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Canada's housing market both vigorous and stable
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G( }7 m/ W+ J. Z1 b2 G- Country's market poised to show growth throughout 2006 -/ r3 j' s2 z/ `8 m, C" j. Z+ J
2 H+ Q" I- F; S, j+ ?2 ? TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market
# Y& a6 n! s I* q; Y- M+ fexhibited moderate price increases and stable unit sales during the third* J5 U7 O) K5 V7 H) c# t
quarter. Wide regional variances continued to be the dominant characteristic* ?( h, I& d f3 j5 O3 \
in the market, exemplified by frenzied levels of activity and double digit- J" a5 @; @; r" ~
price gains observed in the energy and commodity rich Western provinces, and
}- f8 l7 h. g4 tmore reasonable sales volumes and moderate price appreciation in Ontario,+ w3 Q) Y$ a4 f/ f
Quebec and Atlantic Canada, according to a report released today by Royal) G5 [ {% q' U, A3 _! }* b
LePage Real Estate Services." @( b) d: ~1 ]6 N' C2 M
. u8 ]$ t% e x2 k: h5 X/ @
Nationally, market trends established through the first three quarters8 [( Y6 C9 k- s+ s7 o+ l
are forecast to continue for the remainder of the year. Robust economic/ x$ ]" O: w3 H" ^7 ~ R
conditions, low unemployment rates, modestly growing salaries and wages, and* ]0 V$ A7 H. {' E5 Z
sound consumer confidence contributed to the overall strength of the2 ]3 T) N: t; ^) V- V6 _; H9 E
residential real estate sector.
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Of the housing types surveyed, the highest average price appreciation
- B/ a. p4 n" _; A' t' x) Coccurred in detached bungalows, which rose to $300,365 (+16.3%)5 |: ?8 x% _" i8 e2 c6 q" ^
year-over-year, followed by standard condominiums, which rose to $211,562
, m7 [0 f1 C% S4 J% a( B$ w# b(+14.2%), and standard two-storey properties, which increased to $365,380
' j3 P1 W2 d) G% v# h% C+ |9 p(+13.2%).
$ z9 }; U/ \0 p) _# B2 V7 H/ S! M. v7 R" f
"Canada's sturdy housing market continued to demonstrate steady growth
( Z y8 o) j4 Nduring the third quarter. For all but the west, we have moved on from the
# s1 N4 a i1 J+ c( s" a# L4 `frenzied expansion that characterized the first half of this decade, and are1 Y0 f( B* Y& S6 T' B
poised to show continued growth at a more moderate pace," said Phil Soper,
' ] {) N8 q5 c. c, lpresident and chief executive officer, Royal LePage Real Estate Services.
7 C) L6 ~' [5 G3 ^" i3 c$ S L"Gone is the sellers' market that we have lived with for some years. We% ]4 W6 X5 \1 W) n% R5 {6 l
welcome the more reliable conditions that are characteristic of a healthy1 F" ~6 W, y3 Q' m
balanced market."/ t% \7 B# u5 `( D* M$ {8 A
6 ^6 C$ A5 c5 X8 A) b' ^3 Z3 @ Despite the double-digit rise in average national house prices,+ r) z. F* k5 \0 ^# e; s
considerable regional variances were exhibited again this quarter. The shift
4 i0 F/ k. `3 o0 I/ F+ oto balanced market conditions, which began in late 2005, has continued
# S$ H! i _! F! |5 a2 p* Vthroughout most of the Central and Eastern regions of the country. In the core
6 c( v& o, b2 u" Nenergy producing western provinces, the combination of very high in-migration,. C& u/ b" g) x
manageable affordability, and a shortage of inventory has driven record" M" d& I- N! ?" Y, r2 Y
breaking price appreciations.
