigorous and stable
( p" L0 {1 v9 T4 H# S0 h( X
0 ~+ v) B' m! {# @8 O! R- Country's market poised to show growth throughout 2006 -
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0 w$ B: u( a5 i! H, `# }2 w TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market9 a4 I6 R" q: T! E: K, X
exhibited moderate price increases and stable unit sales during the third n# ^' i' m5 {" @
quarter. Wide regional variances continued to be the dominant characteristic2 D1 x! p; A/ P% V* m+ c. j
in the market, exemplified by frenzied levels of activity and double digit
1 _) n2 q; L7 }: B9 ?7 Hprice gains observed in the energy and commodity rich Western provinces, and5 A$ y# ^4 O1 ?0 e% v7 C' U" [2 g
more reasonable sales volumes and moderate price appreciation in Ontario,' w: x1 o: T9 \7 |
Quebec and Atlantic Canada, according to a report released today by Royal' \8 x4 m& T' s: N0 D
LePage Real Estate Services.( F j& R: E& x6 T7 F3 T; E2 d
4 H$ `% u1 ?9 L. Y5 s6 b Nationally, market trends established through the first three quarters
2 _( F: A7 \, f. q. X8 qare forecast to continue for the remainder of the year. Robust economic
; Y9 x. L9 a, p q( J2 V5 B" xconditions, low unemployment rates, modestly growing salaries and wages, and
l7 s, H: x, m7 w( \1 l: e+ n+ P/ }/ nsound consumer confidence contributed to the overall strength of the
* y- z% I; F6 a. \7 u6 O" S4 `3 o' Kresidential real estate sector.3 {$ t! f" ~2 o1 T, b6 O5 h' h
* C6 p& `5 w1 e9 J Of the housing types surveyed, the highest average price appreciation& b; ~5 \- T" a$ Y: ~) E
occurred in detached bungalows, which rose to $300,365 (+16.3%), @4 Z" t1 w% h
year-over-year, followed by standard condominiums, which rose to $211,562
0 p g5 w9 {. \$ f" m; Q% |) Z(+14.2%), and standard two-storey properties, which increased to $365,380
' P' Q2 O5 N% S* G/ m1 s) R(+13.2%). j! B# q" d, o, z+ _) Y
8 p. P4 f8 { B2 m' D
"Canada's sturdy housing market continued to demonstrate steady growth& C4 M) Z* r! [5 g o% J5 h1 H
during the third quarter. For all but the west, we have moved on from the
4 v1 n9 R" `% S$ j% d$ o o, P5 Sfrenzied expansion that characterized the first half of this decade, and are, t# S) X/ d1 S: v% q, w
poised to show continued growth at a more moderate pace," said Phil Soper,4 b" @; k- K9 K+ P2 L7 a& @- L6 s& M5 F
president and chief executive officer, Royal LePage Real Estate Services.; v7 d8 P* v& r: D" \$ ?+ k
"Gone is the sellers' market that we have lived with for some years. We1 Y$ R( }/ p a
welcome the more reliable conditions that are characteristic of a healthy
; ~7 T9 u; F2 b8 S* A# I$ P( Q. kbalanced market."
