Jan 28, 2014

 Calgary listings are selling like hot cakes...well the ones that are priced correctly anyways. Currently we have 2528 ACTIVE LISTINGS in the Calgary area (as of Jan 28, 2014). This number does not account for Pending and Under Contract listings. 1687 are Single Family active listings and 842 are Condo active listings. 
 Did you know a percentage of ACTIVE listings on REALTOR.ca are actually under contract or pending? The sellers have the right to keep the property listed because it isn't actually sold until conditions are waived by the buyer(s). It's important to advise your REALTOR if you want to only view properties that are ACTIVE with no offers. Some buyers view this as a waste of time and others still want to view in hopes of the current offer falling thru.

 The market has been frustrating in Calgary for most buyers to say the least. If you're actively searching, then you know exactly what I mean. There is VERY LOW INVENTORY of quality product, homes/condos are selling in minutes/hours or just a few days with unconditional offers. Yes, that can be scary for some to write an offer with no conditions. I wouldn't advise it unless you're a seasoned investor or know exactly what you're doing. Always seek legal advice, accounting advice and professional advice from your realtor and mortgage agents if you're unsure about something relating to a purchase.
 For sellers, it's been easy to unload your personal or investment properties. Especially if they back on to a highway, commercial space, located above a parkade door, facing a busy street etc. Even the less desirable listings are selling at record speed. Sellers do not miss the boat on this current market if you NEED to sell. From my view point, I don't see things slowing down in the near future: What's going on?

-Interest rates are still at historic lows (Closed 5 year variables around 2.5% & 5 Year fixed rates from 3.39%)
-The Bank of Canada announced Jan 22, 2014 they are maintaining the overnight rate at 1% (Variable rate mortgage owners are happy). Next meeting is scheduled for March 5, 2014.
-In-migration is still strong in Calgary and other cities across Canada. 
-B.C. LNG projects have been approved and probably more terminals to come (Google LNG B.C.). Thousands of jobs will be created in B.C. and Calgary.
-There is still pent up demand to buy from buyers who have waited and waited and waited. Most have pre-approvals locked in and expiring soon.
-RBC silently lowered their fixed rates last week.
-Condo market is heating up with not many new inner city developments being completed until 2015 or later. Many developers are at it again selling their pre-construction projects aggressively with little to no discounts. Do your research or hire a condo specialist that knows the projects. Some are offering much better value than others. Of course build times for these high rises usually range from 24-36 months.

 I definitely feel the above are all indicators the market will stay strong and may heat up during the seasonal spring frenzy. I'm open to your thoughts and comments. Drop me a note at info@artlee.ca

 My suggestion to all buyers who may be actively searching in this market is to do your own research, stick to fundamentals and don't get caught up in the hype. Make sound decisions based on facts and need, not instant gratification and your wants! I would advise clients to work with good...I mean GREAT mortgage agents and realtors to help with your approval and search. Form a team of professionals who can get it done! Those services are usually FREE when buying of course. The GREAT agents in this market will shine above the rest, have your best interests in mind and will offer exceptional service. They will help you make your purchase close smoothly and headache free. Who wouldn't want that? It should be a fun and exciting adventure, not a slow and boring process. GREAT mortgage agents will get the approval done in a timely manner (usually within 5 business days in most cases).

 Lastly, if you're an Realtor please be professional, follow protocol especially with Multiple offer situations (happens daily now in the current market) and do your clients a favor and just do your job the best way you know how. Learn from mistakes and spend the time to educate yourself on areas you're weaker in. I feel realtors are sometimes too caught up emotionally in the sale and just want to kill each other (not actually) while in negotiations. When in reality it's about putting a sound deal together where both parties are happy. Working with people (good or bad) in the industry has shown me the darkness that is out there and also the love and compassion that people show when issues arise. I love my career choice!

