Wednesday, August 18, 2010
BC and Ontario housing markets feel effects of HST in July
The Canadian Real Estate Association (CREA) says national home sales activity continued to trend down in July 2010. The decline was almost entirely the result of fewer sales in British Columbia and Ontario. A slowdown in demand in these two provinces had been widely expected in July, as many purchases were brought forward into the first half of the year in advance of the introduction of the HST.
Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards was down 6.8 per cent on a month-over-month basis in July. The national decline was smaller than the previous two months, as July sales in the Prairies and Quebec came in on par with June levels. Declines in British Columbia (-14.1 per cent) and Ontario (-8 per cent) accounted for 85 per cent of the change in national activity in July.
Actual (not seasonally adjusted) national sales activity was 30 per cent lower in July 2010 compared to last year’s record July. Year-to-date transactions are still up 5.6 per cent compared to the first seven months of last year, although this gap is expected to continue to shrink as the year progresses, since activity rose sharply over the second half of last year, reaching levels that are unlikely to be matched in the final five months of 2010.
New supply continues to adjust to lower demand. The seasonally adjusted number of new residential listings on Canadian MLS® Systems declined by 7.2 per cent in July 2010 compared to the previous month. This is the third consecutive month-over-month decrease, and the steepest in more than a decade. Since reaching their most recent peak in April, new listings have fallen 17.5 per cent.
The declining trend in new listings will help maintain the balance between supply and demand, and temper home price volatility. The national sales-to-new listings ratio, a measure of market balance, has held steady between 48 and 49 per cent for the past three months, which is characteristic of a balanced market.
The average price of homes sold via Canadian MLS® Systems in July was $330,351, edging up one per cent from the same month last year. While year-over-year comparisons have been shrinking as prices stabilize, the national average home price is likely somewhat understated this month, since the majority of activity declines occurred in British Columbia and Ontario, which include many of Canada’s most expensive markets.
The same phenomenon is widely known to have caused much of the downward skewing in the national average price during the recession. This is most evident when looking at a breakdown of average prices by province. Average home prices eased slightly in Nova Scotia and Prince Edward Island in July, but gains in every other province exceeded the national increase.
The national weighted average price compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It climbed four per cent on a year-over-year basis in July 2010. Similarly, the residential average price in Canada’s major markets was up 2.9 per cent year-over-year in July, while the weighted major market average price rose 7.4 per cent.
The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and measures the balance between housing supply and demand. It stood at seven months at the end of July 2010 on a national basis. This is up from 4.4 months one year ago, which was one of the lowest levels in the past three years.
The seasonally adjusted number of months of inventory stood at 7.3 months at the end of July on a national basis. This is the highest level since March 2009, but the pace of monthly gains is slowing as new listings continue to adjust to lower demand.
“The soft sales figures we’re seeing right now can be attributed in part to accelerated home purchases earlier in the year,” said CREA President Georges Pahud.
“Activity may remain at lower levels for some time, but ultimately we expect a more stable market to emerge, with demand coming back into line with economic fundamentals.”
“While the outlook for economic and job growth remains generally positive nationally and in all provinces, the pace of the recovery will vary by region,” he added. “Buyers and sellers should consult with a REALTOR® to find out about conditions in their local market.”
PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.
CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards was down 6.8 per cent on a month-over-month basis in July. The national decline was smaller than the previous two months, as July sales in the Prairies and Quebec came in on par with June levels. Declines in British Columbia (-14.1 per cent) and Ontario (-8 per cent) accounted for 85 per cent of the change in national activity in July.
Actual (not seasonally adjusted) national sales activity was 30 per cent lower in July 2010 compared to last year’s record July. Year-to-date transactions are still up 5.6 per cent compared to the first seven months of last year, although this gap is expected to continue to shrink as the year progresses, since activity rose sharply over the second half of last year, reaching levels that are unlikely to be matched in the final five months of 2010.
New supply continues to adjust to lower demand. The seasonally adjusted number of new residential listings on Canadian MLS® Systems declined by 7.2 per cent in July 2010 compared to the previous month. This is the third consecutive month-over-month decrease, and the steepest in more than a decade. Since reaching their most recent peak in April, new listings have fallen 17.5 per cent.
The declining trend in new listings will help maintain the balance between supply and demand, and temper home price volatility. The national sales-to-new listings ratio, a measure of market balance, has held steady between 48 and 49 per cent for the past three months, which is characteristic of a balanced market.
