A lot of people never bother to look into it. They often don’t envision breaking their mortgage term. In reality, people often exit mortgages early. They do it to take out equity/consolidate debt, sell the property, get a better rate, apply a large lump-sum pre-payment, add a re-advanceable line of credit, or even get divorced.

These and other reasons help explain why the average 5-year fixed mortgage lasts just 3-5 years. Penalties usually come in two varieties: 3-month interest penalties and interest rate differential (IRD) penalties. The IRD penalties are usually much higher and their calculation methods often differ by lender. 

If you’re not sure how your payout penalty is computed, ask your mortgage planner or banker to explain it with an example.

If I can provide you with any assistance, whether you are purchasing or selling, please contact me.  I will be happy to look after your real estate needs.

Inventories seem to be building again, which usually means that prices may be pulled down some. The houses that are priced very competitively are selling quickly, leaving the over-priced inventory sitting waiting for the buyer that is willing to pay the price. Sellers who wait too long, may find that the price will move even lower and they will be forced to take even less. 

The farm news has affected the mood of the market place here in Saskatchewan. It seems that in Saskatchewan when the farmers are feeling troubled, the rest of us follow along whether we need to or not.

Until next time, keep smiling and think positive. We are in one of the best areas in the world right now.

The overall dollar sales have seen a nice increase of 5.9%. The down turn in the $200,000.-$400,000. price range is an indication that the first time home buyer market has declined with the changes in mortgage rules and tightening of money. The new CMHC rules have made it more difficult to qualify for low rate mortgages. Attractive interest rates are still available, but the buyers must now qualify for the 5 year posted rate, which is at 6.25%. This new rule is a bit of overkill in my opinion, but I don’t make the rules. I expect we will see this activity improve as first time buyers get accustomed to the new rules. 

We still have very low mortgage rates with mortgage brokers offering variable rates around the 2% range. This is still quite amazing. The way the world economy has been going, I don’t see any major increase in the near future. I expect the Bank of Canada will back off a little with the poorer economic numbers of late. Even if they raise the rate by a percentage point, we still have some of the best rates in many years. 

Due to the good supply of product on the market,  I don’t foresee any significant rising of prices. Homes that are priced competitively are still selling quickly. The average days to sell have dropped by one day. Not significant, but it is going the right direction. 

If you are considering selling, now may be a good time to go ahead. Just be sure your home showcases well and is priced competitively. 

We have been keeping our handyman busy helping our clients get top dollar for their homes. So if you have been thinking of selling, give me a call. I can help you get the most money possible for your property.

I was discussing the real estate mood with a car salesperson the other day. It was felt that the used car market is similar to the real esate market in that the buyers are tougher when negotiating their purchase.

There will always be people needing to buy homes and those who need to sell.  It may take a little longer sometimes and the prices may vary a little, but the is always a buyer for a good property.

Sales have declined in Canada overall. We are influenced by the national situation to some extent, but we have a stronger economy in Saskatchewan and particularly in Saskatoon.

All the rain we are getting will have a pretty significant effect on the farmers throughout the province. I guess we will see how much as the year passes. We were worried last year and it ended up being a very good year. It doesn't look good for the farmers as of this writing. I guess time will tell.

The inventory is adequate with a fair amount to choose from overall. This maintains a balance in the market of supply and demand.

I have seen some resistance to the pricing in the higher price ranges. The buyers seem to be concerned about overpaying, and have again become tough negotiators during the buying process, While this is going on, we seem to have a shortage of large bungalows on the East side.

I expect we will see about a 2-3% rise over the coming year with most of the gains in the lower to mid range home prices.

It is nice to see the demand increasing for the $450,000 plus price ranges in the city.

The CMHC rule changes came into effect after April 19th. This created a decline in activity in the latter part of the month. We also saw an increase in new listings resulting in higher inventory, which is typical for this time of year.

The positive sign we are seeing is encouraging and should create confidence in future buyers coming into the market.

Sellers can feel confident when placing their houses on the market. If priced competetively, they should sell in two - four weeks.

It may be enticing to think of the money you save by not paying a sales commission to a real estate brokerage. Some of the things to consider are: Who goes out to buy a private sale? Are they trying to save the same dollar that you are? You can't both save the same dollar.  Is the risk that you are taking worth the possible money you may save?

If you are not the type of individual that handles your own investing, you are likely not the suited to selling your own house. As a professional, I see many private sales, not only not saving any money, but getting tangled up in problems with the sale such as accepting an offer only to find that the prospective buyer really can't afford the house and is unable to get a mortgage. Meanwhile you have taken your house off the market for weeks while they continue to beat a dead horse trying to get financing, and never able to do so.

It seems that every year I run across horror stories of deals gone bad, sales that don't complete, misunderstandings because neither party knew how to clearly outline the terms of the purchase.

