I reviewed some recent stats that explain how overall mortgage growth has fallen to its lowest level in the past 17 years!
Overall, mortgages outstanding across Canada total more than $1.5 trillion. And, while this total continues to increase year over year, the rate of growth has decreased. We should pay attention to this!
Typically, when we experience lower mortgage growth or no growth at all, house prices will follow suit and come down.
But, why aren’t the banks up in arms over this given that they make huge profits by lending money? (More on this below.)
Continue reading “Mortgage growth has slowed… so why are BANKS winning & CONSUMERS losing?”
A deal was struck earlier this week that will make it easier for seller’s to list their homes on MLS… The Competition Bureau hopes we will see some changes in real estate commissions….click here for the CBC article.
Currently, a seller pays 5% or 6% to sell their home… and that’s been the standard for many years… But with new technology and the internet, we have seen For Sale By Owner companies popping up everywhere. These companies have not been able to access MLS without employing a realtor.
We all want to save money and pay less… but there is a saying…’you get what you pay for’.. For some, paying a reduced flat fee, and handling viewings, the negotiations, etc, could be worth savings…. but others may not have the expertise, the knowledge or the time to deal with this….
In the end, I think choice is good. It remains to be seen how many people will move away from the traditional real estate agent and handle things on their own… Just beware of something that sounds too good to be true…
On thursday September 30th, the Canadian Real Estate Association (CREA) and Competition Bureau of Canada came to an agreement to allow easier access to their Multiple Listing Service (MLS). More details from the Globe and Mail.
Earlier this year, the Competition Bureau was making a lot of noise for CREA claiming that the MLS should be more readily available to consumers… it seems this new compromise will allow a seller the option of choosing services from a licensed realtor. It’s sounding like we could start to see flat fees being charged by companies to list their home on MLS.
Watch for more ‘For Sale By Owner’ companies (FSBO) to pop up in the coming months…. but also beware of deals that sound too good to be true… One of the concerns raised by CREA is that we could see shoddy service and even fraud. I guess time will tell…. As always, get recommendations, seek professional advice and opinions…
New listings in Canada reached 97,663 in March 2010… the highest number ever according to a report on CBC.ca. Inventory sits at 4.4 months….or in other words, it will take you an average of 4.4 months to sell your home….
That might be correct for some parts of Canada but it’s certainly not the case in major centres as multiple offers and above asking sale prices are still common place in Toronto… The last 5 months has seen a very healthy real estate market… The new Mortgage Rules will take some homebuyers out of the market.
We couldn’t keep going at this pace.. No one wants to see a runaway market… that’s always a recipe for a hard landing… To me, this report is good news….a healthy real estate market means the government’s stimulus package and incentives had the desired effect… Good news is good news….
TIGHTER MORTGAGE RULES
Too many articles this week about possible changes coming from the Minister of Finance, Jim Flaherty, on budget day March 4th. Globe and Mail and CTV.ca Where there’s smoke, there’s fire… or at least there is some serious consideration being given to changes in mortgage lending. If you’re a first time homebuyer that’s looking to buy this year, you may want to get your mortgage preapproved sooner than later… talk to your Mortgage Broker.
HIGHER HOME SALES AND HIGHER HOUSE PRICES
And how about the effect of CREA making the MLS public or more accessible? Will this affect house prices? Some think it will fuel house price increases…. Read this article from the Financial Post.
Here’s an article from The Star that shouts out ‘home sales skyrocket 87%’. Wow, that’s a scary number…And here’s another article from The Star that paints a clearer picture… ‘Some encouraging news and numbers’ they say…it can be confusing … but here’s an article with a good graph from The Financial Post .. look at the figures.. we are still below pre-recession figures… January 2010 sales were about the same as January 2008 sales.. maybe the market isn’t on fire, maybe it’s just active?
Article from Globe and Mail…There has been a lot of pressure on the Canadian Real Estate Association to make the Multiple Listing Service (MLS) more accessible. The Competition Bureau says Agents that want to charge a flat-fee are being excluded from MLS. The Competition Bureau says this restricts competition.
This could be the case of winning the battle but losing the war. A good realtor is someone that can give you the background information about a neighborhood. All those little things that we forget to ask during the frenzy of negotiating an offer and a mortgage.
Your realtor should be able to tell you about the schools, the local businesses, crime and safety issues, industry concerns, etc. This is where the true value of a realtor comes in to play. But I also like freedom of choice… perhaps there is a compromise.
It would be a shame to see a realtor’s services diminished because their incomes go down… An interesting subject for discussion…