The average price of homes sold via Canadian MLS® Systems in July was $330,351, edging up one per cent from the same month last year. While year-over-year comparisons have been shrinking as prices stabilize, the national average home price is likely somewhat understated this month, since the majority of activity declines occurred in British Columbia and Ontario, which include many of Canada’s most expensive markets.
The same phenomenon is widely known to have caused much of the downward skewing in the national average price during the recession. This is most evident when looking at a breakdown of average prices by province. Average home prices eased slightly in Nova Scotia and Prince Edward Island in July, but gains in every other province exceeded the national increase.
The national weighted average price compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It climbed four per cent on a year-over-year basis in July 2010. Similarly, the residential average price in Canada’s major markets was up 2.9 per cent year-over-year in July, while the weighted major market average price rose 7.4 per cent.
The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and measures the balance between housing supply and demand. It stood at seven months at the end of July 2010 on a national basis. This is up from 4.4 months one year ago, which was one of the lowest levels in the past three years.
The seasonally adjusted number of months of inventory stood at 7.3 months at the end of July on a national basis. This is the highest level since March 2009, but the pace of monthly gains is slowing as new listings continue to adjust to lower demand.
“The soft sales figures we’re seeing right now can be attributed in part to accelerated home purchases earlier in the year,” said CREA President Georges Pahud.
“Activity may remain at lower levels for some time, but ultimately we expect a more stable market to emerge, with demand coming back into line with economic fundamentals.”
“While the outlook for economic and job growth remains generally positive nationally and in all provinces, the pace of the recovery will vary by region,” he added. “Buyers and sellers should consult with a REALTOR® to find out about conditions in their local market.”
PLEASE NOTE: The information contained in this news release combines both major market and national MLS® sales information from the previous month.
CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Home Buyers in the Driver’s Seat
The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province declined 42 per cent to 5,784 units in July compared to the same month last year. On a seasonally adjusted basis, MLS® residential unit sales in the province declined 19 per cent in July from June 2010. The average MLS® residential price climbed 6 per cent to $491,832 in July compared to the same month last year.
“A relatively large number of homes for sale have created the most favourable supply conditions for home buyers in more than a year,” said Cameron Muir, BCREA Chief Economist. MLS® active residential listings were 21 per cent higher in July than at the start of the year on a seasonally adjusted basis. However, with newly listed MLS® residential units now declining, tighter market conditions may emerge this fall.
Year-to-date, BC residential sales dollar volume increased 16 per cent to $24.2 billion, compared to the same period last year. Residential unit sales rose 4 per cent to 48,127 year-to-date, while the average MLS® residential price climbed 13 per cent to $504,281 over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
“A relatively large number of homes for sale have created the most favourable supply conditions for home buyers in more than a year,” said Cameron Muir, BCREA Chief Economist. MLS® active residential listings were 21 per cent higher in July than at the start of the year on a seasonally adjusted basis. However, with newly listed MLS® residential units now declining, tighter market conditions may emerge this fall.
Year-to-date, BC residential sales dollar volume increased 16 per cent to $24.2 billion, compared to the same period last year. Residential unit sales rose 4 per cent to 48,127 year-to-date, while the average MLS® residential price climbed 13 per cent to $504,281 over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Thursday, August 5, 2010
BC Home Sales to Rise in 2011
BCREA Housing Forecast Update - Third Quarter 2010
Vancouver, BC – July 30, 2010. The British Columbia Real Estate Association (BCREA) released its Housing Forecast Update for the third quarter of 2010 today.
BC Multiple Listing Service® (MLS®) residential sales are forecast to decline 7 per cent from 85,028 units in 2009 to 79,500 units this year, before increasing 5 per cent to 83,400 units in 2011.
“The volatility in consumer demand characteristic of the past 24 months is expected to give way to more gradual improvement through 2011,” said Cameron Muir, BCREA Chief Economist. “Housing demand has fallen back to earth from its break-neck pace at the end of 2009 and is expected to more closely match overall economic performance over the next 18 months.”
“A larger inventory of homes for sale has created the most favourable conditions for home buyers in more than a year,” added Muir. “However, the buyers’ market is expected to be short-lived as total active listings peaked in May and are beginning to wane, with more balanced conditions set to emerge in the fall.”
