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Canada's housing market both vigorous and stable
( b( h" w5 r$ ?9 `! v+ N
2 @: ~ l; G* G/ R2 X" M- Country's market poised to show growth throughout 2006 -# L: W C& T* m* Z- P4 t: g
9 l; f2 c! J; b k1 l& [( b TORONTO, Sept. 28 /CNW/ - For most of Canada, the housing market# o' ?) |" ~% I* t2 \8 [ @5 X
exhibited moderate price increases and stable unit sales during the third
?- a* J# }6 t7 A6 zquarter. Wide regional variances continued to be the dominant characteristic
* P/ \, e2 ?$ Fin the market, exemplified by frenzied levels of activity and double digit
% K8 j0 L$ x, ]+ sprice gains observed in the energy and commodity rich Western provinces, and
& e/ S4 o0 b' i L: j& _* Wmore reasonable sales volumes and moderate price appreciation in Ontario,
- x! ~) x4 m0 R; \" NQuebec and Atlantic Canada, according to a report released today by Royal
8 R' C% z! g; o: }2 _" DLePage Real Estate Services.9 ~' G/ a7 ^5 P) O' R: `
! x4 Z8 P1 j b# t9 t Nationally, market trends established through the first three quarters
1 N$ e' V8 {0 I* C b7 u( _! Care forecast to continue for the remainder of the year. Robust economic
4 k! K1 v) C, f6 t# A0 g$ l6 uconditions, low unemployment rates, modestly growing salaries and wages, and
6 ?: ?6 {5 L) M8 Qsound consumer confidence contributed to the overall strength of the( y4 Q; y( |# R) r
residential real estate sector.( j- ]; m, s0 Z4 b, K' E
. o* U3 ^0 V& U& C0 h% P Of the housing types surveyed, the highest average price appreciation
' R0 U% P2 q, O$ r Ooccurred in detached bungalows, which rose to $300,365 (+16.3%)
, E; V9 P/ t$ S% M J# q0 gyear-over-year, followed by standard condominiums, which rose to $211,562
- ~$ B& g4 p8 x( D(+14.2%), and standard two-storey properties, which increased to $365,380
2 A, `: R# ^" A" S(+13.2%).+ b) d! k, h& S8 G& S* N% W$ J
' j: n7 Q! v" U; }' g "Canada's sturdy housing market continued to demonstrate steady growth
+ o2 m w/ v" a" x6 q+ Mduring the third quarter. For all but the west, we have moved on from the
2 u E+ U& S2 J2 s; N5 i- Y* {frenzied expansion that characterized the first half of this decade, and are
7 O* F5 W+ D3 ]% O- I/ epoised to show continued growth at a more moderate pace," said Phil Soper,7 d9 i/ v" M. A( V0 @3 s7 I1 Q
president and chief executive officer, Royal LePage Real Estate Services.) h- z- I' |( U4 Y8 t& w
"Gone is the sellers' market that we have lived with for some years. We
/ h) h0 i+ } Dwelcome the more reliable conditions that are characteristic of a healthy
$ a- y8 d, _0 V% Ubalanced market."
& C2 ]( o8 d" s! d; f$ _# ?* M+ c# f+ f7 ~2 F
Despite the double-digit rise in average national house prices,
7 |3 k% I& `8 D5 y) l' K2 Qconsiderable regional variances were exhibited again this quarter. The shift
; a( e5 H; c% {4 n% P6 S2 c2 F: G& Mto balanced market conditions, which began in late 2005, has continued
9 I( n, o% s1 c1 M G) A, L% a1 _8 c9 ythroughout most of the Central and Eastern regions of the country. In the core; [ g! l0 F* s @
energy producing western provinces, the combination of very high in-migration,
; W& u& b8 Z! I6 u0 b. [; vmanageable affordability, and a shortage of inventory has driven record4 Z7 U% W( i0 h* }, \6 X# W5 A
breaking price appreciations.4 e2 b3 S1 [+ t# ?& T% ?
