Susan J. Weeks

Autumn 2008: Presently, the Greater Vancouver residential real estate market has more homes listed for sale than at any other time in the past 5 years.  The market is now officially considered a buyers market because there are many more sellers in the market place than buyers at this time.

The increase in listings is fuelled by concerns over media coverage of the worsening real estate market conditions in certain pocket areas of the U.S.   The current problems in the U.S. real estate market were created when lenders extended sub prime (= high risk) mortgages to individuals who ultimately, could not afford the payments resulting in many foreclosures.  It is important to know that the Bank Act of Canada requires lenders in this country to strictly adhere to a formula called the Total Debt Service Ratio that prevents borrowers from having an entire monthly debt load of not more than 40% of their gross monthly income.  Not so in the U.S.   This factor alone greatly reduces the occurrence of residential mortgage foreclosures in Canada.  

What about those 0 down mortgages offered by some Canadian lenders?  Borrowers of those mortgages also have to qualify as above. How many first time buyers do you know that can qualify for a $500,000 mortgage and still only have their total debt service represent not more than 40% of their gross income? 

Is the bottom falling out of our market?  Likely not. There are too many other important factors supporting our economy such as: increasing population due to wealthy immigrants; booming economy; low interest rates; low unemployment rates; and of course, the 2010 Olympics. 

What about all those price reductions?   Many properties currently listed for sale on the North Shore are actually listed for considerably higher than the current market value and with the low number of buyers in the market place, these listings are being overlooked by the few buyers who are attempting to make a purchase.     In short, if you need to sell, price your home very close to current market value.  Your real estate professional (eg: me) can help you establish that figure.