Discussions

I read this post today: http://www.century21.ca/westmancom/blog/A_Very_Cool_October_For_The_Brandon_Real_Estate_Market_349342.  
 
I know a couple friends who put their homes up for sale this past month and are not getting any interest, like nothing. What's causing the slow market? Shouldn't it be humming based on how the mortgage rules are changing?? Anyone smarter then I have some insight?

Your link won''t work for some reason, but if anyone is looking for the article if you click on "blog" at the top of the error page, you can see the post. I tried reposting the link but it creates the same link, it''s not clear why it''s not working (maybe the way it gets broken up?).  
 
A lot of people seem to be blaming the new mortgage rules that make it tougher for first-time buyers especially, but frankly from what I''ve seen people are just asking too much. The post says that prices are flat, but market conditions have clearly changed and flat is going to be too high.  
 
What I''m really curious about, and what is not reflected in the stats, is how many people are looking but not buying, biding their time. Is there a backlog of buyers waiting for a deal? Or are there actually not as many people looking?  
 
Also, she states that there''s a shortage of buyers, but is that accurate? Is there maybe also a shortage of listings, accounting for less volume overall (there is no breakdown to compare for October, only year-to-year)? Year over year they''re not that high, 2016 seems to be low compared to prior years and the current year.  
 
The median DOM isn''t out of line, and is in fact down 20% month-over-month from a year ago, which does suggest *maybe* there''s a shortage of buyers, but it''s not appreciably driving down the price, which is what you''d expect (down only 1% month-over-month from this time last year, and is up very slightly on YTD from last year and is the highest among the stats reported).  
 
Prices are too high, even if market conditions were perfect. It could be that this is beginning of the long-promised correction where buyers will decrease and prices should accordingly decrease too. Maybe. You can''t make that determination over a single month''s of stats.  
 
Edited by Abbysmum, 2017-11-22 16:10:58

No one wants to buy a house in the winter. Best time to sell is springtime

6lack said "No one wants to buy a house in the winter. Best time to sell is springtime "

Most of the houses I've lived in I bought in the fall/winter because that's when the deals are to be had, LOL!!! Moving sucks in the snow.  
 
But I'm seeing houses sit for a looooong time, months and months. I'm not sure it's a winter thing.

Abbysmum said "    6lack said "No one wants to buy a house in the winter. Best time to sell is springtime " Most of the houses I've lived in I bought in the fall/winter because that's when the deals are to be had, LOL!!! Moving sucks in the snow.     But I'm seeing houses sit for a looooong time, months and months. I'm not sure it's a winter thing. "

Is a gamble. It's all fun and games until you find out in the Spring about moisture problems.  
 
But that's not pertinent to the original question. Sometimes sentiment just turns, and the party's over.  
 
We'll never know exactly why, but the economists will be out in full force making retroactive "predictions".

The problem isn't not enough buyers, it's too much supply. Brandon was growing in recent years at rates unprecedented for many decades. But this growth has now slowed back down. Meanwhile, we are still building way too many new houses (Brookwood, Bella Field, Outback Drive, and more). There just isn't enough demand for the excess supply that's being added to the regular stock of owners trying to sell existing houses. Same is happening with the market for rural acreages around the city. There's just way too many people trying to sell their houses compared to the demand. But of course, sellers won't come down too much because they just can't. So yes, the market is out of whack. Supply and demand aren't coming together at some magical equilibrium. Price, supply and demand aren't adjusting enough.

Myself I am looking to buy. However, who can afford a 350k -450k home on a 50k a year wage?. The banks will not even loan u the amount based on that. I think the prices in today's market in a place like brandon is to high. And the homes based in my price range need a large amount of upgrades. Just isn't worth it.

What are the new mortgage rules on first time home buyers?

Houses do sell quicker in the spring/summer. Not right now

Adam said "    aBUFAmember said "The problem isn't not enough buyers, it's too much supply. Brandon was growing in recent years at rates unprecedented for many decades. But this growth has now slowed back down. Meanwhile, we are still building way too many new houses (Brookwood, Bella Field, Outback Drive, and more). There just isn't enough demand for the excess supply that's being added to the regular stock of owners trying to sell existing houses. Same is happening with the market for rural acreages around the city. There's just way too many people trying to sell their houses compared to the demand. But of course, sellers won't come down too much because they just can't. So yes, the market is out of whack. Supply and demand aren't coming together at some magical equilibrium. Price, supply and demand aren't adjusting enough. " You state that after unprecedented growth, it has slowed. Census in 2016 had Brandon growing at 6.1% from the prev census. Almost 2800 new residents.  Is there further population data that shows a slowing from that point, or you’re guessing?  "

Sorry Adam, no I wasn't thinking of specific data, just my sense of it. About 20 years ago, Brandon was under 40,000. Now we're near 50,000. That's 25% growth in a fairly short time for a city this size. The last census shows us 6% in a five year period. So I wasn't really comparing apples to apples. I also have concerns about the 2011 census, so let's see how the trend continues in the years to come. But I stand by my original message that we are building too much new housing.