The average MLS® residential price is forecast to climb 6 per cent to $492,800 this year and remain relatively unchanged in 2011, albeit declining by 1 per cent to $489,500.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Vancouver, BC – July 30, 2010. The British Columbia Real Estate Association (BCREA) released its Housing Forecast Update for the third quarter of 2010 today.
BC Multiple Listing Service® (MLS®) residential sales are forecast to decline 7 per cent from 85,028 units in 2009 to 79,500 units this year, before increasing 5 per cent to 83,400 units in 2011.
“The volatility in consumer demand characteristic of the past 24 months is expected to give way to more gradual improvement through 2011,” said Cameron Muir, BCREA Chief Economist. “Housing demand has fallen back to earth from its break-neck pace at the end of 2009 and is expected to more closely match overall economic performance over the next 18 months.”
“A larger inventory of homes for sale has created the most favourable conditions for home buyers in more than a year,” added Muir. “However, the buyers’ market is expected to be short-lived as total active listings peaked in May and are beginning to wane, with more balanced conditions set to emerge in the fall.”
The average MLS® residential price is forecast to climb 6 per cent to $492,800 this year and remain relatively unchanged in 2011, albeit declining by 1 per cent to $489,500.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Resale housing forecast revised
OTTAWA – July 30, 2010 – The Canadian Real Estate Association (CREA) revised its forecast downward for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations, and elevated its average price forecast.
Weaker than anticipated sales activity during the crucial spring home buying season in Canada’s four most active provincial markets prompted the revision. The decline is consistent with the exhaustion of pent-up demand from deferred purchases during the economic recession, and sales having been pulled forward into early 2010 due to changes in mortgage regulations.
National sales activity is forecast to reach 459,600 units in 2010, representing an annual decline of 1.2 per cent. Additional expected interest rate increases will keep homebuyers in a cautious mood, with sales activity expected to continue easing over the second half of the year as a result. In 2011, weaker economic growth and consumer spending will contribute to a decline in national sales activity of 7.3 per cent, with annual sales totaling 426,100 units.
“The Bank of Canada recognizes that inflation remains well contained and that economic growth will soften, so interest rates will rise slowly and at a measured pace, which will keep home financing within reach for many homebuyers,” said Georges Pahud, CREA President. “While the jump in national sales activity earlier this year likely borrowed from the future, local markets trends are not necessarily in sync with national trends, so buyers and sellers would do well to consult with their local REALTOR® to best understand the outlook in their market.”
Average price trends have remained stable as new listings began to shrink in the last two months of the second quarter. Supply is expected to continue to adjust to lower demand, keeping the resale housing market balanced on a national basis and in most provinces.
The national average home price is forecast to rise 3.5 per cent in 2010 to $331,600, with increases in all provinces.
“Slowing first-time home buying activity means lower- and mid-priced homes are making a smaller contribution to the average price calculation, causing the average price to be skewed upward as a result,” said Gregory Klump, CREA Chief Economist. “It also means pricing momentum will lose steam due to rising competition among current homeowners looking to trade up.”
Although modest average price gains are forecast in 2011 in most provinces, the national average price is forecast to ease by 0.9 per cent to $328,600.
“The hangover from accelerated home purchases earlier this year is expected to persist over the rest of the year, but positive economic and job market trends bode well for home price stability,” said Klump. “Sales activity and new supply are both expected to continue to ease, so inventories are unlikely to pile up the way they did during the recession.
“Transitory factors that resulted in big swings in housing supply and demand may now be largely in the rearview mirror, so while resale housing activity is expected to ease, the pace of declines should begin to slow,” he added. “Homebuyers will no doubt welcome a more relaxed housing market in places where there was a shortage of supply earlier in the year.“
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Weaker than anticipated sales activity during the crucial spring home buying season in Canada’s four most active provincial markets prompted the revision. The decline is consistent with the exhaustion of pent-up demand from deferred purchases during the economic recession, and sales having been pulled forward into early 2010 due to changes in mortgage regulations.
National sales activity is forecast to reach 459,600 units in 2010, representing an annual decline of 1.2 per cent. Additional expected interest rate increases will keep homebuyers in a cautious mood, with sales activity expected to continue easing over the second half of the year as a result. In 2011, weaker economic growth and consumer spending will contribute to a decline in national sales activity of 7.3 per cent, with annual sales totaling 426,100 units.