' q1 ^) {( g- [4 }& l7 v Echoing the second quarter and supported by Alberta's rapidly expanding
4 b% v, z6 F- Jeconomy, Calgary and Edmonton led the charge of Canadian cities with the& `+ T6 z9 N/ y5 P X
largest house price appreciation in all housing types surveyed. Z5 h: f- P( [+ V. }' Y& y
" o) A. W/ l7 ^/ a* m' l In Ottawa and Toronto, growth remained steady, supported by solid
4 @9 u' h" F% R1 Meconomic fundamentals, an increase in available inventory and strong consumer5 A! r) o2 o; G6 s1 Q x5 i
confidence. While the pace of price appreciation in Ontario leveled off: w+ p0 i$ T; e/ X
slightly, the province's real estate market remains poised for modest growth.
1 m3 X! e7 ~3 V5 c H% r- |( n5 ]In Atlantic Canada, new housing and condominium construction offered buyers! x' f7 n" z: L0 L
greater selection at more competitive prices, resulting in a slower rate of
$ {: v3 M0 \9 ^8 ?4 a0 r/ D$ Zprice appreciation when compared with 2005.
3 Z2 q5 |7 o1 v3 F! C+ `% a6 @1 n! e- M
While the pace of growth in Canada has slowed, the domestic housing9 E% @1 H/ i, w" p- w
market is expected to outperform the American market. The economic and
( _3 z8 h* f$ O$ w9 s* S# M; l/ ufinancial fundamentals driving the residential real estate sector in Canada
* b2 `4 p' b& x3 ^7 ware markedly different than those found in the United States.
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Added Soper: "Canada's housing market is likely to outperform the6 O, I2 u5 Y) O; K+ w
American market through 2007. A number of factors are working in Canada's
7 M0 A: [) R: M2 C5 wfavour, including healthy personal and governmental debt levels, the& r! Y$ v* Y" l% {* j
relatively modest rise in interest rates in our country, and general3 \! D5 {& m, b8 O
affordability in our major cities. In addition, Americans are now seeing the
: T2 v% {4 d" I# d: T7 K2 {downside of a tax system that encourages maximum homeowner leverage, and# h! D2 z5 {" W, [) ~" s# |
aggressive financial products such as zero- and negative-amortization O" p' l6 B: n) t/ t$ ?( b6 S/ L
mortgages that work only in a high price growth environment."
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} j7 b! [6 s, K5 h( p' m6 S <<
+ b0 w) x: s' Q# y! { REGIONAL SUMMARIES
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+ _1 |5 Z" t# Y7 h# ~
Balanced conditions continued to characterize the housing market in
# M& p, n; {1 G. L iHalifax, as significantly higher inventory levels helped to moderate the rate" u4 Z: U9 p# Z
of price appreciation. Buyers were increasingly choosy, taking more time
2 } m; p( r3 @2 ^looking for newer, low-maintenance properties that were not in need of) {9 U$ R$ l) @9 j6 K$ R0 E' X& R
renovations.
4 w# L9 l9 G# {. D; Q2 R# o; {) F; G
The housing market in Moncton remained healthy and strong as a slight# Y: j* G8 J0 V$ b) _1 j2 B
increase in inventory helped to moderate the rate of price appreciation
/ h* g8 Y. O. Z xcompared to the same period in 2005. Activity was brisk throughout August and4 R9 ]: @: q8 c: ^. R6 R6 [* B* f8 A
September and is expected to remain this way through the fourth quarter.
D# ~6 e6 X0 y+ y& O* B; W: K d; n$ ^. M
The housing market in Saint John underwent its traditional summer c' K/ |& b6 ]- `6 F% c
slowdown in the third quarter, with activity picking up towards the end of the+ W- X2 u! d, b& `
quarter. The local economy continued to thrive, as construction on a new9 a5 u7 V& L' R+ V3 k
600,000 square-foot shopping area has begun, bringing several new box stores: Q$ v/ {! g0 f
to the area. Buyers have begun seeking less expensive fixtures for their homes3 m9 j4 {& @) K
and are instead opting for more affordable housing options.
- W1 x: e3 B( n6 t( p( t" X1 G) m; f9 Q1 E: {6 M
In Charlottetown, the housing market started to move towards balanced' P) S/ M, P) J4 `* \9 D# Z5 Y/ W
conditions, as some sellers had to begin to lower the asking prices on their+ Z' [) i) `+ K6 c7 C2 t
homes to make them more competitive. Activity from out-of-town and US buyers9 `" t- k, c6 d$ K: G
was down slightly compared to 2005, likely attributable to the strong Canadian
5 n" ?8 p# h8 ddollar. Inventory levels began to creep up in the third quarter, providing
, ]( ]8 j O. Ibuyers with more options when looking for a home.