) v' h5 g1 v* }. q1 i! H+ ^7 P+ F4 a- h3 j3 \
Echoing the second quarter and supported by Alberta's rapidly expanding, Q. c# k- Q( A V' E) d/ R: K
economy, Calgary and Edmonton led the charge of Canadian cities with the& ~, Z4 u' W: I
largest house price appreciation in all housing types surveyed.: M$ l) @- ]( m9 F- \" _
2 e1 K2 J/ j: M In Ottawa and Toronto, growth remained steady, supported by solid
3 {6 P) x: q( J% o* k5 u0 zeconomic fundamentals, an increase in available inventory and strong consumer
2 C1 r2 M% v L7 v9 T7 W0 E) zconfidence. While the pace of price appreciation in Ontario leveled off
8 v3 H8 R. d8 ]slightly, the province's real estate market remains poised for modest growth.$ H+ z0 U8 @; b% ^/ p% a. G# n4 X
In Atlantic Canada, new housing and condominium construction offered buyers$ k8 t$ \$ I m* E% n5 _
greater selection at more competitive prices, resulting in a slower rate of
% e3 Q+ [: Z u, sprice appreciation when compared with 2005.3 G& N$ E/ v+ Z B) B' { }; `
9 F% n, e& B m
While the pace of growth in Canada has slowed, the domestic housing
" p- P% B0 s# Y1 a& c. c$ Xmarket is expected to outperform the American market. The economic and& ]7 j8 R+ L, K3 v+ v
financial fundamentals driving the residential real estate sector in Canada
# O; b% ?6 P6 d- `/ \0 B6 Yare markedly different than those found in the United States.
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Added Soper: "Canada's housing market is likely to outperform the
" z& C* F+ t# b% \2 I; {American market through 2007. A number of factors are working in Canada's: _3 x/ ^. }5 B! k
favour, including healthy personal and governmental debt levels, the
6 Z) {) }; D& G$ d8 Q1 @2 U* Vrelatively modest rise in interest rates in our country, and general
; l! I: o1 u, N! g9 h# daffordability in our major cities. In addition, Americans are now seeing the1 k1 }" c3 T1 s4 y) E; P3 D w/ w
downside of a tax system that encourages maximum homeowner leverage, and: w' k& O. x! j) d. c
aggressive financial products such as zero- and negative-amortization! o, w9 q& e% E
mortgages that work only in a high price growth environment."
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<<
5 J6 c/ u$ n2 \$ i1 i$ s REGIONAL SUMMARIES
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l) Z; @9 K! p. @' c; I Balanced conditions continued to characterize the housing market in0 Y- w: F3 O- {; m
Halifax, as significantly higher inventory levels helped to moderate the rate
/ O: l/ ^$ r4 {$ ]6 dof price appreciation. Buyers were increasingly choosy, taking more time
' v( ]* b: d' P' d: Alooking for newer, low-maintenance properties that were not in need of
6 i- E0 _* X, I# [/ e- F. a) frenovations.4 D3 l7 G% A5 \% \, B4 B1 o
% Q$ h* c1 H7 g: a The housing market in Moncton remained healthy and strong as a slight2 _* p# `/ a/ U' e7 l
increase in inventory helped to moderate the rate of price appreciation
' E) M5 W- u7 bcompared to the same period in 2005. Activity was brisk throughout August and$ G: w- U8 p% O3 J7 {0 I7 O
September and is expected to remain this way through the fourth quarter.
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; y$ `% |- D/ g& ^' [ The housing market in Saint John underwent its traditional summer6 U& r4 l) I; H, h4 `7 c! ~
slowdown in the third quarter, with activity picking up towards the end of the
( A" Z0 w+ W3 T: Z) b& D2 w: equarter. The local economy continued to thrive, as construction on a new; t, m* c5 F/ n8 Y; E, X) y/ W
600,000 square-foot shopping area has begun, bringing several new box stores- p; z! u& v3 i: l1 r7 Z! ~# x
