Housonomix - 22 Mar 2024: Economic Crossroads: Charting the Course of Canadian Real Estate Amidst Financial Winds 🍁🧭"

🎥 Housonomix Highlights: Insights at a Glance 🕒 (in less than 60 seconds) ✨

Rate Watch 📊: A Slight Dip in the Numbers! 📉

In the latest buzz from the mortgage world, we're seeing a slight drop across the board that could signal good news for borrowers! 🏡💸

• Insured Rates on the Decline! 📉🛡️

  Starting off with the insured rates—these are typically for those making a purchase with less than a 20% down payment. The 3-year fixed rate has trimmed down a notch to 5.14%, marking a biweekly decrease of 0.05%. Similarly, the 5-year variable rate is holding steady at 6.10%, without any change from the previous period.

• Uninsured Rates Nudge Downward! 📉💼

  Uninsured rates, which come into play for refinances or high-value purchases over $1 million, have also witnessed a slight drop. The 3-year fixed is now at 5.49%, with a 0.05% dip, matching the movement in insured rates. The 5-year variable remains unchanged, poised at 6.85%.

• Flexibility with a Better Rate! ✨🔄

  Lenders with more flexible income and credit requirements are offering a starting rate of 6.59% for a 2-year term, which remains unchanged from the previous update.

• Private Lenders Stay Put! 🏦✋

  For those working with private lenders, there's a stable rate environment to report. Private lenders’ starting rates for a first mortgage (up to 80% LTV) are holding at 8.36%. Keep in mind this doesn't include lender & broker fees.

These slight shifts could be the window of opportunity for some to jump into the market or consider refinancing options. 🪟🔑 Remember, a personalized consultation can help chart the best course in this fluctuating market.

🌟 Real Estate Radar: Spring 2024 Market Round-Up Outside the GTA 🌟

📊 In this edition’s Real Estate Radar, we’re doing a round-up of major real estate markets outside the GTA 🌆 that are relevant to our readers and have been requested repeatedly. We thought it’s a good idea to take stock of how the real estate markets outside GTA are faring just as the Spring season 🌷 kicks off. Therefore, in this edition, we’ll be covering sales data till the end of Feb 2024 of Hamilton, Kitchener-Waterloo, Oshawa, London, Ottawa, and everyone’s favorite outside Ontario - Calgary.

• Hamilton: The Hamilton housing market reflects a mixed landscape 🏘️, showing a slight overall average price decrease 📉, varying performance across property types, and an increase in listings and sales 📈, suggesting a shift towards a more balanced market.

  • Detached Homes: The average price 📉 decreased by 1.3% year-over-year to $864,000, with sales slightly down ⬇️ by 0.6% to 306 units and new listings up ⬆️ by 24.3% to 589 🏡.

  • Semi-Detached Homes: Experienced a significant average price drop 📉 of 20.1% year-over-year to $608,000, sales declined ⬇️ by 17.4% to 19 units, and new listings decreased ⬇️ by 13.3% to 26 🏠.

  • Townhouses: Saw a slight average price increase 📈 of 0.4% year-over-year to $714,000, with sales up ⬆️ by 17.2% to 109 units and new listings growing ⬆️ by 14.5% to 150 🏘️.

  • Condo Apartments: Average price rose 📈 by 3.4% year-over-year to $471,000, with sales volume increasing ⬆️ by 30% to 52 units and new listings up ⬆️ by 21.4% to 119 🏢.

• Kitchener-Waterloo-Cambridge🔍: The Kitchener-Waterloo-Cambridge housing market showed mixed price movements across property types 🏠🏢, with a slight overall average price decrease 📉, but a robust increase in sales activity 💼📈, indicating a resilient market despite broader economic pressures 🚀.

  • Detached Homes: The average price 📈 increased by 1.3% year-over-year to $889,280, despite a monthly decrease ⬇️ of 2.4%, with sales up ⬆️ by 9.3% to 281 units 🏡.

  • Semi-Detached Homes: Saw a 1% year-over-year increase 📈 in average price to $673,638, with a notable monthly increase ⬆️ of 6.6%, but sales decreased ⬇️ by 14.3% to 24 units 🏠.

  • Townhouses: Experienced a 2% year-over-year decrease 📉 in average price to $629,734, with a monthly decrease ⬇️ of 1.3%, and sales increased ⬆️ by 10% to 110 units 🏘️.

  • Condo Apartments: The average price slightly decreased 📉 by 0.4% year-over-year to $459,455, but saw a monthly increase ⬆️ of 3%, with sales surging ⬆️ by 30% to 73 units 🏢.

• Oshawa: 🌟 Oshawa's housing market displayed robust growth 📈 with the average home price increasing by 6.9% year-over-year, reflecting a dynamic and appreciating market despite broader economic challenges 🎢.

