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Canada's housing market both vigorous and stable
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" I7 C ~$ J ?3 [2 }- Country's market poised to show growth throughout 2006 -
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+ S* w- \4 u* T) j6 o0 T TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market
: {3 k: v; A# i' j( {$ Gexhibited moderate price increases and stable unit sales during the third3 X2 _1 G! P7 X3 u: ]2 P
quarter. Wide regional variances continued to be the dominant characteristic
0 ?! r0 d7 j# N8 Z' gin the market, exemplified by frenzied levels of activity and double digit
2 L% ?: f* H; xprice gains observed in the energy and commodity rich Western provinces, and% B) M7 ?+ G3 ?3 g2 Y5 ^
more reasonable sales volumes and moderate price appreciation in Ontario,; j! J0 T, `6 j% z" A# ` b
Quebec and Atlantic Canada, according to a report released today by Royal& i, ~9 ?- H: `# F" {
LePage Real Estate Services.
* X. E& N: `& W& o0 M4 ]6 Z' Z8 }" N+ u/ @# Y, B
Nationally, market trends established through the first three quarters
! M Z4 K3 }8 Hare forecast to continue for the remainder of the year. Robust economic4 d4 Z, o5 H% p% q% |/ u
conditions, low unemployment rates, modestly growing salaries and wages, and* ?+ y$ r! ^, N9 y; |3 V- c% L d
sound consumer confidence contributed to the overall strength of the
5 f5 K D( z: r) C* iresidential real estate sector.
: n" p9 O0 f g) s) }% o
2 Z1 q! q5 a' E, w2 I Of the housing types surveyed, the highest average price appreciation3 q8 ]" {+ | H( Y$ u
occurred in detached bungalows, which rose to $300,365 (+16.3%)# k+ R M3 m' r+ D8 g) p
year-over-year, followed by standard condominiums, which rose to $211,562
& n6 r0 o4 u" Q) N. L) P: e8 l- K(+14.2%), and standard two-storey properties, which increased to $365,380* J! k4 \' T1 x7 G3 b/ O
(+13.2%).4 p6 i6 B9 |, D3 }- D8 j/ j2 s
& O( B9 y4 e4 A& } "Canada's sturdy housing market continued to demonstrate steady growth, H2 z; M7 C! `% k' `
during the third quarter. For all but the west, we have moved on from the
" [ Y: P T: m k+ y# x* k# M7 Ifrenzied expansion that characterized the first half of this decade, and are$ L6 [) G# Z7 S$ y) I$ `8 m3 j! G
poised to show continued growth at a more moderate pace," said Phil Soper,
5 Q( G2 F/ t* T. W# c& }6 t& opresident and chief executive officer, Royal LePage Real Estate Services.; C7 W% k' K4 B5 Y; Q" `- o6 ]
"Gone is the sellers' market that we have lived with for some years. We2 t/ ]0 D9 a: S$ `2 {1 d) S
welcome the more reliable conditions that are characteristic of a healthy% [; O% C; e2 N, s- c- O$ {$ x3 b
balanced market."
7 D$ K* C y! ~3 ?# U3 Z2 u% K2 O3 |; V5 }
Despite the double-digit rise in average national house prices,
* @! W3 N4 N0 uconsiderable regional variances were exhibited again this quarter. The shift
! [5 k ?/ t, F! R6 H O7 ]to balanced market conditions, which began in late 2005, has continued w8 C; L6 d1 L( a4 x3 ]( k" k
throughout most of the Central and Eastern regions of the country. In the core. U8 J4 U! i+ D
energy producing western provinces, the combination of very high in-migration, f: D7 C/ B6 ~6 a- Y
manageable affordability, and a shortage of inventory has driven record0 N6 ]; e) \7 M8 D, i1 w
breaking price appreciations.9 @) q- t; A& n) }# U" ~( n- `
3 |7 i7 {; g0 l+ s2 F+ I4 U) s! S: q
Echoing the second quarter and supported by Alberta's rapidly expanding2 {# V7 h7 m1 z P( `( z" T
economy, Calgary and Edmonton led the charge of Canadian cities with the0 b* ?' `- x6 A, B) A, `; f
largest house price appreciation in all housing types surveyed.8 O1 s# c) r; X( |- j
% ~' L, ~" v0 i( I$ I: x
In Ottawa and Toronto, growth remained steady, supported by solid
8 U M8 C: a) Q9 H8 m$ teconomic fundamentals, an increase in available inventory and strong consumer
/ A4 B9 y) a w4 Pconfidence. While the pace of price appreciation in Ontario leveled off9 d% t5 {* T/ m
slightly, the province's real estate market remains poised for modest growth.