to the area. Buyers have begun seeking less expensive fixtures for their homes
9 X+ H2 B& C# w4 u$ P5 d7 Band are instead opting for more affordable housing options.
. n. l( y o' l& O! z: p$ f( R7 `
. G8 A, X) C0 ]' ^3 Y& K In Charlottetown, the housing market started to move towards balanced
7 \- y9 h k4 Y9 h! sconditions, as some sellers had to begin to lower the asking prices on their
+ W. {% d; n: zhomes to make them more competitive. Activity from out-of-town and US buyers
! x0 K; W @+ D3 r% B5 ~! x3 zwas down slightly compared to 2005, likely attributable to the strong Canadian3 J- P; Z a! N" P- G F/ B( n
dollar. Inventory levels began to creep up in the third quarter, providing: k$ X3 J8 o. ^# c, }3 y) s7 P
buyers with more options when looking for a home.1 x8 s7 f) D- e% e
/ ?3 I; t. y5 i/ [% p Activity in St. John's slowed slightly in the third quarter, particularly, m2 f6 a# S: m, w6 V1 P+ o
among higher-priced properties, where there was a slight over-supply of homes
$ Q( f, D& i' M2 }priced over $200,000. Listing periods have increased when compared with 2005,
1 q& b5 x3 e, L" J0 b2 |as some of the pent-up demand that had characterized the market over the last5 ?' V6 ^' ^# h( y- j, o B
few years has been satisfied, resulting in more normal, balanced conditions.- Q8 @: R( f8 S' _. j9 f7 r
$ ?; P5 ]1 I2 {6 U* l Montreal's housing market recorded modest increases in average house+ Q8 }0 \( P# b
prices, due to a slight seasonal slowdown in the third quarter as inventory
8 d1 L- f0 [3 r" g" G1 ^7 Xlevels rose. Part of this can be attributed to the fact that many renting$ D |' L0 Q* `( }7 C
first-time buyers were motivated to close on the purchase of a home by July 1,
# Z2 a: `9 @) P8 S9 r% |9 b7 s: wwhen rental leases expire in Quebec. Once this date has passed some of the
2 D9 h. P8 _0 @# C9 }pressure is taken off the market, allowing buyers to visit more homes before
5 ?' h" A7 V2 C" g% Xmaking a purchase.
S+ I- @* Y8 v+ P, f
1 S R! b3 w, E& u; l" H Ottawa held its position as one of the country's most stable housing
' P" V# i E9 ]0 R) nmarkets in the third quarter, reinforced by a vibrant local economy and strong R" Z4 H3 u' T1 D; f* K, l
confidence, resulting in modest increases in average house prices. The city! n4 v0 |7 `9 x+ w9 q9 y; i/ D' K; b
centre remained a bright spot in Ottawa, with homes in this area attracting& Y; _+ Z7 M5 h6 w0 ^
attention due to their convenient location and proximity to downtown
+ I1 _' t3 @) N5 _" J' yamenities.
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( H5 N% K x3 X0 J6 N The housing market in Toronto sustained healthy activity levels; \* P; u% g2 q/ u/ I/ E
throughout the third quarter, as a strong economy helped to maintain demand
/ w& {! C! f/ O T/ I; {; C# ]across the city, causing average house prices to rise moderately. Toronto has
5 X5 L" s6 x! Scontinued to experience modest growth in average house prices, and has been
4 t5 S0 R+ q* X$ h& |driven primarily by purchasers who are buying homes as their principle
( q3 k6 E' v t$ Bresidence, rather than for investment.
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; M' I* K1 a2 _" v* } The vibrant Winnipeg housing market continued to show its strength as
& `* i) w( g* Z1 B/ Ehouse prices rose during the third quarter. The booming local economy resulted
2 j C d0 c$ Tin a historically low unemployment rate, helping to bolster consumer
8 w! B$ C/ S7 M6 Nconfidence and Winnipeg's ranking as the city with the lowest capitalization
# p. E0 h; P* i) |; urate among the country's larger cities - helped to encourage buyers to enter* U3 e1 M: r$ R! F/ e" n- ^. ?) @* `( P
the market.( v$ ~/ k l" m: v8 e, c; D
5 _! d. ?& y7 _: G In Regina, the market experienced a slight seasonal slowdown through
! { T/ j/ S! t6 Q7 o; yJuly, as there were fewer purchasers in the market due to summer vacations. In
; E2 \) H8 ^: t2 {( k% c, S( ]August, activity resumed to the busy pace previously seen in the spring
' g9 R$ q" E7 I! T9 y7 imonths, as the influx of purchasers made it more difficult to find a home due3 i; `% c4 v% [2 k _/ R' b7 U" t
to the shortage of available inventory.