  • Detached Homes: Saw a 7.2% increase 📈 in average price year-over-year to $910,000, with a 3.7% increase over the previous month ⬆️🏡.

  • Townhouses: The average price grew by 6.9% year-over-year 📈 to $723,000, marking a 6.5% monthly increase ⬆️🏘️.

  • Condo Apartments: Experienced a 10.2% increase 📈 in average price year-over-year to $456,415, with a notable 11.5% rise from the previous month ⬆️🏢.

• London, Ontario: 🌳 The London, Ontario, housing market, while overall being balanced, witnessed a slight increase in average home prices month-over-month 📈, alongside robust sales growth across various property types 🏡🏘️🏢, indicating a resilient and dynamic market.

  • Detached Homes: Average price saw a year-over-year increase of 1.4% to $683,000, with a notable 3.3% increase over the previous month 📈🏠.

  • Townhouses: Experienced a 3.5% year-over-year increase in average price to $507,000, complemented by a 0.6% rise from the previous month 📈🏘️.

  • Condo Apartments: Showed a 3.7% year-over-year increase in average price to $382,000, with a significant 19.8% jump from the previous month 🚀🏢.

• Ottawa: 🍁 Ottawa's housing market demonstrated resilience and growth 📈, with a 3.1% year-over-year increase in average home prices and significant sales activity 💼, signifying a steady market amidst fluctuating economic conditions. It reflects a balanced market that should appeal to both buyers and sellers 🏠🏘️🏢.

  • Single-Family Homes: Average prices slightly increased by 0.5% year-over-year to $796,167, with a monthly increase of 3.3% 📈🏡.

  • Townhouses: Saw a moderate 1.6% increase in average price year-over-year to $538,745, despite a slight 0.6% decrease from the previous month 📉🏘️.

  • Condo Apartments: Experienced a significant 7.6% increase in average price year-over-year to $429,410, along with a 3.6% increase from the previous month 📈🏢.

• Calgary: 🏔️ The Calgary real estate market shows itself to be a robust seller's market 📈, with significant year-over-year price increases across all property types 🏠🏡🏘️🏢, coupled with rising sales volumes and a healthy uptick in new listings, signaling strong market activity.

  • Detached Homes: The average price for detached homes increased by 14.4% year-over-year to $777,000, with sales volume rising to 954 units (a 20.2% increase) and new listings growing by 5% to 1,195 📈🏠.

  • Semi-Detached Homes: Semi-detached homes saw an average price increase of 13.9% year-over-year to $667,000, with sales volume surging by 36% to 191 units sold and new listings increasing by 15.5% to 223 📈🏡.

  • Townhouses: Townhouses experienced a 20.2% jump in average price year-over-year to $467,000, sales volume increased by 11.7% to 352 units, and new listings rose by 27% to 457 📈🏘️.

  • Condo Apartments: Condo apartments recorded an 18.4% increase in average price year-over-year to $332,295, with sales volume growing by 30% to 638 units sold, and new listings went up by 19.9% to 836 📈🏢.

Maple Pulse : 🍁Canadian Housing & Economy Pulse - Navigating Changes & Challenges 📉🏡

In this edition’s Maple Pulse🍁, where we highlight the main events concerning Canadian housing and economy over the last few weeks, here’s what we’re tracking:

• Inflation Eases, Paving the Way for Potential Interest Rate Cuts in Canada 📉: In a positive development, the annual inflation rate decreased to 2.8% in February, defying expectations of an increase and signaling a potential for the Bank of Canada to consider interest rate cuts in the near future. This second consecutive month of softer inflation figures is attributed to significant drops in the costs of cellular and internet services📱, along with a moderation in grocery price 🛒increases. With inflation now within the Bank of Canada's target range and core measures of inflation also declining, economists anticipate a more conducive environment for rate reductions, potentially starting mid-year, as the Bank seeks sustainable progress towards its 2% inflation target. The next interest rate decision is awaited with optimism for April 10, 2024.

• The Growing Wealth Divide: Renters vs. Homeowners 🏠💼: An RBC report highlights the widening wealth gap between renters and homeowners in Canada, revealing significant barriers renters face in accumulating wealth compared to their homeowner counterparts. Since 2010, homeowners' net worth has surged from nine to 13 times household disposable income, whereas renters have seen only modest growth, from three to 3.5 times income. This disparity is exacerbated by renters allocating a larger portion of their income to housing costs, which have risen to 29% in 2022 from 25% in 1999, in contrast to homeowners who spend 21%. The challenge for renters is further intensified by the continuous climb in rent prices, with the average asking rent reaching $2,193 a month in February, marking a 10.5% increase from the previous year. As a result, renters find themselves with less disposable income to save for a down payment, complicating their path to homeownership and wealth accumulation.

