News Release: September 2, 2010

2^nd quietest August in decade presents opportunity for Fraser Valley buyers      

(Surrey, BC) – The Fraser Valley Real Estate Board (FVREB) processed 997 sales on its MLS® in August, a decrease of 44 per cent compared to the 1,786 sales during the same month last year and 9 per cent fewer than in July, however 10 per cent more than the 910 sales in August 2008.

Deanna Horn, FVREB President, explains, “In August, sellers in the Fraser Valley took as much of a break as buyers.

“Even with our slowdown in sales, we’re seeing inventory edge lower. Since May, we’ve seen our volume of active listings decrease by 10 per cent.” 

The Fraser Valley Board posted 11 per cent fewer new listings in August compared to the previous month, the fourth month in a row of declining new inventory. At the end of August, the total active inventory was 10,287, 5 per cent less than in July, however still 14.5 per cent more than the selection available in August 2009.  

Horn adds, “Our selection of homes is healthy, interest rates remain historically low and prices are moderating, which represent excellent conditions for buyers. We’re currently seeing residential prices edge down month-over-month, but remain 4.7 per cent higher than they were a year ago.”   

The benchmark price for Fraser Valley detached homes in August was $510,107, down 0.1 per cent compared to July and 5.4 per cent higher compared to $483,839 in August 2009.   

The benchmark price of Fraser Valley townhouses in August was $324,485, a 0.4 per cent decrease compared to July and a 4.5 per cent increase compared to August 2009 when it was $310,389. The benchmark price of apartments decreased by 1.9 per cent from July and increased 1.5 per cent year-over-year going from $236,146 in August 2009 to $239,659 in August 2010.   

Information and photos of all Fraser Valley Real Estate Board listings can be found on the national, public web site www.REALTOR.ca. Further market statistics can be found on the Board’s web page at www.fvreb.bc.ca. The Fraser Valley Real Estate Board is an association of 2,972 real estate professionals who live and work in the communities of North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission. 

Full package:

http://www.realtorlink.ca/portal/server.pt/document/3236287/package_201008_pdf

‘If ever there was a time to buy, it is now,’
 John Greenwood, Financial Post · Thursday, Sept. 2, 2010

Bank of Montreal has chopped its benchmark five-year mortgage rate, aggressively throwing its weight behind what many are calling an increasingly wobbly housing market.

“It’s a great time to buy a home,” Martin Nel, a senior BMO official, said in news release announcing the change. He added that people who take advantage of the offer will benefit.

“If ever there was a time to buy, it is now,” Mr. Nel said.

The move, which takes effect today, brings the bank’s key five-year rate to 3.59%, down from 3.79%, making it one of the lowest five-year rates ever offered by a Canadian bank, says industry newsletter CanadianMortgage Trends.

But some experts are already scratching their heads because of the aggressive tone of the announcement as well as the timing, given the recent spate of warnings about the uncertain state of the market, including one earlier this week from the Canadian Centre for Policy alternatives predicting an imminent collapse.

When the big banks make mortgage rate changes, they generally just disclose the new numbers without commenting on housing market conditions. If pressed, bank officials are usually quick to explain that the changes in these consumer lending rates are merely a function of fluctuations in their own borrowing costs.

“It’s a bit puzzling to me,” John Andrew, a professor at Queen’s University’s School of Urban and Regional Planning, said of the BMO announcement. “Perhaps they are concerned that the number of new customers will fall off precipitously.”

Residential real estate prices have been in free-fall in the United States as well as many European countries, in contrast to the Canadian market, which has been on a tear for a good part of the past decade with prices in many cities at record levels.

But analysts worry that it’s only a matter of time before the Canadian housing market moves in the same direction, and they point to warning signs that have already appeared.

Earlier this year, Moody’s reported that debt-to-income levels of Canadian households are the highest ever and close to where they were in the United States before that market started to fall apart in 2007.

The Bank of Canada has raised concerns that the high debt loads of Canadian consumers have made them vulnerable to changes in interest rates and potential deterioration of the economy.

In a bid to crack down on what some described as reckless real-estate speculation, the federal government brought in new regulations in the spring to make it harder for first-time buyers to qualify for government-backed mortgage insurance.

Borrowers must now meet standards for a five-year fixed-rate mortgage, even if they want a shorter-term, variable-rate product. As the key measuring stick for many homebuyers, a lower five-year mortgage rate will mean that more people will qualify to buy more expensive homes than with a higher mortgage rate.

The tougher rules had the desired effect. The recent imposition of the new harmonized sales tax in Ontario and British Columbia also affected demand, and as a result the market cooled so much that industry insiders became worried it had gone too far.

The Canadian housing market is important to the banks because residential mortgages make up the single biggest asset class on their balance sheets.

There are nearly $1-trillion of home loans outstanding, to the Bank of Canada says. About half of these loans are held by the chartered banks.

Read more: http://www.financialpost.com/ever+there+time+says/3471835/story.html#ixzz0yNEHN8mj