3 a% _6 |. U- W0 e) A8 j' O5 ZIn Atlantic Canada, new housing and condominium construction offered buyers- r; D* i* m8 C0 ?2 w5 p
greater selection at more competitive prices, resulting in a slower rate of
. g- {3 |: ^; s2 A0 L% b2 ^price appreciation when compared with 2005.+ s \* e! P8 L0 `
. d, Z( M3 \( F0 q, G: `9 U# {
While the pace of growth in Canada has slowed, the domestic housing
1 e9 G' I. P. F2 `, rmarket is expected to outperform the American market. The economic and7 _ Z9 Y: s( d. d% {2 L
financial fundamentals driving the residential real estate sector in Canada
, @' x+ F5 o* N) n2 Q P# aare markedly different than those found in the United States.
# W4 A! U" r9 F
& t8 v; O: W. b: G* z# A* m3 r Added Soper: "Canada's housing market is likely to outperform the) e5 t3 n# }. q6 j3 k- b
American market through 2007. A number of factors are working in Canada's
) ~8 N- S0 z# q$ u- F% y/ c3 {, Pfavour, including healthy personal and governmental debt levels, the! r4 l' h( w# g9 ^' w
relatively modest rise in interest rates in our country, and general
; G* h$ Y9 Z' E' Haffordability in our major cities. In addition, Americans are now seeing the) ]7 |! a- F/ ^) [; w
downside of a tax system that encourages maximum homeowner leverage, and
2 ]- ?, X7 P# P1 Z# [aggressive financial products such as zero- and negative-amortization1 V6 z4 l* C( g; O6 n) p
mortgages that work only in a high price growth environment."
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8 F k: e. G! ^3 d; Z <<
3 L* X$ t3 j0 P2 J# J* W REGIONAL SUMMARIES
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. ]% E' j$ K5 b5 z1 M3 D# m
Balanced conditions continued to characterize the housing market in4 G; R* E& j7 m
Halifax, as significantly higher inventory levels helped to moderate the rate- r$ w' ~* ^7 r. N- M$ n' I' X
of price appreciation. Buyers were increasingly choosy, taking more time
7 k' V6 X2 p, @looking for newer, low-maintenance properties that were not in need of7 r+ ?1 i `# y% ?1 T3 o
renovations.
8 w0 X& j8 p* F( \
5 M( G/ X m3 U4 N- _ The housing market in Moncton remained healthy and strong as a slight4 L6 s7 K9 E- J2 Y
increase in inventory helped to moderate the rate of price appreciation8 \, [+ T6 P' z- l, Q' v/ g/ q
compared to the same period in 2005. Activity was brisk throughout August and& [+ g5 K) p" _5 c0 f+ t
September and is expected to remain this way through the fourth quarter.- T4 K: W! m5 l* C, R
$ g2 K1 P6 A: F6 ~# J( P( u4 [% Y The housing market in Saint John underwent its traditional summer
, U( ^8 u( Z. `6 Y+ E$ x, aslowdown in the third quarter, with activity picking up towards the end of the: R6 a+ @0 Y! n" R
quarter. The local economy continued to thrive, as construction on a new
6 b1 K! d. n& \600,000 square-foot shopping area has begun, bringing several new box stores
. s+ {' g+ _2 r! @/ t2 q- _to the area. Buyers have begun seeking less expensive fixtures for their homes# c8 \# M& D8 {. v
and are instead opting for more affordable housing options.5 j/ H; }* H4 W+ g( u
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In Charlottetown, the housing market started to move towards balanced: y: \+ ^. u" j# ` Z
