Market Update

With winter coming to an end, we thought it would be a great opportunity to see where the local real estate market sits heading into spring by looking at sales and listing data provided by WECAR.

So far through February, we are noticing somewhat of a shift to a sellers market in Leamington.  There were 28 new listings for the month compared to 46 during the same period in 2014.  At the same time there were 33 sales compared to only 15 in 2014. Homes that sat idle for extended periods of time have been selling while new inventory has not been added to replace them.  In February, the average price for a home in Leamington was $168,743 vs $149,743 in 2014 – an increase of almost 18% on more than twice the number of sales.  A Sales/Listing Ratio of 118% places Leamington in stark contrast to other Essex County municipalities whose S/L Ratio typically hovers between 50-60%.  The county average was 57%.  Clearly the cold weather has not been a deterrent to buyers in Leamington.

1120 Mersea Rd 1 SOLD

The town of Kingsville saw a greater sense of balance.  There were 18 newly listed homes and 14 sales with an average sale price of $202,750 this past February.  By comparison in 2014 there were 16 sales and 25 listings at an average sale price of $226,375.  A S/L Ratio of 78% is still fairly high compared to the rest of the county.

What these numbers show is that buyers in the area are very active, motivated perhaps by the recent interest rate cuts and a potential increase on the horizon.  If you had any interest in selling, the current climate represents a great opportunity to fill a hole in the market as demand creeps up with new inventory needed to fill the void. As warmer weather approaches, now might be the perfect time to start planning your next move.  Contact Us today to see how we can help it happen for you!

1363 Heritage

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Market Update

Hard to believe, but 2013 is more than half way done!  Before you know it we’ll be getting ready to send the kids back to school.  This is a great opportunity then to take stock of where the local real estate market is at compared to this time last year.

According to statistics provided by the Windsor-Essex County Association of Realtors, YTD market activity is down 2.91%.  There are 4,687 available listings as of the end of June compared to 5,013 at this point last year.  Sales are down a modest 0.04% with 2,590 units sold compared to 2,591 units sold by this point in 2012.  YTD average price however has increased 3.62% to $180,645.  At this point in 2012 the average sale price was $174,341.  In sum, the market appears to be showing a sense of balance with inventory slightly down, sales staying relatively flat but sale price is increasing.

There are pockets in the local market that have been relatively strong lately.  For example;

  • Waterfront properties along Point Pelee Drive and Robson Road in Leamington. In the last two months, 5 waterfront homes have sold at an average price of $279,900.
  • Golfside Village in Kingsville. Since the beginning of the year 17 houses have sold in this subdivision with an average price of $219,147. The average exposure time for these properties was 70 days and sellers got  on average 99% of their asking price.
  • Bennie Ave townhouses.  Since the beginning of the year, 7 townhouses have sold on Bennie, Christina and Peter at an average price of $168,068.  Since the beginning of May, 5 new listings have been added with an average list price of $166,177.

These figures show that between Leamington and Kingsville there is a strong demand for certain property types and locations.  We are, however, beginning to see mortgage rates start to tick up ever so slightly which might take a bit of the momentum out of the market if they continue to rise.  As a buyer or seller then, this is a great time to think about getting into the market.  Lower interest rates mean buyers can afford to spend more on a home as the cost to service the debt is lower.  Buyers may also be motivated to move quicker as they don’t want to lose access to this cheaper credit.

If you’re thinking of selling, please Contact Us or send me a quick email at brad@critchlowrealty.com.  We’d be happy to give you an analysis about what’s happening where you’re living.

Now enjoy the rest of the summer.  Before you know it you’ll be stocking up on school supplies!

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Mortgage Rate Slashed!

The four major banks have all slashed their mortgage rates in an effort to gain your business.   Royal Bank, CIBC, BMO and TD have all announced that the current rate for a 5 year fixed closed mortgage is 2.99%.  We just had a conversation with the branch manager at a TD Bank branch  and they’ve been authorized to go even lower.  To be eligible for this special rate, applications must be submitted by April 30, 2013 and funded by August 30, 2013.  Homeownership hasn’t been this affordable in recent memory.  It’s a great time to give up renting and buy your first home.  It’s also a great time to consider upgrading to a larger home.  Contact Us today even if you’re just considering your options.  We’d love to give you an honest opinion of what we think your home is worth.  But don’t wait, these rates won’t be here for long.

 

June Market Data

Here’s a quick update on the statistics for the Windsor-Essex real estate market for the month of June 2012.  Total market activity was down just over 10% from June of 2011.  YTD, market activity was also down just over 3%.  June sales were down 8.6% with a total of 467 transactions.  YTD sales though are still up 7.68%.  Avg sale price for June of 2012 remained flat compared to last year while YTD avg sale price is still up 3.66%.  The most popular price bracket was between $100,000-$139,999 with raised ranches and ranches being the most popular styles.

These figures suggest that some of the gains experienced in the first half of the year might be starting to balance out a fraction.  This could be due in part to an expiration of the generous mortgage rates banks were offering at the beginning of the year.  Overall though interest rates still remain historically low and the market remains healthy with room for growth the remainder of 2012.

For more detailed information on June’s statistics, please see the following link – http://data.windsorrealestate.com/stats/June2012/June2012.html

New Mortgage Rules Announced

In a news conference in Ottawa, Finance Minister Jim Flaherty announced a major shift in mortgage regulation in Canada aiming to promote long term stability in the real estate market.  Homeowners and people looking to purchase a home should pay particular attention to the 4 major changes put forth today.