 Well I'm going to end my ranting now as I sit in my car, waiting for clients to arrive at a listing that is probably going into multiple offers today. Good for the seller, bad for us haha
 The above is my personal opinion and thoughts only.

Hope everyone has a wonderful day,

A

City residential sales totaled 1,172 units in December, bringing total sold units for 2013 to 23,489. Prices for the year were up by 8.6 per cent over 2012. 

“Sales growth exceeded expectations in 2013, pushing above long-term trends,” said Ann-Marie Lurie, CREB®’s chief economist. “Two consecutive years of elevated levels of net migration, combined with an improving job outlook and confidence surrounding long-term economic prospects, supported the demand growth.” 

As expected, both new listings and transactions in December eased over the previous months because it is typically a slower time of the year for sales. However, sales activity for the month was in line with long-term averages, despite poor weather conditions just before the holiday season. 

“Typically, fewer sellers list their homes in December,” said Becky Walters, CREB® president. “There were more new listings this year than in 2012 because some sellers saw the continued price gains and decided it was the right time to list.” 

Market conditions favoured the seller for much of 2013, causing price gains in both the single-family and condominium sectors in the city. 

The single family benchmark price was $472,200 in December, a 0.3 per cent increase over the previous month and an 8.6 per cent increase over the previous year. On an annual basis, unadjusted single family prices grew by more than seven per cent in 2013, exceeding previous highs. 

“Prices have recovered in the single-family market, but sellers need to keep in mind there are differences between communities and types of homes,” said Walters. “Higher-end homes (priced above $500,000) have recorded slower price growth than those in the lower-price segment. And there are many communities where prices have not surpassed previous highs.” 

There were 16,302 single-family homes sold in 2013, an 8 per cent increase over the previous year. Meanwhile, the 22,569 new listings were nearly one per cent higher than in 2012. 

Condominium apartment sales totaled 4,007 units in 2013, more than 14 per cent higher than in 2012. Condominium townhouse sales totaled 3,180 units a 22 per cent increase over 2012. 

“The condominium market is more affordable than single family, and that is attractive to first-time buyers who are weighing rising rental costs against ownership costs,” said Walters. “Investors are also attracted to condos, because prices have not yet fully recovered to their previous highs.” 

Condominium apartment and townhouse prices totaled $278,600 and $307,100 respectively in December. On average, annual benchmark price growth in the townhouse market totaled just more than six per cent, compared to the apartment sector increase of nearly nine per cent. 

“In 2014, both sales activity and prices are expected to improve, but not at the same pace recorded this year,” said Lurie “While factors influencing demand will support growth in 2014, rising listings and increased competition from the new home sector should alleviate some of the supply pressure in the market.” 

Those factors, combined with potential increases in long-term lending rates, should take some of the steam off the exceptionally strong price growth recorded in 2013, said Lurie. 

CREB® is ranked as one of the largest real estate boards in Canada. It is a professional body of more than 5,000 licensed brokers and registered associates, representing 235 member offices. One of the main functions of CREB® is the operation of the Multiple Listing Service® (MLS®) System.

CLICK FOR FULL REPORT

DOES LOCATION WITHIN A CONDO COMPLEX MATTER? YOU BE THE JUDGE...

 Often I show condos in high rise buildings, low rise buildings, townhouse complexes and point out observations my buyers may never ever consider. For instance, one buyer saw a great deal on a 1 bed, 1 bath unit in a newer development. We went to get information and it seemed all other 1 bed 1 baths were sold out except the 2 main floor units beside the front entrance in this low rise building (5 stories or less). Coincidence, that these were the last available units? Usually not! For many buyers, the more sought after units seem to be on higher floors and on the corners with the least amount of shared walls. For townhomes, the more desirable units usually back on to a green space/ravine’s and are end units. Of course not everyone can afford the most desired units in every complex. The builders know which units are going to sell the fastest and usually price them accordingly.

