Mortgage rates are on the rise. While this is not really news since rates have scraped along the bottom for quite a long while now, the much bigger question is when they would start to rise and it appears the ascent begins now. Within the past few weeks several of Canada’s main banks have raised fixed rate mortgages from between 10 and 20 basis points, and of course the trend is for more of the same. For buyers who have sat on the fence, the golden age of cheap mortgage money is ending and a new phase of ever increasing rates begins.

For those thinking about making a purchase, it makes a lot of sense to talk to your mortgage broker to get pre-approved and get a rate “locked in”, meaning even if mortgage rates rise in the short term, the rate your mortgage broker promised you will be honored for usually between 90 and 120 days depending on who you did your pre-approval with.  Your mortgage broker would be happy to provide more details.

Having a rate locked in while shopping for a property ensures you have a smooth search process with no unpleasant surprises. Knowing what you can afford before you put in an offer ensures you get the property you want when the perfect one comes along. Searching for property without being pre-approved can lead to disappointment if you find your dream home and then discover during the approval process that there are additional obstacles to getting your mortgage. Be prepared and get the best rate possible, so you can get the home you want for the rate you want! Forewarned is definitely forearmed 

If you were to try to predict the Vancouver real estate market 5 years from now, it would be a total shock if mortgage interest rates weren’t higher – of course how much higher is difficult to predict – but it’s a very safe bet that they will be higher so if you have been waiting for that perfect “sweet spot” combination of low rates and the lowest prices possible, I would say there’s no time like the present… Happy hunting!

Vancouver’s previously red-hot real estate market is presently languishing in a general state of malaise right now, the degree of which depends on which side of the equation you are viewing things from. Things aren’t exactly bad, but the one thing that everybody seems to agree on right now is that things aren’t exactly all that awesome either. A sentiment of apathy seems to linger in the market at present, and I don’t see it changing significantly anytime soon…

In the lower mainland we have roughly a 50/50 split, meaning that 50% of us rent and 50% of us own. If you presently rent and have been holding off a purchase for prices to come down before buying, it’s been a frustratingly slow wait. With such high real estate values the first time buyer especially finds it challenging to find an affordable entry point into the market, so even recent modest declines of 5% translate into big savings.

Sellers have had to scale back their expectations because not only have property values stopped climbing they have tapered back by roughly 5% in value. Properties that would previously have sold out in a day with multiple offers have given way to properties sitting for months.  Interestingly, for houses that aren’t selling the prices aren’t dropping by much - the vast majority of sellers have just taken the property off the market rather than accept a lesser value.  With sellers unwilling to take a loss supply is reduced and available inventory becomes more limited for buyers to choose from.

Realtors too have their own version of malaise in this indifferent market.  Realtors are small business owners and operating costs are perhaps surprisingly significant depending on the brokerage you belong to, so when business drops off for a prolonged period of time it doesn’t just adversely impact Realtors only. Because the Real Estate industry is a huge employer in BC, the domino spin-off effects touch many other businesses as well so the malaise stretches far and wide.

The best news for all concerned is that within this mediocrity there is still good opportunity for everyone to win. For buyers, 5% less or better is a fantastic discount to ease the pain of still expensive real estate values. For sellers, the good news is that those high property values have still been retained even though prices are a bit off from the highs. And for Realtors, it’s an opportunity to hone skills, revisit your core principles, and deliver fantastic, reliable service to remain truly valuable and relevant to your customers :)