If you have been reading my website for a while, you know that I have said the market would heat up again and in the spring it gets busier. It has been my opinion that the market has been continuously slowed by more difficult mortgage qualifying rules and that there is always an adjustment period with values after changes are made, after which the market resumes.
Last July was a significant set of changes, most of which I believe are negative to the average Canadian and that the policy makers are short sighted. This was confirmed by news recently that federal Finance Minister Jim Flaherty was calling banks after they lowered mortgage rates to express his displeasure, meaning he would prefer the banks to make more money than for Canadians to have more money in their pockets each month.
Anyways…back on topic. The market has been adjusting to the new changes and while sales are still down 6.1% from April 2012, they are up 11.9% from March 2013. 11.9% in one month is a significant increase, and is almost back to last year before the mortgage rule changes. I would tend to believe you will see a pretty solid may as well.
Now, the thing is statistics are useless without context. You must be considering buying a home or refinancing to be here, so the context here must be “What does this mean to you?” There are three basic types of people that read this:
- Type 1 – They are the kind that are always interested in buying, but when the market is quiet, they say to themselves “I shouldn’t buy now because prices are going down/are down. Its best to wait.” Then they read positive news on the market like this one and say “Whoa, the market is hot now, there is no way I can get a deal in this market. I better wait until the market softens.” Believe it or not, there are a lot of people who are like this, and all they usually ever decide on is indecision. Meanwhile, prices continue their long-term trend of increasing in value and they are not enjoying any of it.
- Type 2 – The bandwagon jumpers. They read news like this and decide its time to buy, and its good for them to do so, but they likely missed out on an opportunity out of fear from seeing bad news in the media.
- Type 3 – Those who just want a place to live and go about getting the best deal they can for themselves at the time that they are ready to buy, regardless of the market or time of year. Generally, I think these are the wisest types of buyers, who will not get caught up in the short term and look at owning their own home as a long term decision and a lifestyle decision.
Now there is a 4th type, and its very rare, but they are the ones that do the best in real estate. They like real estate and aren’t afraid to buy any time, but they look in the newspaper and see an article about the awful real estate market and they think “now’s the time to buy as much real estate as possible.” They look for opportunities when most people are scared off at the negative news.
I would suggest if you feel you are type 1 that you at minimum start to think like a type 3. We can help you with that.
In a market that is adjusting to mortgage rule changes, its best that you have someone creative (but ethical) on your side, with very good mortgage rates and ways to get you a mortgage approval. Also, someone who can look at your entire financial picture and suggest mortgage options and other options that fit within your financial picture.