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Canada's housing market both vigorous and stable
& r) W* N1 I- ]+ ]% E2 N
6 `7 @' f+ Z; Q- Country's market poised to show growth throughout 2006 -
% i0 H) B: d2 k! r5 f
2 m/ c6 `# S! R6 r. u w: t TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market, R4 f: j# J) F
exhibited moderate price increases and stable unit sales during the third# [& o. Y+ i/ u4 F }+ u2 ^" E
quarter. Wide regional variances continued to be the dominant characteristic
( ~* _9 S1 n9 h; Gin the market, exemplified by frenzied levels of activity and double digit
6 k2 s, B4 u6 P6 H8 P9 O1 qprice gains observed in the energy and commodity rich Western provinces, and& [0 B G; |+ u! b, f1 e0 A* N; i0 j
more reasonable sales volumes and moderate price appreciation in Ontario,
1 N! L1 r" F7 h! z9 I2 f/ R0 tQuebec and Atlantic Canada, according to a report released today by Royal5 m+ b+ U! `, F9 k' j
LePage Real Estate Services.
5 @: w' O& y2 z2 X( Z8 U& r
7 S: @6 d5 Z L0 \ Nationally, market trends established through the first three quarters( m* ~( s" O8 ~+ f1 G
are forecast to continue for the remainder of the year. Robust economic+ F' ^/ A1 X+ u6 ?7 z4 Y
conditions, low unemployment rates, modestly growing salaries and wages, and7 {8 [" B" A5 H
sound consumer confidence contributed to the overall strength of the
. U2 b! r2 h$ n) z V' V3 _ }& hresidential real estate sector. }" z/ A0 t' |' Y3 c5 w2 c, W, L
! D* q; B5 j ^( j T6 m Of the housing types surveyed, the highest average price appreciation1 ]7 O4 h8 {/ s. U$ v* H
occurred in detached bungalows, which rose to $300,365 (+16.3%)
. r9 t* F6 z6 N3 @" nyear-over-year, followed by standard condominiums, which rose to $211,562
* e/ }# b: B% B(+14.2%), and standard two-storey properties, which increased to $365,380
% } S1 P- b4 G: e(+13.2%).
, R" _3 k- _; T) \( s& M; ?0 T/ h7 X/ n7 Z
"Canada's sturdy housing market continued to demonstrate steady growth
, S8 C) W1 Z9 T& @ y: J- cduring the third quarter. For all but the west, we have moved on from the% g3 N. K# w9 l, S9 O- l
frenzied expansion that characterized the first half of this decade, and are
j6 O- m+ l8 c. Upoised to show continued growth at a more moderate pace," said Phil Soper,
, ~/ ]/ B6 _& P% ^" Mpresident and chief executive officer, Royal LePage Real Estate Services.
3 _8 n# @; g5 G0 J; I! v5 C7 Z) v"Gone is the sellers' market that we have lived with for some years. We
8 [, C2 U* ]: B* Q( Zwelcome the more reliable conditions that are characteristic of a healthy$ E2 j3 l2 `0 r! u4 i" i
balanced market."
7 W. D: d& t' R/ k* G% w; c! b/ O' _) ?$ O( A. d. y
Despite the double-digit rise in average national house prices,
" J+ @) \' B* c- G0 W* sconsiderable regional variances were exhibited again this quarter. The shift
' c8 ]$ h' f! k" ^$ uto balanced market conditions, which began in late 2005, has continued$ W/ S1 K+ C+ ]
throughout most of the Central and Eastern regions of the country. In the core8 {$ g; \/ L( W! N! H$ _
energy producing western provinces, the combination of very high in-migration,
4 Y/ e. c& D, E; ~' Ymanageable affordability, and a shortage of inventory has driven record
0 `0 b( S! C" m3 q) D) Z6 }breaking price appreciations.! H3 G2 b K# `
+ R& f3 q* ]3 X, o' k
Echoing the second quarter and supported by Alberta's rapidly expanding) T9 r* w6 S6 H& t
economy, Calgary and Edmonton led the charge of Canadian cities with the
9 w, ~! c1 n+ K3 c5 Z4 P: U1 Ylargest house price appreciation in all housing types surveyed.