“The Bank of Canada recognizes that inflation remains well contained and that economic growth will soften, so interest rates will rise slowly and at a measured pace, which will keep home financing within reach for many homebuyers,” said Georges Pahud, CREA President. “While the jump in national sales activity earlier this year likely borrowed from the future, local markets trends are not necessarily in sync with national trends, so buyers and sellers would do well to consult with their local REALTOR® to best understand the outlook in their market.”
Average price trends have remained stable as new listings began to shrink in the last two months of the second quarter. Supply is expected to continue to adjust to lower demand, keeping the resale housing market balanced on a national basis and in most provinces.
The national average home price is forecast to rise 3.5 per cent in 2010 to $331,600, with increases in all provinces.
“Slowing first-time home buying activity means lower- and mid-priced homes are making a smaller contribution to the average price calculation, causing the average price to be skewed upward as a result,” said Gregory Klump, CREA Chief Economist. “It also means pricing momentum will lose steam due to rising competition among current homeowners looking to trade up.”
Although modest average price gains are forecast in 2011 in most provinces, the national average price is forecast to ease by 0.9 per cent to $328,600.
“The hangover from accelerated home purchases earlier this year is expected to persist over the rest of the year, but positive economic and job market trends bode well for home price stability,” said Klump. “Sales activity and new supply are both expected to continue to ease, so inventories are unlikely to pile up the way they did during the recession.
“Transitory factors that resulted in big swings in housing supply and demand may now be largely in the rearview mirror, so while resale housing activity is expected to ease, the pace of declines should begin to slow,” he added. “Homebuyers will no doubt welcome a more relaxed housing market in places where there was a shortage of supply earlier in the year.“
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Bank of Canada raises interest rates further
Notes slowing global economic growth
The Bank of Canada increased the target for its trend-setting overnight lending rate on July 20, 2010, raising it by a quarter of a percentage point to 0.75 per cent. The increase follows on the heels of an equal interest rate increase in June 2010, when it was raised for the first time since 2007. The Bank rate now stands at one per cent.
In its most recent interest rate announcement, the Bank marked down its outlook for economic growth globally, emphasizing the uneven economic recovery in the U.S., and weakening prospects for European economic growth.
In the Bank’s view, Canada’s domestic economy is evolving largely as expected in recent months, but trimmed its forecast for economic growth this year and next by 0.2 per cent to 3.5 per cent in 2010 and 2.9 per cent in 2011. While the Bank raised its forecast for Canadian economic to 2.2 per cent in 2012, it nonetheless left the easing trend for growth intact.
The Bank indicated, “[this] revision reflects a slightly weaker profile for global economic growth and more modest consumption growth in Canada. The Bank anticipates that business investment and net exports will make a relatively larger contribution to growth.
Where the domestic recovery had previously been led by housing and consumer spending it is now guided more by government stimulus.”
The Bank also reaffirmed its view that housing activity and household expenditures were pulled forward into the first half of 2010, which is expected to cause them to soften in the second half. It also recognized that business investment has been weaker than it previously expected, “held back by global uncertainties.” The Bank anticipates “that business investment and net exports will make a relatively larger contribution to growth” over its forecast horizon.
As of July 20th, the advertised five-year conventional mortgage rate of 5.79 per cent was down 0.06 per cent from one year earlier, and 0.2 per cent below where it stood when Bank made its previous interest rate announcement on June 1, 2010. However, it is 0.3 percentage points higher than it was at the beginning of the year.
The Bank has signaled to financial markets that it is leaving its options wide open as to whether it will raise interest rates further when it makes its next rate announcement on September 8th.
“As it did with its previous announcement in June, the Bank messaged financial markets that further interest rate increases are not pre-ordained,” said CREA Chief Economist Gregory Klump. “The strength of recent economic indicators have prompted the Bank to raise interest rates, but the Bank has signaled that it may keep rates on hold should the economic recovery begin to show signs of loosing steam.”
The Bank will make its next scheduled rate announcement on September 8th.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
The Bank of Canada increased the target for its trend-setting overnight lending rate on July 20, 2010, raising it by a quarter of a percentage point to 0.75 per cent. The increase follows on the heels of an equal interest rate increase in June 2010, when it was raised for the first time since 2007. The Bank rate now stands at one per cent.
