Is the market slowing down?

CMHC forecasted this slow down over a year ago, kudos to them! If you want more info click or paste http://www.charitylinkrealty.ca/cityprofiles/london/index.jsp. On the right hand side click on the CMHC links, lots of good valuable information.

The good news is we will continue to move to a balanced market, that’s right no buyers market in sight. That means an equal number of buyers and sellers out there. Yahoo the strong survive! Prices won’t increase as quickly as in the recent past and sellers might have to negotiate a few more extras (yeah) such as appliances. The forecast does call for a moderate price increase. All in all we are headed into a nice steady market. I love these markets.

Too bad the papers are reporting negative news, it hurts us all. Take Stirling in St. Thomas as an example. The papers reported a job loss at the plant of 2,300 +- when there are actually only 700 +- jobs. Yes Stirling at one time employed 2,300 but not for a long time now. The plant closing will have a slow down effect as St. Thomas and the surrounding businesses adjust but I don’t think it has to be the doom and gloom we hear about. A lot of people employed at Stirling don’t even live there!

The 10 year average for home sales in London/St. Thomas for the month of September is 6,597; 5 year average is 7,269; this year 7,113 sales. Not as bad as you think.

As we approach Christmas our market naturally slows year after year after year. Mortgage rates are still great. If you are thinking of buying now is a fantastic time especially if you find a motivated seller whose house meets your wants and needs. If you are serious about selling call me for up to date market info that will help you achieve your plans. If we know what the market is doing we know how to price to stay ahead of the market. More on pricing next week.

What are your thoughts?

Someone said...

Someone said you should not invest now because history will repeat itself; the recession in the U.S. is expected to hit Canada really hard, putting us in a recession by the next year. The unemployment rate in the U.S. is at an all-time high, Canada has reported that 50,000 jobs were lost in July alone, the biggest number since February 1991.

What does this mean for London? If there is a recession, mortgage rates increase and loans are more difficult to obtain. For people who have over extended, they will start selling assets—typically investment property, then cottage, then home. As a result, real estate prices fall.

However, the London economy is slightly different. A majority of the Canadian job losses were in the manufacturing sector; London is a service economy. The 2 largest employers in London are the London Health Sciences Centre and the University of Western Ontario. 269,000 jobs were created last quarter alone (LEDC).

Student enrollment in a recession rises with funding through student loans. With over 30,000 students at UWO, London is known to be a “University Town”. Investments in student rental properties are essentially recession-proof.

Can we expect real estate prices to crash in the next year? No. It is possible that prices will decrease in some segments. Since London is a service economy and a “University Town”, we won’t get hit as hard as cities with a manufacturing economy, in fact there will be a greater need for student rental properties.

So, is it really a bad time to invest in student rental property? No. With an economy like ours, now is the time to buy.

Interest rates remain low. Average mortgage rate for the past 10 years is 10%, anytime you are below the average you have to be ahead of the game. Take advantage of the present market!

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slow down

The market has slowed as normal during our summer. People are on holidays, spending time with their children or just enjoying the hazy days of summer. Not to worry our market will pick up in the fall as usual. Reminder, October is fast approaching and CMHC will no longer approve the 100% finance "fully insured" mortgage feature. if you were considering using this option time to get serious and buy:).
CMHC predicted a balanced market and they are right, yeah.

100% financing? Not anymore.

On July 9, the Department of Finance announced that it will no longer offer 100% financing or 40 year amortizations. You will however be able to obtain mortgage loan insurance for amortizations of up to 35 years and up to 95% of the value of the property.

So, if you were thinking of 100% financing or a 40 year amortization, you may have to take another look at your options. October 15, 2008 is when these changes are to take effect.