There are even more pitfalls for a buyer, which we can go into another time.

So beware, the professionals in the industry have gone through the training and guidance of seasoned professionals and mandatory updates in training to become aware of the pitfalls and issues to cover to ensure a smooth transaction.

There are good reasons to use a professional for selling and buying a home, for investing, writing your will, and many other things. Why would you not hire a professional for one of the largest financial transactions you are likely to make?

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In the rural & bedroom communities, activity is up as well.  In  areas 6-9, surrounding Saskatoon, 300 homes were put up for sale, compared to 173 in February and 134 in January.

Sales are increasing as well.  In March, 361 properties exchanged hands, up from 236 in February and only 179 in January, while in the surrounding area, 97 properties were sold in March compared to 38 & 34 in February and January.

Properties are moving a little more quickly as well.  The average days to sell a home in Saskatoon has dropped to 30, from 34 in February and 38 in January

While the largest increase in unit sales has been in the lower priced side of the market we have seen a significant increase in unit sales over the $400,000. range, and especially in the over $500,000. range. This means that the higher income group are beginning to have confidence in the housing markets again.

Until next time,
Mike

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95% financing with a maximum of 35 years amortization is still available for principal residences.

The qualifying has changed some. Now buyers must qualify for the 5 year posted fixed rate to obtain an insured mortgage. You can take the lower interest rate options such as the variable rate, but you must qualify for the higher rate and term.

The maximum financing available for revenue properties is 80% with CMHC insurance.

These are the important changes that everyone should be aware of.

If anyone has further questions I can be reached at 306 221 4785

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I don't agree. I felt the writer was very short sighted. He stated that if you bought a couple years ago your home was actually worth less than it is now. While this may be true in some cases, there is no doubt in my mind that over a five year window your home's value will definitely be higher. If your home is worth between $200,000. and $350,000. it is certainly worth more money today than it was 3 or 4 years ago. If you look over the past 10 years any home has more than doubled in value, even though your payments are the same, or in some cases less, if you have a variable rate mortgage. Especially if you compare to renting, where the rents have increased substantially over the  same period.

If you invested the money in mutual funds 4 years ago you are extremely fortunate if your asset has maintained its value.

For those who understand investing, as Robert Kiyosaki explains it in Rich Dad Poor Dad, your home is not an investment, but to most of us it is the highest valued asset we own. As we grow older our home is the most secure asset we will own. This security is very important to maintain stability in our later years.

I have seen times in my career where people sell their homes and decide to rent as they get older only to find that the rents have increased dramatically and in some cases their apartments are converted to condos and they are forced to move at a time when they are the least able to handle to stress of making changes.

So you can look at home ownership from a different perspective. I feel very strongly that owning your home as soon as possible in your lifetime is the best option for anyone by far. Over the decades as one goes through life, home ownership is the best choice for your future financial security. 

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“Expect Saskatchewan to lead all provinces in 2010, and to battle Alberta for top spot in 2011,” Lovely said.

This already reflected in the increase in the number of building pemits for new housing in Saskatoon. We can expect to see growth in our province and Saskatoon before the rest of Canada.

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While the numbers show dramatic increases January to February the figures compared to last years numbers year to date are good, but not quite as rosy as the February over January appear to be.

I have noticed a wide range of activity in the different price ranges.

The greatest increases are in the $125,000-150,000 range and the $200,000-$250,000. range. There s been a drop in volume in a couple price ranges.

The $275,000-$300,000 range saw a YTD drop of 30%. I think this is largely due to a lack of houses for sale in this price range.  We are seeing lower levels of activity in the over $500,000. price range, with only one sale over the $750,000. mark. The volume in the $500,000 - $750,000 range is the same as last year.

It appears that we are loking to another good year overall, with unit sales in the major catigories up over last year.

I can see shortages of product in the mid to lower prices ranges (especially the $200,000.- $350,000.range) in all areas in the city.

The average sale price has moved by 1% over last year, which is what we in the industry expected. We are doing well in the economic climate in Canada.

The average sale price in Saskatoon's rural residential is up a little with unit sales being down slightly. I believe what we are going to need to see in the rural residential to bring the volumes up, is more inventory. We have an over supply of vacant land parcels and a shortage of developed properties. Prices have stablized and we now need some volume for people to feel good about purchasing in the country.

The average sale price is up 2% over 2009 in the rural areas around the city. (much the same as within the city)

So overall we are doing well in Saskatoon.  It is a great time to sell if you have been thinking about it.

