The market stats paint the same picture as last month. Hot Hot Hot!
So hot we had water restrictions for a while, Click here for a solution for that brown lawn. J
Once again we see more homes selling in certain markets than there are listings. Meaning that enlisting a Realtor willing to go knock on doors is increasingly the only way buyers are finding new homes. Some of the top producing Realtors I work with are out there knocking on doors to find listings for their clients, and these are Realtors with 20 years in the business. So no, even in this busy of a market, nothing is simple. The neighbours on the other side having no room in their garage due to a vast collection of Mtn bikes is a good sign too.
- Detached 600K – 1.25M Coquitlam – 160 homes sold of the 104 listed. Bizarre! 150% sales ratio.
In Coquitlam the trend continues, your home might sell without even being listed.
I mentioned this was the case with our own home last month, we found a solution quickly and it quite close to our last residence. A low pressure move. No multiple offers, no craziness. How can this be? We bought a half-duplex. Ten years old, 3800 sq feet, on an 18,000 sq foot lot, and about 350K below what a comparable detached house would sell for in the same area. That is a big savings for the sake of less than 200 sq feet of common wall.
On Wednesday July 15 the Bank of Canada cut the overnight lending rate by 0.25%.
How does that affect you?
If you are in a fixed rate mortgage it has no impact at all. If you have other higher interest debt such as credit card or car loans, again it has no impact.
If you are one of the small (but growing) percentage of mortgage holders in a variable rate mortgage you did a mostly-happy-dance August 1st when lenders passed on a 0.15% rate cute to holders of variable rate mortgages and secured lines of credit.
Only mostly happy as you asked; ‘where did the other 0.10% go?’
This is the second 0.25% rate drop this year, and the second time the mortgage lenders have retained 0.10% of that drop. Lenders are increasing their profit margins on the variable rate product, and there is little that borrowers can do about this.
The big question is whether or not the same metrics will apply when it comes time for rates to rise, which may well be some time off into the future. Will the next 0.25% rate increase result in just a 0.15% lender increase, or will lenders hit borrowers with the full increase.
Only time will tell. The fine print of mortgage documents gives this power to the lenders, as variable rate mortgages are granted at ‘lender prime’ not the Bank of Canada prime.
What about the impact of low rates on the housing market?
There appears, thus far, to be little impact on fixed rates, and the qualifying rate used to obtain a variable rate mortgage remains at 4.64%, so in other words the rate cut has not directly translated into greater borrowing power for consumers at all. Thus it should do little in push prices in the already hot markets any higher.
As always, if you have additional questions on this topic, or general mortgage questions, I’m here to help!
Have their really been many this past month? The search continues for the one bogeyman causing prices to rise. It must be one thing or another, anything but the obvious simple answer.
Supply – limited.
Demand – steady and still rising.
From where I sit things remain as busy as they were in March/April.
|What does it all mean?Once again I say no cooling of prices and activity until the weather cools. Many people seem to be skipping summer vacations and spending their time shopping for homes instead. I encourage you all to take a month off, as I would love a few days off. J|
But when the right home appears, you have to be ready to grab hold of it.
All the best.