: [+ V( p2 u3 Z$ L1 o7 r V: p% q2 q+ g9 @1 J. a
Activity in St. John's slowed slightly in the third quarter, particularly
: u( c- O5 F3 j/ Y& [& qamong higher-priced properties, where there was a slight over-supply of homes
. N& H/ f) p' s- k r% Wpriced over $200,000. Listing periods have increased when compared with 2005,
, b8 @0 }! c! H+ {, y( G2 _as some of the pent-up demand that had characterized the market over the last" \# Y, P, _/ l( U
few years has been satisfied, resulting in more normal, balanced conditions.
1 l% U, ?3 n3 g" t( b9 k- i$ Z6 [8 h: C4 E) o Z2 }8 Q
Montreal's housing market recorded modest increases in average house2 ]% Z: p5 L; c
prices, due to a slight seasonal slowdown in the third quarter as inventory
; z5 i6 | ]3 u! h7 Tlevels rose. Part of this can be attributed to the fact that many renting# a* A5 L2 U( z; Q+ y) V( P
first-time buyers were motivated to close on the purchase of a home by July 1,, t# ?, L& H. o) X' c
when rental leases expire in Quebec. Once this date has passed some of the) ^$ Q% G5 ?- v7 l1 u' R& d
pressure is taken off the market, allowing buyers to visit more homes before
z' ?) v. P9 f: omaking a purchase.
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9 r4 x) P5 _' q- I& N Ottawa held its position as one of the country's most stable housing Q; C9 ?0 o+ X) h
markets in the third quarter, reinforced by a vibrant local economy and strong
" p l' e N* p0 v5 nconfidence, resulting in modest increases in average house prices. The city
6 }: k- ^6 w/ `& S; ncentre remained a bright spot in Ottawa, with homes in this area attracting
+ z! e0 w& c, hattention due to their convenient location and proximity to downtown
1 A! j! X+ l1 ^- a# ~$ ramenities.5 ^* W- R- P/ f9 o p6 F( \9 W
' f& h: S+ G8 n- q
The housing market in Toronto sustained healthy activity levels
7 X- x% o- L' P- z1 Wthroughout the third quarter, as a strong economy helped to maintain demand
. t% _, I1 D0 L7 `. n* nacross the city, causing average house prices to rise moderately. Toronto has E3 t5 Q6 T. q1 m
continued to experience modest growth in average house prices, and has been
0 ~' f& _1 G" D$ s1 p% V( g6 Cdriven primarily by purchasers who are buying homes as their principle) y1 ]2 U1 u$ `4 \+ M# \
residence, rather than for investment.% d. j7 _, F4 x* l J; x3 e2 i/ I
9 j5 c0 U8 O4 r; p8 A$ K
The vibrant Winnipeg housing market continued to show its strength as {( e0 k$ i' t$ G5 n% E2 }* q8 U/ d
house prices rose during the third quarter. The booming local economy resulted
7 i/ }6 L; h8 n* d) ]' `% cin a historically low unemployment rate, helping to bolster consumer/ s3 U) T8 |" m
confidence and Winnipeg's ranking as the city with the lowest capitalization# D- Y& |" Z$ h1 D
rate among the country's larger cities - helped to encourage buyers to enter6 E/ U0 n& U' x' l+ }1 [3 `
the market.& o! \$ u# K& n f& Q; k6 d
" O! j; c: B8 G; ^" N In Regina, the market experienced a slight seasonal slowdown through2 v: _9 X: g8 s9 |& q
July, as there were fewer purchasers in the market due to summer vacations. In
2 d3 j# p9 _8 V; v' y# ~- U0 u1 lAugust, activity resumed to the busy pace previously seen in the spring
7 K! F1 H6 N2 p: \( dmonths, as the influx of purchasers made it more difficult to find a home due4 @6 h0 A* a) s9 z
to the shortage of available inventory.
