Island Real Estate Slumping
The market continues to slump,even the media is not placating the real estate lobby.
From the National post,
Toronto appraiser Barry Lebow, of Lebow Hicks Ltd., said the Canadian real estate market has nowhere to go but down -- no matter how much cheap money is
thrown at consumers. These days he's taking the conservative route when assessing the price of homes because he doesn't want to face the wrath of a bank that has to foreclose on a house that was valued high and ends up selling for less than the mortgage placed on it.
"There are going to be tremendous changes in real estate... There are just not enough first-time buyers and the ones buying today, those people are not really buyers, You know what they are? They are renters of cheap money, variable-rate mortgages of 2.99%," says Mr. Lebow.
"If mortgage rates were 8% to 9%, these people wouldn't be buying. It's an artificial market. One hiccup in the rates and it's all gone."
The slump looks like it will continue for some time.
I'm not saying it isn't going to crash ( I fully expect it to) but the guy that wrote that obviously hasn't driven around this town lately.
Has anyone here actually seen a for sale sign in Nanaimo without a sold sign on it lately?
I grant you that some stuff is selling.
PRICES ARE STILL FALLING.
You should drive around some of the sub divisions on the north end of town.
Originally Posted by 3 of 7
For Sale, For Sale ; lots of them.
How many are living on the edge I don't know.
Perhaps some are trying to leave town for the tar sands!
FWIW We have had a net increase in people moving to BC ; most of them old & retired.
We have had a net loss of our youth who have chosen to move on to more fertile pastures!
This does not bode well for the long term in Nanaimo.
When ( and they will) interests rates climb we are in for a s**t kicking!!!
FWIW,again, I live in an area that has weathered two economic downturns with relativley stable house prices . This time the prices have slumped & little is selling. Some have given up , rented out the home & moved on.
I have driven around the north end (we garage sale on the weekends.) I'm totally amazed by the amount of sold signs and the resulting moving sales.
What's your point with that comment? Anyway...
Originally Posted by BigMac
I've been watching Island real estate for YEARS waiting for the right property and price, and based on my limited knowledge of the average wages here, the prices are not sustainable for residents, (and you can forget about foreign (Alberta, Ontario) money as well)! Prices are definately on a downward trend...I just hope interest rates don't increase too much in the next 2 years, or foreclosures will be everywhere (in Alberta too).
I agree it's all about the interest rate, with floating mortgages hovering at or under the inflation rate it's basically free money right now.
As anyone will tell you that lived here in the late 70's and early 80's we know that real estate can drop by more than half it's value in a short time.
My point was it hasn't begun here yet. I don't call a 10% drop in the current price "falling value when it's gone up 30% and more in some recent years. It's still way inflated.Our average home price in Nanaimo is still above $300,000 which is more than twice what it's worth at a 10% mortgage rate ( which certainly is possible given the amount of foreclosures in other markets )
I know personally of a house that's above the 300,000 mark and hasn't moved in over 3 months. They are getting an average of 2 people per month. The market is moving for cheaper apartments and houses - but that's about it.
Today speaking with a nice woman from the interior, turns out she has a friend here in Nanaimo with a Nice house which has been on the market for 8 months. Its entirely possible that the price is too high. I've been looking there are many houses still over $400,000 with no buyers.
One has to wonder that when the homes are re evaluated (downwards) for tax purposes ; what will happen to the tax base?
Originally Posted by Sly fox