In its most recent interest rate announcement, the Bank marked down its outlook for economic growth globally, emphasizing the uneven economic recovery in the U.S., and weakening prospects for European economic growth.
In the Bank’s view, Canada’s domestic economy is evolving largely as expected in recent months, but trimmed its forecast for economic growth this year and next by 0.2 per cent to 3.5 per cent in 2010 and 2.9 per cent in 2011. While the Bank raised its forecast for Canadian economic to 2.2 per cent in 2012, it nonetheless left the easing trend for growth intact.
The Bank indicated, “[this] revision reflects a slightly weaker profile for global economic growth and more modest consumption growth in Canada. The Bank anticipates that business investment and net exports will make a relatively larger contribution to growth.
Where the domestic recovery had previously been led by housing and consumer spending it is now guided more by government stimulus.”
The Bank also reaffirmed its view that housing activity and household expenditures were pulled forward into the first half of 2010, which is expected to cause them to soften in the second half. It also recognized that business investment has been weaker than it previously expected, “held back by global uncertainties.” The Bank anticipates “that business investment and net exports will make a relatively larger contribution to growth” over its forecast horizon.
As of July 20th, the advertised five-year conventional mortgage rate of 5.79 per cent was down 0.06 per cent from one year earlier, and 0.2 per cent below where it stood when Bank made its previous interest rate announcement on June 1, 2010. However, it is 0.3 percentage points higher than it was at the beginning of the year.
The Bank has signaled to financial markets that it is leaving its options wide open as to whether it will raise interest rates further when it makes its next rate announcement on September 8th.
“As it did with its previous announcement in June, the Bank messaged financial markets that further interest rate increases are not pre-ordained,” said CREA Chief Economist Gregory Klump. “The strength of recent economic indicators have prompted the Bank to raise interest rates, but the Bank has signaled that it may keep rates on hold should the economic recovery begin to show signs of loosing steam.”
The Bank will make its next scheduled rate announcement on September 8th.
“Copyright Canadian Real Estate Association. Reprinted with permission.”
Housing Market Favours Buyers
Vancouver, BC – July 15, 2010. The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province declined 23 per cent to 7,722 units in June compared to the same month last year. On a seasonally adjusted basis, MLS® residential unit sales in the province declined 5 per cent in June from May 2010. The average MLS® residential price climbed 8 per cent to $499,908 in June compared to the same month last year.
“Market conditions have shifted from balanced conditions at the start of the year to a buyers’ market this summer,” said Cameron Muir, BCREA Chief Economist. In June, there was 9.3 months of supply on the market given current sales activity, up from 5.6 months in January 2010. “Tighter credit conditions for homes with secondary suites and low equity home buyers have moderated consumer demand,” added Muir.
Year-to-date, BC residential sales dollar volume increased 31 per cent to $21.4 billion, compared to the same period last year. Residential unit sales rose 17 per cent to 42,343 year-to-date, while the average MLS® residential price climbed 13 per cent to $504,281 over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
“Market conditions have shifted from balanced conditions at the start of the year to a buyers’ market this summer,” said Cameron Muir, BCREA Chief Economist. In June, there was 9.3 months of supply on the market given current sales activity, up from 5.6 months in January 2010. “Tighter credit conditions for homes with secondary suites and low equity home buyers have moderated consumer demand,” added Muir.
Year-to-date, BC residential sales dollar volume increased 31 per cent to $21.4 billion, compared to the same period last year. Residential unit sales rose 17 per cent to 42,343 year-to-date, while the average MLS® residential price climbed 13 per cent to $504,281 over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Home Buyers Facing Less Competition
Vancouver, BC – June 14, 2010. The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province declined 4 per cent to 7,950 units in May compared to the same month last year. On a seasonally adjusted basis, MLS® residential unit sales in the province declined 11 per cent in May from April 2010. The average MLS® residential price climbed 7 per cent to $498,294 in May compared to the same month last year.
“A slower pace of home sales combined with an increase in the inventory of homes for sale has quelled upward pressure on home prices,” said Cameron Muir, BCREA Chief Economist. A total of 54,362 MLS® residential listings were recorded in May, up 26 per cent from January on a seasonally adjusted basis. “Moderating market conditions in Vancouver, the Fraser Valley and Victoria are reducing the number of multiple offers as a greater selection of homes for sale lessons competition amongst home buyers,” added Muir.
