This morning's Vancouver Sun has an article that suggests buyers are poised to take advantage of lower prices and lower interest rates.
http://tinyurl.com/cvakw3
I quote a small part of the article - where Cameron Muir the economist for the BCREA talks about the factors that are encouraging buyers to look at the market.
"He [Cameron Muir] said the benchmark price for a two-bedroom condo in Metro Vancouver was $334,602 in January, 11.5 per cent less than the $378,336 the same condo would have sold for 12 months earlier. A typical posted five-year fixed-term mortgage stood at 5.79 per cent in January, much lower than a similar mortgage rate of 7.39 per cent the previous January.
Therefore, he said, a condo with a 10-per-cent down payment (on a 25-year amortization) would have resulted in a monthly mortgage payment of $1,890 this January, nearly $600 less than the January 2008 mortgage payment of $2,468 (property taxes, maintenance fees and mortgage insurance fees not included).
On top of that, he said, there's upward pressure on rents with the same two-bedroom condo renting in October 2008 for about $1,507 a month - a five-per-cent increase from October 2007."
In my earlier posts I mentioned my impression, from my own experience within my market, and how it seemed that the market was becoming more active. It seems that I am not alone in having that impression.
Mortgage brokers, apparently, are seeing lots of buyers getting pre-approved for mortgages. Since prices are most definitely down, and if rents are rising then the argument for first time buyers to get into the market makes sense.
We will see what the next few months bring in terms of sales and prices.
Here in Vancouver, on Canada's west coast, we are dealing with a slower real estate market. Hey, no surprise there you probably think. True. This time of year is generally slower anyway. The rain, or lately the snow, keep people inside by the fire rather than hitting the streets and visiting those alluring open houses.
And we cannot forget the economic woes that assail us here, even in the sheltered Canadian economy. While our mortgage default rates are under 1%, we cannot be complacent. Job losses, tighter lending policies and general lack of confidence are hitting us all.
I would argue that the main factor for real estate is consumer confidence. Our media loves a bad story. Falling house prices and fears of further falls make headlines. But, digging around behind the big stories you see such things as a $16million penthouse in the newly opened Shangri-La just sold. Another 4 penthouses in the downtown core sold for $900,000 each - to the same buyer. And a recent bulk sale of newly built condos was a huge success with over 300 sales in less than a week.
If we all look for bad things, we'll surely find them. And the opposite is true too. Let's all get out there and remind people that things ain't so bad.
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