It’s the end of another work week and the start of another month! Hope you paid your rent and your mortgage bills and still have money in the bank.
The month of May wrapped up with higher than normal listings and lower than normal sales. We’ll have to wait to see what the official word is, but it sounds like we may see a bit of softening in some detached prices and little bump up in condo prices.
Let’s do our regular end of the week news round-up and open topic discussion thread for the weekend! Here are a few recent links to kick off the chat:
–MOI 6.66, the MOI of the beast
–Inventory graph back into record high
–Teranet sales pair dries up
–Will bloggers ruin the perfect market?
–Okanagon sees huge foreclosure spike
–How much is your commute?
–Building jobs boom
–Van Commercial RE booms
–RBC: Ownership costs climbing
–Rising prices means confidence for Toronto
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
A new report issued by US ratings agency Fitch says that fast-rising home prices and record levels of household debt pose a threat to the credit portfolios of Canadian banks.
The agency examined the exposure of Canada’s six largest banks to mortgage risk and found that household debt fuelled by mortgage credit expansion in Canada is the largest threat to credit profiles.
“These are quite high levels of debt for households and the movement in house prices, we don’t think this is sustainable in the long term,” said report author Fabrice Toka, senior director at Fitch.
The six banks have a combined $730-billion in mortgage exposure and an additional $182-billion in home equity loan exposure, the report noted.
High unemployment or interest rate shock “could aversely affect the ability of leveraged homeowners to meet their mortgage obligations,” the report said.
The risk testing scenario looked at drops of 1 to 10% and sees CIBC and RBC as the most exposed to mortgage value risks. The debt-to-income ratio in Canada is currently higher than it was in pre-recession US, but Fitch points out that there are structural differences in our housing market.
Here’s the full article in the Financial Post.
Hi gang, I’m back for a tour of the BPOE. Driving though Greenwood, BC (population 600, 30 listings) I noticed a For Sale sign in front of this house. This very same house was on sale for about $435K around 2007 as I noted in this forum (or Vance’s, can’t remember):
For Sale: $239,900
1897 Heritage home! If only the walls could talk! Original RCMP headquarters and definitely has B&B potential. 4 BDRMS, 2 baths. Modern renovated kitchen wit all amenities-stainless steel appliances & cord flooring. This home has so much to offer that you must see it!
Now do you remember back in the days when you talked about those ridiculous prices along Highway 3, you were granted with chants of “BC Bud!” (interior HAM)? What happened? Did everyone stop smoking? Well maybe all the RE buyers stopped smoking!
However maybe the RE industry is using stronger stuff, because a bit further west on Highway 3 I saw the following:
It reminded me of one of those ghost developments in Florida, apart from the elevation and weather. A great expanse of local streets (each with its own theme statue) and the odd house here and there.
Now that prices are cratering in the nearby Okanagan Valley, where they have things like shopping and hospitals and mild weather, who’s going to buy up there?