What does the future look like for buyers and sellers?
After many attempts to write my bi-monthly newsletter; here it is. I’m not sure why I had such a hard time; but there is a lot happening, adapting to this ‘new normal’. Wondering what will be in-store for parents and kids come September, and the economy – there are many different theories on how all of this will affect the housing market. So I suppose I wasn’t sure where to start or if my content would still be valid by the time it reached you.
What I can tell you from my own experiences these past 6 weeks; there is a strong presence of buyers actively out looking and purchasing homes. However, I can’t say there is an abundance of inventory for them to choose from. Therefore, we are seeing multiple offers and properties selling over ask. Depending what you read, there are many different forecasts for the housing market in the coming months. Some predict that the market will continue to steam roll ahead, inflated prices and no inventory. While some predict that when the COVID dust begins to settle we will see the results. of people out of work, deferring payments, etc – there will be an influx of homes on the market and less buyers. I personally think there will be ‘bubbles’ in different markets throughout the province that will see less of the negative effects. No matter what – we are going to begin to see the aftereffects from COVID, regardless of which side of the fence you are on.
The “New Norm”for CMHC?
No doubt you heard or read about the changes to CMHC and the insured mortgage product, will it affect you and your buying power? CMHC is trying to take on less risk and so they tightened their rules. That is what their July 1 2020 rule changes are about. Just to recap, as of July 1 2020 CMHC will have increased their minimum credit beacon score requirements to 680 from 600. They also reduced their debt service ratios, which is what we use to calculate the amount income is needed to service all of your debts including the mortgage you are applying for. Lastly, they deemed that down-payment can no longer come from a loan- a program hardly used/offered by lenders. All in all these changes have reduced the amount most people can borrow by roughly 11%.
Is this a big deal? Not really… at least for now.
We have two other Insurers in this country- Canada Guaranty and Genworth. They have not changed their policies to match CMHC. They often do though. Canada Guaranty and Genworth will over the next few months increase their market share of Canadian mortgages they will insure as they take on more of the mortgages left behind from CMHC. Once they reach their limits, they will likely change their policies to match CMHC. OR CMHC sees that risk isn’t as bad as they thought, and they return their policies to where they were. Time will tell. If you know someone who is trying to get into the market now is a good time to act.
Finding a home to fit this “New Normal” lifestyle
I have been working with a few buyer clients recently and one thing they all seem to have in common; is wanting the space to live, work and play for this ‘new normal’ lifestyle.
Now when searching for the right home, clients are looking for a home with the opportunity to create their own version of ‘perfection’ even if it’s on a small scale and a small budget. Making the back yard into an epic play centre for the kids, creating a functional area for schooling and working from home, home gyms, theatre rooms, a bigger kitchen for family meals. Something to think about if you’re planning a move – what have you learnt from these past few months? Is there something you absolutely must have, or be able to create in your next home? Or maybe you realized, you can live with less – less house; maybe you’re ready for a smaller home with less maintenance and upkeep?
Where you planning a Move in 2020?
You still can! We just have to go about things differently now. I can help you safely buy and sell a home. Safety and health precautions are always in place, showings are now limited length in time, only the realtor and 2 buyers are allowed to attend the showing – no children or extended family. I have special clauses to protect both my buyers and sellers. As a seller, I will showcase and market your home with professional photos, virtual tours, and floor plans, and screen all potential buyers – avoiding unnecessary showings and time wasted. If 2020 was your year to move, let’s create a plan that benefits you and make it happen!
