Home prices at lowest point in more than 10 years

maybe soon close to home?



http://i2.cdn.turner.com/money/2012/...-sales.top.gif



NEW YORK (CNNMoney) -- Home prices fell to their lowest point in more than a decade in January, which helped to lift the pace of home sales, according to a report from an industry trade group.

The National Association of Realtors reported that the median home price in January fell 2% from December to $154,700. That's the lowest price reading since November 2001, before the run-up in home prices that became known as the housing bubble.











The median price is the point at which half of homes are sold for a higher price, and half are sold at a lower price. (Multi-million dollar foreclosures)

Serving as a drag on existing home prices is a large inventory of homes in foreclosure. Distressed home sales, which includes homes in foreclosure and so-called short sales in which the home is sold for less than what is owed on the mortgage, made up 35% of sales in January.

"Prices will continue to fall through the first half of 2012 due to the high share of distressed sales," said Stuart Hoffman, chief economist with PNC Financial. "The recent agreement between the big mortgage servicers, state attorneys general and the Obama administration will also result in more homes going to foreclosure over the next few months, adding to downward pressure on prices."

But the pace of sales rose to the highest level since May of 2010, helped by the low prices and rock-bottom mortgage rates. The seasonally-adjusted annual sales pace of 4.57 million homes was up slightly from the revised 4.38 million in December. The last time homes sold at that pace, buyers were rushing to qualify for an $8,000 homebuyer's tax credit that was about to expire. The latest reading was roughly in line with the expectations of economists surveyed by Briefing.com.

"The uptrend in home sales is in line with all of the underlying fundamentals -- pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents," said Lawrence Yun, chief economist for the Realtors.

The housing market has been showing signs of recovery in recent months. The combination of low mortgage rates and a decline in home prices means homes are more affordable than they've been in decades. PNC's Hoffman agreed that the report is a further sign of recovery in the market, although he cautioned "it will remain a long process."

This could be a really bad year for the west coast of North America.

All of that floating debris (and probably a few sneakers with feet in them) will be hitting the coast this summer. Smelly rotten, corpse ridden debris will be a reminder of what living on the coast next to a fault line means.

It could potentially be the nail in the coffin for California especially. High probability of default (like Greece) and complete collapse from this year forward.

Not to be too overly pessimistic.

Now only if they admitted to the housing bubble and upcoming crisis in Canada.

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Originally posted by arian_ma
Now only if they admitted to the housing bubble and upcoming crisis in Canada.

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What bubble?

The only bubble I can see is Vancouver with all the Chinese buying shit up @ record pace and prices.

Calgary market is quite balance IMO. Average prices has been down while everything else is inflating slowly. Don't see a problem here unless some asshole figures out fusion as an energy source.

Quote:

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Originally posted by arian_ma
Now only if they admitted to the housing bubble and upcoming crisis in Canada.

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Anyone who read the news knows of the possible threat
http://www.economist.com/node/21546057

http://www2.macleans.ca/2012/01/26/w...g-bubble-pops/

http://www.cbc.ca/news/business/stor...economics.html

- I still maintain that Alberta will see a very small (if any) price decrease. Canada yes, Alberta no.

.

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Originally posted by Xtrema


What bubble?

The only bubble I can see is Vancouver with all the Chinese buying shit up @ record pace and prices.

Calgary market is quite balance IMO. Average prices has been down while everything else is inflating slowly. Don't see a problem here unless some asshole figures out fusion as an energy source.

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What about when the interest rates finally increase and we say goodbye to 30 yr mortgages? All those who bought with 0% and 40 yrs are gonna be straight fucked. The demand will be further lowered if the gov decides that you actually need to have cash again to buy a house (what a crazy idea that is)

But I do agree, too much money floating around in Calgary.

Quote:

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Originally posted by Xtrema


What bubble?

The only bubble I can see is Vancouver with all the Chinese buying shit up @ record pace and prices.

Calgary market is quite balance IMO. Average prices has been down while everything else is inflating slowly. Don't see a problem here unless some asshole figures out fusion as an energy source.

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:werd:

:drama:

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Originally posted by arian_ma

What about when the interest rates finally increase and we say goodbye to 30 yr mortgages? All those who bought with 0% and 40 yrs are gonna be straight fucked. The demand will be further lowered if the gov decides that you actually need to have cash again to buy a house (what a crazy idea that is)

But I do agree, too much money floating around in Calgary.

