“Guess which country, alone in the industrialized world, has not faced a single bank failure, calls for bailouts or government intervention in the financial or mortgage sectors. Yup, it's Canada. In 2008, the World Economic Forum ranked Canada's banking system the healthiest in the world. America's ranked 40th, Britain's 44th.

Canada has done more than survive this financial crisis. The country is positively thriving in it. Canadian banks are well capitalized and poised to take advantage of opportunities that American and European banks cannot seize. The Toronto Dominion Bank, for example, was the 15th-largest bank in North America one year ago. Now it is the fifth-largest. It hasn't grown in size the others have all shrunk.

So what accounts for the genius of the Canadians? Common sense. Over the past 15 years, as the United States and Europe loosened regulations on their financial industries, the Canadians refused to follow suit, seeing the old rules as useful shock absorbers. Canadian banks are typically leveraged at 18 to 1—compared with U.S. banks at 26 to 1 and European banks at a frightening 61 to 1. Partly this reflects Canada's more risk-averse business culture, but it is also a product of old-fashioned rules on banking.”

Newsweek USA - Mon Feb 9, 2009 - Fareed Zakaria (http://www.newsweek.com/id/183670)

Praise indeed from south of the border. This was an excerpt from an article by the Editor of Newsweek last Monday and started to be emailed around to various people at a furious rate last week.

I think the important thing to note is the confidence from an overseas observer in Canada’s strength. Because we naturally live very insular lives, we focus only on what affects us and what the challenges are, yet as you can see from this article (and this is but a small excerpt from a much larger optimistic text) observers overseas derive confidence from Canada’s economy.

This naturally does not mean the tough times are over, but perhaps that we are starting to develop a little confidence in the market place.

We have certainly seen the interest levels pick up in real estate since January 1 2009, and for many Realtors, the first two months of this year have been better than the last three months of 2008, both for enquiries and actual contracts being written, but sales levels are still low with inventory being high which continues to create a great opportunity to look at buying a home with low interest rates available today.

Statistics remain a challenge for all of us, both you as a consumer and many of us as REALTORS. Recently, two major national banks decided to abandon the MLS data for reporting housing activity because of ambiguities, inaccuracies and lack of whole data, in their words, the results from MLS data portrayed an artificially gloomy picture and they needed to get realistic figures. Remember the MLS only records activities that REALTORS participate in, and part of their philosophy was that new development sales and owner sales account for a sizeable segment of the market place.

As an example, one area that is extremely frustrating is the “Recreational Property” category, an area that my real estate office does a lot of work in. As a REALTOR, when we list a property, we have to categorize it into single family or perhaps strata apartment or perhaps an acreage. One of those available categories is “Recreational”. This is an area that the media targets as having fallen off the radar screen for buyers, something that I can personally attest is not true. The reason is that the category is outdated and under utilized. If I list, as an example a condo at The Cove in Westbank or a single family home at La Casa Lakefront Resort, are they a condo and a single family home respectively or are they recreational properties. If an out of town buyer purchases a single family home on the lake and uses it twice per year, is that a single family home or a Recreational Property? You see the dilemma and naturally that is one very large reason why that category over the years has been declining and media construes that nobody is buying that property any more.

Another area of confusion is the relative spread of values in the Okanagan that continues to distort the figures (median or average although less so if you use a median). Most of the sales that we see today have been sub $400,000 for a single family home in many regions and sub $500,000 largely. The buyers of several million dollar homes are seasonal in nature and have gone quiet for the past several months, although last week in talking to the folks over at Woodland Hills, they indicated that their phones are busy again. This radically distorts the average sales price which forum pundits then jump on as evidence that home prices are eroding in the valley. Think again, it is simply an indication of what is selling not how much it is selling for compared to last year. The news media of course is privy to those statistics and and many of them often draw similar illogical conclusions even after talking with local real estate boards. There is some discounting happening in the MLS market place and every seller's personal circumstance will dictate what they are prepared to sell their house for, but that is not across the board and reflects nothing other than a seller trying to entice a buyer to look at their home, often times a buyer that is not even looking and therein lies the problem!

It is very early in the year, but I would suggest we are seeing some signs of continued and perhaps even increased activity in the market place. I would personally like to think that we are close to the bottom of the low sales volume cycle and that the activity would continue to increase as interest rates remain low, selection remains high and jobs are created in Kelowna. Time and confidence will tell!