James Wong Richmond Realtor

The Globe And Mail published an article today "Federal officials told CMHC it could burden borrowers" that may have more far reaching consequences on home owners.

"Canada Mortgage and Housing Corp. officials ignored warnings from senior Finance Department and Bank of Canada officials during the past two years that its active business in high-risk mortgage insurance could overburden consumers.

According to sources familiar with the discussions, CMHC executives did not heed the warnings and continued to underwrite larger volumes of insurance policies for risky home loans with 40-year amortizations and minimal down payments.

The sources said the federal agency's executives disagreed about the potential risks and defended the creditworthiness of borrowers who were granted insurance for the riskier mortgage products".

Many critics cautioned the danger of the 40 years and 0% down payment mortgage that may hurt home owners in the event of home prices dropping significantly. These concerns are now a reality when home prices have dropped 12% to 15% in major Canadian city centers, especially places like Greater Vancouver, Victoria, Calgary and Edmonton.

Some home owners are in trouble

With home prices projecting to decline further over the next 12 months, home owners who bought with little equities will need to cover their losses if they sell their homes now. Those who could not keep up with their mortgage payments will lose their homes. When defaults start to show up, the losses suffered by Canadian banks will end up with CMHC and other mortgage insureres. CMHC will end up taking on huge mortgage default losses as over 70% of these 40 years mortgages were under-witten by CMHC the past 2 years.

Canada is now reported to be in recession with negative GDP growth. If the economy tank in Canada, many people will lose their jobs due to cut-backs and lay-offs. It is inevitable that foreclosures and bankruptcies will increase in the near future.

The loan loss for each default in the high-priced centers in Canada can easily exceed $100,000. A 20% drop in price on a $500,000 home will wipe off $100,000 value from a home. Together with interest cost, real estate/legal fees, etc, loan losses can piled up quickily.

Buying opportunities

There are many buying oppotunities for investors who have the financial resources. Home owners who could not hold on to their homes may be forced to sell at lower than market prices. Until more buyers return to the market, home prices will continue to decline. It's difficult to tell if the market will stabalize by the end of 2009 or 2010.

If you are looking for investment properties in Richmond, Vancouver or Burnaby, you can contact me at 604-721-4817 or email me.

The Greater Vancouver real estate market is fast changing. Home owners and consumers are faced with many questions on how best they can deal with the market. In a report published in the Financial Times, ” Your home may be worth more than you thought: CREA” home owners, buyers and sellers are wondering what's the real market situation in their local market.

The Canadian Press on Dec 12, 2008 published "House prices slip 10 per cent across Canada in Nov" painted a more pessimistic view on the housing market for 2009.

Real estate is local - home owners have to deal with their local real estate markets. Presently, home prices are selling at 10% to 12% lower than comparable homes sold a year ago.

It’s Time To Get Ready

If you are buying, do your research and work with an experienced local realtor. Whether you should buy now, or wait a little longer depends on your circumstances. Home prices are now more attractive and affordable than a year ago.

You should buy when you find the right home, and you are comfortable with your financial commitment. No one knows when home prices will reach the bottom.

Most home buyers are hesitant to buy at current market value. When your offer price is too low, the seller may not want to sell his home to you. The final price of a home is made between you as a buyer and the seller. Only when both parties can agree on a price, a deal can be done.

You can keep an eye on the Richmond market by following my monthly update posted on my website RichmondBCRealEstates.com. It is time to look around and get ready.

If you are looking to buy or sell a home in Richmond, South Vancouver and Burnaby, you are welcomed to contact me at 604-721-4817 or email me.

The subject on "writing a low ball offer" in a buyer's market is aptly described in a blog post by Vancouver's Realtors Rob Chipman and Aaron Best.

"Lowball opportunities are now available, and their numbers will only increase in the coming months".

"Lowballs are a funny subject. They’re easy to talk about, but tough to pull off. In the first place they take a certain amount of nerve. In the second place, they’re a tougher offer to close than a non-lowball. There’s no reason why a buyer shouldn’t consider lowballing, however. Its not a tactic for everyone, and it involves lots of hard work and learning, but it can pay off handsomely".

You can read the full article below:

So You Want To Write a Lowball! (part 1), and the second part of the article:

So You Want To Write a Lowball! (part 2)

If you are a homebuyer, you may find some great buying opportunities in today's market. Whether you are buying a home in Richmond BC for your own occupation, or a second or third home for investment, you can view the latest Richmond market activities here.

If you have a specific real estate need, kindly contact me at 604-721-4817 or email me.

RE/MAX recently released report reported in The Vancouver Sun, "Threat of global recession to hinder home sales in major Canadian housing markets in 2008 and 2009" cited global economic uncertainty weighed heavily on residential real estate activity in most major Canadian centres.

"The first quarter of 2009 will certainly be a continuation of the trend we're seeing now, with reduced transactions and average prices coming down in Vancouver and throughout British Columbia."

According to the report, some 440,000 homes are expected to change hands in Canada by year's end - a decrease of 15 percent from record levels reached in 2007.

Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada, said that "the nation's housing market performance next year will depend largely on how the country's economy fares at the local, provincial and national levels, but he remains hopeful for gains in 2009".

"The situation is not expected to be remedied until consumer confidence is restored," Polzler says. "We could see a bounce back as early as spring - if inventory levels remain stable, pent-up demand kicks into gear, and lower interest rates stimulate home-buying activity."

Should you buy now or wait a little longer? Home prices in Greater Vancouver are now down 12% to 15% from the peak towards the end of 2007. As home owners, real estate is local and there are challenges when you are buying or selling in today's market:

- as a seller, you want to know how much lower home values will go down.
- as a buyer, you wonder if you should wait for further price reductions.
- as a homeowner, you may be concerned how the present market impacts on your home equity.
- when trading-up or down, how do you manage 2 transactions in today's market.
- as an investors, you wonder whether it is a good time to buy, renovate, and re-sell for a profit.
- as a first-time buyer, you want to know if you can get financing in these uncertain times.

There is no easy answer to the above questions. You have to evaluate you options and find out what is the best action for you. If you like to discuss your needs, you are welcome to contact me at 604-721-4817 or email me with your questions.

Should you buy now or wait a little longer? Home prices in Greater Vancouver are now down 12% to 15% from the peak towards the end of 2007.

People are asking what is happeing to the housing market:

- Sellers want to know how much lower their home values will go down.
- Buyers want to know if they should wait for further price reductions.
- Homeowners want to understand the impact on their equity.
- Investors are asking whether it is a good time to buy, renovate, and re-sell for a profit.
- First-time buyers want to know if they can get financing in these uncertain times.

There are no easy answers to the above questions. Each person will have to assess their own individual situation. In a buyer's market like today, if you are trading-up buying and selling at the same time, you benefit with better choices.

Circumstances cause each of us to make decisions despite uncertainties related to global economies and politics. There are many great buying oppotunities and good selections of homes now. If you are comfortable with your finances, you now have a better chance of finding the home that's right for you.

If you like to find out where you can find the great deals, your are welcome to call me at 604-721-4817 or email me.