A return to a buyer’s real estate market in Vancouver – but for how long?
Real estate market conditions in Vancouver and its popular neighbourhoods rarely seem to favour those looking to enter into the condo or housing market during the past decade. Fortunately over the past two years there have been some really great opportunities for Vancouver home buyers.
The best opportunity of recent time happened during the latter part of 2008 and early 2009 as the ongoing US recession, beginnings of the Canadian recession, and the impending global credit crisis captured newspaper and TV headlines. During that time those brave enough or secure enough in their finances that bought homes experienced some of the best deals and home prices the area has seen since 2006.
During the second quarter of 2009 historically low interest rates, accumulated inventory, pent up demand, coupled with increasing consumer confidence created a buying frenzy in Kits, Fairview and other Vancouver popular neighbourhoods. This resulted in record breaking months of home sales and competing offer situations were common. Once again those selling their homes controlled the real estate market.
The early part of 2010 was similar to the mid and latter part of 2009 with many Vancouver home buyers looking to capitalize on what was thought to be the end of the super low interest rates, less stringent CMHC rules, and pre- HST era. As expected once key lending rates were raised by the Bank of Canada and the HST implemented the Vancouver real estate market slowed down.
As happened in the fall of the 2008 and early 2009 the power has now in the latter part of 2010 shifted to the home buyer. So why aren't people buying homes?
Simple, many people in a position to buy bought during the past year and a half so demand is understandably significantly down. What I'm also finding though is that many people just don't realize how good buying conditions really currently are.
True - key lending rates have been raised twice in the last year by the BOC, and with the new CMHC rules you must qualify at the posted rates. However ... all the major banks have actually lowered 5 year fixed rates twice over the past two months. A mortgage broker with RBC told me a few days ago that 5 year fixed rates are again in the 3.6 -3.7 percent range! That's as good as I can remember them ever being during the market doldrums of 2009.
With such reduced demand, great low interest rates, and a large amount of homes for sale in Vancouver home buyers are truly in a great position to negotiate a very fair price and favourable terms on a home purchase. Will it last? It seems unlikely. Here's why.
The number of new listings for sale in Kitsilano, Fairview, and downtown areas have been dropping over past recent months so it is very possible that come fall we will reach a point where demand and supply are more equal. This will shift us into more "balanced" real estate market conditions. With interest rates if the national economy starts recovering the way we've be led to believe it will, and the US economy eventually starts to rebound the banks will undoubtedly start increasing them.
For more on Kitsilano and Fairview market conditions be sure to visit my other websites www.kitsilano-condo.com and www.fairview-condo.com.