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In Ottawa and Toronto, growth remained steady, supported by solid
$ _0 j5 p7 F3 ~economic fundamentals, an increase in available inventory and strong consumer# i% v6 V1 n" O1 T
confidence. While the pace of price appreciation in Ontario leveled off
) O1 H5 _2 L5 p( f1 [* aslightly, the province's real estate market remains poised for modest growth.& E" D, G! |" Q9 B3 ~% m
In Atlantic Canada, new housing and condominium construction offered buyers
% v/ k8 U6 u0 V% w3 f) v0 Mgreater selection at more competitive prices, resulting in a slower rate of+ o& x! q1 Z0 p# G& p1 W
price appreciation when compared with 2005.
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While the pace of growth in Canada has slowed, the domestic housing
2 w1 v5 F7 }" b! }market is expected to outperform the American market. The economic and; X7 i' ]- ]/ t& X& X3 z- ]
financial fundamentals driving the residential real estate sector in Canada% ?7 t: E& j$ n" @- }; D) O
are markedly different than those found in the United States.
4 w1 ]) R i7 j
5 r2 p- K1 d6 | Added Soper: "Canada's housing market is likely to outperform the
2 Q$ T9 N* P; [. ^* K# w' \American market through 2007. A number of factors are working in Canada's
" c$ M- m! C8 F a# @- Nfavour, including healthy personal and governmental debt levels, the
( |% e/ O4 P9 ?! \& G8 arelatively modest rise in interest rates in our country, and general& Z3 c; Z9 S8 j% t& \4 k, D
affordability in our major cities. In addition, Americans are now seeing the7 u8 Z4 K! q# N t' [* D4 G J0 W
downside of a tax system that encourages maximum homeowner leverage, and
b% J5 e9 z1 v4 o& A* F/ _aggressive financial products such as zero- and negative-amortization* b9 [% [5 ^* u: q" @% n( [: q
mortgages that work only in a high price growth environment."2 w2 q2 R2 x9 u% {* d6 d
* I: m- \: m( a% ^
<<
! U& j$ E7 Z# m' R6 }( ~0 n REGIONAL SUMMARIES7 G, ]: m$ V7 J9 y+ r+ x
>>; }; n# X3 j( N- A7 W3 M
9 V) x8 J3 C& X% } Balanced conditions continued to characterize the housing market in2 M& E$ t5 @, M5 `% i: _
Halifax, as significantly higher inventory levels helped to moderate the rate
: w# B+ J& {4 W- Fof price appreciation. Buyers were increasingly choosy, taking more time* o: m+ k/ Y7 j
looking for newer, low-maintenance properties that were not in need of$ A+ Q/ T7 t5 w" @
renovations.
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The housing market in Moncton remained healthy and strong as a slight& k/ {0 v1 U2 Y& Y5 |: X/ j
increase in inventory helped to moderate the rate of price appreciation
4 I1 v: Z5 P, f! c) Mcompared to the same period in 2005. Activity was brisk throughout August and
7 J2 l* V: e( g9 I9 |September and is expected to remain this way through the fourth quarter.% Z7 S& g; c4 n/ c1 W. X
3 K: p( ?* _! C The housing market in Saint John underwent its traditional summer5 p9 U+ c# [+ V
slowdown in the third quarter, with activity picking up towards the end of the
8 I3 }8 P5 R4 ~5 m3 B4 `; O0 V( `quarter. The local economy continued to thrive, as construction on a new# A1 I7 x) _1 n3 w, d) Z+ K$ Y
600,000 square-foot shopping area has begun, bringing several new box stores9 ~! @# P+ d' ]
to the area. Buyers have begun seeking less expensive fixtures for their homes O% J/ E- z. x0 x4 i
and are instead opting for more affordable housing options.