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( C4 ?1 U/ Q+ V0 a Activity in Saskatoon remained brisk as the market maintained its
0 I4 [* b9 c, W- |. _2 _momentum from the busy spring sales period. The economy in Saskatoon remains$ F* g3 k1 \# O* I, L6 q2 g. {7 [
vibrant, as employment opportunities are abundant with many businesses! L8 D& S; m# o$ D2 a/ Z
struggling to make hires and having to recruit outside the province.8 J- `7 S3 W+ r. [
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Calgary's housing market recorded blazing average house price increases( S. H* I! Q% a. O% z' y6 h$ Y
in the third quarter, in all surveyed categories. The burgeoning economy, low
/ A& }% h7 I |1 [1 N0 k# Junemployment rates and low inventory levels remained the leading factors that
3 x V' r9 p1 S$ Y& A2 }pressured Calgary's house prices upwards. However, regardless of the soaring# o" ]2 i; |8 ?0 G
prices that characterized the market - even during the typically slower summer% K. [9 r9 R' |
season - it is expected that activity will become slightly more balanced, as
/ S# T+ H, o0 V! Vbuyers are becoming more reluctant to participate in the frenetic activity.
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Edmonton's booming local economy continued to thrive in the third quarter
# y4 ~$ V- E) @& Oas activity in the oil sands north of the city continued to flourish. Edmonton( K2 ]( ]- c7 i: j
remained the hub of activity for those coming to work in the oil industry,2 [$ F, A) ^, Y. P" y8 ^$ R
maintaining tight inventory levels across the city, resulting in prices/ B. X0 W0 N; k
increasing at record levels. However, as inventory levels continued to improve
' S3 T- m- P' yin the third quarter the rate of price appreciation should moderate slightly: X( f$ d0 F! j! Y& I: W) K( V
towards the end of 2006. ; ^! k9 p) x+ B p! T" E9 \
v8 j8 G: {" @2 N
While Vancouver has seen a slight reprieve from the severe shortage of
- ~. I% u$ K1 @inventory that had previously characterized the market, supply is still unable
' x' f( S* D1 qto meet demand, driving house prices upwards. Vancouver has a very diverse7 ]. k4 {7 l! j0 F6 t. L3 n
group of active buyers - from first-time home buyers to baby-boomers to
( H& X: _7 f% b% {1 eforeign investors - all of whom fuel the demand for houses, placing added
5 x6 ^& e9 `) Q- f8 j3 h6 L: npressure on tight inventory levels.5 s( ~; ]! S# O4 q7 `
( `% h9 }) D: y; Z% q Victoria's market is vibrant and supported by strong economic# e' O* u& P A
fundamentals, fuelled by a booming tech sector and a migration of young people; u0 I. Y! c( ~* o
into the city that has continued to support the area's house price increases;3 H& X9 s% P6 V
while increased inventory levels have afforded buyers more time when searching
# @) z5 Y& |* f( D- Lfor a home, helping to normalize the market's pace.8 g: N4 ?) V" p. b0 B
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Survey of Canadian Average House Prices in the Third Quarter 2006
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-------------------------------------------------------------------------
, O# k0 q# C0 A Detached Bungalows Standard Two Storey
) |8 l; p3 I, A I. h/ c% k+ d& c -------------------------------------------------------------------------
( S0 o1 [% X \ 2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3
. C1 J% X8 |" ~1 k& ?. t Market Average Average % Change Average Average
~" P" N+ }) ]7 U* e" r -------------------------------------------------------------------------' v& p- f; f1 d: w; l; k
Halifax 186,333 173,333 7.5% 198,667 199,000
0 b) ^+ V' l' o. e7 g -------------------------------------------------------------------------
2 i1 A, h% i) X. Q+ \ Charlottetown 145,000 141,000 2.8% 175,000 170,000
+ H/ s5 w5 f8 N. }' | ~' D5 l -------------------------------------------------------------------------4 L- h* @- F# B1 b
Moncton 135,000 127,000 6.3% 129,000 123,000( D# u# w* R$ B. }/ ?- B4 E4 ?