4 D7 A& E" w3 ?9 B) l5 R2 f- U: b t9 e/ R- h+ {+ O4 B. v7 g e
Despite the double-digit rise in average national house prices,
! F$ M$ P& r* x" r: h1 |considerable regional variances were exhibited again this quarter. The shift# |' K( x5 ~/ A) `3 o
to balanced market conditions, which began in late 2005, has continued
+ d% k, r; V2 V) n: jthroughout most of the Central and Eastern regions of the country. In the core" h- t* a! R6 ]7 u
energy producing western provinces, the combination of very high in-migration,
% {# b; [& D, K/ [ k4 B1 X- ~# G/ lmanageable affordability, and a shortage of inventory has driven record
. I' }- i# @3 P; Q( pbreaking price appreciations.7 ]0 v P1 }/ x
8 ^. t/ K' i$ \% q# X7 k, P$ X( ` Echoing the second quarter and supported by Alberta's rapidly expanding0 v6 m+ q9 v1 T. n$ D2 ?* h
economy, Calgary and Edmonton led the charge of Canadian cities with the
. ]' y0 B2 t i% Olargest house price appreciation in all housing types surveyed.7 i6 d" B# o* M
{7 l4 _& r$ U6 [ R) D
In Ottawa and Toronto, growth remained steady, supported by solid
/ _5 C: Z5 r: E7 f( Geconomic fundamentals, an increase in available inventory and strong consumer. G- C; p9 ]" k0 V$ [9 E) c6 ~
confidence. While the pace of price appreciation in Ontario leveled off$ J& m/ c {. p4 Z( s
slightly, the province's real estate market remains poised for modest growth.: L1 Z, |; E! t( h6 h, X$ w
In Atlantic Canada, new housing and condominium construction offered buyers
, m f. n# z K6 E, }, A2 Vgreater selection at more competitive prices, resulting in a slower rate of
2 Q7 g3 d7 E* b& _, ?% v, zprice appreciation when compared with 2005.# c4 b0 g0 B4 Z1 ?4 C- \: d
* h" B* e) @0 k' Q) ]3 l While the pace of growth in Canada has slowed, the domestic housing
6 C$ M& H- {8 S; Emarket is expected to outperform the American market. The economic and1 O5 _* z+ d* P0 A) R# q6 N% z
financial fundamentals driving the residential real estate sector in Canada0 {# m, n* [3 j- X2 F
are markedly different than those found in the United States.
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Added Soper: "Canada's housing market is likely to outperform the2 Q& E' y0 |" {( k2 N8 c
American market through 2007. A number of factors are working in Canada's
G! f6 B* C6 Y1 j9 afavour, including healthy personal and governmental debt levels, the3 L" B: p G2 o# [4 D* x) e
relatively modest rise in interest rates in our country, and general# H' o+ e4 m7 y8 \: y5 r8 O( l: E
affordability in our major cities. In addition, Americans are now seeing the
5 l8 }, O4 M- Tdownside of a tax system that encourages maximum homeowner leverage, and7 c8 v1 g2 T5 K9 i; L
aggressive financial products such as zero- and negative-amortization
' r' W R/ F5 c% T+ {2 T1 E' R; @mortgages that work only in a high price growth environment."
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<<" M, L$ G+ C$ p2 ?; m O7 d
REGIONAL SUMMARIES
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Balanced conditions continued to characterize the housing market in e; D0 Y. L( ]/ Q
Halifax, as significantly higher inventory levels helped to moderate the rate4 J: k$ {' {9 q( G$ E' m [2 p
of price appreciation. Buyers were increasingly choosy, taking more time6 }- {- K* w8 u) r1 S3 B6 @
looking for newer, low-maintenance properties that were not in need of2 [0 g- a2 `4 {+ g7 ?" h
renovations.4 f5 _, S! u6 `9 A/ [0 P$ b8 W& M
0 t7 A, C( E; x$ z7 b) c, I* W
The housing market in Moncton remained healthy and strong as a slight
I) Q: v: n# _4 h/ Jincrease in inventory helped to moderate the rate of price appreciation
% z; {, Z% q9 fcompared to the same period in 2005. Activity was brisk throughout August and
2 g6 U/ ?4 L% K) XSeptember and is expected to remain this way through the fourth quarter.
0 y( g1 f+ y/ _0 Q, p9 |1 c
1 Q% B% d& F0 M1 L/ l1 J The housing market in Saint John underwent its traditional summer% t3 b1 R+ U) }2 l
slowdown in the third quarter, with activity picking up towards the end of the
9 |3 _- o: O: Gquarter. The local economy continued to thrive, as construction on a new
6 J, g# M+ G7 l! C600,000 square-foot shopping area has begun, bringing several new box stores
$ t+ }- Z) \8 z" M# A2 @) fto the area. Buyers have begun seeking less expensive fixtures for their homes% S/ a( [) `& H3 W) u) O
and are instead opting for more affordable housing options.! ?+ \2 F* L1 j1 G+ D
- P& u/ ^- _# ?/ j: D: I In Charlottetown, the housing market started to move towards balanced
- k; ^$ W, P, A5 a4 zconditions, as some sellers had to begin to lower the asking prices on their9 D& a' p' N" x) ?# e
homes to make them more competitive. Activity from out-of-town and US buyers
7 u* y: q! R/ x* ?9 a" C) awas down slightly compared to 2005, likely attributable to the strong Canadian* W+ c0 }8 i0 f+ {( `7 {4 |! `( ^
dollar. Inventory levels began to creep up in the third quarter, providing
U! K& e' y- T7 N* [3 `buyers with more options when looking for a home.
