According to the Financial Post, the government of Canada is going to make it just a little more difficult to qualify for a mortgage. Buyers are no doubtedly taking advantage of record low interest rates to acquire a home.

• It is going to be harder for first time buyers in the way of qualifying for government backed housing Insurance from either Canada Home Mortgage Insurance (CMHC) or private sector which is required if the downpayment is less than 20% of the purchase amount. What exactly does all that mean? It means the average income required to qualify for a home after April 18 2010 will be $5,000-$8,000 higher.

Not a first time buyer but planning to invest for your retirement portfolio? After April 18 2010 be prepared to put 20% down instead of the former 5% required before the deadline.

Why? The government is trying to protect Canadians from overextending themselves as interest rates climb from the presently historical lows.

Quick Reference on how this could affect you:

• Borrowers must qualify for a 5 year fixed rate term instead of the previosly accepted 3yr loan when calculating Gross Debt Service Ratio. Refinancing will be capped at 90% for government backed high-ratio mortgages

Full Article from Financial Post.

After beginning the year with low’s, buyer confidence in the South Okanagan Real Estate market quickly retrurned.  Penticton real estate continued to gain momentum monthly until December when we hit near record territory. More homes were sold last  month than in any December since 1989.

Average home prices started the year at $334,222.  As the months went by, the average home price increased to $407,361.  December 2008 showed the average sales price was $388,727.

Regarding the recession and the Okanagan, there have been some dissappointments in the local and global economies. When it comes to real estate, the immediate issue tends to be local in nature! We all need homes. Housing here is more affordable to buy than rent. Also, with low vacancy rates, rental properties are another favorable investment until retirement. Where else would you want to retire? I have quite a few more years ahead of me, and either way, I want and will be in the Beautiful Okanagan valley enjoying the sunshine, mountains and beautiful beachfront homes.

2009 had a roaring yearend for myself and other busy agents in the office. Prices correcting, interest rates, high rental rates  and first time buyers fueled the market when things were getting a bit stale.  An inactive start to the market showed the largest number of listings we had seen in years.  Large inventory resulted in competitive pricing and an unforseen buyers market.  The large inventory levels drove prices down while offering a good selection. A lot of first time homebuyers  find it less expensive to buy than it was to continue renting, so lower priced homes started to sell again first.

 A good credit score,  secure job and bit of cash or parental co-signer  you have a great chance at qualifying for what your pay in rent. Also entered the market place where the “new first time homebuyer.” The parent that helps the newly weds would rather the college student/entrepreneur pays the parents’ mortgage over than anyone else!

Late spring  prices had officially corrected enough and the market stabilized. Then, near suummer’s end, there was a little upward pressure – single family homes in the $300,000 to $450,000 price range. if  priced right, nicer homes sold very quickly.  Listings that appeared to be overpriced failed to sell.

The Canadian Mortgage and Housing Corporation (CMHC) is considering some changes to their program of insuring mortgages. This could affect first time homer buyers or those without a 25% downpayment. Certainly the impact of new Harmony Sales Tax  HST remains an unknown.

Spring is always the strongest part of the real estate market here in the Okanagan. If you are thinking of a move this year call me!

Real estate aside, I hope you all have a happy and healthy 2010. If there is anything I can do to help you don’t hesitate to call.

Dori Munday.

27 Years of Continuous Success!

Royal LePage Boasts 50%  Year after Year.

When considering a purchase on a home that is currently in foreclosure there are some points that are important to understand.

As a purchaser you can make an offer on a foreclosed property and have the bank accept it subject to financing, inspection, insurance, home inspection and any other pertinent clauses. Once all the conditions have been met a court date is triggered. The accepted offer price is now public knowledge and anyone willing to pay more for the property has the opportunity to present their unconditional offer along with deposit to the court. This means that they must either be an all cash buyer or have all the financing 100% approved and ready to be released. At the court competing bids are common.

If you are interested in a property where a court date has already been triggered you must consider that an offer submitted to the court has to be unconditional, if you would like a home inspection you must have it done prior to presenting the offer. Same with financing the source of your funds must be cash or have your mortgage specialist have the property and you 100% approved. This is not a pre-approval this means that your broker has submitted the property, schedule A to the lender and has given you the clear ok to present an offer in court with a deposit of more than $10,000 already in trust with your realtor. Your broker needs to know that you are looking at going to court with your offer and financing. Your deposit can be compromised if this is not taken very seriously.

In competing bid situations, the principal objective of the Court is to protect the interests of the owner of the property being sold. The Court has few, if any, concerns about competing bidders, lawyers, realtors and others. The Court attempts to ensure that the best (normally: highest) offer is approved. That is done by allowing all competing bidders (including the bidder whose offer is already before the Court) to submit one final sealed bid. The Court opens and reviews all the bids together and approves the best one. Once the bids are opened by the Court they cannot be changed in any way; the auction process is completely final.

The Court will not approve any offer with a “subject” (a purchaser’s condition precedent). The only acceptable (and mandatory) “subject” is a vendor’s condition precedent that the offer is subject to Court approval.

The Court will not approve any offer without a significant and real deposit (i.e. – a minimum of $10,000, either already deposited in a realtor’s or lawyer’s trust account, or a bank draft or certified cheque attached to the offer).

The Court will not approve any offer without the full and proper legal name(s) of the purchaser(s) (exactly as such name(s) will appear will appear in title if that offer is successful bid). So an offer with the words “or nominee” or anything similar would not be approved. Once an offer is approved, the name(s) cannot be changed in any way.

All offers presented to the Court must have a schedule “A” attached and signed by the offeror(s). Offers without this Schedule will not be acceptable to our client (and therefore also not acceptable to the Court, because our client is the vendor).

The Bank of Canada met this morning and has left rates unchanged. Much media anticipation was looking for Mr. Carney to follow Australia’s increase but has stated that different influences are present here in North America and we may not see any increases until 4th quarter of 2010 possibly. Great news!

Please find attached a TD overview of the meeting.

Fixed rates have increased to 4.18% – 4.39% on a 5 year fixed depending on the lender with some quick close discounts available. (subject to change)

approx $452/month over 35 years per $100,000 – OAC
approx $536/month over 35 years per $100,000 – OAC

Vancouver, BC – May 26, 2009. As part of its Spring 2009 Housing Forecast, the British Columbia Real Estate Association (BCREA) reported today that housing market conditions have improved more rapidly than expected. As a result, BCREA has revised its home price forecast upwards, reflecting greater price stability through the balance of the year. The average Multiple Listing Service® (MLS®) residential price in British Columbia is forecast to decline eight per cent to $420,600 in 2009, instead of 13 per cent originally forecasted at the beginning of the year.

“The majority of the decline in home prices has already occurred,” said Cameron Muir, BCREA Chief Economist. “Balanced markets are emerging in Victoria, Vancouver and the Fraser Valley. There’s now little downward pressure on home prices in these areas.”

Home sales in the province have climbed out of a trough, posting double-digit percentage gains for three consecutive months (seasonally adjusted).  

BC MLS® residential sales are forecast to decline 12 per cent to 60,755 units this year, as a result of a weak first quarter. However, stronger consumer demand is expected to continue for the balance of the year and through 2010. Residential sales in 2010 are forecast to climb 10 percent to 66,740 units.

Affordability reached a three-year high in April with lower home prices and record low interest rates reducing the carrying cost of the average priced home 24 per cent over the last year.

“A significant increase in affordability has brought many first-time buyers into the market,” added Muir. “First-time buyers were largely absent in the late fall and winter, making it more difficult for move-up buyers to sell their current homes. The chain of ownership is now being oiled.”  

Source: BCREA