  Some people worry about the increased security risk and increased traffic on the lower levels especially near the front entrance. Does that make these units undesirable, absolutely not! Does it narrow down the buyer pool for when and if you decide to sell? I believe it does sometimes. Does it affect the selling price in the future? Probably a little bit.

 Please keep in mind ground floor units could be desirable for a buyer who has a dog. It’s definitely easier to exit the building from the main floor to take the pooch for a walk multiple times a day if need be. Maybe a buyer has mobility issues and prefers the ground floor opposed to using the elevator and or stairs every day. Perhaps there’s a private entrance on your ground floor unit and your guests can enter through that door instead of the main?

 Everyone’s wants and needs are unique, but remember when purchasing to think about who might want to buy your condo if you decide to sell one day. If you plan on never selling, then please think about your quality of life in that unit. Will the elevator opening in front of your unit/arrival ring/noise drive you crazy? Will the heavy foot traffic walking by your door consistently frustrate you? Will the vehicle traffic noise bother you because you’re fronting onto a highway? Does hearing the underground garage door open and close non-stop make you want to move? The list goes on...living in a condo can be amazing and is a lifestyle choice. You will have more time to do other things instead of mowing the lawn, shoveling the sidewalk and other basic maintenance issues associated with normal home ownership. You will be able to just lock up and travel for a month, or even better a year without having to find someone to house sit. Finding a location within a high/low rise building or townhouse complex in your comfortable price range is key to happy condo living. Location, Location, Location...it does matter!

Often desirable features of a condo apartment/townhouse:

-Top floor    
-Corner unit  
-Quiet side of a building facing a main road
-Units away from the elevator and foot traffic   
-Units with views  
-Units that are quieter
-Units with more natural sunlight
-End units 

Often less desirable aspects of a condo apartment/townhouse:
-Units near the elevator and or staircases with heavy foot traffic  
-Units with little to no direct sunlight
-Units fronting or backing on to main roads with vehicle noise and pollution
-Units above garage doors  
-Units near the front entrance   
-Units near exhaust fans for forced A/C or heating

 I've decided to blog about this topic to get your condo brain juices flowing and I hope you have found some of the info useful. Of course hiring a Certified Condo Specialist to help with your search is FREE. They will maximize your time, remove the stress, represent you in negotiations, explain condo documents to you and what they mean and guide you through out the process. Again it's FREE; the seller/builder usually pays your Realtor for helping you find their Condo. A great realtor will always have your best interests in mind and can help with choosing that all so important location within a condo complex, new or already standing.
 
 I'm new to blogging and appreciate any comments and or questions you might have.
Again, I must reiterate that everyone's wants and needs are different. It all comes down to personal preference, quality of life and budget. So the next time you're shopping for a condo, think location within the building!

Art Lee
REALTOR/Certified Condominium Specialist
Real Estate Professionals Inc.
202, 5403 Crowchild Trail NW
Calgary, AB T3B-4Z1

Cell: 403.827.4477
Fax: 403.592.9104
Email: info@artlee.ca
Web: www.artlee.ca 

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

Global growth prospects are unfolding largely as the Bank projected in its July Monetary Policy Report (MPR), with a widespread slowing of activity across advanced and emerging economies. The economic expansion in the United States continues at a gradual pace. Europe is in recession and its crisis, while contained, remains acute. In China and other major emerging economies, growth is decelerating somewhat more quickly than expected from previously-rapid rates, reflecting past policy tightening, weaker external demand, and the challenges of rebalancing towards domestic sources of growth. Notwithstanding the slower global momentum, prices for oil and other commodities produced by Canada have, on average, increased since July.

In Canada, while global headwinds continue to restrain economic activity, underlying momentum remains at a pace roughly in line with the economy’s production potential. Economic growth is expected to pick up through 2013, with consumption and business investment continuing to be its principal drivers, reflecting very stimulative financial conditions. Business investment remains solid. There are tentative signs of slowing in household spending, although the household debt burden continues to rise. Canadian exports are projected to remain below their pre-recession peak until the beginning of 2014, reflecting the dynamics of foreign demand and ongoing competitiveness challenges, including the persistent strength of the Canadian dollar.

