Saturday, July 7, 2012

Very few buys but big sticker's

Volume has really ground to a halt, despite talk on the media of buyers diving in to beat the changes in the mortgage rules which come into effect this Sunday.

Maybe we will see a huge spike in the sales numbers on Monday as last minute buys hit the MLS or maybe buyers have had their epiphany.

Maybe they realised that if they cannot afford to buy a house at the lowest ever interest rates, rigged with Tax-payer insurance for their default, with just a 5 year change in amortization period from 30 to 25 - then they shouldn't buy it!

In any case some lenders started implementing the changes sooner than July 8th .

Meanwhile the really big money, not concerned by questions of CMHC insurance is still buying.

eg West Van has 7 new SFH listings yesterday, 3 price changes and just one sale, a remarkable $3.3 Million under the original asking price! However the sale price was still $8.08 Million.

That sort of huge number will distort the median and average prices up when over-all volume is so low. There was another high ticket sale on the Westside with anemic sales too.

So we will get some skewing in the prices as the lower end (which is now about one MILLION dollars!) pulls back, while big local, Albertan and off-shore money can still buy the upper end. None of this will change the trajectory, but low volumes have this effect.