7 s8 B5 L& V& b+ O2 X# n4 ]
9 }' Y6 J/ G2 J( [. h! n0 @ In Charlottetown, the housing market started to move towards balanced$ v* M8 ?5 E/ f( H1 s( Q" O9 c
conditions, as some sellers had to begin to lower the asking prices on their
7 o, J6 u1 t. Z% x2 @homes to make them more competitive. Activity from out-of-town and US buyers& d, |: N$ x: P6 ^
was down slightly compared to 2005, likely attributable to the strong Canadian
% J' u- z- }6 C! |3 o* Fdollar. Inventory levels began to creep up in the third quarter, providing
, _1 U# c+ l: |) ]buyers with more options when looking for a home.! L) T) C+ }* Z |7 }
; U) c5 w0 `+ z. C1 n7 H& L7 u4 W
Activity in St. John's slowed slightly in the third quarter, particularly0 n. X* M+ m8 ~/ W* E" g
among higher-priced properties, where there was a slight over-supply of homes, _3 U5 R6 r$ q, Q" o
priced over $200,000. Listing periods have increased when compared with 2005,
, }0 I' V: l9 ~& V3 ~% Eas some of the pent-up demand that had characterized the market over the last8 ^. J: S) d* W- p
few years has been satisfied, resulting in more normal, balanced conditions.
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( K( R0 d+ k5 R& c5 [+ ^ Montreal's housing market recorded modest increases in average house" T0 R- P) N! F8 e- h) v2 k% q
prices, due to a slight seasonal slowdown in the third quarter as inventory: K2 H$ [& t4 }* ?9 X. D% A
levels rose. Part of this can be attributed to the fact that many renting
]' F. V9 g# r+ gfirst-time buyers were motivated to close on the purchase of a home by July 1,
( e+ D# x1 E9 p* N2 kwhen rental leases expire in Quebec. Once this date has passed some of the
+ B. W9 Y1 Q: k7 a m! apressure is taken off the market, allowing buyers to visit more homes before" v `+ {' }5 ~3 s6 o: ?- r
making a purchase. D: q* J+ [, r; t2 ?5 g9 ?! w
. L }) X6 G5 J+ F$ s" Q Ottawa held its position as one of the country's most stable housing$ F. [* Y7 @/ z
markets in the third quarter, reinforced by a vibrant local economy and strong
+ g9 M& p( J1 B3 l! A" {confidence, resulting in modest increases in average house prices. The city/ G6 h/ D* T& m. y# s
centre remained a bright spot in Ottawa, with homes in this area attracting6 t" j# K) G# n, W
attention due to their convenient location and proximity to downtown( t( Y" X+ t2 Q5 H- K5 I. @2 @ u% c
amenities.
6 m1 a4 x* L1 W9 t3 `2 M& M" V; c. F
The housing market in Toronto sustained healthy activity levels, N, I6 X% w7 c
throughout the third quarter, as a strong economy helped to maintain demand
% [+ j/ _* K, D4 r& U: sacross the city, causing average house prices to rise moderately. Toronto has
( p# ?" F2 T _/ [. W: hcontinued to experience modest growth in average house prices, and has been
7 u0 m3 |' s+ l8 ~9 m/ {9 Hdriven primarily by purchasers who are buying homes as their principle, B6 S: K$ j- M8 ^$ t1 H& S7 \
residence, rather than for investment.: J' _6 R h) Y- `0 ~ ]& s: j
& B' f. B9 b' {. D/ h1 P/ L
The vibrant Winnipeg housing market continued to show its strength as
9 g9 m% w/ a2 P& A+ zhouse prices rose during the third quarter. The booming local economy resulted
& b, ]! V/ i z; \: l2 oin a historically low unemployment rate, helping to bolster consumer
2 e& w& d4 c& M/ M4 o. n5 }/ W/ j9 fconfidence and Winnipeg's ranking as the city with the lowest capitalization( [+ ]% h6 C9 R- v& s! ^
rate among the country's larger cities - helped to encourage buyers to enter
& s# f( N6 h; Q; Wthe market.