conditions, as some sellers had to begin to lower the asking prices on their
6 N L- t) l7 Yhomes to make them more competitive. Activity from out-of-town and US buyers2 A& }4 ?* p6 M, v/ ?
was down slightly compared to 2005, likely attributable to the strong Canadian7 }" o$ O5 ]# e* i# l
dollar. Inventory levels began to creep up in the third quarter, providing8 D( D# R/ H$ R
buyers with more options when looking for a home.+ G% y8 M( r: G' x m
) o- ^- _, R) M) B) o |. J
Activity in St. John's slowed slightly in the third quarter, particularly/ A7 P; X, W9 y' G4 t
among higher-priced properties, where there was a slight over-supply of homes
0 ^! c' b9 W* Bpriced over $200,000. Listing periods have increased when compared with 2005,
: s+ T+ |! V3 Y! aas some of the pent-up demand that had characterized the market over the last9 s, N0 `4 u- Z& F/ ]
few years has been satisfied, resulting in more normal, balanced conditions.
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Montreal's housing market recorded modest increases in average house
$ N& [/ h0 l& Z) pprices, due to a slight seasonal slowdown in the third quarter as inventory
- G- ^) e' o- Xlevels rose. Part of this can be attributed to the fact that many renting
& y ?. T3 z0 M/ R9 ~first-time buyers were motivated to close on the purchase of a home by July 1,
7 e2 B+ L5 Q2 \when rental leases expire in Quebec. Once this date has passed some of the5 R9 Y" v7 G; p+ t
pressure is taken off the market, allowing buyers to visit more homes before. T' ]. W% O2 ]% {+ Z( ?; y
making a purchase.# P, H) e6 L) Z$ L
( a' _6 N7 V% U: M- q0 T Ottawa held its position as one of the country's most stable housing; F( d$ X1 @# q z$ _+ d. F
markets in the third quarter, reinforced by a vibrant local economy and strong$ O: Z/ R5 w" {: m. O/ O5 [+ N
confidence, resulting in modest increases in average house prices. The city
s |, X. g6 F9 wcentre remained a bright spot in Ottawa, with homes in this area attracting6 Y6 \9 R* m) ?& s
attention due to their convenient location and proximity to downtown
- A( I1 C5 t) p; @: l- H9 I( }amenities.2 A4 Y9 Y- l2 K, q0 R
0 Q, q' j( ^+ K9 y$ D& q$ n The housing market in Toronto sustained healthy activity levels! U4 a& A! X; q T8 N/ b
throughout the third quarter, as a strong economy helped to maintain demand
W: _' q7 y) G! _! Iacross the city, causing average house prices to rise moderately. Toronto has
, ]- e, z e" Ncontinued to experience modest growth in average house prices, and has been
: l$ W) e* s& x* D3 E5 S: Ndriven primarily by purchasers who are buying homes as their principle/ z9 B1 V, ~! E. Q* b6 [1 N
residence, rather than for investment.
1 m# N* l: j k% }" S! \$ U& [- b/ B, R5 r. n$ b% R
The vibrant Winnipeg housing market continued to show its strength as( \# v+ x$ v8 v" H5 J8 x
house prices rose during the third quarter. The booming local economy resulted
; g# K4 L3 s, }* l+ Tin a historically low unemployment rate, helping to bolster consumer4 }9 n; H V3 T" O4 c3 j/ V
confidence and Winnipeg's ranking as the city with the lowest capitalization
3 i J6 Y) X' Q9 z* zrate among the country's larger cities - helped to encourage buyers to enter
: Y* S3 Z. K* L8 r/ B Q% P! Pthe market.& A8 ~* D S u, t" W c7 K
6 \3 d( g4 s) x5 ] W2 }1 L/ N In Regina, the market experienced a slight seasonal slowdown through! ]6 k/ O; G/ E: W
July, as there were fewer purchasers in the market due to summer vacations. In
( t O: ]& ~/ l! x1 ?, @6 _August, activity resumed to the busy pace previously seen in the spring
' r/ m3 q8 T6 Z3 Gmonths, as the influx of purchasers made it more difficult to find a home due
. G- N+ o+ }1 m- ~/ B9 gto the shortage of available inventory.