Core inflation has been softer than expected in recent months but, with the economy operating near its production potential, it is expected to return, along with total CPI inflation, to 2 per cent over the course of the next 12 months.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. To the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate, consistent with achieving the 2 per cent inflation target over the medium term. The timing and degree of any such withdrawal will be weighed carefully against domestic and global economic developments.

Information note:

The next scheduled date for announcing the overnight rate target is 23 October 2012. A full update of the Bank’s outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 24 October 2012.

Source:  http://www.bankofcanada.ca

Several Calgary Communities Get a Boost in Sales and Price

Calgary, November 1, 2011 – According to figures released today by CREB® (Calgary Real Estate Board), Calgary residential sales totaled 16,184 after the first 10 months of the year, an increase of eight per cent over last year.  

Over 61 per cent of Calgary’s established communities saw increased sales levels compared to last year.  Garrison Woods, Collingwood and Mahogany saw the largest sales increase at 170 per cent combined; nearly half of all Calgary communities recorded price increases, with Shaganappi, Chinook Park and Downtown leading the way with a combined average price increase of 55 per cent.   

“A boost in full time jobs throughout the year is gradually translating into improved sales in the real estate sector,” says Sano Stante, president of CREB®. “Consumers are taking advantage of price stability and a healthy variety of selection.  While these gains are moderate, we are set to outpace 2010 sales.”

Single family home sales totaled 988 for the month of October 2011, an 11 per cent increase over October 2010, but continue to remain well below historical levels.  Year-to-date sales totaled 11,503, a 10 per cent increase over last year. 

October listings have edged upwards over last year’s levels, increasing by nearly two per cent, but year-to-date there are six per cent less listings than levels recorded last year. 

“Consumers are feeling more confident about the local real estate market,” adds Stante.

The average price of single family homes for the month of October 2011 was $455,399, while the median price was $395,000, an increase of two per cent compared to last year. This is primarily due to the rise in the number of luxury homes sales.  Despite the monthly price increase, however, year-to-date figures remained stable at levels comparable to the previous year. 

Condominium sales for the first 10 months of the year totaled 4,681, a three per cent rise over the same period last year.  Inventory levels remained at 1,935 units, resulting in months of supply pushing above five months. 

“The condominium market has significantly tightened compared to last year, however, moving into winter, we expect to see a rise in months of supply,” Stante says.

Condominium year-to-date average and median prices in 2011 were $288,736 and $262,500, respectively, a slight decline over the first 10 months of 2010. The decline is mostly due to increased sales in units priced under $200,000. 

“Overall, the resale housing market continues to show signs of improvement and, with no near term change in interest rates, we can expect the market will continue to see moderate and stable growth throughout the rest of the year,” Stante concludes.

Calgary Real Estate Board

The Canadian Real Estate Association said Friday sales last month rose 3% from August on a seasonally adjusted annualized basis — highest since May 2010 — and the second straight month sales rose.

Meanwhile, prices have also begun to stabilize as fears of a dramatic meltdown appear to be abating. The average price of a home sold in Canada last month was $331,089, down slightly from the $331,683 average a year ago. But prices were up from a month earlier, when the average was $324,928.

“Supply and demand are rebalancing and that’s keeping prices steady in many markets,” said Georges Pahud, president of CREA.

The other factor keeping the market afloat are interest rates.

The Bank of Canada has signalled it will take a pause on raising its key lending rate which should keep the prime rate at most banks at 3%, affecting any variable rate borrowers.

But it’s consumers on the long end of the borrowing spectrum who appear to be getting a better deal with the five-year term fixed-rate mortgage reaching an all-time low over the past month.

