Posts Tagged Real Estate
Younger Home Buyers not Buying; Stagnation in the Housing Industry
Posted by Top Home Loans in General Banking, Mortgage Advice on June 8, 2010
Housing relies on market impulses to establish housing prices. In a strong housing market, buyers will exceed the sellers causing the demand for properties to increase dramatically. When housing markets are weak, sellers will exceed buyers, and buyers will settle on depreciated values.
In most real estate markets, it relies on new buyer’s to enter the market at a rate that meets or exceeds the rate of new housing coming into the market. Even with cheap mortgage rates, buyer’s are not being enticed to purchase new homes and resales homes. Instead, they prefer to remain at home until later in their lives. In many cases, children are not moving out of their parents house until their early thirties. This causes less buyers available in the market.
Also, many younger people are not able to get jobs due to the lack of available positions. Baby boomers are nearing the end of their working career and will be retiring soon. At this time, more and more younger people will be able to find homes more easily; however, more houses will come onto the market when the owners pass away.
The supply of homes in Canada will continuously increase while demand will decrease. Do not be surprised if property values continue to decline until the government imposes ways to circumvent the decline in property values.
Do you think younger buyers will start buying? What will house values do in the long term?
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Real Estate Discounters Driving Down the Cost of Selling your House
Posted by Top Home Loans in Property Management, Real Estate on April 4, 2010
MLS, the multiple listing service, has changed how many real estate consumers search for a place to live. In the past someone could only find what they are looking for if they used a real estate agent; however, since the internet has come along, it has become easier and easier for consumers to find a property on their own. Today, not only is it easy to buy a property, it is also easier to sell a property with the deregulation of MLS.
Recently, CREA, the Canadian Real Estate Association, has made several changes to MLS to make it easier for the average consumer to have a listing appear on MLS. The deregulation of MLS will allow for most people to have a listing appear on the site without having to hire the full services of a real estate agent.
Some real estate firms are quoting listing properties on the service for as little as $110. Believe or not, this is actually great news for buyers. The reason it is great news for buyers is that there will be increased selection of houses available, and more people will be placing properties up for sale on the service.
With increased inventories, buyers will have greater selection, and through the laws of supply and demand, property values should fall due to an increase in inventory. The discount in fees to the seller will also result in a lower purchase price, and less bidding wars on properties.
Sellers also benefit from the reduced realtor fees that they had to pay when listing a property. This will allow more would be sellers to sell easier, and without as much of a cost to the seller.
With many home buyers putting zero down, and 40 year amortizations, they may be looking for an exit point from their purchase; however, they have not been able to do so because their mortgage had been higher than their property value.
With the changes, the major losers appear to be the real estate agents. Real estate agents already had a tough time competing, and now this will make it even more difficult. Expect to see a major decrease in the amount of active realtors over the next few years.
With these changes, the real estate market will look a lot different in a few years.
What do you think will happen in the market? What do you think home prices will look like in several years?
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Mortgage Bits: Pop!!! That is the Sound of the Real Estate Bubble Bursting
Posted by Top Home Loans in Economy, General Banking, Mortgage Advice, Mortgage News on April 3, 2010
Own a house? Own an investment property? Thinking of buying a property. We have hit rock bottom mortgage rates for the past year and a half, and the rates will be rising soon. What does the future have in store for your property value?
The fact remains that Canadians have made it through the recession without too many scratches or bruises; however, property values and consumer confidence have continued to increase to an all-time high. Clearly, since our average property values are over double that of our American neighbors, the government and the Bank of Canada must intervene.
They have done exactly that. Rates have started moving higher, and the ability for people to be approved for a mortgage has restricted substantially. The new rules set forth by lenders will dramatically affect who can borrow and how much they can borrow.
As buyers are removed from the market, and sellers are forced into the market, property values should stay fairly consistent or begin to decrease. Hopefully, these rule changes will be only temporary; however, they could remain for quite some time. At least until housing becomes affordable again.
What do you think about housing prices?
What does the future have in store for the Canadian housing market?