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I can see that risk. Mortgage rule already restricted a bit to hedge that risk. Sure we do have record low rates and it will be for at least a couple more years. But banks are not giving mortgage away to anyone like the US. As long as job market is strong in AB (and it is), affordability is not a question.

The income and real estate price gap is much wider in Toronto/Vancouver. They are more likely to use higher amortization terms and 0% down. And they are priced higher which mean more room for adjustment/fall. Due to their shitty economy, they are more prone to risk of foreclosure and bursting of bubble.

Vancouver will be fucked if all of sudden Chinese stop money from flowing out of the country (not likely). And Toronto is probably fucked no matter what.

Where can you get a mortgage with 0% down in Canada? I thought the best you could do was 5% for a first timer.

Thats why Canada does not compare at all to the USA In terms of housing stability IMO... We have not in Canada seen a crash of the real estate market like the USA. Is the reason not because our laws are more strict including a 20% minimum down payment other than first timers? Am i missing something?

Either way... if you dont NEED to sell your house you will never lose money on it... property will only appreciate in the long run.

Edit: It's all fear mongering

Quote:

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Originally posted by vtec4life
Where can you get a mortgage with 0% down in Canada? I thought the best you could do was 5% for a first timer.

Thats why Canada does not compare at all to the USA In terms of housing stability IMO... We have not in Canada seen a crash of the real estate market like the USA. Is the reason not because our laws are more strict including a 20% minimum down payment other than first timers? Am i missing something?

Either way... if you dont NEED to sell your house you will never lose money on it... property will only appreciate in the long run.

Edit: It's all fear mongering

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Doubt there's a true 0% down payment but when you do 5% and 30 year am period, the CMHC premiums push the principal amount up and your down payment percentage is very near 0 at that point...

There seems to be a lot of downward pressure on pricing that is coming on stream in terms of the condo/townhouse market within the next 1-3 years. I'd expect to see a decrease in pricing in the short-medium term.

.

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Originally posted by Cos






They used to have 10%-25 year as the max.
They then changed it to 5%-25 year
Then to 30 years
Then to 35 years
Then to 0% down and 40 years.

Then when the bubble hit it went back to 35/5%, then to 30 years, and they are now talking about dropping to 25 years again. So for a few months there really was a true 0% down mortgage. All you had to cover was closing costs. CMHC would cover 100% the cost of the mortgage PLUS the CMHC fee. Lol :nut:

Problem is that if you move lenders you have to be able to qualify at the new interest rate AND new term. So if you bought on 50 year 0 down at 4.25. If interest goes to 5 or 6 and 25 year you practically need double the income than you had 5 or 6 years ago.

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Technically CMHC still does 80% LTV at 40 year am... good luck finding a lender right now that will do that though.

Back in 2006-2007, you could buy a new house with 0% down by leveraging the equity increase of the property due to the increasing market.

I've also heard many stories a few years ago of 5% down, but a "5% back signing bonus" upon closing.

Anyone know of any sort of bears ETF betting against the housing market or any good stocks to short if you think there is a bubble? A Canadian mortgage insurance company would be great. What really worries me isn't whether real estate prices are gonna decrease or not (as I'm pretty sure they are), but with the CMHC backing everything, how broke will that make Canada?

Calgary market is nowhere near as low as it was back in 2008/2009. I sold and bought a house then, and the market is substantially higher right now.

Also, affordability in Calgary, and Alberta is pretty good. Miles ahead of Van and Toronto, both of which are headed for a nasty situation over the next few years.

Quote:

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Originally posted by Cos



So for a few months there really was a true 0% down mortgage. All you had to cover was closing costs. CMHC would cover 100% the cost of the mortgage PLUS the CMHC fee. Lol :nut:

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Longer than a few months. We bought with true 0% down the first month it was made available (GE had it 3 months before CMHC), in May, 2004.

Even still, imagine renewing your 40 yr mortgage to a 30 (or soon to be 25???) year one......................................how many people in Calgary do you supposed took advantage of the 40 yr? How many of them will be able to afford it after remortgaging? Ouch

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Originally posted by arian_ma
Even still, imagine renewing your 40 yr mortgage to a 30 (or soon to be 25???) year one......................................how many people in Calgary do you supposed took advantage of the 40 yr? How many of them will be able to afford it after remortgaging? Ouch

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Unless I'm mistaken, those rules only effect new mortgages. You can still renew for more than 30 months if you originally had a >30 month amortization. They may be a bunch of clods in Ottawa, but they aren't going to try and bankrupt all it's citizens.