When it comes to real estate, SPRING has SPRUNG!

When we meet with sellers in the cold months of winter it is common to hear "We want to sell but we want to wait until the Spring market." The thought process is understandable. There are typically more buyers in the Spring market, but the flip side of the coin is that there are also more sellers. Real Estate also stubbornly refuses to follow a traditional calendar. 

The most important thing to know for a seller is when should I sell my house. And the answer can be found in the numbers. The best time to sell is always when there is low inventory compared to the number of active buyers in the market. And the numbers tell us that Spring is here now and in a very strong way!

If we start with the average price of a home sold in January of 2018 in Oxford County the number is $369,607.26. Nothing wrong with that number at all, but when we look back to January of 2017, we see that same number was $326,821.01. That's an increase of over $40,000 in just 12 months.

The next question is why? And the numbers give us the answer once again! There were only 68 home sales in Oxford County in January 2018 compared to 109 in January 2017. This was because of constrained inventory with a great stream of active buyers. The simple laws of supply & demand come into play. When many buyers want to purchase an item that is in short supply, prices rise. There were 94 new listings in Oxford County this past January. When you look at the number of homes sold in the same period, the picture is completely clear!

So the Spring market has arrived very early this year! If you are thinking of selling your home this year, the timing could not be better than right now. None of us has a crystal ball, but Spring (the calendar one!) normally sees an influx of listings. We have recently seen the return of buyers from the east in force and they are ready to buy homes in our area. We are also starting to see the return of offer days and multiple offers on properties again that we haven't been seeing much of for several months. 

If you would like to know more on how the current state of the market can be leveraged into getting you top dollar for your home, please contact any member of The Sherman Group. We look forward to answering all of your questions and helping in any way we can!

Happy Spring!

(no matter what the groundhog says...)

UPDATED! Explaining Canada's new mortgage rules

UPDATE: It was recently brought to our attention that lenders have received a grace period on this change. They now must have this implemented by the end of November. Most lenders are choosing to do so, and this is a great opportunity for buyers with less than a 20% deposit. If this effects you as a buyer, you need to have your mortgage application in to your lender before the changeover if you want to be approved under the old system. Your house does not have to be sold by the end of November, you just need to have your application submitted. This will substantially effect the amount you can borrow. If you have any questions, Tracey and I would be happy to answer them. Please feel free to contact either of us. This is good news, even if it only has a small window, for many buyers. Please don't miss this opportunity! 

New mortgage rules came into effect on October 17th and many buyers are wondering how exactly this effects them. These changes effect anyone buying a home with less than a 20% downpayment. Before the change, you only needed to qualify at your lenders posted rate, around 2.39%. In an effort to slow a hot market in a few key cities, as well as insure that buyers will still be able to afford their house payment in the case of a future interest rate hike, these buyers must now qualify at the higher Bank of Canada benchmark rate, around 4.64%.

How the math works:
The average home price in Woodstock is around $280,000, so we will use that as a benchmark. If you were applying for a 25 year mortgage, paid monthly with a 5 year amortization,  and you had saved a 5% downpayment of $14,000, your payment would be $1,239.02 at 2.39%. That is what your would be paying monthly, but under the new rules you need to qualify at the higher rate of 4.64%. And that same mortgage at 4.64% has a monthly payment of $1,571.59. That is a difference of $332.57 you must qualify for to be approved for the $280,000 mortgage, even though you will only be paying $1,239.02 per month.

If, under the old system, $280,000 had been the most the bank could approve you for, your new approval would be around $221,000. That is a difference of $59,000. Genworth, one of two companies that supply mortgage insurance in Canada, has estimated that this will leave 1/3 of new home buyers unable to purchase a home under the new rules. Fortunately, Oxford County is located in an area where great homes can still be purchased in an affordable budget. Areas like Toronto and Vancouver will be taking the brunt of the loss of first time buyers. Tracey and I would be happy to sit down and explain this to anyone with questions, or would like to see what options are available in today's home market. As always, the first best step in buying a home is to get a pre-approval from your lender. If you aren't sure who to see, we would be happy to recommend someone we know will do a great job for you!