Year-to-date, BC residential sales dollar volume increased 50 percent to $17.5 billion, compared to the same period last year. Residential unit sales rose 31 per cent to 34,619 year-to-date, while the average MLS residential price climbed 14 per cent to $505,468 over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
“A slower pace of home sales combined with an increase in the inventory of homes for sale has quelled upward pressure on home prices,” said Cameron Muir, BCREA Chief Economist. A total of 54,362 MLS® residential listings were recorded in May, up 26 per cent from January on a seasonally adjusted basis. “Moderating market conditions in Vancouver, the Fraser Valley and Victoria are reducing the number of multiple offers as a greater selection of homes for sale lessons competition amongst home buyers,” added Muir.
Year-to-date, BC residential sales dollar volume increased 50 percent to $17.5 billion, compared to the same period last year. Residential unit sales rose 31 per cent to 34,619 year-to-date, while the average MLS residential price climbed 14 per cent to $505,468 over the same period.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Avoid overpricing your home
It’s essential that you price your home as accurately as possible in any market to help ensure it sells at a reasonable price within your desired timeframe.
Sellers can often be reluctant to price their home in line with the marketplace as they feel they may be giving away too much of their home equity. The reality is, however, that pricing your home correctly from the start will benefit any seller in the long run.
Here are some of the reasons why pricing your home at the current market value is extremely important:
• Potential buyers may not look at your home if they believe it’s out of their price range.
• Buyers comparison shop when considering a home purchase. When a buyer compares an overpriced home versus one that is priced at market value, it will likely convince them to place an offer on the well-priced property instead of yours.
Properties that have been on the market for extended periods often come under scrutiny from buyers who question why the properties have yet to sell.
Perception is a key factor in how a seller’s home is viewed by the average homebuyer.
• Real estate agents may skip over showing an over-priced home as they may believe the seller has little motivation to actually sell the property. Buyers’ agents are always keen on getting their clients through the doors of a well-priced home first in order to give their clients first crack at getting the home of their dreams.
• The longer a listing stagnates on the market, the more likely it will sell for less than had it been priced right in the first place.
The key to pricing your home to sell for the most amount of money in the shortest period of time is to work with a local real estate professional. We know how to do an accurate market comparison and arrive at an asking price that will offer some room for negotiation, but not scare off potential buyers.
As always, if you have any questions about buying or selling a home, your answers are just a phone call or e-mail away!
Sellers can often be reluctant to price their home in line with the marketplace as they feel they may be giving away too much of their home equity. The reality is, however, that pricing your home correctly from the start will benefit any seller in the long run.
Here are some of the reasons why pricing your home at the current market value is extremely important:
• Potential buyers may not look at your home if they believe it’s out of their price range.
• Buyers comparison shop when considering a home purchase. When a buyer compares an overpriced home versus one that is priced at market value, it will likely convince them to place an offer on the well-priced property instead of yours.
Properties that have been on the market for extended periods often come under scrutiny from buyers who question why the properties have yet to sell.
Perception is a key factor in how a seller’s home is viewed by the average homebuyer.
• Real estate agents may skip over showing an over-priced home as they may believe the seller has little motivation to actually sell the property. Buyers’ agents are always keen on getting their clients through the doors of a well-priced home first in order to give their clients first crack at getting the home of their dreams.
• The longer a listing stagnates on the market, the more likely it will sell for less than had it been priced right in the first place.
The key to pricing your home to sell for the most amount of money in the shortest period of time is to work with a local real estate professional. We know how to do an accurate market comparison and arrive at an asking price that will offer some room for negotiation, but not scare off potential buyers.
As always, if you have any questions about buying or selling a home, your answers are just a phone call or e-mail away!
Is Your Mortgage Portable
Selling your current home and moving into a new one can be stressful enough, let alone worrying about your current mortgage and whether you’re able to carry it over to your new home.
Porting enables you to move to another property without having to lose your existing interest rate, mortgage balance and term. And, better yet, the ability to port also saves you money by avoiding early discharge penalties.
It’s important to note, however, that not all mortgages are portable. When it comes to fixed-rate mortgage products, you usually have a portability option. Lenders often use a “blended” system where your current mortgage rate stays the same on the mortgage amount ported over to the new property and the new balance is calculated using the current interest rate.
