The Insider’s Scoop

No one can ever know for certain when it is the best time to buy a house or if it is better to lock into a fixed rate versus a variable mortgage rate. What we do know is that prime rate (currently 3.50%) has been rapidly dropping and this leads many of us to think "should we have gone with a variable?" Maybe, maybe not. Returning from a recent lender presentation, a leading bank gave their opinions about the market and here is what they had to share:

• the Bank of Canada will likely further decrease prime rate in January on their next 'rate date ' - January 20th, 2009.

• this will likely be the last rate decrease for sometime at which point prime rate will begin to rise. When it does rise, it will do so at a speed much faster than it has taken for it to lower to the rate it is currently at.

• fixed rates will likely be at their lowest in February 2009. Keep in mind that most financial institutions have a 90-120 day rate hold so if you are looking to purchase a home or renew your mortgage within that time frame, February will be the time to lock that rate in.

Ultimately it is up to the individual consumer to determine whether or not they would be able to sleep at night (determining their own, personal risk-tolerance) if prime rate were to drastically increase or would you prefer a certain level of peace-of-mind with a fixed rate?

The 11 Dollar House.com

I came across a very interesting idea and wanted to share it with all of you…  A man by the name of David, and his family, are taking in entries for $11 and a story of why you should win a renovated home in Edmonton, Alberta.  I encourage you to take a look at this, and for you to enter.

I inquired to David of why he and his family is doing this and what they are looking to get out of it… Here is his responce.

As for the contest itself, the number of entries are around 220.

As for the idea, it’s a combination of things, I guess.  A bit over a year ago, our daughter (6 at the time) asked if we were selling the house, how much would we sell it for.  I asked her how much did she think.  She suggested $5, or something like that.  I laughed, but for whatever reason, I started to think that while $5 wouldn’t be good, a bunch of people paying $5 might mean somebody could get the house.  The actual $11 was the result of working out the mechanics of the contest, more math than anything else, although we did like the sound of The 11 Dollar House.

Since around January of this year, I was fiddling with a website when I had time, but I didn’t want to run anything until I’d finished an addition slated to add a third storey (or a half storey, technically).  I wanted the house to mainly have it’s final form before putting it out there.  By the end of August, this was mostly finished, so off we went, with a little hiccup in September that put our timelines out by a month (which may or may not make a difference, we’ll see).

The date to have all entries in is currently slated for December 31, 2008.

So, what do you think about this social experiment? It’s called a contest, but really it’s a question as to whether or not thousands of people will pay $11 so that one person, a complete stranger to all of them, can get a house mortgage free. Of course, every person paying also hopes that they will be that one person, that complete stranger, who wins. Do you think there are enough people out there with the necessary mix of altruism and selfish (not in a bad way) hope?

What are your thoughts?  Below is the website that you can check out for more info.

Weekly Market Update – Week 50

As we head into the Christmas season, and the focus changes to family time, and holidays, we will see a further reduction in listings, and sales.  Over one month, we are down 80 sales per week from 253 during the week of November 17, 2008 to this week at 173. Even further back we are down 143 sales per week from the week of October 14, 2008 at 316 sales.

We will most likely see the number of listings drop a bit further, but will pick up again middle to end of January.  There still will be sales happening, but in most cases you will feel the slow down, which is typical this time of the year.

The properties that are selling right now are the ones that are priced well, show well and are willing to negotiate when the offer comes in.  If you are fortunate to have an offer in this market, it is worth a serious look at, and consideration.

November 2008 Market Update

An educated consumer, watchful of current market trends, still drives Calgary’s real estate market.

While November typical seasonal slowdown was magnified by the prevailing lack of overall consumer spending compared to one year ago, the changes in the listings-to-sales ratio demonstrates strategic thinking on the part of buyers and sellers alike.

Calgary single-family unit sales for the month of November totalled 670, 18.3% fewer sales than the month before while new listings added for this market segment dropped by 32.5% compared to the previous month’s report. The larger drop in new listings added results in fewer properties offered overall and indicates thoughtful intention on the part of sellers. The median price of a single-family unit held steady at $387,300, a decrease of only 0.7% compared to the month before. The average price of a Calgary single-family unit in November recorded at $435,471, 5% off the average recorded last November.

Change in the condo market indicators revealed more consistent month-over-month buyer/seller intention. Condominium sales recorded a decline of 29% from October this year, while new listings in November dropped 30.8% below new listings added one month ago. The average price of a condominium unit dropped 1.2% below the average price the month before and recorded at $312,710 this November.

The Season of Giving

As we are rapidly approaching the Christmas season, where giving is better than receiving… We want to recruit you to our lending team, Team Chamberlain Group, on Kiva, a non-profit website that allows you to lend as little as $25 to a specific low-income entrepreneur in the developing world. You choose who to lend to – whether a baker in Afghanistan, a goat herder in Uganda, a farmer in Peru, a restaurateur in Cambodia, or a tailor in Iraq – and as they repay the loan, you get your money back.