-------------------------------------------------------------------------9 a/ s( i1 {+ r# h
Saint John 141,200 142,900 -1.2% - -
$ Q, |# c; {& _3 R3 S/ k. u5 @ -------------------------------------------------------------------------
7 Y$ _* V( S" s, b1 p4 P St. John's 143,667 142,667 0.7% 200,667 202,333$ c: Z: F4 N$ V
-------------------------------------------------------------------------5 s) n" C W/ q
Atlantic 150,240 145,380 3.3% 175,833 173,5835 a' f( E; I0 T+ L2 ~" k
-------------------------------------------------------------------------3 \4 S" w! ~; Z9 D( O( U
Montreal 213,691 203,500 5.0% 321,141 316,1859 h& ~/ o: u# |0 Z9 I! ?
-------------------------------------------------------------------------
& Q& u( W' J6 a8 d Ottawa 290,083 278,417 4.2% 285,667 273,250/ C/ j- b: v9 R. |/ B
-------------------------------------------------------------------------, u$ q' O F7 G% p% i0 D: x( ]
Toronto 373,368 355,882 4.9% 481,523 474,766
+ O! i) l; D: ?8 O3 q9 X3 ~ -------------------------------------------------------------------------
1 Q+ K% l# W4 `* Y7 A9 o: C3 f Winnipeg 181,579 159,860 13.6% 202,337 180,7071 d& W* a% \( q
-------------------------------------------------------------------------. s- g. `0 ]4 A: @ S
Saskatchewan 170,667 156,083 9.3% 182,600 166,500
8 A0 c9 V$ l: u. Y' Y -------------------------------------------------------------------------
- u/ p5 y% u/ T; U2 ? Calgary 395,067 252,411 56.5% 405,778 264,389
$ m; z. o) p" o -------------------------------------------------------------------------
5 a; s- e+ d1 {# x% N7 w Edmonton 286,857 194,857 47.2% 316,429 206,7148 r8 P: g& Q6 j* @/ O+ D( ^
-------------------------------------------------------------------------+ X- T. ~" ^" i" }, p) \% C
Vancouver 704,250 601,000 17.2% 794,000 697,500
# A5 }1 a* M" Q1 N. ~ G( {$ u -------------------------------------------------------------------------
5 ?8 G1 |% s3 ~$ `$ f Victoria 375,000 348,000 7.8% 403,000 391,0002 D& O) w" R+ Q
-------------------------------------------------------------------------
$ ^5 S2 f6 w- D/ M6 c* B. T l National 300,365 258,202 16.3% 365,380 322,860) U: g; W" y( B0 h
-------------------------------------------------------------------------3 K {* n7 w0 i
- W% P2 X8 I9 q3 R- `) T/ m6 L -------------------------------------------------------------
: r+ A8 g# T2 p, c+ k _$ W9 g: @ Standard Condominium/ ~$ D! M5 ], z7 E: V3 C
-------------------------------------------------------------- x5 i3 D) P7 P! d' @ w- p
2-Storey 2006 Q3 2005 Q3 Condo+ @* z K+ t' g
Market % Change Average Average % Change5 Y5 J4 y* ~5 p! l$ L8 F# T9 ]
-------------------------------------------------------------
0 n2 r' t: V$ S- G Halifax -0.2% 142,000 103,000 37.9%
/ o4 O2 R8 E" m, V1 O3 S$ k5 K* c2 ^ -------------------------------------------------------------9 @+ G# d G& M8 C0 k
Charlottetown 2.9% 98,000 98,000 0.0% u$ F, r: T5 D! I/ A5 |# B/ ^$ [3 M
------------------------------------------------------------- w/ c9 J- n9 Q0 W$ h) m! h* c
Moncton 4.9% - - N/A ]9 Z) a O! P' o
-------------------------------------------------------------5 {# O- t0 h. ^0 z% D
Saint John N/A - - N/A7 ?; {* P) L9 A2 w
-------------------------------------------------------------% h7 _* I; A9 g! E
St. John's -0.8% 146,333 145,667 0.5%1 ?9 e" d7 Z Y. t% L5 c2 R6 y