# F: |& \7 X& r# S* O1 C9 m/ f: z7 c- X1 ^6 Z
Activity in St. John's slowed slightly in the third quarter, particularly$ K! T$ X: ]5 A: K1 j6 q8 j" [
among higher-priced properties, where there was a slight over-supply of homes
0 K3 G" k; {0 ?" u" | l: mpriced over $200,000. Listing periods have increased when compared with 2005,
! D2 G r! R) H- V% Q( pas some of the pent-up demand that had characterized the market over the last7 g. _ V& T6 l. w1 L9 P
few years has been satisfied, resulting in more normal, balanced conditions.
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2 ~) i8 ^ |$ U Montreal's housing market recorded modest increases in average house1 ], u( S5 Z* }+ T, L6 }
prices, due to a slight seasonal slowdown in the third quarter as inventory
7 ^+ k0 `) N7 g- x, i0 T m. rlevels rose. Part of this can be attributed to the fact that many renting1 w# G- b1 L! r: n3 A* M
first-time buyers were motivated to close on the purchase of a home by July 1,
6 j8 d" m. T0 m4 Twhen rental leases expire in Quebec. Once this date has passed some of the
, _. ?, C$ L5 J" `, H" }! h# ]! Mpressure is taken off the market, allowing buyers to visit more homes before
& G1 V% R: q# ]3 Ymaking a purchase.
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- j- v1 U6 d+ f# F Ottawa held its position as one of the country's most stable housing
% j) n% j+ p k) y; G2 B* _4 ~! \markets in the third quarter, reinforced by a vibrant local economy and strong
S- N7 G# Y* X2 y; h1 A/ b' M1 @confidence, resulting in modest increases in average house prices. The city
$ b7 M& ?3 A) x% [; W @' }( n! ucentre remained a bright spot in Ottawa, with homes in this area attracting
. {: r- Z$ M3 d T# `, |attention due to their convenient location and proximity to downtown2 p: l" |9 j" ]9 K4 w9 P" m& m
amenities.4 I$ P: i7 a* u2 F0 O, A2 r
1 [+ \0 x5 j A. J. E The housing market in Toronto sustained healthy activity levels
" O& p) N3 R* \' hthroughout the third quarter, as a strong economy helped to maintain demand5 [, i4 F% x4 J" S y, J
across the city, causing average house prices to rise moderately. Toronto has
/ m+ G8 W4 y: ]! b! Gcontinued to experience modest growth in average house prices, and has been5 a0 t0 _5 r- I8 R& v
driven primarily by purchasers who are buying homes as their principle; q, N$ S2 ^" ~) c( e [5 R: P
residence, rather than for investment. \" t0 u+ t7 Z
3 }% i$ K/ ?) N, `% D& A The vibrant Winnipeg housing market continued to show its strength as
8 X m9 k8 ^ [$ B* N: Nhouse prices rose during the third quarter. The booming local economy resulted
& ~1 f" \2 X) M0 zin a historically low unemployment rate, helping to bolster consumer) P$ }: K9 b, k
confidence and Winnipeg's ranking as the city with the lowest capitalization2 U' ?5 i0 F" D( y; l5 g/ Z
rate among the country's larger cities - helped to encourage buyers to enter
7 D5 H! _4 v O5 `/ K: t1 j& Z' Bthe market.
+ f" V# W- ~# h! O) H" v+ {3 T9 x- d% p& W+ ?& A$ h+ y* o( B
In Regina, the market experienced a slight seasonal slowdown through5 V' n; n# x. }% t2 L* [
July, as there were fewer purchasers in the market due to summer vacations. In
( O% F5 C+ a# ]. S- [August, activity resumed to the busy pace previously seen in the spring
, ?, ?2 ]5 O7 H0 T; ^1 smonths, as the influx of purchasers made it more difficult to find a home due
" j& ^1 g% T* Q9 M- j3 P( R- U3 cto the shortage of available inventory.
