Economic Uncertainty Drives Real Estate Plunge Across Lower Mainland

I found this article on the Vancouver Sun’s website today. Provincially the real estate market is feeling the squeeze. The Sun reported that real estate sales are down 58% in the Lower Mainland. In Kamloops, the Kamloops and District Real Estate Association released it’s January statistics and our board is reporting 64% drop in residential sales for the month of January. Read below for the full story, it is focused more on the Lower Mainland, but keep in mind our market is not so different here in Kamloops. We are affected by some of the same economic factors that the Lower Mainland is affected by.

Home sales at lowest point since early 1980s, according to reports

Real estate sales across the Lower Mainland crawled along in January, real estate boards reported Tuesday, with consumers reluctant to buy during recessionary times and with expectations that prices will continue to decline.

In Metro Vancouver, Realtors recorded 762 Multiple-Listing-Service sales in January, down 58 per cent from the same month a year ago, and the so-called benchmark price for a typical detached home down 11 per cent to $659,638 compared with January of 2008.

In the Fraser Valley, Realtors booked a similar 59-per-cent decline in sales at 359, and the so-called benchmark for a typical single-family home down 9.6 per cent from the same month a year ago.

Both the Real Estate Board of Greater Vancouver, which covers most of Metro except Surrey, and the Fraser Valley Real Estate Board, which takes in Surrey and White Rock, said sales were at levels not seen since the early 1980s.

“We’re seeing the same factors at play: uncertainty in people’s minds about where the economy is going and where their jobs are going,” Robyn Adamache, a market analyst with Canada Mortgage and Housing Corp. said in an interview.

“As well, I think at lease some people are expecting further price reductions and perhaps are holding off on buying waiting for that to happen.”

The B.C. Real Estate Association on Monday released its latest forecast that predicted prices will decline 16 per cent in Metro Vancouver over 2009.

Adamache added that January is traditionally a slow sales month and not a month that can be used to gauge how the year will go, but “we’re sort of well below [sales levels] we’ve seen in previous Januarys.”

Both real estate boards also saw inventories of unsold homes decline in January. In Metro Vancouver, covered by the Greater Vancouver board, January new listings were down 30 per cent to 3,700, and current active listings of 13,966 are down 6,000 from October.

However, Adamache said that sales have slowed so much that the months of supply in unsold inventory has crept up to 11 months, the highest it has been in 10 years.

She added that the ratio of sales to new listings has dropped to a level that has not been seen since at least 1984, the first year for which she has records.

In the Fraser Valley, total inventory of unsold homes in January stood at 8,630 units, 26 per cent higher than January 2008, but 30 per cent lower than the record high inventory recorded last September.

Tsur Somerville, director of the centre for urban economics and real estate at the Sauder School of Business at the University of B.C., said it will be later in the year before we know how much the market is still declining, or whether there has been any stabilization.

The reason, Somerville said, is because the year-over-year comparison is with a month that had relatively high sales, and the dramatic drop-off in Vancouver’s markets did not begin until later in the year.

“I think we’re still declining just because the [sale decline] is 60 per cent versus 40 to 50 per cent,” Somerville said in an interview, “but we won’t get a sense of how much and at what rate until later.”

Dave Watt, president of the Real Estate Board of Greater Vancouver, said the last 10 days of January did see realtor showings and sales pick up relative to the beginning of the month.

Watt said the buyers in the market are “back to looking for a home to purchase and are very much thinking long term.”

Kamloops and District Real Estate Association Statistics For January 2009

The numbers are out. The Kamloops and District Real Estate Association has released the statistics for January 2009. It is amazing to see the difference between the number of sales this January vs. the number of sales last January. I thought the numbers would be up significantly from December 2008, but I was definitely wrong (December there were 60 residential sales). Residential unit sales were up by only three for the past month. I have noticed an increase in the amount of buyers actively looking for a home, but obviously many buyers are waiting to see what will happen with the prices in the market in the next couple months or so. I will be interested to see the February statistics and see if there is a significant change from January, which I believe should occur.

Kamloops Real Estate, Comparative Analysis By Property Type For January 2009.

Kamloops Real Estate Comparative Analysis By Property Type January 2009

Kamloops Real Estate Comparative Analysis By Property Type January 2009

Kamloops Real Estate, MLS Activity Report For January 2009.

Kamloops Real Estate, MLS Activity Report January 2009

Kamloops Real Estate, MLS Activity Report January 2009

Listing Your Home At The Right Price Affects Your Bottom Line

What is your home worth? Click here for a free online home evaluation.

Home For SaleWhen you are selling your home, the price you set is a critical factor in the return you will receive. That is why you need a professional evaluation from an experienced Realtor that is well educated about your area of Kamloops. This person can provide you with an honest assessment of your home based on several factors including:
* Current market conditions
* Condition of your home
* Repairs or improvements
* Time frame

In real estate terms, market value is the price at which a particular house, in its current condition, will sell for within 30 to 90 days. Today, in Kamloops real estate market, we are finding that homes are taking longer to sell, on average roughly 70 days for a well priced home. This is why it is important to price your home competitively as well as ensure it is in the best condition to show to buyers as possible.

If the price of your home is too high several things could happen:
* Limits buyers: Potential buyers may not view your home only because it would be out of their buying range.
* Limits showings: Other Realtors and buyers may be less reluctant to view your home.
* Used as leverage: Other Realtors may use this home to sell against homes that are better priced.
* Extended stay on the market: When a home is on the market too long, it may be perceived as defective. Buyers may wonder, “what is wrong,” or “why has not this sold?”
* Lower price: An overpriced home, still on the market beyond the average selling time, could lead a lower selling price. To sell it, you will have to reduce the price, sometimes, several times. In the end, you will probably get less than if it had been properly priced at the start.
* Wasted time and energy: A bank appraisal is most often required to finance a home.

It is a well known fact that well-kept homes, properly priced in the beginning, always get you a quicker sale for the best price. In a buyers market, like we are experiencing currently, often you need a professional to assist you in the sale of your home.

CMHC And The First Time Home Buyer

As the Government of Canada’s national housing agency, Canada Mortgage and Housing Corporation (CMHC), plays a major role in Canada’s housing industry. The agency offers numerous housing services including research services, market evaluations, and access to affordable financing choices. Programs include aboriginal housing, residential rehabilitation assistance, home adaptation for seniors independence, public and private partnerships and numerous grants and awards.

For many people, especially first time home buyers, saving the necessary down payment is a challenge. Additionally, with less than 25% of the purchase price to put down, a lender requires mortgage insurance for protection against any payment defaults. CMHC makes it easier for Canadians to obtain a home, by providing mortgage loan insurance. By providing this insurance, CMHC limits the lenders’ risk, allowing the lender to finance up to 95% of the purchase price of a new home. You can purchase a property with as little as 5% down. If the cost is $150,000, you only need a down payment of $7,500.

You can become a homeowner, even if you don’t have a large down payment put aside. You just need to meet the following conditions and home ownership can be within your reach.

* The home must be located in Canada and considered your principal residence.
* You must have a down payment of at least 5% of the purchase price.
* Your home-related expenses must not exceed 32% of gross household income
* Your total monthly debt load must not exceed 40% of gross monthly household income
* You must be able to pay closing costs equal to at least 1.5% of the purchase price.

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