Seller's are tapped out.....

[Johnny Horton]

My buddies in the business tell me that a lot of Seller's are tapped out of equity in the properties that they are selling.
Many of the mortgages are very close to the selling prices, ie.....no equity left.
Although there are a lot of first time Buyers purchasing these properties, the Seller's don't have the equity to buy "up" or buy "down". So maybe what we'll see is the prices at the bottom end of the market strong, but quite a weakening in the mid level prices.

Interesting......

[rofina]

So in other words the first time buyers are delaying the inevitable, no?

[byob]

Yup! Very interesting indeed. This market could go either way at this point.

I hope those sellers have prime (-) mortgages and don't have to renew anytime soon. That will be their only cushion incase this market continues downward and they can't sell anytime soon.

Q1 2009 Landcor data

Is the housing recession at last coming to an end? Even though property sales throughout British Columbia were at a 24-year low in Q1 2009, sales did pick up with each passing month indicating that the housing market is responding to typical seasonal increases according to a new report from Landcor Data Corporation.

We are pleased to issue the Q1 2009 Residential Sales Summary, a comprehensive report evaluating sales and price data for BC and all six key regions, comparing findings to Q4 2008 and Q1 2008.

"Our data confirms the market may be nearing the bottom given the strong upswing in residential sales province wide during the first quarter," says Landcor President, Rudy Nielsen. "Lower prices and financing rates may be starting to move more potential buyers off the fence and into the market."

Some Key Findings:
Q1 2009 property sales fell province-wide, with some regions being harder hit than others. In the Kootenays sales dropped 56%, in the Okanagan 55% and on Vancouver Island, 51% from Q1 2008.
Q1 2009 property prices also fell. The largest drop in the average sales price was 21.2% for an attached unit in the Fraser Valley region.
2 regions in BC bucked the trend of falling prices: the Kootenay region, where the condominium average sales price increased 25.7% from Q1 2008 followed by the North/Northwest where the condominium average sales price increased 18.1%.
When comparing month over month sales in Q1 2009, Greater Vancouver shows a steady increase with February and March posting increases over previous months.
"Based on this data, I think we're beginning to see a light at the end of the tunnel," says Nielsen. "By the time we publish our Q2 2009 report, we'll know for certain whether it was just a Grizzly bear with a flashlight!"

Click here to download the full report (320 KB)

Thank you for your continued support in our company, and have a great day.

Best Regards,

Rudy Nielsen, R.I. (B.C.) F.R.I.
President & Founder

[byob]

http://rs6.net/tn.jsp?et=1102585528531& ... 7X3d_IkK8=

Try this link.

[rentah]

Johnny, thanks for the post, I give it that much more weight, given its source.
In a related story, I was told by a realtor that a good number of westside SFH sellers are in trouble because of speculative condo deals that are underwater.
Thus, a tangled web...

[kansai_92]

Even though property sales throughout British Columbia were at a 24-year low in Q1 2009, sales did pick up with each passing month indicating that the housing market is responding to typical seasonal increases according to a new report from Landcor Data Corporation.

24-year low. That says a lot.
We have more properties and more population than 24 years ago as well.

[rentah]

Even though property sales throughout British Columbia were at a 24-year low in Q1 2009, sales did pick up with each passing month indicating that the housing market is responding to typical seasonal increases according to a new report from Landcor Data Corporation.

24-year low. That says a lot.
We have more properties and more population than 24 years ago as well.

Wow!
Mortgage rates are at ALL TIME LOWS and BC properties sales are at 24-year lows?!
This has to mean that real demand, corrected for easy money factor, is very very low.
If mortgage rates blink (WHEN they blink), I suspect we'll be shocked by how little demand will remain.

[metalhead]

whether it was just a Grizzly Bear with a flashlight!

Attn. all Bulls. Just look into the light.

[Greenhorn]

I know purchasers who are tapped out. They have a new place, lots of debt and have had to cut out holidays, eating out, the second car, meat out of their diet, etc. But I never knew sellers were in this same boat.

Realtors on this forum, is this true? You do do a title search before taking a listing right and are aware of the encumbrances on title, right? Are you seeing big mortgages registered?

[markx]

Isn't that the same as saying a foreclosure wave and subprime crisis is inevitable? With no equity, there's not a lot of incentive to continue paying mortgage, if someone can find a rental cheaper than mortgage.

[byob]

You said it 'markx'.

As I said in a previous posting, we are 1.5 to 3 years behind the USA in this mortgage/real estate madness.

The US market peaked in 3Q 2005, then the prices started dropping, and are still dropping. Our market peaked in 3Q 2005 as well, but our 'prices' kept going up and did not peak until 2Q 2008.

The only properties that are selling in the USA are 'bank' owned properties.

Just because the banks have re-course up here doesn't mean there won't be alot of people walking away.

The banks would be foolish to think they have an upper hand in this.

Very close examination will reveal that the lenders, banks and the BOC are powerless.

Also, what about those lenders that won't be or aren't around anymore?

'What if' I went to re-new my mortgage and my lender is no longer in business?

Lawyers are going to have substantial increase in their business, for sure.

[ValleyAgent]

The title searches we get from the Fraser Valley Real Estate Board show mortgages registered against the title but don't show any $ amounts. It just shows the name of the bank or credit union and the registration number. Regarding seller's tapped out it sounds like a sweepig generalization to me... It all depends on the sample group right?

[ironhide]

Also, what about those lenders that won't be or aren't around anymore?

'What if' I went to re-new my mortgage and my lender is no longer in business?

what would happen if the original lender goes bankrupt and no other financial institution would be willing to lend b/c of the credit crunch. is this a likely scenario? geez, you dont even have to be laid off to lose your shirt now. scary thought.

[byob]

Best case senario ... "DO NOT MISS' a single mortgage payment and you may not have a problem re-qualifying.

Un-insured BFS business for self individuals are in for a rocky ride, I suspect, and interest on these loans will definitely go up.


A few of the B lenders are still out there.

Their LTV's could be as low as 65% now and lower for commercial. [ this could be the major hurdle, you better have additional capital to cover your decrease in property value, remember lenders aren't into risky lending anymore ].

After the contractual term is over, there is 'no guarantee of renewal'. If there is additional risk, lenders don't have any obligation to renew.

Some have a even higher interest rate 7+%, charge additional fees, and probably want this mortgage loan insured as well.

Apparently some of the B lenders are lobbying Ottawa to back stop their portfolio's incase they are not around. I haven't heard anything new lately.

[Johnny Horton]

If Seller's are just bailing to save their credit rating and not buying back in, the market is going to be tough this year. Maybe drop 5-10% .