BUYER'S MARKET IN THE LOWER MAINLAND BRITISH COLUMBIA - BUT IT WON'T LAST

The following are excerpts from an article by Tricia Leslie that appeared in the NewLocalHome.com July 29^th, 2010 issue in the Surrey/North Delta Leader. Follow this link to read the entire article and for a great review of the new housing available in the Lower Mainland. There is also another great article on "Homes: humans vs online" that is a good read. http://www.newlocalhome.com/editions/nlhr100729

RATE HIKE MEANS OPPORTUNITY FOR BUYERS

- The Bank of Canada increased the target for its overnight lending rate July 20, raising it by a quarter of a percentage point. The latest increase follows on the heels of an equal interest rate increase in June, when it was raised for the first time since 2007; the Bank rate now stands at one per cent.

- The most recent hike is not necessarily a bad thing, according to Vancouver-based mortgage broker Peter Kinch, with Dominion Lending Centres:

- "This will be a great window of opportunity for new homebuyers," Peter Kinch says.

- This past spring was one of the strongest spring housing markets for the real estate industry, especially in Metro Vancouver, he says.

- "There were three reasons the spring market was so strong: fear of rising rates, fear of impending HST and the fact it was a spring market," Kinch says. "The inference is that rising rates and HST will cause the markets to slow down and come to a grinding halt." That may not be the actual reality, but that is the inference from all the fears, Kinch says.

- Of course interest rates will go up, but they're not exactly going to skyrocket, Kinch says. ......"Rates will rise, but the fears of skyrocketing rates will not be realized."

- Kinch predicts there will be a softening of home prices in Metro Vancouver, and that prices will drop by anywhere from two per cent to upwards of six per cent.

- "If I'm looking to get into the market, what a fantastic time to do it ... it's the first time a slight rise in interest rates is exciting news for the homebuyer," he says. Home prices should settle over the course of the winter, only to rebound in spring 2011, once people realize the HST is here to stay and they have adjusted to the new reality. Fear and confusion will be replaced with knowledge and acceptance, and people will realize that interest rates have not skyrocketed as they feared, he says.

- Next spring's market will recapture any losses from the spring and fall markets, but in the meantime, it will behoove new homebuyers to take advantage of fears and confusion about the housing market, Kinch says. If people are planning to purchase a home this fall in Metro Vancouver, they can take advantage of a lot of selection in the market and lowered prices, he notes.

I love it when I come across an article like this that mirrors my own thoughts. It is a great time for homeowners to trade up, a great time for first time homebuyers and also a great time for investors to be shopping the market.

Let's talk . . .