" A' _; F5 @1 g3 P$ J) n9 K y) R) m6 P" T4 W/ b$ B8 B @" P% A" O
Activity in Saskatoon remained brisk as the market maintained its
4 C4 z* m' o& w2 T# j9 Fmomentum from the busy spring sales period. The economy in Saskatoon remains
/ t9 u3 z; M% c ~) X. U, Kvibrant, as employment opportunities are abundant with many businesses x' z- S7 O: Y2 d ~! `
struggling to make hires and having to recruit outside the province.: v; d9 O- c4 V8 M" a& K
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Calgary's housing market recorded blazing average house price increases" V" |' T! k4 s( N0 e6 V
in the third quarter, in all surveyed categories. The burgeoning economy, low
, [2 R7 C, `3 ]: h1 `' c9 Aunemployment rates and low inventory levels remained the leading factors that7 O f! o! }+ q: E+ s
pressured Calgary's house prices upwards. However, regardless of the soaring; N1 C% d% P: M: ~( W" m, \
prices that characterized the market - even during the typically slower summer
% p. Q& b! w) L( nseason - it is expected that activity will become slightly more balanced, as
3 X. f1 w# G) }+ ~1 F( B: \& x5 ibuyers are becoming more reluctant to participate in the frenetic activity.* i8 K% s/ i' r5 c7 V, N
! u' u; f9 K+ V; Y# G Edmonton's booming local economy continued to thrive in the third quarter
! d" J, k, o' N% vas activity in the oil sands north of the city continued to flourish. Edmonton8 C2 B0 K- Q9 {2 g% n- @
remained the hub of activity for those coming to work in the oil industry,
i; X Y4 w% m' a, Zmaintaining tight inventory levels across the city, resulting in prices; ~1 u) w" \* x" Y* B
increasing at record levels. However, as inventory levels continued to improve
( b8 p1 C! l" J; {8 [* ein the third quarter the rate of price appreciation should moderate slightly
" y9 h# U) g8 Otowards the end of 2006.
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While Vancouver has seen a slight reprieve from the severe shortage of
% T6 F, A, p; f: k3 N) w- Binventory that had previously characterized the market, supply is still unable5 V; X* |& U. L' b0 `4 `- K9 `
to meet demand, driving house prices upwards. Vancouver has a very diverse9 v" V& t! j8 e' j1 C3 t
group of active buyers - from first-time home buyers to baby-boomers to
3 Q+ F7 J0 @' R( B8 kforeign investors - all of whom fuel the demand for houses, placing added" w/ G# B7 C" Y7 M5 D1 D" X
pressure on tight inventory levels. H2 J. c3 j, _1 b
5 V% P9 |& x" W( i4 ~1 _) U3 n Victoria's market is vibrant and supported by strong economic# Y& I2 R+ O. d r
fundamentals, fuelled by a booming tech sector and a migration of young people7 l# w# _, ?8 k: n2 O# z3 L6 O9 B
into the city that has continued to support the area's house price increases;
, X1 M" q% U$ \( E5 Twhile increased inventory levels have afforded buyers more time when searching0 I% A2 {8 D. Y
for a home, helping to normalize the market's pace.% D* R* J* f; C3 K
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: C' J. }! n& z Survey of Canadian Average House Prices in the Third Quarter 2006
0 a8 l5 K6 N2 l. J- J7 D+ t: G$ v, n8 @$ H6 y
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" s- k. Y) ~# L1 D: a' {5 n Detached Bungalows Standard Two Storey
; L# h* p0 Q' m8 N1 K3 B5 m2 P; e -------------------------------------------------------------------------
1 w3 M! }- J8 e& { 2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3
! d9 f6 p4 c W, N Market Average Average % Change Average Average( g8 M9 ~# y8 _# @# e" {