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Activity in Saskatoon remained brisk as the market maintained its
7 H7 X1 c( `) bmomentum from the busy spring sales period. The economy in Saskatoon remains
& d! }2 ^# g# J* Pvibrant, as employment opportunities are abundant with many businesses
" ^2 K2 {* F' o! Ystruggling to make hires and having to recruit outside the province.* Y, c1 e6 w4 c( Z& _* S
1 y: l2 X. z1 \+ F+ B6 k8 D
Calgary's housing market recorded blazing average house price increases( i, g+ X: \' Y# Z, Q% o( V
in the third quarter, in all surveyed categories. The burgeoning economy, low
/ s; ~+ @% i8 H- R# p" I3 `unemployment rates and low inventory levels remained the leading factors that1 m5 u& G' U) v
pressured Calgary's house prices upwards. However, regardless of the soaring
/ g% G# m2 ^9 t. nprices that characterized the market - even during the typically slower summer
7 q/ r" z7 K4 P5 cseason - it is expected that activity will become slightly more balanced, as
6 I6 T6 K- J4 dbuyers are becoming more reluctant to participate in the frenetic activity.
$ L9 h. [# g! G! Z
; a3 D' {8 t/ s) M# V } Edmonton's booming local economy continued to thrive in the third quarter
6 y( v) h2 T3 J) v7 \6 qas activity in the oil sands north of the city continued to flourish. Edmonton
- y N$ y6 z6 t: Z7 [remained the hub of activity for those coming to work in the oil industry,& {5 A- I5 L1 Z# y# z: T; Y* }
maintaining tight inventory levels across the city, resulting in prices
' D; v, @. g# }% C7 ?increasing at record levels. However, as inventory levels continued to improve! m" n! L! B6 p, O E; X
in the third quarter the rate of price appreciation should moderate slightly
" y6 S3 k7 g' |/ q0 I L; v ~4 Htowards the end of 2006.
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While Vancouver has seen a slight reprieve from the severe shortage of: ^) {( K# i9 c' l% v; W8 C
inventory that had previously characterized the market, supply is still unable
. J6 h9 j( k$ x: y6 K4 sto meet demand, driving house prices upwards. Vancouver has a very diverse. f: Z: P" K# N$ f
group of active buyers - from first-time home buyers to baby-boomers to& {; R: Y$ N5 Q! c
foreign investors - all of whom fuel the demand for houses, placing added4 f, O2 s. \2 O5 C9 R
pressure on tight inventory levels.
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& }5 U# i6 a2 ]$ D2 z+ l! S8 b Victoria's market is vibrant and supported by strong economic+ ?& k0 c' h' U
fundamentals, fuelled by a booming tech sector and a migration of young people
' `5 y- s; ^4 N( ~6 u4 xinto the city that has continued to support the area's house price increases;
6 n9 ?3 L! S. x a+ hwhile increased inventory levels have afforded buyers more time when searching2 w' E' B* V1 @1 _
for a home, helping to normalize the market's pace.
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7 A7 A! R! E5 O- I" U6 p <<8 t: `- o! j% e! ~; }
Survey of Canadian Average House Prices in the Third Quarter 20068 X( ]& G+ T6 a0 `
$ ?- F, R) g& @' d7 s
-------------------------------------------------------------------------" y A, y; o! {/ d! W+ r2 d. g# ?
