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The real estate market in Western Canada is expected to face some major challenges. Large inventory build-up of resale and new homes surpassing 20,000 active listings and unusual contraction in sales over the past few weeks are alarming. Canada especially Greater Vancouver may finally join other countries, to deal with a declining housing market.
The drop in housing demand was reported in The National Post “West leads drop as Canadian housing slumps“. Un-official July sales reported through the MLS system is pointing to a slump (over 60% drop in sales compared to June) in BC housing sales. When the official report is released ealry nex month, much worst headlines will be reported by the media.
The National Post reported “Mortgage crisis may be looming for Canada.“ The tighter under-writing, termination of the 40 years amortization and 0$ down payment financing by CMHC, rising interest rates, higher inflation and declining exports are making Canadian consumers less confident of their future.
Moving forward, the state of Canada’s economy and the challenges faced by consumers were summed up by National Post Columnist, Diane Francis’s ” Debt meltdown summer notes“ Canada’s housing market could follow the decline in house prices as in the US, UK, Spain, Australia and now New Zealand.
Not the best info in the world is it? 21 listings, 11 s/s's and no firm deals in 2 months...makes it pretty challenging!
Pricing is the name of the game. I guess working to get your sellers to lower their prices can help.
Maybe sharing Teresa Boardman's pricing article (Part 1 & Part 2) with your sellers can convince them to reprice their homes.
James I have the lowest priced listings around I consistently price them at lower then the comp-etition......its scary to think how much lower?
This market is weird. I was able to convince my sellers to reprice and reduce their prices at market. The past 2 weeks were totally quiet, only one showing in an apartment complex with 4 other listings. Mine was the lowest price 2 bedroom apartment with up-dated kitchen and laminated floor. Hope August will have more activities.
I have found there to be no shortage of active buyers...what I have foud is a shortage of buyers able to secure financing with lenders shiftin towards the new guidlines in advance of October 15th. Along with this lenders are reporting an abundance of applications of which many are unstaisfactory once viewed by the underwriters. This is slowing the process down to the point where even preapproved clients are waiting up to seven days for their financing.
Kye - The banks are tightening their lending over the past few months. The high prices for homes in Greater Vancouver make it very difficult for families with average income to qualify for their mortgages. Some sub-prime mortgage lenders already packed up and closed their operations in Canada.