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Real estate market equilibrium close at hand

Tuesday, April 13th, 2010 | 3:02 pm

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By Kathy Michaels

Real estate sales saw an uptick with the onset of warm weather, but spring hasn’t boosted the number of new homes under construction.

Kelowna area housing starts totaled 44 detached homes in March,  matching levels from a year ago according to Canada Mortgage and Housing  Corporation.

“Detached homes have been the focus of new home construction in 2010,” said Paul Fabri, CMHC  Market Analyst, noting that the figures jived well with the forecast for the year ahead.

“New home buyers are taking advantage of favourable interest rates and lower construction costs.”

Condos have yet to be an area of strength for the local economy. With hundreds of units still sitting on the market, finished and unused condominium construction should continue to be constrained in 2010.  Rental apartments have accounted for most multi-family starts to date this year.

Meantime, Central Zone of the Okanagan Mainline Real Estate Board  reported March 2010 sales activity of all MLS property types improved over 2008, the early part of 2009 and last month as the local housing market continues to pick up steam moving into spring.

“Sales activity remains strong and listings continue to increase in the Central Okanagan as Spring  unfolds and the promise of warm weather spurs Buyer interest,” said Brenda Moshansky, real estate board president.

“New listings rose 27 per cent over last year at this time —1,362 compared to 1,070— and are up 12 per cent over February.”

A wider selection of properties means more choice for buyers and a better opportunity to find the dream home they are looking for.

Overall sales of 366 units this month jumped 49 per cent from the 245 sold in March 2009 and rose 26 per cent from the 289 sold in February.

Total residential units sold showed a 42 per cent improvement over last year at this time —331 compared to 233 – a 33 per cent increase from last month (249).

Sales of 172 single family units were up from 130 last year and increased from 123  this February.   Townhouse and apartment sales continue to show improvement, rising to 63 townhouses sold compared to 34 a year ago  and 56 apartments sold compared to last year’s 47.

“As economic growth improves in BC and recovery is well underway across the country, mortgage  rates have gone up with the anticipation of potentially higher inflation,” said Moshansky.  “Despite the increases, home  prices remain relatively affordable and mortgage rates comparatively low in the Central Okanagan – factors that will continue to draw Buyers into our attractive market and to strengthen sales.”

Moshansky said she expects to see buyers with pre-approved mortgages making a move before the upcoming changes to qualifying criteria come into effect in mid-April.  And, others could jump in sooner rather than later in the coming months to avoid further rate increases and the pending HST.”

Real estate market equilibrium close at hand1.051

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2 Responses to “Real estate market equilibrium close at hand”

  1. Tim says:
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    Uh huh…if you ask a real estate agent everything always looks like it has been painted with gold. Articles like this are a waste of time that distort the facts about what is really happening…

    “Worse, mortgage rates are going up. Taxes, too. The provincial government is bleeding red ink, ensuring fewer services and more levies. Meanwhile family incomes have flatlined, job creation everywhere is stalled, and house values have just increased by 20 times the inflation rate in one year.” http://www.greaterfool.ca

    That link is just one man’s opinion but if you read all of the national newspapers it doesn’t take a rocket scientist to figure out that the market is being inflated by super low interest rates which are fuelling ridiculous house prices. For instance, the average price of a home in the States right now is $160K…in Canada is is $340K…huh? What recession?

    http://www.theglobeandmail.com/globe-investor/forums/globe-investor-1_economy_housing-bubble/

    “CHMC, as you know, insures most high-ratio, high-risk home loans in Canada – protecting the lenders against defaults. So, in essence, taxpayer resources are used to take the risk out of lending to risky borrowers. CMHC’s debt ceiling has exploded higher, and now rivals the country’s national debt – all so tens of thousands of new buyers can ‘own’ homes through the use of extreme leverage. It means any housing price correction of 20%, 15% or even 10% would wipe out their equity.” http://www.greaterfool.ca

    Check this one out… http://www.crackshackormansion.com

    So in my humble opinion, as I wouldn’t want to offend any real estate agents, it’s only a matter of time until “pop”….remember that recession that we “were” in…guess what…we are still in it!

  2. RealEstateBoardLackey says:
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    Buy Now!!! It’s different here. Buy now!!! Interest rates will go up and house prices will follow. Buy Now!!!

    Please continue discussion on the forum: link