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0 k# M+ z$ P3 R" j; l In Regina, the market experienced a slight seasonal slowdown through7 s" f% a& F/ |. x, _% F0 n! Q
July, as there were fewer purchasers in the market due to summer vacations. In
# {8 Y7 E" K- eAugust, activity resumed to the busy pace previously seen in the spring
. z2 e+ X5 f# Z0 w0 C; imonths, as the influx of purchasers made it more difficult to find a home due
! s) M0 h4 G, G6 c9 y5 G) x+ V7 \to the shortage of available inventory.7 n5 R, s x7 f) `) ~1 F
& l" ^3 ]" G# k! J
Activity in Saskatoon remained brisk as the market maintained its7 p& E5 W' J9 ~" U) E$ y" K3 U
momentum from the busy spring sales period. The economy in Saskatoon remains
! w$ W, u& c- @9 P) C- |vibrant, as employment opportunities are abundant with many businesses5 V& w6 j; |. F( V+ @8 o: K+ A
struggling to make hires and having to recruit outside the province.( l. e5 s/ h3 [" U
6 |7 L/ x2 k" X+ V( R Calgary's housing market recorded blazing average house price increases
4 w+ |1 F, M' f1 P* j$ Ain the third quarter, in all surveyed categories. The burgeoning economy, low
7 U8 x4 w6 g. c9 Tunemployment rates and low inventory levels remained the leading factors that+ m# @' v6 m, u
pressured Calgary's house prices upwards. However, regardless of the soaring5 Z! T7 f$ D' e- f( S
prices that characterized the market - even during the typically slower summer+ m' Y+ p9 p7 v% m; \. s
season - it is expected that activity will become slightly more balanced, as. E( w: y' Z- M9 }2 B( L# z
buyers are becoming more reluctant to participate in the frenetic activity.
5 H& ]2 B% S+ r$ x
& ^6 }4 M. K! S& q& X8 j) W2 @2 X Edmonton's booming local economy continued to thrive in the third quarter
) x R0 z( U# i$ h) Vas activity in the oil sands north of the city continued to flourish. Edmonton4 K2 ]% J" f8 `4 A1 N4 F
remained the hub of activity for those coming to work in the oil industry,
3 l; Z" z: {) P- j) }maintaining tight inventory levels across the city, resulting in prices" ]4 I) B2 s( B" Y- p, e* a
increasing at record levels. However, as inventory levels continued to improve
) @/ j. I' ^( p0 I' `: hin the third quarter the rate of price appreciation should moderate slightly0 x6 {8 y3 ?% _: i8 E
towards the end of 2006. # a% E5 e3 K7 `3 e
7 L) p. u8 x. p8 K- ?8 C+ Q' Y# a- h) PWhile Vancouver has seen a slight reprieve from the severe shortage of
4 Y$ l$ o- X9 \4 W$ f9 ?inventory that had previously characterized the market, supply is still unable
# b3 r% b0 s4 x* Tto meet demand, driving house prices upwards. Vancouver has a very diverse: s Z! t6 l. \4 k
group of active buyers - from first-time home buyers to baby-boomers to6 m/ I$ H, J9 G% o: e1 G: L/ }# s
foreign investors - all of whom fuel the demand for houses, placing added9 w( `* U( H: f& b$ x# }; g
pressure on tight inventory levels.
: Q6 B5 E+ _" t1 q$ ]# W) m
* ^1 Y2 m5 z3 {! q Victoria's market is vibrant and supported by strong economic; E' r# Z9 l. P
fundamentals, fuelled by a booming tech sector and a migration of young people
. E3 h9 A* @4 c) ?0 [+ S+ G* Qinto the city that has continued to support the area's house price increases;
. f8 S$ E' S9 |! l4 Hwhile increased inventory levels have afforded buyers more time when searching
( z% _8 P8 e- u* C0 V+ N2 Z! g, m y) i efor a home, helping to normalize the market's pace.
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5 S d! v: L$ i <<1 ~# K2 l2 j9 R- r
Survey of Canadian Average House Prices in the Third Quarter 2006
) Q# r h) g' J6 X7 Y0 i6 w1 y+ |3 o& H: `% ]2 k
-------------------------------------------------------------------------
5 V L. Q% t4 U$ s) n& v3 G Detached Bungalows Standard Two Storey
" q7 h5 s1 w7 R, P6 t -------------------------------------------------------------------------* t4 L) |9 l2 P. f+ H- L" W
2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3/ V% U, _* ^- ~- H2 F' ^
Market Average Average % Change Average Average
% d4 S p; C9 a+ M+ C2 S7 \) } h -------------------------------------------------------------------------1 \) q3 U# s5 F) V6 S- I/ K+ Z
Halifax 186,333 173,333 7.5% 198,667 199,000
8 h! z+ V4 _' r) n1 k% z% }; H0 h* a- Z -------------------------------------------------------------------------6 d; u% |. Z. K2 g J2 \* X2 {
Charlottetown 145,000 141,000 2.8% 175,000 170,000
- f7 b9 S7 c7 E" T; v -------------------------------------------------------------------------1 G: w+ D, V, J" A4 v% f
Moncton 135,000 127,000 6.3% 129,000 123,000$ V( u+ f! z: j' j$ C! W0 @
-------------------------------------------------------------------------
/ J" T, u! P8 s( e. O Saint John 141,200 142,900 -1.2% - -6 v9 e' ?- ?/ S/ Y3 ]6 e: w* ?