With variable-rate mortgages, on the other hand, porting is usually not available. As such, upon breaking your existing mortgage, a three-month interest penalty will be charged. This charge may or may not be reimbursed with your new mortgage.
Porting Conditions
While porting typically ensures no penalty will be charged when you sell your existing property and buy a new one, some conditions that may apply include:
• Some lenders allow you to port your mortgage, but your sale and purchase have to happen on the same day. Other lenders offer a week to do this, some a month, and others up to three months.
• Some lenders don’t allow a changed term or force you into a longer term as part of agreeing to port your mortgage.
• Some lenders will, in fact, reimburse your entire penalty whether you are a fixed or variable borrower if you simply get a new mortgage with the same lender – replacing the one being discharged. Additionally, some lenders will even allow you to move into a brand new term of your choice and start fresh.
• There are instances where it’s better to pay a penalty at the time of selling and get into a new term at a brand new rate that could save back your penalty over the course of the new term.
While this may sound like a complicated subject, your mortgage professional or lender will be able to explain all of your available options.
Porting enables you to move to another property without having to lose your existing interest rate, mortgage balance and term. And, better yet, the ability to port also saves you money by avoiding early discharge penalties.
It’s important to note, however, that not all mortgages are portable. When it comes to fixed-rate mortgage products, you usually have a portability option. Lenders often use a “blended” system where your current mortgage rate stays the same on the mortgage amount ported over to the new property and the new balance is calculated using the current interest rate.
With variable-rate mortgages, on the other hand, porting is usually not available. As such, upon breaking your existing mortgage, a three-month interest penalty will be charged. This charge may or may not be reimbursed with your new mortgage.
Porting Conditions
While porting typically ensures no penalty will be charged when you sell your existing property and buy a new one, some conditions that may apply include:
• Some lenders allow you to port your mortgage, but your sale and purchase have to happen on the same day. Other lenders offer a week to do this, some a month, and others up to three months.
• Some lenders don’t allow a changed term or force you into a longer term as part of agreeing to port your mortgage.
• Some lenders will, in fact, reimburse your entire penalty whether you are a fixed or variable borrower if you simply get a new mortgage with the same lender – replacing the one being discharged. Additionally, some lenders will even allow you to move into a brand new term of your choice and start fresh.
• There are instances where it’s better to pay a penalty at the time of selling and get into a new term at a brand new rate that could save back your penalty over the course of the new term.
While this may sound like a complicated subject, your mortgage professional or lender will be able to explain all of your available options.
Looking Beyond the Seemingly Perfect Home
If you’re in the market to purchase your first home or relocate to a new home, it’s easy to get caught up in the home-buying process and forget some of the details. The clock is ticking, rates have nowhere to go but up and you’ve found the perfect home on the perfect street. Nothing left now but to make an offer, right?
Well, while location definitely matters, if you’re not careful and observant when making your new home choice, you could end up in a great location and still purchase a money pit.
After all, in many cases, those anxious to sell their home have been known to make a few cosmetic adjustments or staging tricks to hide the areas where their house may require a little extra care or even some serious repairs.
Pay special attention to and mention to your home inspector (if you reach that point) if you come across anything that seems out of the norm, including:
1. Freshly painted basements. We all know that basements are often prone to leaks. If you notice that a basement has recently been painted – particularly the floor of an unfinished basement – make sure you ask why this was done. Also take a look around the outside perimeters of the home to see if there are other telltale signs of a possible basement leak.
2. 2. Strong smells. Your senses are your first and one of your best methods of avoiding deception. Mould smells like mould. It’s easy to hide the visual signs of mould with paint, but it’s a hard smell to mask. Don’t be afraid to sniff around any area that makes you feel uneasy.
3. 3. Suspicious piles and large plants. If something looks out of place, ask about it. A pile of bricks stacked against the side of the house could just be a pile of bricks, but it could also be a way of hiding a cracked foundation. The same holds true for a large plant or tree located in an odd area.
One of the benefits of working with a qualified real estate professional is that we know what to look for in a home to ensure you’re not buying a money pit. If you see anything that doesn’t feel right, let’s discuss it. Follow your gut. Even after you’ve been through a home, answers to your questions and concerns are just a phone call or e-mail away!
Well, while location definitely matters, if you’re not careful and observant when making your new home choice, you could end up in a great location and still purchase a money pit.
After all, in many cases, those anxious to sell their home have been known to make a few cosmetic adjustments or staging tricks to hide the areas where their house may require a little extra care or even some serious repairs.