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We compete on a daily basis in the different communities across the country. They do not set the fees we charge or how we run our businesses. The media seems to think that the Competition Bureau is going to lower real estate fees charged by the brokerages across the country. If MLS.ca, or realtor.ca was only a web site that may be possible, but it is much more. We as licensed associates and brokers are responsible for the clients we represent in their real estate transactions. We are bound by CREA as well as the provincial commissions to represent and protect our clients interests in these transactions. The consumers have a choice in who they use. The brokers decide how much they will charge for these services. There are fixed rate brokerages throughout the country. The problem the discount brokerages have is the same as all businesses. If you don't charge enough you cannot offer any service, or have competent people to serve the clients.

The cooperation that takes place in organized real estate is what creates the power behind the MLS system. the member to member cooperation ensures ethical conduct and a set of rules which ensures that all the clients get a standard of service and expertise that makes this system run so well and serve the public as it does. If the Competition Bureau succeeds in weakening this system, the loser will be the public in the long run.

If you want to buy cheap service you can obtain that now. There must be a good reason the public has not chosen to go that route en-mass. To receive sound expert service and expertise it costs more, but in the end you are always better off the pay for an expert in a transaction as large as selling or buying an home.

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Finance minster, Jim Flaherty announced tighter lending standards for mortgages today.  His purpose?  To prevent homeowners from getting into financial difficulty when mortgage rates rise.

After consulting with major Canadian lenders, he unveiled the plan with three main components:

1. All borrowers will need to qualify for a five-year fixed mortgage rate, regardless of whether they choose a shorter term at a lower rate.  This will ensure borrowers can make higher payments as interest rates rise.
2. The maximum amount when refinancing a mortgage will be lowered to 90 per cent of the value of the home, from 95 per cent.
3. A minimum 20 per cent down payment is now required to qualify for CMHC insurance for non-owner-occuped properties purchased as an investment. 

These new rules will come into effect April 19, 2010

A number of large Canadian lenders already practise the first peg of Flaherty's plan.  After Tuesday's announcement, Bank of Montreal noted that it requires its high-ratio borrowers to be able to qualify using the five-year rate.  "While we do not believe that Canada faces a housing bubble, we fully support the minister's actions," the bank said in a release. "Given the prospect of higher interest rates and the recent run-up in housing prices in some markets across Canada, the measures announced today are prudent."

Canada’s average five-year mortgage rate was 5.39 percent on Feb. 10.  In May, it was 5.25 percent, the lowest since 1951, according to Bank of Canada figures.  Bank of Canada Governor Mark Carney has pledged to keep his main interest rate at a record low 0.25 percent through June unless the inflation outlook shifts.

What hasn't changed is, you can still buy a home with a 5 per cent down payment.

If you have any questions or would like to discuss this in relation to your real estate plans, please feel free to give me a call.

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Prices there are much different than here in Saskatoon. Anyone living here who complains about a price drop will feel wonderful if he/she compares price changes here at home to those in the Pheonix area. Houses that sold for $260,000.00 in 2007 are now selling for $140,000. - $170,000. in the good areas. Houses in some working class areas have dropped to as low as $80,000.00. (This is for an 8-12 year old bungalow, 1300-1600 sq. ft., with a double attached garage.)

The real estate environment is varied in different parts of the US. Some areas are hit harder than others. They are still reeling from a tough economy while we are stablilizing and starting to see some upwards movement in the lower to medium priced homes. Overall, we are much better off here in Saskatchewan.

Canadians that have money are a major buying force in the Phoenix market.

I came home feeling good about things back here other than the weather. The thing that I noticed even more than the weather are the bumpy streets.

It's still great to be home and among friends and my clients (who have become my friends).  Real estate is a great business to create friends for life.

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The average sale price dropped 3% from last January. I expect this is because of the short supply of the lower priced product available. We are now waiting for the break that will bring more product on the market at a little higher prices in the $200,000. - $350,000. range.

It seems to be more of a challenge to find the buyers for the higher priced houses.

With only 3 unit sales over the $500,000.00 in January we should be careful not to measure the expectations for the coming year on one month. I expect we will see an increase over the next few months.

Overall our economy is postive and the buyers are calling to check things out. When that senario is happening it is positive.

I will publish comments on the higher price ranges next week. Please check back later next week for information on the $400,000. plus price ranges

Our Saskatoon market continues to correct, as our inventory declines toward the end of the year. I expect the lower inventories will cause the market under $350,000 to begin to rise again, or at least stabilize.  It will take longer for the higher end market to see any rise in prices.                                                

Unit sales were up 31% this December at 211 homes, compared to 161 sales in December of 2008.  The year began quite soft in terms of unit sales. This has been more than offset by the increase in unit sales in the middle part of the year. The year ended with a net increase in unit sales of 9% overall. This however does not accurately reflect the higher priced properties. There has been declines in the higher priced properties unit sales for 2009.  As the lower and mid range properties stablize, I expect we will see this move into the higher price ranges as well.