  • The maximum amortization period has been shortened from 30 to 25 years
  • The maximum amount of equity a homeowner can take out when refinancing has been reduced from 85% to 80%
  • The availability of insured mortgages will be limited to homes with a purchase price of under $1 million
  • The maximum Gross Debt Service Ratio will be fixed at 39% and the maximum Total Debt Service Ratio will be set to 44%

These regulatory changes are set to take effect July 9, 2012 and were implemented to help reduce the overall debt levels that Canadians have been taking in recent years.   These measures seem to be primarily targeted at the red hot condo markets in major centres such as Toronto, Montreal and Vancouver.  They will, however,  have an impact locally as lower interest rates and generally easy access to financing have both influenced a modest recovery in the Windsor-Essex region in the first half of 2012.  If you are considering purchasing a home, please contact us to discuss how the regulations might impact your situation.

For a good editorial analysis of today’s announcement, please see the following article in the globe and mail.

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/ottawas-new-mortgage-rules-save-us-from-ourselves/article4359211/

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Mortgage Wars Follow-up

Here’s a good article reflecting on the benefits of the current mortgage market to consumers.

..

Mortgage war means good news for homeowners
By Gordon Pape | Moneyville – Sun, 18 Mar, 2012 7:00 PM EDT.. .

Good news! The mortgage wars are back. Bad news! The mortgage wars are back. It all depends on your perspective.

If you’re an aspiring homeowner or you want to refinance to pay off back-breaking credit card debt, the latest battle of the banks for market share is a terrific opportunity.

If you’re Bank of Canada Governor Mark Carney, it’s a slap in the face. You’re the most influential financial person in the country and you’ve been spending a lot of time during the past two years warning Canadians about the dangers of their ever-increasing debt levels. And what is the banking oligarchy doing in response? Thumbing their collective noses at you by encouraging people to take on even more debt!

The latest cat fight for mortgage market share couldn’t have come at a better time for prospective borrowers. The spring housing season is just starting to heat up and prices stubbornly continue at record highs despite alarm bells that the bubble could burst any time soon. In this climate, any break on mortgage rates that makes your dream home more affordable is welcome.

The mortgage market is a Wild West show right now. The banks are aggressively undercutting one another to build their business before the low-interest window closes. Bank of Montreal kicked off the latest round of rate-cutting by offering a five-year closed mortgage at 2.99 per cent and an even more eye-popping 10-year rate of 3.99 per cent.

Royal Bank has countered with an “all the frills” four-year fixed rate of 2.99 per cent with amortizations up to 30 years. That translates into a monthly payment of $1,260 on a $300,000 loan. By comparison, at 5 per cent the monthly carrying cost would be just over $1,600. Royal even offers to pay the switching costs if you move your business from another financial institution. Talk about dog-eat-dog!

Most other banks are offering similar deals just to stay in the game. For the moment, this is a true buyer’s market for borrowers but it may not last long. Some of the deals have fixed termination dates (e.g. March 28 for BMO’s 10-year 3.99 per cent rate). Others could be pulled at any time.

Meanwhile, in Ottawa, Carney must be seething. The last thing he wants to see is Canadians jacking up their household debt to income ratios even more. But short of intervening directly in the private sector, which he would be reluctant to do except under extreme circumstances, his hands are pretty much tied.

He’d love to raise the key overnight target rate from its current level of 1 per cent but for the moment he’s a prisoner of the domestic economy and international forces. The recovery is still fragile and the high loonie continues to hurt our export markets. Still, you can bet he’ll make a move at the first possible opportunity.

Do you remember in high school when your English teacher would make you parse lines from Shakespeare? That’s what economists do when the Bank of Canada issues its interest rate statements. They dissect every line, looking for clues that indicate any subtle shifts in position that might suggest a move up or down in the near future. They found several such clues in the March 8 announcement that the overnight rate would remain unchanged for now.

“The heightened uncertainty around the global economic outlook has decreased in the weeks since the Bank released its January Monetary Policy Report (MPR),” the statement said. “With tentative signs of stabilization in European bank funding and sovereign debt markets, conditions in global financial markets have improved and risk aversion has decreased.”

Reduced global uncertainty. Signs of stability in Europe. Global financial markets looking better. Less risk aversion. Hmm.

The statement went on: “Canadian household spending is expected to remain high relative to GDP as households add to their debt burden, which remains the biggest domestic risk.”

It doesn’t take an economist to read between the lines here. With the global economy improving and household debt “the biggest domestic risk” interest rate increases are on the way sooner rather than later.

The U.S. Federal Reserve Board’s pledge to hold its rates at record lows until 2014 is a problem because it means a Canadian rate increase will probably push the loonie even higher. But Carney may be prepared to live with that to try to shake the country out of its debt spiral.

So if you are thinking about borrowing money, my advice is to act now. The window may be closing faster than you think. And here’s another tip. Take the longest low-rate option you can find. You may not see anything like it again in your lifetime.

Gordon Pape is editor and publisher of the Internet Wealth Builder newsletter. His website is www.BuildingWealth.ca
Image: Keith Beaty/Toronto Star file photo.

http://ca.finance.yahoo.com/news/mortgage-war-means-good-news-230000317.html