Detached Bungalows Standard Two Storey
1 l# e8 i# ?* o) j2 d* U* x0 } -------------------------------------------------------------------------
* Y* {! e4 e) M1 J- R/ S 2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3 q- R b# k$ R4 v, R+ E6 x
Market Average Average % Change Average Average
/ M/ g" ?6 N( m9 r7 o7 U2 b, J' \ -------------------------------------------------------------------------
# [. k$ l, I( P( B4 H! @0 z2 G Halifax 186,333 173,333 7.5% 198,667 199,000
) z2 s3 ` k* N8 g' x9 K -------------------------------------------------------------------------1 G- \2 x- q+ {# k
Charlottetown 145,000 141,000 2.8% 175,000 170,000
6 E, \! d* W2 U! ?- \% X4 P -------------------------------------------------------------------------4 x2 ]& ?! J: Q+ q n
Moncton 135,000 127,000 6.3% 129,000 123,000- i. B0 L8 a0 v- v# s
-------------------------------------------------------------------------2 f6 o1 f/ y1 ]- R
Saint John 141,200 142,900 -1.2% - -
5 J& O( x8 D) s7 z7 U; V5 U -------------------------------------------------------------------------0 K9 t; ~* `( Q( N# E3 O! \
St. John's 143,667 142,667 0.7% 200,667 202,333
: F' @- G1 o$ K$ }+ J -------------------------------------------------------------------------4 H4 ]! s! r6 B9 z+ V2 [9 ~
Atlantic 150,240 145,380 3.3% 175,833 173,583
- T! y2 E" l" s3 d: S8 q -------------------------------------------------------------------------
[* n8 }2 I" v$ ^ Montreal 213,691 203,500 5.0% 321,141 316,185
& W, _8 U. C8 ^) F5 Y; ]% x# c -------------------------------------------------------------------------7 b! p! Z# @+ c& D# C
Ottawa 290,083 278,417 4.2% 285,667 273,250' D& X. d8 v, M2 K1 ~
-------------------------------------------------------------------------
( S N6 Q% Q# k) w( x5 K: o Toronto 373,368 355,882 4.9% 481,523 474,766# b* @/ `- V9 r. b
-------------------------------------------------------------------------
' i) Q2 A/ F' K Winnipeg 181,579 159,860 13.6% 202,337 180,707
6 I; }7 b3 J" B8 F+ @ -------------------------------------------------------------------------) n6 Q/ V7 h0 @3 I$ O' x
Saskatchewan 170,667 156,083 9.3% 182,600 166,500
# p. ` S" y9 D- r2 j3 a( \1 { -------------------------------------------------------------------------
- T/ E3 Q& c7 x# ]1 k. M+ `+ W Calgary 395,067 252,411 56.5% 405,778 264,389
; P. u9 {9 W3 H4 S' [: W- D5 y -------------------------------------------------------------------------4 G( `0 N. C, Q. j H5 c0 q0 }
Edmonton 286,857 194,857 47.2% 316,429 206,714
0 q8 n% Z' D; ~& }+ _9 y, W -------------------------------------------------------------------------
6 @5 e B7 S0 W9 f Vancouver 704,250 601,000 17.2% 794,000 697,500
4 Z0 y9 `& i$ r7 B; R+ k7 {% R( [2 c -------------------------------------------------------------------------
1 i8 g8 x+ ]4 w: q d Victoria 375,000 348,000 7.8% 403,000 391,000
' V5 f w1 A5 e9 |( ? -------------------------------------------------------------------------
9 k* |' u# v. w0 l0 D) v National 300,365 258,202 16.3% 365,380 322,860
I K# X8 a3 X+ H ~# W2 A4 s -------------------------------------------------------------------------( z2 z& b2 z, m
8 T- [# _6 e# P+ H -------------------------------------------------------------9 b% ?" }9 K2 `# O: G
Standard Condominium
) |/ r# J$ h* G- \; l. ? -------------------------------------------------------------3 I6 u% d! j: H, B! k
2-Storey 2006 Q3 2005 Q3 Condo
3 [& {, i8 Q- ?* T& { Market % Change Average Average % Change
1 |) ?( @+ ]2 L) A7 W: b4 ] -------------------------------------------------------------
4 R* L! U4 ~1 ^6 ^# I1 ?; R Halifax -0.2% 142,000 103,000 37.9%
* g+ D$ N0 q; B1 R* {- x -------------------------------------------------------------
+ o/ ^8 d% E( A" X; j" o2 r Charlottetown 2.9% 98,000 98,000 0.0%
