Pandemic Effect on Homes & Mortgages
Housing Marketing & Record Low Mortgage Rates
Metro Vancouver home sales have been in full swing in 2021 with continuous months of year-over-year sales growth. Until recently, the available home inventory has remained relatively low combined with some of the lowest mortgage rates ever seen. In February 2021, The Real Estate Board of Greater Vancouver (REBGV) reported over 3700 home sales which was 73% YOY growth over the previous year. The recent competition for the available inventory has raised the average home price in the region to $1,084,000.
When we look a little Eastward to the Fraser Valley, we have a new benchmark price of $1,163,400 for a single-family home which represents a 19.9% increase over last year. My Realtor friends have shared many stories of increased competition and aggressive offers coming in much over the asking price. For me personally, I have several clients that have been pre-approved for mortgages that are quickly learning from each deal they miss out on and getting more aggressive with offers for the next round. I just don’t like to imagine someone that was not pre-approved for a mortgage in this competitive climate. A pre-approved mortgage is a good thing always and gives you a fighting chance!
The Build Up During Pandemic Times
What a year it’s been in the world of Real Estate and the Mortgage Industry. March 2021 marked the one-year anniversary of the Covid-19 pandemic and we have seen many new trends in the world of business. The one trend that not too many experts predicted was the BOOM in home sales. As we saw more of the workforce re-allocated to their homes and not having to travel to urban zones, we started to see many of them saving up for down payments to purchase homes and willing to move East of the Vancouver to secure more square footage and bigger yards for growing families. Many local folks spent more time at home and less money on things like family outings, vacations and splurge items which has led to Canadians saving as much as $100 billion in extra savings over the year. This statistic was recently shared by in a report from BMO bank that surveyed 1000 people looking to purchase a home within the next year. Here’s a look at a few more interesting findings from this survey:
· 80% of First time home buyers intend to use these new found savings for a bigger down payment
· Over 36% plan to purchase a home with a down payment between 5% to 10% of the home’s value
· 20% plan on using 16% to 20% towards their home down payment
· While the savvy savers, which represent 15% are planning to down pay 21% to 50% in the purchase of their new home.
So What’s Next in Real Estate?
Many housing market experts are suggesting that overall sales activity will remain solid for all of 2021. As well, there are forecasters predicting over a 16% increase for the national average home price by end of the year. It’s been quite the ride and will be remembered for many years to follow. If moving into a new home or your very first home is on your family goals list, then I invite you to connect with me to build your own customized mortgage plan. I wish you the best as you make your entry into the housing market of 2021 and may you land your dream home!
Best regards,
Sukh Sangha