If you join our lending team, we can work together to alleviate poverty. Once you’re a part of the team, you can choose to have a future loan on Kiva “count” towards our team’s impact. The loan is still yours, and repayments still come to you – but you can also choose to have the loan show up in our team’s collective portfolio, so our team’s overall impact will grow!

Check out the Team Chamberlain Group lending team, and learn more about lending teams on Kiva in general, by clicking here: JOIN THE KIVA CHAMBERLAIN TEAM

Thanks for your serious consideration,
Jared & Rebecca Chamberlain

#1 Reason People Don’t Succeed is…

You probably guessed it…

FEAR

Judith Briles did a study/ survey on why people don’t succeed, and what the biggest fears are for men and women… Here is the list of the greatest fears that we as humans experience.

• Being Poor
• Loosing Money
• Making Mistakes / Failing
• Borrowing Money
• Not Trusting Yourself / Keeping Wrong Advisers
• Looking Stupid
• Talking About Money
• Creating and Sticking to A Plan
• Investing
• Being Too Stressful

And the biggest fear for women is…

Becoming a Bag Lady

Canada Will Dodge Worst of Recession

Nothing like pain of early 1990’s, economist says

“As it happens, growth in Canadian domestic demand has only ever crumbled amid monetary tightening by the Bank of Canada, regardless of the duration and severity of the recession in the United States,” Mr. Desnoyers said. “Moreover, history teaches us that real GDP growth in Canada has never sunk into a painful recession without domestic demand growth collapsing.

“Consequently, though we are not ruling out the possibility of Canada recording a technical recession, given the severity of the U.S. downturn, brandishing the spectre of a serious recession in Canada akin to those of 1990 or 1982 does not seem warranted,” Mr. Desnoyers said.

Canadians ‘Scared !

This is the front page of today’s Calgary Herald.

The article says that 90% of Albertans are scared that we in Canada could have a majority government.  Personally I don’t want to see this happen.  If there was an election to be held right now, I do think that the Tories could still be on top.

What are your thoughts on this government… What do you want to see happen?

Crunching Statistics

For those of you interested in these mortgage statistics (and who wouldn't be?) I've highlighted the one's I've found to be especially enlightening in bold red. Now, correct me if I'm wrong but with an average of 1.59% off of posted bank rates, I think we should see the number of people using mortgage broker's these days increase from 35% onwards!

Leah Plaizier

CAAMP has released its annual mortgage report and it's chock full of mortgage stats. Here's a rundown on the more notable ones:

• 5,250,000: The number of Canadian home owners with mortgages.
• 29%: The percentage of Canadian homeowners who got a new mortgage in the last 12 months.
• 86%: The percentage of people renewing or refinancing that stayed with their existing lender.
• $136,000: The average mortgagor's equity. This equity equals 51.7% of their home value on average.
• 22%: The percentage of mortgagors who took equity out of their homes in the past 12 months. People are spending more because last year it was 17%.
• $41,000: The average equity that borrowers took out of their homes this year. That's up 16% from last year. The most common reason for borrowing this equity? Debt consolidation.
• 50%: The ratio of new mortgages taken out in the last year with amortizations greater than 25 years.
• 5.41%: The average Canadian's mortgage rate. Last year it was 5.56%.
• 0.40%: The average interest rate improvement realized by people who refinanced in the past year.
• 1.59%: The average discount off of bank-posted rates.
• 1.96: The average number of quotes people get when shopping for a mortgage.
• 0.28%: The percentage of Canadians who are 90 days or more past due on their mortgage. That's up just slightly from last year.
• 10%: The approximate decline in mortgage approvals that CAAMP foresees in 2009.
• 36%: The percentage of Canadians who are aware that insured 40-year and 100% LTV mortgages have disappeared.

Peoples' favourite mortgage terms:

• 1-3 years: 29% of borrowers
• 4-5 year: 61% of borrowers
• Over 5 years: 10% of borrowers

CAAMP says there's a noticeable trend in borrowers taking shorter terms when compared to last year.

There's also a big trend towards variable rates. 40% of mortgages were variable in the past year. In CAAMP's 2007 report the number was just 21%. CAAMP says that's because "consumers may be expecting interest rate reductions." We'd also like to think they're becoming more educated about the long-term advantage of variable rates.

Where did people get their new mortgages this year?

• Major banks: 47%
• Mortgage brokers: 35%
• Credit Unions: 11%
• Other: 6%

Facts gathered by The Mortgage Group Ontario

Canadian Coalition

What are your thoughts on the Canadian Coalition… What do you want to see happen???

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