We’re living in interesting time. Interest rates are super-low and going lower which should drive down the cost of a mortgage, but at the same time we have a very unusual economic slowdown across the board.
Some people even thing this could have an effect on the Vancouver real estate market:
” Interest-rate drops usually fuel housing sales, but this time they will be more than offset by the “unprecedented paralysis of economic and social activity” during the COVID-19 pandemic, causing B.C. homes sales to drop this spring, the B.C. Real Estate Association predicted March 17.”
“All four scenarios predicted home sales in the province would drop in the spring and early summer. The market would then likely rebound in the second half of the year “contingent on the outbreak resolving.” However, only one of the scenarios found that home sales in the province would recover to a point of activity higher than if there had been no pandemic, with the other three forecasting a more muted recovery”
read the full article here.
It’s a buyers market for.. well stocks and oil anyways.
Will plummeting interest rates make real estate more appealing or will a hit to the wider economy drive down house prices?
What’s your bet?
Southseacompany points out that the economist Robert Schiller has some thoughts on the economy and a bit of history repeating:
“Housing is driven by narratives. Before 2007, the narrative was flipping houses [and the belief that] home prices have always gone up,” the Yale economist said during an interview with Yahoo Finance’s YFi PM. “Then, after the Great Recession, it was tragic narratives about people who lost their home, or dangers of borrowing too much or lending too much. It’s been 10 years since the crisis. Now, those narratives are starting to be forgotten.”
Read the full article here.
Central 1 credit union is forecasting further big drops in sales and a “marshmallow soft” market for the next few years.
The province’s median home resale price across the year is expected to decline 4.1 per cent in 2019, then a further 1.2 per cent in 2020. This will be followed by the most meagre of recoveries in 2021 with a 1 per cent rise, which doesn’t even bring the median back to 2019 prices.
The biggest short- to medium-term price declines are expected, unsurprisingly, in Metro Vancouver, said Yu – but this could be what puts the market back on track in the longer term.
“In Metro Vancouver, on a benchmark basis, prices are down around eight per cent and we’re expecting that to fall further, giving us a total peak-to-trough decline of about 12 to 15 per cent. So that will erase a lot of the gains we saw from 2016 onwards. But this should pull some people back into the market.
Read the full article here.
Best if you’re hoping for price drops on real estate that is.
We dont have official numbers for March yet, but realtor Steve Saretsky says that we just saw the lowest March sales numbers since 1986:
Saretsky said prices are in fact taking a dip, however the slide isn’t evenly distributed.
“You know you can probably get a 40 per cent discount at a house in West Vancouver, but you might only get a 15 per cent discount on a house in East Vancouver.”
He added that condo sales also saw an 18-year low last month.
Of course he did say this on April 1st. Read the full article here.