Gary Siegle, the Calgary-based regional manager for mortgage broker Invis Inc., said the standard rate for locking in for five years is now 3.69% but adds some lenders have dropped to as low as 3.39%.

“I’ve been working for 38 years and I don’t recall rates this low ever in my career,” said Mr. Siegle, adding the discount on variable-rate mortgages has dropped to the point that consumers can float with a rate as low as 2.35%.

“The question I wonder about is at these rates is why are people not all over the real estate market?”

CREA said two-thirds of local markets last month posted sales increases with Winnipeg, Calgary and Montreal standing out. However, compared with last year, sales still lag across the country, down 19.8% in September from a year ago.

“Record level sales activity late last year and earlier this year is expected to further stretch year-over-year comparisons in the months ahead,” the group warned.

TD Bank Financial Group economist Shahrzad Mobasher Fard expects falling mortgage rates to be a significant boost for the market for the near future. “They are a factor that cannot be dismissed,” said Ms. Mobasher Fard. “[Current rates] won’t lead to an overheating but it will support further growth in home sales and prices. The last two months of data indicate there has been a bottoming out of home-selling activity and prices.”

Demand is still tepid but there has been a slowdown in new listings, which are 15% off the peak reached in April. The number of months of inventory, which represents the number of months it would take to sell inventories at the current rate of sales activity, was down to 6.6 months in September.

It was the second straight month inventory levels dropped, having stood at 6.9 months in August and 7.2 months in July.

“Mortgage lending rates eased in the third quarter, which helped support sales activity over the past couple of months,” said Gregory Klump, chief economist with CREA.

“Interest rates are going nowhere fast, so home ownership will remain within reach for many home buyers.”

The chief executive for Royal LePage Real Estate Services Ltd. said he was almost a bit relieved to see the latest figures.

“I was pleasantly surprised to see the year-over-year average price flat given the strength of last year’s September results,” said Phil Soper. “I expected a small decline in average price. It has been driven almost entirely by the low cost of money.”

Financial Post

gmarr@nationalpost.com

With the federal government’s Home Buyers’ Plan, you can use up to $25,000 in RRSP savings ($50,000 for a couple) to help pay for your down payment on your first home.

You then have 15 years to repay your RRSP.

To qualify, the RRSP funds you’re using must be on deposit for at least 90 days. You’ll also need a signed agreement to buy a qualifying home.

Even if you have already saved for your down payment, it may make good financial sense to access your savings through the Home Buyers’ Plan.

For example, if you have already saved $25,000 for a down payment — and assuming you still have enough “contribution room” in your RRSP for a contribution of that amount, you could move these savings into a registered investment at least 90 days before your closing date.

Then, simply withdraw the money through the Home Buyers’ Plan.

The advantage? Your $25,000 RRSP contribution will count as a tax deduction this year.

Use any tax refund you receive to repay the RRSP or other expenses related to buying your home.

While using your RRSP for a down payment may help you buy a home sooner, it can also mean missing out on some tax-sheltered growth.

So be sure to ask your financial advisor whether this strategy makes sense for you, given your personal situation.

For more information, visit Canada Customs & Revenue Agency Website at www.cra.gc.ca and search Home Buyers Plan (HBP).

Edmonton Sun, darren.sharko@rbc.com

This month's RBC Financial Markets Monthly publication reports that the Bank of Canada is likely to hold rates until March 2010.

Report Excerpts:

Canada takes a breather after sprinting out of recession

With real GDP standing a hair’s breadth away from its pre-recession peak and final domestic demand already treading into new territory, reports of more moderate activity in July did not prove too surprising. The sharp recovery in the housing market started to stall in mid-2010 because pent-up demand generated during the recession was satiated and buying—ahead of the mild tightening in mortgage rules and the implementation or increase in the HST in three provinces—was exhausted. The robust sales pace left a high level of household debt in its wake resulting in the debt-to-income ratio rising to an all-time high in the first quarter.