2 c! J2 i7 Q8 l9 A- o* F% j
5 ~, I t% S( Z( z! A Activity in Saskatoon remained brisk as the market maintained its
& B; A* W2 }9 n& Z4 g% Lmomentum from the busy spring sales period. The economy in Saskatoon remains. V" D" t& y! h$ a' o4 ?
vibrant, as employment opportunities are abundant with many businesses
& m- `0 A1 x3 h4 t9 R; rstruggling to make hires and having to recruit outside the province.
t9 i; K! Q! c1 s4 o% g1 Q+ c+ C; r! s$ D, V
Calgary's housing market recorded blazing average house price increases
! s/ A( x3 r5 o6 @/ \ Q; Jin the third quarter, in all surveyed categories. The burgeoning economy, low
( Z' g4 S2 ?- \' |% O$ Qunemployment rates and low inventory levels remained the leading factors that
8 _& v, G/ a9 q Qpressured Calgary's house prices upwards. However, regardless of the soaring
2 Y9 T8 p8 _" Q( {& a6 O+ rprices that characterized the market - even during the typically slower summer1 G# J; a+ Z+ C: |) N- J
season - it is expected that activity will become slightly more balanced, as7 {, L1 S. \7 n* }0 U8 ]
buyers are becoming more reluctant to participate in the frenetic activity.6 V& ~+ A' ?4 J
3 A5 w# ?: M0 p2 M7 c- P' z Edmonton's booming local economy continued to thrive in the third quarter
8 d" s# F* |8 J+ O; Was activity in the oil sands north of the city continued to flourish. Edmonton1 ?) I0 y0 o7 T) Q2 Q: r2 W' x. P
remained the hub of activity for those coming to work in the oil industry,, s) K o& T) l( u
maintaining tight inventory levels across the city, resulting in prices. E0 z# Y$ Y7 q7 q
increasing at record levels. However, as inventory levels continued to improve2 ~+ r) ?# V; v$ `% J$ m& O) ~
in the third quarter the rate of price appreciation should moderate slightly; L6 Y+ g( z8 i. r: ]7 [, F
towards the end of 2006. 2 N) P% e M/ C) \: M1 P* c
- s% p( F8 n7 O- ]& E, nWhile Vancouver has seen a slight reprieve from the severe shortage of5 y1 ^7 ~4 k6 ~" ]2 m
inventory that had previously characterized the market, supply is still unable1 P; Z& Z D9 ]. h2 @( Q
to meet demand, driving house prices upwards. Vancouver has a very diverse
9 U% ]# S- |# qgroup of active buyers - from first-time home buyers to baby-boomers to& O. d' q9 n9 f0 ?; [
foreign investors - all of whom fuel the demand for houses, placing added' H) g: G$ E7 I, }. e% S
pressure on tight inventory levels.
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" g4 t# u9 d& d8 W$ I+ f9 O" L. _ Victoria's market is vibrant and supported by strong economic1 U4 J4 r: P, B9 N2 o9 R2 K
fundamentals, fuelled by a booming tech sector and a migration of young people, v2 [. p) o$ F* N3 J# g5 r
into the city that has continued to support the area's house price increases;
3 z. t$ s% o; `5 O# j$ ^while increased inventory levels have afforded buyers more time when searching
: g; H9 n" C' x0 r6 b( h/ W+ xfor a home, helping to normalize the market's pace.5 Z- b5 v& O1 r
, L V. @) d* k# a4 ^ <<
: U: i2 }" c% `, {4 F3 f7 t. P$ ~ Survey of Canadian Average House Prices in the Third Quarter 20064 }4 ]# S: d( o
$ g1 l- k, N, v; K, a; m; K7 N
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X' ^2 F) Y/ D2 p: R* Q5 k0 U/ ~ Detached Bungalows Standard Two Storey; D; k+ z2 I$ S( f9 i
-------------------------------------------------------------------------& i, L/ N# p) X
2006 Q3 2005 Q3 Bungalow 2006 Q3 2005 Q3
" U2 f; d. h, G4 X: p) M Market Average Average % Change Average Average3 j/ }9 K( Q0 \- i7 n# L% K
-------------------------------------------------------------------------