I figured with the rules changing come Jan 1st the market would be a little hotter right now, especially on the lower cost homes. It seems like the banks don't want people to own anymore... or rather, the CMHC is getting sore about people saving 20% and not throwing them money for no reason so they're tightening things up. In case anyone is unaware, as far as I understand the rules are changing in January so that in order to be approved for your mortgage with 20% down (to avoid paying high CMHC fees) you must be approved to be able to pay back the current rate plus 2% on the remainder of the loan or they won't approve you. (I think currently you just have to be approved at the current rate) While I don't disagree with the banks protecting themselves from rising interest rates and bankruptcy - how are people supposed to afford housing when decent housing is around the $250,000 + range??? No wonder the market is at a standstill. And people who do want to own are forced to throw away thousands to CMHC.  
 
I have seen plenty of lower cost homes on the market for a long while though... so perhaps the price doesn't have everything to do with it? Are young people no longer willing to accept fixer upper homes?  
 
But still. Housing is something people will always need - surely the market will pick up again? And it sure seems like the builders aren't slowing down any...

the market does appear to be slower; but prices also seem to be high for some of the houses out on the market; there are new builds that can be had for 350k. vs someone selling a dated home for 320k that needs work done to it.

The pricing here is definitely high. I moved from Winnipeg about a year and a half ago. There, I bought a 3 bedroom, two bathroom home in a not-great, not-terrible area. It was only 8 years old. It was actually a really nice place.  
 
When I moved to Brandon, the house I ended up buying was built in 1947, had 3 much much smaller bedrooms, 2 bathrooms, but one is in the basement, rather than on the top floor (which is annoying when you have to pee at 3am), and basically is worse in almost anyway.  
 
The house here cost about $25,000 more dollars and it was the best house I could find here in my price range.  
 
It's nuts. We've been in the house under two years and are already looking forward to being able to buy something nicer in another two years or so. But it's going to be very very expensive.  
 
I was shocked that housing here was so expensive.

aBUFAmember said "    Adam said "    aBUFAmember said "The problem isn't not enough buyers, it's too much supply. Brandon was growing in recent years at rates unprecedented for many decades. But this growth has now slowed back down. Meanwhile, we are still building way too many new houses (Brookwood, Bella Field, Outback Drive, and more). There just isn't enough demand for the excess supply that's being added to the regular stock of owners trying to sell existing houses. Same is happening with the market for rural acreages around the city. There's just way too many people trying to sell their houses compared to the demand. But of course, sellers won't come down too much because they just can't. So yes, the market is out of whack. Supply and demand aren't coming together at some magical equilibrium. Price, supply and demand aren't adjusting enough. " You state that after unprecedented growth, it has slowed. Census in 2016 had Brandon growing at 6.1% from the prev census. Almost 2800 new residents.  Is there further population data that shows a slowing from that point, or you’re guessing?  " Sorry Adam, no I wasn't thinking of specific data, just my sense of it. About 20 years ago, Brandon was under 40,000. Now we're near 50,000. That's 25% growth in a fairly short time for a city this size. The last census shows us 6% in a five year period. So I wasn't really comparing apples to apples. I also have concerns about the 2011 census, so let's see how the trend continues in the years to come. But I stand by my original message that we are building too much new housing. "

Data:  
http://brandon.ca/building-safety/building-statistics  
 
If I am reading correctly for residential building the number of dwellings are decreasing.  
2013-411 dwellings  
2014-314 dwellings  
2015-181 dwellings  
2016-257 dwellings  
2017-200 dwellings  
 
Sure the city is still growing but the housing market is now catching up to itself. People know that the houses that were 60 grand have sold for 200 grand. The almost 300 grand homes now need new shingles, furnaces, appliance upgrades, etc. The used sales prices that were making people sleep great at night are no longer around. Hard to find a good home anymore at a great price. Houses used to sell themselves and agents were there to reap the commissions. Now houses are taking longer to sell.

Since 2000 house prices have risen 250%. Wages have risen 25%. At some point you have to hit a wall of debt.