BC home sales forecast to grow in 2013 - BCREA 2012 Fourth Quarter Housing Forecast

BC Multiple Listing Service® (MLS®) residential sales are forecast to decline 9.8 per cent to 69,200 units this year, before increasing 8.3 per cent to 74,920 units in 2013. The fifteen-year average is 79,000 unit sales, while a record 106,300 MLS® residential sales were recorded in 2005.

“Despite stronger consumer demand in the interior, BC home sales will fall short of last year’s total,” said Cameron Muir, BCREA Chief Economist.

“A moderating trend in Vancouver has recently been exacerbated by tighter high-ratio mortgage regulation. The resulting decline in purchasing power has squeezed some potential buyers out of the market. However, strong full-time employment growth, persistently low mortgage interest rates and an expanding population base point to more robust consumer demand in 2013.”

“While the average MLS® residential price is forecast to decline 7.6 per cent to $518,600 this year, the change is largely the result of luxury home sales returning to more normal levels after an unusually active 2011,” added Muir. In addition, the Lower Mainland’s share of provincial home sales is expected to decline to 57 per cent this year from 62 per cent in 2011.The average MLS® residential price in BC is forecast to edge up 0.7 per cent to $522,000 in 2013.

For more information and the full article please visit: http://members.rebgv.org/realtorlink/rebgv/publications/RLzine/RL_nov162012/files/BCREAForecast.html

18th Annual REALTORS® CareBlanket Drive - Share the Warmth!

Gather your old blankets, sleeping bags and clothes for the 16th Annual REALTORS® CareBlanket Drive. Between November 26^th and December 3^rd, participating real estate offices of the Real Estate Board of Greater Vancouver and the Fraser Valley Real Estate Board are collecting donations for people in need of warmth this winter.

The Blanket Drive is looking to collect clean blankets, tarps, sleeping bags, and warm clothing of all shapes and sizes. Donations are distributed through local charities, churches and community service organizations. My office will be collecting donations for the REALTORS® CareBlanket Drive. Our address is 2185 Austin Avenue, Coquitlam, BC, V3K 3R9. For a list of these charities and a list of donation drop-off locations see over or go to http://www.rebgv.org/blanket-drive

The REALTORS Care® Blanket Drive story

Way back in 1995, some caring REALTORS® in Vancouver observed the homeless situation in the city’s eastside and said to themselves, we’ve got to do something.

They put out an appeal to their fellow colleagues for warm blankets and coats and collected 600 bags of donations specifically dedicated to Vancouver’s homeless in the downtown core.

That single act of kindness has blossomed into one of the largest annual collections of warm clothing and blankets, helping homeless people and the working poor in every single community in the Lower Mainland.

Seventeen years later, thousands of REALTORS® from Whistler to Chilliwack have collected enough donations to help more than 166,000 people in need. Each year, more than 75 dedicated members actually pick-up and deliver all the donations, and well over 100 real estate offices in the Lower Mainland act as collection depots.

The annual REALTORS Care® Blanket Drive now collects an astonishing 5,000 plus bags of warm, winter items on behalf of dozens of local charities.

If you have any further questions or would like more information on the event, please feel free to call 604 319 4700.

Our debt isn’t like their debt

http://business.financialpost.com/2012/10/30/canada-need-not-fear-u-s-style-housing-crash-cibc/

CIBC Deputy Chief Economist Benjamin Tal sounds like he’s getting tired of the comparisons linking the Canadian housing market to a U.S. style crash.

Canada is just not going to have a severe crash, he says in a report dubbed “Should We Worry About a U.S. Style Housing Meltdown?

You could lose a “night’s sleep” if you glance at charts comparing U.S. household debt and prices before their correction with today’s Canadian housing market but Mr. Tal says a closer look reveals vast differences.

“To be sure houses prices in Canada will probably fall in the coming year or two but any comparison to the American market of 2006 reflects a deep misunderstanding of the credit landscapes of the pre-crash environment in the U.S. and today’s Canadian market,” says the economist.

He lays out a number of myths used to compare the two markets, listing everything from the difference in the quality of debt to the false assumption that most Americans had long-term 30-year mortgages before the crash.

“I just think the comparisons are irrelevant,” says Mr. Tal. “There are two different questions. Are we slowing? Yes, we are slowing. But not every slowdown should be a U.S. type crash. Just because it happened there doesn’t mean it happens here.”

The Canadian Real Estate Association said this month that September sales across the country were down 15.1% from a year ago. Many commentators expect prices to fall next but CREA said last month’s average sale price of was up 1.1% from a year ago.

Interestingly enough, Mr. Tal says some of the defences used to explain how the Canadian housing market is different than the U.S. probably are not valid.

For starters the low rate of mortgage arrears means nothing, it was just as low before the U.S. crash. Canada is a recourse country where borrowers in every province but Alberta can go after a homeowner’s other assets but that’s not much different than America where only 12 states are non-recourse states. Mortgage industry deductibility has long been seen as a contributor to the U.S. housing crash but only about 15% of Americans use that tax break, says Mr. Tal.

But the economist doesn’t need those excuses. He says the debt-income ratio in Canada is high but look at the quality of debt which rose quickly in the U.S. with almost 22% of the market considered risky — some of those people with a negative equity position even before prices crashed. In Canada, you must have a minimum of a 5% down payment.

While the 30-year fixed rate mortgage has long been the U.S. standard, 80% of new mortgages in the U.S. went for an adjusted rate mortgage leading up to the crash. Those mortgages had teaser rates for two to three years that were almost 4.25 percentage points below prevailing rates.

“[That teaser] expires and overnight you’ve got two years worth of [Federal Reserve] increases in one day, that’s a shock,” says Mr. Tal.

He says the Canadian market has room for a soft landing which is what Australia experienced recently. “They demonstrated there is such a thing as a soft landing, interest rates went up and prices went down by 7% to 8%.”

So why are we so obsessed with comparing ourselves to the U.S.? Mr. Tal says it’s normal. “It makes sense because it happened in the U.S. and everybody was talking about it and we are going through a significant increase in house prices. I can understand why people do it but it should be based on fact.”