Pay special attention to and mention to your home inspector (if you reach that point) if you come across anything that seems out of the norm, including:
1. Freshly painted basements. We all know that basements are often prone to leaks. If you notice that a basement has recently been painted – particularly the floor of an unfinished basement – make sure you ask why this was done. Also take a look around the outside perimeters of the home to see if there are other telltale signs of a possible basement leak.
2. 2. Strong smells. Your senses are your first and one of your best methods of avoiding deception. Mould smells like mould. It’s easy to hide the visual signs of mould with paint, but it’s a hard smell to mask. Don’t be afraid to sniff around any area that makes you feel uneasy.
3. 3. Suspicious piles and large plants. If something looks out of place, ask about it. A pile of bricks stacked against the side of the house could just be a pile of bricks, but it could also be a way of hiding a cracked foundation. The same holds true for a large plant or tree located in an odd area.
One of the benefits of working with a qualified real estate professional is that we know what to look for in a home to ensure you’re not buying a money pit. If you see anything that doesn’t feel right, let’s discuss it. Follow your gut. Even after you’ve been through a home, answers to your questions and concerns are just a phone call or e-mail away!
MORTGAGE MATTERS
Homeowners who break a closed mortgage before maturity will often make a pre-payment before the mortgage is discharged. The idea is to reduce the mortgage balance and thereby pay less of a pre-payment penalty. It’s a great idea if you have the funds to do it. Remember, however, that lenders have different policies on how close to the payout date you can make a pre-payment.
Positive Correlation Between Homeownership and Financial Fitness
According to a recent survey sponsored by mortgage insurer Genworth Financial Canada, homeowners are in the best shape when it comes to financial fitness in Canada.
Sixty-five percent of homeowners pay off their credit card balances each month (versus 48% of non-homeowners). Furthermore, a quarter of those homeowners with mortgages have managed to make a lump-sum payment or accelerate their mortgage payments in the past year.
Nearly half (44%) of homeowners were able to pay all of their bills and save some money in the past year, suggesting a strong correlation between homeownership and financial fitness.
The Financial Fitness survey was conducted in conjunction with the Canadian Association of Credit Counselling Services. Compared to the same survey undertaken in 2007 when the economy was booming, Canadians are even more likely now to say their financial fitness is good (55% versus 50%).
Other key survey findings show:
• Mortgage holders more likely to have accelerated or made a lump-sum payment include those with incomes $75-$99k (32%) or $100k+ (30%), and women more than men (26% versus 21%).
• 49% of homeowners made down payments of 20% or more on their purchase
• 13% of homeowners say they are in great financial shape
• 12% of homeowners say they have requested a credit report within the past 12 months
• 59% of Canadians say they pay their credit cards in full each month
• 39% of Canadians say that in the past year they were able to pay their bills and save some money. A further 41% were able to pay their bills but not save
• First-time buyers/those who intend to buy a home as well as those requiring mortgage insurance are more likely to have spoken to a financial planner/coach in the past 12 months
Sixty-five percent of homeowners pay off their credit card balances each month (versus 48% of non-homeowners). Furthermore, a quarter of those homeowners with mortgages have managed to make a lump-sum payment or accelerate their mortgage payments in the past year.
Nearly half (44%) of homeowners were able to pay all of their bills and save some money in the past year, suggesting a strong correlation between homeownership and financial fitness.
The Financial Fitness survey was conducted in conjunction with the Canadian Association of Credit Counselling Services. Compared to the same survey undertaken in 2007 when the economy was booming, Canadians are even more likely now to say their financial fitness is good (55% versus 50%).
Other key survey findings show:
• Mortgage holders more likely to have accelerated or made a lump-sum payment include those with incomes $75-$99k (32%) or $100k+ (30%), and women more than men (26% versus 21%).
• 49% of homeowners made down payments of 20% or more on their purchase
• 13% of homeowners say they are in great financial shape
• 12% of homeowners say they have requested a credit report within the past 12 months
• 59% of Canadians say they pay their credit cards in full each month
• 39% of Canadians say that in the past year they were able to pay their bills and save some money. A further 41% were able to pay their bills but not save
• First-time buyers/those who intend to buy a home as well as those requiring mortgage insurance are more likely to have spoken to a financial planner/coach in the past 12 months
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