-------------------------------------------------------------------------
u% Y7 S' t1 m( k( J8 T Halifax 186,333 173,333 7.5% 198,667 199,000) J4 b! b( _. a/ T" x( Y" v$ b6 K
-------------------------------------------------------------------------/ Q6 L- m( l7 S
Charlottetown 145,000 141,000 2.8% 175,000 170,000( k f% P0 N7 a9 ^2 K/ P) `4 ~( `
-------------------------------------------------------------------------' s8 U9 V0 K& @' K. o
Moncton 135,000 127,000 6.3% 129,000 123,000
6 A0 G' H0 s* l+ F) q) ` -------------------------------------------------------------------------
/ W7 E) I" C9 t9 B# W1 M Saint John 141,200 142,900 -1.2% - -
! @ [( e" l* e -------------------------------------------------------------------------
: r8 w- x/ `& v% y St. John's 143,667 142,667 0.7% 200,667 202,333$ q) M9 l8 ?' z6 d4 _" l
-------------------------------------------------------------------------& A4 S$ g% d1 g8 a g( p
Atlantic 150,240 145,380 3.3% 175,833 173,583
4 @3 h) |/ c9 ?; C% {, O -------------------------------------------------------------------------
) j1 n) S) q0 }- ` Montreal 213,691 203,500 5.0% 321,141 316,185# |. S( E& C7 O
-------------------------------------------------------------------------
) c. [7 s9 ?* H) E Ottawa 290,083 278,417 4.2% 285,667 273,250* r$ e' S+ P4 h2 ^
-------------------------------------------------------------------------4 u9 ~" E2 S" U- b- p+ x! G
Toronto 373,368 355,882 4.9% 481,523 474,766
1 [$ d/ k# S- }* f -------------------------------------------------------------------------3 i( u; N) c7 y' C2 p; j( x
Winnipeg 181,579 159,860 13.6% 202,337 180,707
& D& Q- T! B! z! e -------------------------------------------------------------------------
" ?( W+ O+ ?( t' m3 o Saskatchewan 170,667 156,083 9.3% 182,600 166,500
6 ?$ C& g. T7 X& W! B -------------------------------------------------------------------------
( |2 C, \( y- T3 k0 L& S Calgary 395,067 252,411 56.5% 405,778 264,389
+ m" w7 Y0 q6 a6 q* f: g -------------------------------------------------------------------------" p$ |4 A! @* J2 [. j
Edmonton 286,857 194,857 47.2% 316,429 206,714& k! R# d# M+ T. t+ l3 A
-------------------------------------------------------------------------# G/ ^. t, H( J/ W: m6 v2 o
Vancouver 704,250 601,000 17.2% 794,000 697,500
2 Q3 @" Y, U, q7 \ -------------------------------------------------------------------------
; r% u$ w6 ?1 q Victoria 375,000 348,000 7.8% 403,000 391,000
, f9 J+ V7 A }" |8 }4 v, X -------------------------------------------------------------------------) S- ~. s0 c8 ^0 {
National 300,365 258,202 16.3% 365,380 322,860
3 t; q2 C) J, l, l -------------------------------------------------------------------------' k; R x0 ^; V( O! T9 W% p9 _
( W4 x X/ K8 {3 d: h, Y% j
-------------------------------------------------------------4 f% B2 S/ Y9 ?% T! B( Z
Standard Condominium* o; M5 [- W4 c, H. F
-------------------------------------------------------------
0 b- i6 V2 t: W% u& c% j 2-Storey 2006 Q3 2005 Q3 Condo
9 F/ I. |9 a& M- u Market % Change Average Average % Change
7 [: m# N$ e1 K" X4 o6 c# R -------------------------------------------------------------
3 P0 x/ K% O7 O# J9 t( I Halifax -0.2% 142,000 103,000 37.9%2 D# Q( v6 |/ J# k! p f
-------------------------------------------------------------
9 ]8 {( y( I, P% G- k* l& H7 p Charlottetown 2.9% 98,000 98,000 0.0%; R' G7 F. y& d. s: z
-------------------------------------------------------------
' w9 h" ? I6 V" T) m; C ?; | Moncton 4.9% - - N/A
" W3 O: W/ J4 a0 r/ \ -------------------------------------------------------------
