We can just about say ‘another year’ of Real Estate craziness is behind us, because October was once again over the top busy and already we are seeing multiple offer situations in November from one end of town to the other.
How crazy is it now you ask? We actually had a Credit Union notify us Nov 5th that they had run out of money. They are currently not writing mortgages, at all. Full story here
The market stats continue to show no signs of slowing anytime soon, the industry consensus is that it will power through into next year without missing a beat.
Lots happening in the news…
I don’t pester my clients for donations to the various causes that turn my crank, I just take care of it. So thanks to all of those with whom I have worked this year we did some good in the ride to conquer cancer and now we are doing some good with the DLC Bikes for Kids program.
We (that’s you and I) bought 21 bikes for kids for this Christmas. That is 21 pretty happy pre-teens and early teens. Thanks.
Logical and Simple News – it exists.
A logical headline and simple story. Sales up, supply down.
October 21, just two days after the sweeping change brought in by the Federal Election, the Bank of Canada had their scheduled meeting and, as expected, once again determined to leave interest rates unchanged in an announcement that included language suggesting rates are going to remain stable through 2016 and into 2017. No kneejerk reactions for the level heads that dictate a large part of monetary policy. Good to see.
So what does the other news of the week mean for us and our mortgage?
The election results and subsequent media coverage have been more a story of Justin Trudeau the man, than the story of the sweeping win for the Liberal party. No doubt many home owners went to bed Monday Oct 19th wondering if, on collective spending promises exceeding ten billion dollars, they would be waking up to increased interest rates the very next day. Clearly, not so far.
One man, or even one political party, cannot claim complete responsibility for the steadily lower interest rates we have enjoyed over the past decade, which for most households has meant dollars in their pockets. Nor can one man or one political party be thought to have an immediate or even short-term impact on the economy such that interest rates rise by any significant amount in the immediate future.
Adjusting interest rates, along with the economy of Canada, is a bit more complicated process. It is contingent on many things which are well beyond the control of any one man, even one as calm, cool, and collected as Mr. Trudeau appears to be.
CMHC Housing Outlook bullet points.
I could write 5000 words on the great data presented to a few hundred people Nov 2cnd in Vancouver. But here are a few salient points:
- Half of vancouver homes are more the 30 yrs old. – Hence a booming renovation market. Good for the economy.
- 7% are in need of major repairs or updates. Opportunity knocks.
- There are currently 3,000 completed and unsold units in BC. Province wide. Very low inventory. Nearly the same figure as last year…and look how things went.
- ‘Market equilibrium’ which is what the Vancouver market is demonstrating does not mean fair.
- Prepare for a strong 2016, with rates and average home prices both rising slightly further
Warped Headline News
Here is perhaps the most disappointing headline, among many that twisted the content of this story, that I have seen on Vancouver Real Estate perhaps ever. We can do better people!
Bottom line, we should be embarrassed that this sort of study (172 sales in a Province with 50,000 sales per year) would garner the ink, clicks, and eyeballs that it did.
The media turned a seashell fragment into JAWS.
Shameless, disgusting and ultimately disappointing reporting.
What about rates?
Well they are rising between 0.10% and 0.25% along with the bond market as expected with the election of our new Government. The old guys were fiscal prudes and the market was not so excited about that, so rates stagnated for the past several years. The new guys are talking about cranking up the printing press and spending ten billions dollars of ‘future money’ which will not just stimulate the economy, but will also stimulate interest rates. How stimulating will it get? Time will tell.
In the meantime, housing gets about $36.00 more expensive per month for the average BC family.
Many would say, “thirty six bucks was worth it for the change” – although a couple hundred months from now they might not feel the same way, especially of that 36.00 becomes 72.00 or 108.00 per month. (a 0.25% increase on a 300,000 mortgage is about $36.00 per month payment-wise)
We shall see, no big movement is expected anytime soon, especially with the Bank of Canada.
So the variable rate mortgages remain a great place to be, as they have for decades.
|What does it all mean?
Selling is still simple, and will remain so for some time – especially with a bit of pressure on rates motivating people to make a move.
Buying remains a pain in the butt.
So, speak to your Broker and figure out how to buy first and sell second.
Also get those snow tires on, that is a sure fire way to win a bidding war – be the only one that can make it up the street to present your offer in person.