Recent growth has not been strong enough to exert significant downward pressure on the unemployment rate and inflation pressures have been moderate with the core rate at 1.6%. The headline inflation rate was 1.7% in August, thereby holding below the Bank’s 2% target, even after the harmonization of provincial and federal sales taxes in Ontario and BC were incorporated into the price measure. Unlike in the US, where we expect that core inflation will remain very low, we forecast Canada’s core rate to hold just below the 2% target during the forecast horizon and gravitate above 2% in mid-2012.

Rate increases likely to resume in early 2011

Our overall assessment of the Canadian outlook has changed little in the past month, so we are maintaining our call that the Bank will gradually raise the overnight rate to 2.25% in the second half of 2011. This gradual reduction in policy accommodation will keep a lid on the degree that term interest rates will rise especially against a backdrop of very low U.S. rates. We trimmed our 2011 forecast for yields looking for the two-year rate to end 2011 at 2.85% and the 10-year bond yield at 3.75%.

Other highlights from this month's Financial Markets Monthly:

• U.S. data have been a mixed bag and confirm that the U.S. recovery is continuing, albeit slowly. The risk of deflation, not inflation, appears to be at the top of the mind for policymakers now with the Fed likely to implement another round of quantitative easing to ensure that growth and inflation do not slow further.
• The uncertain global outlook is likely to be the dominant factor in the Bank of Canada shifting to the sidelines for the remainder of 2010.
• Policymakers in the UK are unlikely to deliver a further easing in policy unless conditions become much worse.
• The RBA stayed on the sidelines this month although the statement showed a clear tightening bias which sets up for a hike before year end.
• Canada’s economy sputtered in July after very robust domestic demand earlier in the year.
• Inflation remains mild with both the headline and core rates below the Bank’s 2% target.
• The uncertain global outlook is likely to be the dominant factor in the Bank shifting to the sidelines for the remainder of 2010.

Click here for full report.

Source: RBC Financial Markets Monthly

Almost half the people who go to open houses in the Big Apple aren’t in the market for a home at all, but instead are rummaging in their neighbors’ closets, looking for free food and picking up decorating tips, according to a new survey, the findings of which are reported in The New York Post.

Connecticut-based title-insurance company Entitle Direct spoke with some 200 people who attended open houses for homes in the city’s toniest neighborhoods — including the Upper West Side of Manhattan and Park Slope in Brooklyn — and found that some 57 percent of attendees regularly check out the homeowner’s personal belongings, including artwork, clothing and notes on the refrigerator.

They’re also there for any free food and sushi is especially popular, Entitle’s director of sales and marketing Edward Baum told the newspaper. An open house is cheaper than dinner and a movie, he said, and it’s an easy way to check out what your neighbors are up to. New Yorkers like to see how they’re doing in relation to their neighbors, he added.

“People like to know where they stand, so they’re doing the research. They also enjoy the entertainment of looking at other folks’ apartments,” Baum told the paper.

Real estate brokers tolerate the open house snoopers because they might just decide to buy, the Post said. But serious homebuyers like Julie and Parker Bagley, interviewed by the newspaper this week as they attended a West 74th Street open house, say they just get in the way.

“Some people just like to look. It’s a little weird,” Parker Bagley told the paper. “If people aren’t serious, then they shouldn’t be out looking at apartments. It’s inconvenient.”

 It's tough being the seller in a buyer's market. However, you can improve your odds with the right research. In many cases, making a smart deal and getting the best price comes down to studying your market and being an educated seller.

It doesn't really matter how much money you think your home is worth. Nor does it matter what your agent thinks. The person whose opinion matters is the buyer who makes an offer.

 Price your home right

Pricing homes is part art and part science. It involves comparing similar properties, making adjustments for the differences among them and tracking market changes. Study the supply and demand within your neighbourhood to consider whether to price your home above or below the market value.