-------------------------------------------------------------------------
6 [' Z$ K( Z& \: ^; |/ H% Y St. John's 143,667 142,667 0.7% 200,667 202,333
0 x% I; b0 b2 i" y -------------------------------------------------------------------------
' x! ~( M, q/ l4 h2 L5 }/ b4 | Atlantic 150,240 145,380 3.3% 175,833 173,5839 r+ K* h2 s9 e! ?' ]6 ?
-------------------------------------------------------------------------2 G* F/ i0 Y' j& w4 F) X5 `# N% _3 g5 m
Montreal 213,691 203,500 5.0% 321,141 316,185" F5 I8 I1 O% \2 k' H
-------------------------------------------------------------------------
8 Y* I* M/ U$ Q4 V Ottawa 290,083 278,417 4.2% 285,667 273,250
0 V8 O' d4 x0 ~6 z; F3 `! ` c -------------------------------------------------------------------------5 C! o4 q3 D3 u; G$ g" |! g0 I
Toronto 373,368 355,882 4.9% 481,523 474,766
$ K3 n n4 V; ]8 D2 c -------------------------------------------------------------------------9 [3 ~' }5 x7 e
Winnipeg 181,579 159,860 13.6% 202,337 180,707
* D, U8 | P- l: t+ ^ -------------------------------------------------------------------------
4 {5 X* ~. D- i" r1 N6 f7 z! Z Saskatchewan 170,667 156,083 9.3% 182,600 166,500
2 {# i& y# a8 P; Q -------------------------------------------------------------------------; h4 g) U; r# w0 y2 X& G- g! s
Calgary 395,067 252,411 56.5% 405,778 264,389: k9 N# N* `3 C5 ?4 e; |- u2 L# r
-------------------------------------------------------------------------
6 x( u4 B) D r Edmonton 286,857 194,857 47.2% 316,429 206,7144 H V! m& l1 Q2 U5 E' {( w
-------------------------------------------------------------------------8 G* b0 A( M/ ?' p8 X0 S0 V" Z$ Y
Vancouver 704,250 601,000 17.2% 794,000 697,500
0 G, L; W, j. z/ g9 V* B -------------------------------------------------------------------------
+ L- t) x3 s K Victoria 375,000 348,000 7.8% 403,000 391,000
% N6 E% {7 `9 p9 M+ d/ K, B -------------------------------------------------------------------------
g% E( U' T8 x, p7 Q' P+ U National 300,365 258,202 16.3% 365,380 322,860
6 C3 q2 ~6 e" h4 C) K7 y -------------------------------------------------------------------------
% b' P8 k8 P: o, C
: C7 i: ]" h" s: E+ g -------------------------------------------------------------
9 X3 H! d1 U" ?( M) c Standard Condominium
2 r+ I4 L% b. E" t9 U -------------------------------------------------------------/ G! n& j+ G V0 D4 T
2-Storey 2006 Q3 2005 Q3 Condo3 _) {" H. i4 N/ L
Market % Change Average Average % Change
3 G% ?4 v% C& p, t -------------------------------------------------------------7 ?; r9 w2 r2 P. Y. q; d4 E( R
Halifax -0.2% 142,000 103,000 37.9%$ _( z5 Y, ?8 e. R
-------------------------------------------------------------) `; l2 _2 |* f
Charlottetown 2.9% 98,000 98,000 0.0%1 E& C3 r: h+ i% ~
-------------------------------------------------------------6 C: L, N5 _8 |0 E. o! L& w7 ?