-------------------------------------------------------------
1 u9 [4 l- i& H7 r @) A6 ^0 v Atlantic 1.3% 128,778 115,556 11.4%" e i% z2 R9 B r1 l
-------------------------------------------------------------; J! D# k/ r( U9 D9 r7 \- U9 h- z2 E, f3 J
Montreal 1.6% 193,190 188,016 2.8%% U3 Z) D9 o* N. z
-------------------------------------------------------------
8 {+ V* W% P0 T$ i2 k5 n Ottawa 4.5% 181,083 172,250 5.1%
, y) ?% `6 J4 A -------------------------------------------------------------
9 U- [6 M* P7 n& D+ ~; `/ G+ o Toronto 1.4% 252,088 242,918 3.8%
$ M8 v3 L2 @5 C7 s- N -------------------------------------------------------------, ^& r0 {/ {) O! W7 B5 I9 Z
Winnipeg 12.0% 105,648 96,008 10.0%
# L. c! M) O7 m0 ?* V -------------------------------------------------------------( m$ S8 c0 j# X& a$ G. V/ Y8 O
Saskatchewan 9.7% 106,250 101,000 5.2%7 o) t3 s* w! P# V6 c( f. w
-------------------------------------------------------------+ \2 ~7 R) y5 D* E- i7 n6 `6 U
Calgary 53.5% 245,844 153,867 59.8%( j& G6 X T& f
-------------------------------------------------------------
! J) B* [* F3 Q' P0 d' \+ S- R Edmonton 53.1% 200,433 131,500 52.4%
u/ D3 J1 ]7 @) j/ q1 I. k! Z -------------------------------------------------------------( [8 V, y7 n2 Q+ g x" e) c
Vancouver 13.8% 366,250 323,250 13.3%
/ s5 ?, r# ]$ t* `' U7 j I -------------------------------------------------------------. t* b* Q+ Q9 K
Victoria 3.1% 229,000 220,000 4.1%0 C5 }- V: }- p8 n; R. ?3 j- [" q; X
-------------------------------------------------------------3 S* R# _7 B7 ]
National 13.2% 211,562 185,296 14.2%. U( U5 V: m/ w4 s6 E) M( j& ?
-------------------------------------------------------------
8 U$ L! M9 A1 [ >>
8 |8 J S: _; X5 K0 v- X5 \- J$ V$ |% T$ r( |2 _# W* m; R& t
Average house prices are based on an average of all sub-markets examined" F$ C/ T6 M. t/ F7 r' c
in the area, except for the smaller markets of Charlottetown, Moncton, Saint1 } h- \/ l0 u) j8 Q' s5 }" U
John and Victoria.8 |1 `3 z- `8 r+ C
: h1 u7 S" j7 `/ f/ b; }. _ The Royal LePage Survey of Canadian House Prices is the largest, most5 M8 b! N! I1 L: ^
comprehensive study of its kind in Canada, with information on seven types of. U; Q7 l+ l! O) W
housing in over 250 neighbourhoods from coast to coast. This release& ~- Y! f3 y% w0 W( `6 k% w
references an abbreviated version of the survey, which highlights house price# w% ]$ Y2 m+ M8 K# R
trends for the three most common types of housing in Canada in 80 communities
) A1 [; i; [4 Y/ `across the country. A complete database of past and present surveys is% Z# l% \6 e: U
available on the Royal LePage Web site at www.royallepage.ca, and current
# q( ]1 y; D) P3 Y p# s) m8 }figures will be updated following the end of the third quarter. A printable* V) [% O9 T8 J$ a
version of the third quarter 2006 survey will be available online on
( R5 P- Q0 q- \. j/ M/ I$ uNovember 15, 2006.& L( o1 m! Q/ S4 _" V* T
Housing values in the Royal LePage Survey are Royal LePage opinions of g6 _4 j7 A! q0 I4 w3 c. i& Y
fair market value in each location, based on local data and market knowledge
3 m. b/ L& l) Gprovided by Royal LePage residential real estate experts. Historical data is
- b8 |) P% a- c) Qavailable for some areas back to the early 1970s. |
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