 Pricing your home lower than your competitors can essentially generate more offers, thereby driving the price higher. On the other hand, pricing it too high and you risk buyers going into “sticker shock”.

 The benefits of pricing right

1.Your property sells faster because it is exposed to more qualified buyers.

2.Your home doesn't lose its "marketability".

3.The closer to market value, the higher the offers.

4.A well-priced property can generate competing offers.

5.Real Estate Professionals will be enthusiastic about presenting your property to buyers.

 The result of overpricing

Many sellers believe that if they price their home high initially, they can lower it later. Often, when a home is priced too high, it experiences little activity. Gradually, the seller will lower the price down to market value, but by that time it's been up for sale too long and some buyers will be wary and reject the property.

 On occasion, the price is dropped below the market value because the seller runs out of time and the property is sold for less than its value.

 
Missing the right buyer

You may think that interested buyers "can always make an offer," but if the home is overpriced, potential buyers looking in a lower price range will never see it.
Those who can afford a home at your asking price will soon recognize that they can get a better value elsewhere.

 Importance of early activity

As soon as a home comes on the market, there is a flurry of activity surrounding it. This is a crucial time when Real Estate Professionals and potential buyers sit up and take notice.

 If the home is overpriced, it doesn't take long for interested parties to lose interest. By the time the price drops, a majority of buyers are lost.

 The longer your house sits on the market, the less cash it commands. If you have to sell in a slow market, study the current trends, forget old values, recognize current values, and price your house lower than others in your market. Start at a sale price that is going to entice buyers from the get go. You will be the first one to sell in your neighbourhood and you will win from there.

It is an interesting exercise to look at the house one could buy in today’s market, compared to that 2008. As many remember, 2008 was a cooling off period. Housing prices were decreasing, the market returned to more normal parameters, and buyers relaxed. In fact, the average price for a Calgary Metro single family home in August 2008 compared to August 2010 is almost identical, $440,625 and $445,617 respectively, according to the Calgary Real Estate Board.

But can you qualify for the same house today as you could in 2008? Yes, but you can also purchase much more of a home. I’ll show you why.

Currently, mortgage lenders are offering incredibly low fixed-rate mortgages, which are much lower then those available in 2008.

Looking back to August of 2008, we see that 5.74 per cent was a competitive five year fixed-rate, where as today, borrowers are experiencing rates of 3.79 per cent for the same product. Quite a difference indeed.

Imagine that the Smith family wanted to purchase a home in 2008. They had a combined household income of $70,000, and had saved up a five per cent down payment. Based on the interest rate of 5.74 per cent, they are told they can qualify for a maximum purchase amount of $390,000. The payment on this mortgage would be $2,096 per month, amortized over 35 years.

So while the Smiths did look for a property, they never did find anything that was quite right for them. Then the arrival of 2009 brought some financial uncertainty, so again the Smiths held off. Now here we are today in 2010. The Smiths see a significant number of houses on the market and are feeling much more confident about buying again. They contact their mortgage broker to be sure they can still qualify for the $390,000. They are optimistic considering their household income is still $70,000 annually, and they have been also able to save up a bit more money over the years for their down payment.

The Smiths are shocked to discover that because of today’s dramatically lower interest rates, they can now qualify for $500,000 — an incredible $110,000 increase in purchasing power! Their mortgage broker explains that with five per cent down, and still going with the 35-year amortization, their payments will be $2,100 per month. A difference of just $4 more per month will get them into a home they previously thought out of reach just two years ago.

Do the Smith’s need to purchase a $500,000 home? Not necessarily, but now their options are much broader when considering types of homes available to them.

This example shows how incredibly powerful the low interest rates currently available are to prospective homeowners. If you find yourself in a similar situation to the Smiths, you need to connect with an experienced mortgage broker before these interest rates are gone! Act quickly, you are about to be generously rewarded for your buying patience.