The mild temperatures that we’ve experienced so far in 2010 have made me wonder at times if spring has arrived early this year. I’ve already seen a few green blades of grass and some buds on the trees.
March, April and May have been the busiest months (most sales) for almost every year this decade. Last year, after a dismal winter hibernation, the market took a little longer to get up and running and we didn’t see the busiest months until May, June and July.
So far in 2010, however, the ground is already starting to thaw. For the first six weeks of the year, the number of sales (single family + condo) increased every single week.
The first five weeks of the year averaged 276 sales/week. The second five weeks averaged 388 sales/week. Last week we reached 479 sales in one week.
Prices are showing similar growth, traveling from a single-family median price of $398,000 in January to $411,000 in February and $422,000 so far in March. For those who are wondering, that puts us at only 4% off the market peak of June 2007’s median single-family price ($439,000).
There is much talk in the news these days of imminent rising interest rates and upcoming mortgage rule changes that may put downward pressure on our marketplace.
The mortgage rule changes that take effect April 19 (see http://www.cbc.ca/money/story/2010/02/16/mortgage-flaherty.html for details) affect a small demographic of homebuyers. The biggest change is to those purchasing non-owner-occupied properties (rental properties). We may see a small rush trying to get in under the existing rules but most potential home buyers and sellers will realize that their dreams of home ownership (or “larger-home” or “nicer-home” ownership) have not been dashed.
Regarding interest rates, as long as the increases are small and gradual, they won’t likely cause any sharp dropoff in demand for new and resale homes. Raising rates, for example, by 0.25% this summer would have a minimal effect, especially on those in 35-year mortgages. This category comprises a large sector of buyers, especially first-time buyers who many have predicted will fuel the real estate growth this year. A $300,000 mortgage at 4% over 35 years has a monthly payment of $1,322. At 4.25%, that payment is $1,367, a difference of a few less visits to Starbucks each month.
Birds are chirping, the sun is hanging around longer each day and optimism is in the air for home buyers and sellers. Spring is here and I’m happy to help you make the most of it. Let me know if you are looking for the right time in 2010 to make your move.