Home buyers and sellers in saw-off

Cooling market creating cautious approach on both sides

In Maple Ridge

In Maple Ridge

As Christmas draws nearer it seems there’s little good cheer this season for homeowners hoping to get the gift of a big real estate payoff.

Instead, buyers and sellers are acting a bit like Scrooge these days and, saying bah humbug to existing housing prices.

“We are likely to see a cooling trend until the spring,” realtor Ron Antalek said. “This should change through the early months of 2013.”

The benchmark-selling price in Maple Ridge continued to fall gradually from $483,000 in September to $459,000 in November.

Despite the noticeable decrease, this downturn is much smaller than surrounding Metro Vancouver communities, where prices are dropping more dramatically.

But local sellers appear unimpressed by the continued downward trend and are starting to take their homes off the market in large numbers, say local real estate watchers.

“Home sellers appear more inclined to remove their properties from the market today rather than lower prices to sell their properties,” said Real Estate Board of Greater Vancouver president Eugen Klein.

In Maple Ridge, the number of homes on the market has dropped from a high in June of almost 800 to less than 600 this month.

Total listings in the region have declined by nearly 3,000 properties since reaching a peak of 18,493 in June, according to RESBGV statistics.

The drop in the number of new listings is more dramatic, with a one-third reduction in the number of homeowners deciding to put their houses up for sale in Maple Ridge.

In November, there were less than 100 new listings in the Maple Ridge area compared with a 2012-high of more than 375 in May.

These numbers bear out the region-wide trend, which saw a 36.2 per cent downturn in new listings from one month earlier.

The overall number of houses available was down to 2,758 from 4,323 in October.

Meanwhile, home sales for November in the region were down by 30 per cent over the same month in 2011, indicating that, despite a shrinking market, buyers still aren’t willing to pay current prices.

“Buyers appear to be expecting prices to moderate,” Klein said.

Antalek says he expects this trend to continue shortly into the new year, when pent up demand from a shrinking supply of housing will reignite the market and help maintain what he says is one of the region’s most stable markets.

“Prices have not fluctuated widely here,” he said.

Much of the change in market conditions has been blamed on one change to mortgage eligibility made by the federal government in July.

In the wake of the housing and debt crisis in the United States, federal finance minister Jim Flaherty implemented mortgage changes that local mortgage brokers and realtors alike say are directly responsible for the downturn in the real estate market since July.

Buyers applying for government-backed mortgages with less than 20 per cent down must now face a maximum amortization rate of 25 years instead of the 30-40 year amortizations that have become increasingly popular in the past decade. The new amortization limit applies to those buying a home under $1 million with less than 20 per cent down.

Outgoing Bank of Canada Governor Mark Carney reported this week that one positive result of the changes is that the number of people taking out fixed-rate mortgages doubled to 90 per cent of mortgages. He also noted that mortgage rate remained at historic lows.

As buyers adjust to mortgage changes, they will also get a bit of good news next year that will likely give them a boost in confidence as the HST changes are implemented, which should give them a bit more confidence, Antalek said.

“This is the kind of thing that can spark buyers interest.”