By Emily Mathieu – Toronto Star Moneyville

After a roller coaster-style ride Canada’s housing market is showing signs of stabilizing, with resale home sales rising for the third time in as many months, according to a new report.

Seasonally adjusted national home sales rose 4.6% in October 2010, according to a report released Monday by the Canadian Real Estate Association. October’s increase followed similar activity in August and September, bringing current activity to 13.3% above levels reported during the year’s low point in July.

Across the country sales activity for the month ran about halfway between the lows reached in December 2008 and record activity in late 2009, said Gregory Klump, the CREA’s chief economist, in a statement.

“This suggests that the Canadian housing market may be starting to normalize. After the wild rollercoaster ride that many housing markets have been on, normal and stable market conditions are something that many buyers and sellers will likely welcome,” he said.

Actual (not seasonally adjusted) national sales activity in October was 21.6% below levels reported the same time last year, when activity set a new record for the month, the report showed.

In October the national average price for a home was $343,747, up less than a percentage point compared to the same time last year. October is the fourth consecutive month where the average home price has remained roughly even with year-ago levels, according to the report.

“After a wild ride in the past three years, the Canadian housing market is approaching something closer to normalcy,” said Douglas Porter, deputy chief economist with BMO Capital Markets, in a note.

While sales are down “heavily from the piping hot pace” of last year they are close to average levels since 2000, said Porter.

“And, prices are up just slightly from a year ago, while the inventory of unsold homes is close to typical. In other words, there’s not much here for either the wild-eyed optimists or the ranting pessimists, which is probably a good thing,” he said.

Pascal Gauthier, senior economist with TD Bank Financial Group, said the last three months of data “suggest that a trough in resale housing activity may have formed earlier than we expected.”

Gauthier said heading into 2011 sales and prices appear to be better supported than forecasts made in September. TD will be making an updated forecast available in the next few days, he said.

“The stabilization and ensuing uptick in resale housing activity should also help to limit the downside risk to the overall economy,” said Gauthier.

“On the flipside, subdued employment and income growth in the quarters ahead should act to cap the housing market’s upside in 2011.”

The number of new residential listings edged up 1.3% in October, on a seasonally adjusted basis. New listings remained 14% below peak levels reached in April 2010, the report showed.

Georges Pahud, CREA’s president noted in a statement that while the report showed that national housing markets are improving, local market trends can differ significantly, so buyers should check with their realtor to get a better understanding of their market.

The numbers used in the study come from activity on the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards.

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