: \ }. k# K d7 X6 j Halifax 186,333 173,333 7.5% 198,667 199,000# _3 q% i+ k0 j3 z5 ~& D3 }
-------------------------------------------------------------------------% l7 o9 G/ j) `8 E2 d- H
Charlottetown 145,000 141,000 2.8% 175,000 170,0007 T D6 C( _3 H& S! M
-------------------------------------------------------------------------1 H: p$ v0 C2 }4 @: Y
Moncton 135,000 127,000 6.3% 129,000 123,000$ k' X' z- \ w8 a
-------------------------------------------------------------------------
& z; g0 p1 z6 _7 d! {3 C! l- F! U Saint John 141,200 142,900 -1.2% - -
- g+ a& g: @. G3 v1 d -------------------------------------------------------------------------
5 P6 {7 y' B5 Y% n+ I. t, q St. John's 143,667 142,667 0.7% 200,667 202,333- W# u$ ~# t; P0 c
-------------------------------------------------------------------------' l0 o* ?. \" T5 i7 d' A) `
Atlantic 150,240 145,380 3.3% 175,833 173,5833 c8 Y. }! r# A. T2 z* J
-------------------------------------------------------------------------
) S0 q$ Q4 e) y/ m: C# { Montreal 213,691 203,500 5.0% 321,141 316,1852 o$ k6 q X, B9 W; z5 C
-------------------------------------------------------------------------0 \/ I7 d0 M) H7 S
Ottawa 290,083 278,417 4.2% 285,667 273,250
) M- T) n( R8 B+ U# ^1 d5 _; q1 V/ `/ ] -------------------------------------------------------------------------. L) H) `6 O) d9 f
Toronto 373,368 355,882 4.9% 481,523 474,766
! z* E! S8 s/ K) \1 \9 k1 [ -------------------------------------------------------------------------
7 e1 M W5 v8 A0 l- o# c5 h Winnipeg 181,579 159,860 13.6% 202,337 180,7073 G; L9 ^* H* `/ J. r! G0 q
-------------------------------------------------------------------------- w& F' k; I" e# y+ ]. D4 _7 L) {
Saskatchewan 170,667 156,083 9.3% 182,600 166,500
- u# U; I# t8 z- K- b6 c3 G: [% }& } -------------------------------------------------------------------------$ {1 \! i5 M4 d1 U$ R9 i' _2 z
Calgary 395,067 252,411 56.5% 405,778 264,3892 A0 a; z) u2 ?2 ]- e5 ?/ C1 B. G
-------------------------------------------------------------------------
6 |' I+ u* f3 \" k! c* M7 t/ W% I Edmonton 286,857 194,857 47.2% 316,429 206,7149 y6 i+ o* g# Y9 u9 s# c
-------------------------------------------------------------------------
) p, b. g$ z, |1 _5 R- U, N! w9 w Vancouver 704,250 601,000 17.2% 794,000 697,500
% u0 h; } u, }7 {' I -------------------------------------------------------------------------
- W$ O1 p( r/ A9 X) G5 ^ Victoria 375,000 348,000 7.8% 403,000 391,000
8 L% k0 } T3 e3 s6 q -------------------------------------------------------------------------
2 N* ^& {, s- ?* V: z: q National 300,365 258,202 16.3% 365,380 322,860. H% |/ A; ?! S
-------------------------------------------------------------------------
4 P: e! u: G: Z a0 e$ a6 \, p' ~5 a' M) f
-------------------------------------------------------------+ `5 c! Z. ^7 ]/ ?- u5 _# S0 Q
Standard Condominium o% g' Q$ M0 D5 J: ^1 y
-------------------------------------------------------------: ]# B+ t! X C3 R9 u% t) B2 ? Y% F
2-Storey 2006 Q3 2005 Q3 Condo
% l: F6 v6 g) _3 j. f( }4 | Market % Change Average Average % Change% c [# D% o8 l
-------------------------------------------------------------
" c/ c' M! q C" k% u/ G Halifax -0.2% 142,000 103,000 37.9%+ ]6 [: y# u0 [3 R0 n9 L
-------------------------------------------------------------- N) |! ~! I# T2 ~ F$ \; h% U
Charlottetown 2.9% 98,000 98,000 0.0%
4 \* r" }7 |, _1 _6 p ~1 R5 v0 q2 o -------------------------------------------------------------
9 [- l0 R6 P! U0 D/ i4 x Moncton 4.9% - - N/A2 b- S1 k* h6 E8 s# L& W
-------------------------------------------------------------