• Landmark Settlement Transforms US Real Estate: End to the 6% Commission 🏦: In a historic agreement that promises to reshape the US real estate market, the National Association of Realtors (NAR) has settled lawsuits with home sellers, agreeing to a $418 million payout and the elimination of the standard 6% commission on home sales. This decision follows antitrust allegations aimed at reducing competition and artificially inflating home prices. The settlement introduces new regulations, including prohibiting the inclusion of agent compensation in listing services and eliminating the mandate for brokers to subscribe to multiple listing services. Expected to lower real estate commissions by 25% to 50%, the agreement paves the way for more competitive and diverse selling models, impacting the financial dynamics of the real estate industry and potentially lowering the costs for homebuyers significantly. Why this matters north of the border? As we’ve covered in previous editions, a similar suit is making its way in Canada as well.

• Undercover Investigation Reveals Misleading Bank Practices 🕵️‍♂️💰: An undercover investigation by CBC News reveals that bank employees at Canada's big five banks—TD, RBC, BMO, Scotiabank, and CIBC—are under intense pressure to meet sales targets, often at the expense of customer well-being. Employees, speaking under the condition of anonymity, reported being encouraged to sell unnecessary products to customers, contributing to stress and ethical dilemmas. The investigation, involving hidden cameras, uncovered instances of bank employees providing misleading information about products, such as credit cards and mutual funds, and failing to prioritize customers' financial health over sales targets. The findings suggest a systemic issue of prioritizing sales over customer needs, raising concerns about the need for more stringent consumer protection measures.

• Vendor Take-Back Mortgages: A Creative Financing Comeback 💡🏦: In the face of rising interest rates, Vancouver's real estate market is witnessing the return of vendor take-back mortgages, a private lending strategy that's proving to be a boon for selling challenging properties. The arrangement allows sellers to act as lenders, offering a financial lifeline to buyers unable to secure traditional bank loans due to the property's condition or zoning. While this can lead to a higher sale price for sellers and an investment opportunity for buyers, it requires careful legal oversight to ensure protection for both parties. As regular readers might remember, we had covered this strategy in detail just in the previous edition of Housonomix.

Plenty of eye-popping events this week 🌟. Good news with inflation, with fingers crossed 🤞 on when Canadian interest rates finally start to drop. The only dark cloud ☁️ in that picture is oil which is already up over 12% just in the last 6 weeks and expected to rise further in the summer. Other than this, the US real estate market, particularly realtor commissions, is poised for a massive shake-up, although when (or if) something similar happens over here in Canada, remains to be seen. The other noteworthy story was the hidden camera investigation catching shenanigans of bank employees pushing unnecessary products to customers. Remember, at the end of the day, a bank employee is an employee who has to follow his employer’s diktats. When it comes to mortgages, the biggest liability for most people, at least there’s an option of working with an independent mortgage agent like yours truly, who doesn’t have to follow such orders and only goes with what’s best for clients.

🏠 Mortgage Mastery: Securing the Best Rate - Tips for Negotiating and Securing the Best Possible Mortgage Rate 🏡💼

Navigating the mortgage landscape can be daunting, but with the right strategies, securing the best rate for your dream home is within reach! Here are some essential tips to help you negotiate and secure the most favorable mortgage rate possible.

1. Boost Your Credit Score ✨

Your credit score is a critical factor lenders consider. Ensure your credit report is error-free and strive to improve your score by paying down debts and making timely payments. A higher score can unlock lower rates!

2. Save for a Larger Down Payment 🐷💰

The more you can put down upfront, the less risk you pose to lenders, which can lead to better rates. Aim for a down payment of 20% or more to avoid the added cost of mortgage insurance.

3. Shop Around 🛒

Don’t settle for the first offer. Explore options from various lenders, including banks, credit unions, and online lenders. Comparison shopping is key to finding the best rate.

4. Consider the Mortgage Type and Term 🔄

Fixed-rate mortgages offer stability, while adjustable-rate mortgages (ARMs) might start lower. Decide what’s best for you in the long run. Also, shorter loan terms often have lower interest rates.

5. Negotiate 🗣️

Yes, mortgage rates are negotiable! Use offers from other lenders as leverage and don’t be afraid to ask for a better rate or lower fees.

6. Time Your Rate Lock ⏳

Mortgage rates fluctuate. If you see a favorable rate, consider locking it in to avoid future increases, especially if you expect rates to rise.

By employing these strategies, you're not just applying for a mortgage; you're ensuring you get the best financial conditions possible. Happy house hunting! 🏠🔑

Ready to unlock your best mortgage rate yet? 🗝️💼 Let's navigate this journey together! Reach out to us, your dedicated mortgage agent, to explore personalized strategies that fit your unique situation. Together, we'll secure the rate that opens the door to your dream home. 📞✉️ Don't wait; your best mortgage experience starts here!

🏡 Brick by Brick: 😄 Smiles & 💡 Wisdom for Your Property Journey