3 n% T* @% d, @, D+ W& c -------------------------------------------------------------( A8 | x: W+ B9 m, \9 K6 y- J
Moncton 4.9% - - N/A' @6 \ S _* r, { G. d6 q
-------------------------------------------------------------: }/ D& D$ g$ T/ z" I/ j2 ^8 \
Saint John N/A - - N/A* R' Z: p% C7 q. T8 {* m
-------------------------------------------------------------4 ^1 c0 w* i5 c2 W! B) C
St. John's -0.8% 146,333 145,667 0.5%
2 ] {* `9 ^/ t" a+ j( b -------------------------------------------------------------! |$ K% D2 Z; T {8 X# e
Atlantic 1.3% 128,778 115,556 11.4%
- X, b5 H+ N+ ~ j -------------------------------------------------------------
& `: h7 G3 t) M Montreal 1.6% 193,190 188,016 2.8%
4 H; k* s3 f. G( h! t& H# v& m -------------------------------------------------------------
: ]0 y5 p1 P, U) o Ottawa 4.5% 181,083 172,250 5.1%
% t# U6 Y) e! Z$ n! o9 t -------------------------------------------------------------
; ]. X1 R' u; j# |; K Toronto 1.4% 252,088 242,918 3.8%
1 p" t$ S9 `5 l" {# W7 O -------------------------------------------------------------
& H: q }( H3 S7 C" T+ D* S1 y Winnipeg 12.0% 105,648 96,008 10.0%: e" c' e5 t, @( u
-------------------------------------------------------------; O. X2 e" h1 B' H
Saskatchewan 9.7% 106,250 101,000 5.2%
2 t0 i* D( Y4 h4 T -------------------------------------------------------------
1 } n& V+ \( G: H3 i9 E Calgary 53.5% 245,844 153,867 59.8%
( j6 o! A4 n, g8 ?5 \( Y# e -------------------------------------------------------------* G5 N- w; U5 y; P- E
Edmonton 53.1% 200,433 131,500 52.4%4 x9 C' |, l: Y
-------------------------------------------------------------
$ P- h& X; ^( x) L3 ^6 w) I; ?: }) N Vancouver 13.8% 366,250 323,250 13.3%
* X5 d6 ]! p$ n! G4 J2 y -------------------------------------------------------------
: f' O, ?( G1 s Victoria 3.1% 229,000 220,000 4.1%: y- r# h2 X/ G8 Q
-------------------------------------------------------------( |* z: k) _3 J6 G0 x. |+ ~, ]3 p) |
National 13.2% 211,562 185,296 14.2%
+ } m+ l$ Z0 u3 n8 m c2 | -------------------------------------------------------------* R8 [+ a8 Y2 K0 \( d
>>6 ]0 g( t" z- D+ E7 _
; C7 G! y$ t5 j, J
Average house prices are based on an average of all sub-markets examined: X# p/ x. v6 h/ @
in the area, except for the smaller markets of Charlottetown, Moncton, Saint
& L9 X. D' a' {; pJohn and Victoria.& |* ^$ N' H- G: v
3 B' ~' z$ h7 Z( t% q8 L
The Royal LePage Survey of Canadian House Prices is the largest, most
R6 s3 S' @7 A* Scomprehensive study of its kind in Canada, with information on seven types of' z# z( x6 @2 H& H3 I) ^
housing in over 250 neighbourhoods from coast to coast. This release
$ f3 g, ~ r1 l; A1 preferences an abbreviated version of the survey, which highlights house price
) F' h- A; I, B! e6 i3 u: vtrends for the three most common types of housing in Canada in 80 communities5 v1 x. L# A& K. e# Y
across the country. A complete database of past and present surveys is
) a$ u" o# P; Y, J4 A; Q* bavailable on the Royal LePage Web site at www.royallepage.ca, and current
* \6 v+ {/ ^/ R! E8 |figures will be updated following the end of the third quarter. A printable
7 X( E( V6 {5 a% e/ _4 Jversion of the third quarter 2006 survey will be available online on
, z4 ~: S" p4 z0 U' _* m" n8 Y; gNovember 15, 2006.) x; W2 Y# s! [" [: Z
Housing values in the Royal LePage Survey are Royal LePage opinions of3 R, V/ h/ X/ H' X9 v# o5 t
fair market value in each location, based on local data and market knowledge
. b2 j, ^9 r( X( Hprovided by Royal LePage residential real estate experts. Historical data is- z4 S. R$ }- E/ R
available for some areas back to the early 1970s. |
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