# ^+ S) E, ~+ G4 V" ]* k Saint John N/A - - N/A5 r& c6 @: ^# @' `0 O# J2 l
-------------------------------------------------------------
9 ?: i: N% ?! _! b St. John's -0.8% 146,333 145,667 0.5%
" w; D) s% d- J -------------------------------------------------------------
3 C* w, Q$ @8 t y Atlantic 1.3% 128,778 115,556 11.4%1 Z: t& P1 B) e- l, j
-------------------------------------------------------------/ Y- g6 n& }/ V3 j( g
Montreal 1.6% 193,190 188,016 2.8%
3 s( \# D, f% \/ ^9 R& l9 r -------------------------------------------------------------
; h) A# T6 S4 C! b6 E8 H8 V Ottawa 4.5% 181,083 172,250 5.1%% h# s2 H4 F) f; d
-------------------------------------------------------------. D3 D0 X( P# g% x! S6 [
Toronto 1.4% 252,088 242,918 3.8%
' F; h5 E. A) x. }0 t2 S -------------------------------------------------------------
5 q6 ]( j- ~6 H* \# @ Winnipeg 12.0% 105,648 96,008 10.0%' q7 c4 t3 F0 R, n% L
-------------------------------------------------------------" T* k8 @5 m, D. f& Y; `9 {1 `+ T
Saskatchewan 9.7% 106,250 101,000 5.2%( w; _6 k; |" y
-------------------------------------------------------------1 Q+ Q8 r u" L% e* T
Calgary 53.5% 245,844 153,867 59.8%
6 q3 u) O( E: Q -------------------------------------------------------------! [/ v& e* d, y8 _
Edmonton 53.1% 200,433 131,500 52.4%
: M% v" R0 @: x3 t1 N4 ^0 u" o! ^+ F -------------------------------------------------------------
& Q2 n3 J0 Z* [* e& t# v! _ Vancouver 13.8% 366,250 323,250 13.3%$ z6 ~5 D _% `$ @( Y0 R
-------------------------------------------------------------
0 u9 j/ ^( u: w9 Z r: r' v% U" @# E Victoria 3.1% 229,000 220,000 4.1%
! M8 K d, U' l -------------------------------------------------------------
" Y5 C6 o! I, c& p National 13.2% 211,562 185,296 14.2%9 }2 h( A S# w
-------------------------------------------------------------+ O- P- ]& }3 e
>>
( W) G1 c, @' Q
/ n+ }$ _' }" ~6 h% Z/ _' u1 L Average house prices are based on an average of all sub-markets examined
' \5 R3 H8 K2 s* qin the area, except for the smaller markets of Charlottetown, Moncton, Saint5 a+ H {3 k8 K' p* M
John and Victoria.' Y6 w5 D4 |! k
( J+ ^! r4 ~8 u8 ^5 t+ v7 i+ E The Royal LePage Survey of Canadian House Prices is the largest, most
$ ?: F$ `# ~5 \3 c" tcomprehensive study of its kind in Canada, with information on seven types of( x% }: T& x* }- ~
housing in over 250 neighbourhoods from coast to coast. This release
# ~! r- N6 r. w4 a: L$ Ireferences an abbreviated version of the survey, which highlights house price9 s0 J& K. U# Q
trends for the three most common types of housing in Canada in 80 communities
! H" ^+ @( l5 }3 g3 E+ l3 ~% x& Kacross the country. A complete database of past and present surveys is
3 l3 e7 |7 T0 b' f$ qavailable on the Royal LePage Web site at www.royallepage.ca, and current
( g; P" e5 [7 H/ f2 h7 U- f. k$ `figures will be updated following the end of the third quarter. A printable7 k D3 K9 M3 F9 `+ p' h
version of the third quarter 2006 survey will be available online on
) J& a/ ~* P+ y( u( H3 J1 ~November 15, 2006.
, Y% `9 {7 z1 c ]: Y Housing values in the Royal LePage Survey are Royal LePage opinions of5 u, T# _& _ I0 m2 b5 ^* t% W
fair market value in each location, based on local data and market knowledge( [0 p& [$ @6 {) r( K$ Y
provided by Royal LePage residential real estate experts. Historical data is# c7 a! }' H" w/ {/ j% |( x/ ` B3 c
available for some areas back to the early 1970s. |
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