Moncton 4.9% - - N/A
1 u7 x' c- Y7 _9 L; P( Q -------------------------------------------------------------
# W9 z% G! v* I2 c Saint John N/A - - N/A0 B+ s% y4 P8 X( Y9 E
-------------------------------------------------------------: C# [! g0 u" W6 R( ]* a6 I
St. John's -0.8% 146,333 145,667 0.5%% d+ F; f' z( [
-------------------------------------------------------------
, |+ j% {' t3 ?( i: i1 y5 c* P Atlantic 1.3% 128,778 115,556 11.4%
) ^0 Q, _, N& @2 f -------------------------------------------------------------3 C* d7 k) ]& U2 m* ?
Montreal 1.6% 193,190 188,016 2.8%
- p7 a8 T0 W9 i# X% d6 f -------------------------------------------------------------6 V- p; a, x! S! K2 N9 U+ q
Ottawa 4.5% 181,083 172,250 5.1%, T6 u/ s" _& l7 P" M' }
-------------------------------------------------------------# j$ v# n1 S7 q M) }
Toronto 1.4% 252,088 242,918 3.8%6 l: Z. b5 V( F$ x& I" {2 r, ~
-------------------------------------------------------------
P9 u. X8 A5 Y# y) D7 q Winnipeg 12.0% 105,648 96,008 10.0%; u5 O; y: i0 N8 \( v
------------------------------------------------------------- S2 n0 O( B1 A0 y8 i$ w
Saskatchewan 9.7% 106,250 101,000 5.2%1 I7 w# g# t$ Z. M7 I7 k
-------------------------------------------------------------' |5 o$ s, B9 D$ @; {
Calgary 53.5% 245,844 153,867 59.8%2 F$ S# e" y& Z- Q3 U
-------------------------------------------------------------
5 E: H* H5 N) K( w* b Edmonton 53.1% 200,433 131,500 52.4%
- D; x6 s( g9 @6 g. {" t -------------------------------------------------------------
: f' B! B; q+ N7 b9 H5 X# F: M Vancouver 13.8% 366,250 323,250 13.3%0 G( Y" A0 ]& d4 {3 K; d
-------------------------------------------------------------
/ d4 T8 B4 |2 r8 P/ {% { Victoria 3.1% 229,000 220,000 4.1%
% o3 ~2 F8 `# |8 J -------------------------------------------------------------; S+ }# }3 f; E) I; t/ s, J
National 13.2% 211,562 185,296 14.2%+ t1 d2 _1 V T& `+ L6 \2 @
-------------------------------------------------------------
b2 W% p/ v3 @% s/ u >>
+ p( L$ c2 m. h4 B* e. ~/ G6 S' f# Y# a; I& S8 z8 o5 m4 P
Average house prices are based on an average of all sub-markets examined
. B) i( G9 R/ o6 r! @in the area, except for the smaller markets of Charlottetown, Moncton, Saint
! n6 s9 C# a9 ?, FJohn and Victoria.
/ Z" ?- G* v: q" ~+ K7 X1 I3 W/ R+ @3 m E- S" @+ l
The Royal LePage Survey of Canadian House Prices is the largest, most
1 t4 c$ K" |" z8 Q/ p& z* ocomprehensive study of its kind in Canada, with information on seven types of
- `$ T( f8 A3 lhousing in over 250 neighbourhoods from coast to coast. This release
! d8 Z- Z2 G* X6 oreferences an abbreviated version of the survey, which highlights house price2 s2 R% B4 c0 G/ Q: n9 f7 }& O
trends for the three most common types of housing in Canada in 80 communities
3 [; W5 B8 x4 O/ {7 { jacross the country. A complete database of past and present surveys is
9 N8 D& f/ u5 lavailable on the Royal LePage Web site at www.royallepage.ca, and current1 v5 Z/ e$ F1 s8 {5 \1 j. [
figures will be updated following the end of the third quarter. A printable" v' g9 o8 k& T' `
version of the third quarter 2006 survey will be available online on
1 V( C# l/ A, r+ I1 ~: y7 a$ E2 ZNovember 15, 2006.' W; ^5 q; @6 {7 ?6 ]# n
Housing values in the Royal LePage Survey are Royal LePage opinions of$ e* f7 v0 q: D& L4 f
fair market value in each location, based on local data and market knowledge# I) Q2 v; a: F- G3 X4 X& v* G
provided by Royal LePage residential real estate experts. Historical data is% E+ U8 j- Q9 m
available for some areas back to the early 1970s. |
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