; u% q2 p, G5 Z Saint John N/A - - N/A
/ C. j( ~& i) q' k0 {& s7 x -------------------------------------------------------------, f n/ v" h0 M' G
St. John's -0.8% 146,333 145,667 0.5%5 `6 t r; i6 M1 [
-------------------------------------------------------------
# O$ M9 J% n) [ Y3 z2 Z3 V Atlantic 1.3% 128,778 115,556 11.4%
' D5 J1 `' p6 Z6 P m -------------------------------------------------------------) E1 } r& D. y5 X3 O9 P9 B: @; n
Montreal 1.6% 193,190 188,016 2.8%
/ i0 b5 f) ~/ `( M/ i/ Z& r -------------------------------------------------------------
* H8 @( k) B1 N( { Ottawa 4.5% 181,083 172,250 5.1%
' B5 j& H, n7 e# }' P, k% N( X8 J -------------------------------------------------------------9 y/ R5 g6 n2 O' ~) A
Toronto 1.4% 252,088 242,918 3.8%" [; c: t# Z! i1 S5 _1 c
-------------------------------------------------------------
; y. D" k) u9 s4 A% \; f) l Winnipeg 12.0% 105,648 96,008 10.0%
1 O0 Z+ D8 F! B5 p- @/ S9 y -------------------------------------------------------------1 C6 _, _- d5 Q- F8 p3 {- }
Saskatchewan 9.7% 106,250 101,000 5.2%
. V" N2 T4 f$ C- c t5 ~ -------------------------------------------------------------
- s! y& c. ]) N' g/ \ Calgary 53.5% 245,844 153,867 59.8%
. H2 |* h$ W. i) [8 c -------------------------------------------------------------
: p+ Y- v, i$ I5 Y, v; R Edmonton 53.1% 200,433 131,500 52.4%: {& A& i8 X& E
-------------------------------------------------------------
( u/ G2 W; [% r) y0 J. D4 l6 E& t Vancouver 13.8% 366,250 323,250 13.3%
. W S' Z2 U x; z4 P3 g4 q1 w -------------------------------------------------------------" l/ x! C' k) s+ i: H5 `$ f
Victoria 3.1% 229,000 220,000 4.1%
7 ]0 [$ o- \- x6 p9 x+ t. c -------------------------------------------------------------
% o! K7 S- ~0 G4 `: B4 D2 N3 r5 a4 D National 13.2% 211,562 185,296 14.2%
) V5 N+ o! B! m9 C/ S- j' m -------------------------------------------------------------% p" i Q( H, W! g7 ^+ P
>>
) h5 [ `( S+ y) R* i/ T6 h6 }2 @; f! R: \' W
Average house prices are based on an average of all sub-markets examined
8 `; F7 `9 J, j' Y+ m. {in the area, except for the smaller markets of Charlottetown, Moncton, Saint0 Q! M+ z& p. O4 \2 y" z+ {0 n" G
John and Victoria.0 h" \& n% \% Z, @+ {
9 c+ V. a' E9 N/ G The Royal LePage Survey of Canadian House Prices is the largest, most
2 |" k& A+ u) w& O/ o, a, G3 Zcomprehensive study of its kind in Canada, with information on seven types of0 l6 E, Z. r) I) u$ l* v: O
housing in over 250 neighbourhoods from coast to coast. This release8 z7 G5 c' \5 m3 \, }
references an abbreviated version of the survey, which highlights house price& q- U8 E% U# R: @4 {
trends for the three most common types of housing in Canada in 80 communities
2 D0 |' G. Z4 t( p5 Z4 yacross the country. A complete database of past and present surveys is
) y5 Y* v4 w" iavailable on the Royal LePage Web site at www.royallepage.ca, and current
7 D3 O/ ^/ F* lfigures will be updated following the end of the third quarter. A printable. O+ \! O. R9 D) i9 ?; P- C1 V/ p( @
version of the third quarter 2006 survey will be available online on I# c$ K, [# V* d
November 15, 2006.
4 [6 S4 {4 P( @, u" G, j Housing values in the Royal LePage Survey are Royal LePage opinions of9 L% M5 [7 ?; r# F
fair market value in each location, based on local data and market knowledge: {& q) D/ E$ \' U/ `
provided by Royal LePage residential real estate experts. Historical data is
0 M) H. I$ ?# n$ ?& `available for some areas back to the early 1970s. |
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