Shine comes off housing boom

MLS real estate sign.

Retreat in May sales signals abrupt shift to a buyers’ market

http://www.theglobeandmail.com/report-on-business/shine-comes-off-housing-boom/article1591578/

Steve Ladurantaye, Jacquie McNish

Globe and Mail Update Published on Thursday, Jun. 03, 2010 6:59PM EDT Last updated on Tuesday, Jun. 08, 2010 1:37PM EDT

Canada’s resale housing boom has run out of steam.

After a year of solid gains, monthly sales in major cities took their first step back in May as the threat of higher mortgage rates, tighter qualification rules and a flood of new listings took the pressure off buyers to rush into the market.

In a number of markets, real estate agents said bids have virtually dried up as waves of new homes hit the market. The first quarter saw a record 233,402 properties listed as homeowners looked to cash in at what they perceived to be the top of the market.

The abrupt shift from a sellers’ market, where bidding wars were the norm, to a buyers’ market, where bidders can afford to demand lower prices, has led to price reductions in some cities.

“We had to bring the price way down,” said Amy Polson, a Toronto agent with Royal LePage Real Estate Services Ltd. who recently sold a three bedroom detached home in Toronto’s east end for $561,000 after the price was dropped 12 per cent.