“You said 0.7% is a big drop?”

What I should have said was “highlighted as one of the larger drops.”

No, not “big” but it was a month-over-month drop so not peanuts either.

We have subsquently decided not to build at this time (although we would like to in the future) We have decided to wait until there is a stabilization period.

Find yourself another builder! LoL

Norm,

You said 0.7% is a big drop? The way building costs have risen due to labour I’d expect it’ll be forced to come down at minimum 15%.

I wouldn’t buy into that logic, consider:

First, a relatively small component of your house cost is for lumber. Windows, flooring, kitchen cabinets, basically all of the pre-manufactured stuff is what costs money. Labor is also another big component which obviously won’t be affected by the supply of lumber.

Second, we still have mills in Canada but they are extremely unprofitable right now and running lean. Should supply magically increase they could increase supply.

Third, even ignoring the last 2 comments, should we need to buy lumber from the US we are going to get a good deal. There lumber companies are in the same spot and it is a very competitive market. Prices are not going to go up by 20 or 30% just because we have to buy from the US.

Hmmm. I’m not an expert on lumber but I have not heard of any potential lumber shortage in Canada. If anything, I would have assumed a bit of a surplus. Most of our lumber goes to the U.S. and I don’t imagine that they are buying a lot of it these days. Anyone else?

On cost of construction, this article from the Globe stating the costs have declined for the third consecutive month. Apparently, Saskatoon took a fairly large drop. Falling labour costs get the credit.

http://tinyurl.com/agobbc

My wife and I are first time home buyers and we really enjoy reading this blog because of all the intelligent comments and helpfull information.

We are currently looking to build a house, but given the current economic circumstances, are unsure of when to build.

I have heard (from a home builder) that as soon as lumber inventories are used up here in the city, they will have to buy lumber from the U.S (because of all the lumber mills shutting down in Canada) which will increase the price of building a house.

Is there any truth to this comment?

“Save Your Money”

Now’s not the time to be investing in real estate, or making big purchases. How tough is it really to live within our means, let’s say for one year, and take out no credit on anything, save for the mini-van needing a new transmission because it’s GM build quality

Think any one at Cameco expected to be laid off during our “boom” and now over 400 laid off because of global slow down and commodity crash!

“He contradicts himself:”

he says he thinks the surplus inventory will be absorbed by the end of the second quarter.

Cory,

The local board owns the data. Canadians are very geeked up about privacy and that might be what primarily prevents the release of details on specific properties. That said, anyone with a ten dollar bill can find out what someone paid for a home by pulling the title.

Ringo,

Sorry, there is no way to determine that through a search of listings.

Bales,

Just did a switch to Merix (must deal with a broker). 3.75% for three years. They paid all of the fees (legal appraisal, etc) and the process has been exceptionally smooth. This particular product must fund in 45 days but may still be available when you’re ready (perhaps at a lower rate). Worth looking into. I do agree with Mark’s thinking on time lines and was having some reservations wondering if I should have gone five years. Instead, I’m going to live like a pauper for three years and try to make some headway on my balance.

Plus you can pay off 25% of mortgage each year, AND increase payments 25% if you choose to do so.

I have greatly enjoyed being a customer of theirs for seven years now – hassle-free and simple. (They don’t have physical banks, but seemingly in compensation they have very good phone staff and an excellent website interface.)

And I second the idea of going for a longer term right now. Those with a (prime – x)% mortgage should hang on to it for dead life, but anyone asking me about renewing right now is getting my advice to lock in.

Also Norm – I gotta ask. I was poking around the mls listings (in osler), and there’s property listed that was built in 2007 and never lived in, still for sale. Do you have any available numbers as to how many properties that are listed (new) are THAT old?? I was unaware that there were listings that were that old. Hopefully this isn’t the future??

Remember, Bank of Canada determineds prime rates, which only ‘help’ determine variable mortgages, which are tied to prime rates at banks. All other fixed mortgages take their cue from the larger bond market. They have to compete with, say, all those treasury bonds being issued in the States. Some fear this will send bond yields very high, meaning mortgage yields will have to follow, meaning higher rates. The Fed Reserve in the US has hinted it may fight this by buying it’s own long term bonds back, but it’s an unpredictable affair. Fixed four and five year rates are as low as they’ll likely get. And much, much safer than a variable or 1 year fixed. Those are my thoughts. But I think most on here will agree.

Anyways without going into to many details about my situation my question is this. My mortgage is up for renewal may 1st. Bank of Canada will most likely cut rates in March. Right now my interest is fixed at 4.25 through TD which says I could get a one year now at 3.75. However a bank of Canada announcement cutting rates does not necessarily lower bank prime. With bankruptcies starting to rise I am skeptical whether a buyers morgage rates can get any better. March 20 is a long way away these days. Your thoughts, I am interested to hear.

No, not so far.

I think the apparent acceleration of job losses is what’s most concerning. Good point, though, the reporting of these unemployment numbers do not tend to be reported proportionally. Percentages should be what we’re concerned about, not raw numbers. I saw an intereting set of graphs the other day that show the current unemployment numbers adjusted for population (US only, sorry):

http://tinyurl.com/crz3bd

http://www.reginarealtors.com/ourservices-marketstatistics.html

Sigh, yes, someone has to do it. All part of my carefully plotted path towards bankruptcy.

“It looks as if Mr. Market just can’t see the recently announced bank bailout plan working either:”

Mr. Market is fickle. We’ll see how he likest the 2 trillion in guarantess etc. a few months down the road.

Also, keep in mind, the recession so far isn’t as quite as bad as some headlines may suggest. I know there’s been a lot of Great Depression talk (though less in the last few months) but we’re still not seeing the kind of job losses proportionally that we were hit with in the early 80s. Provided, you adjust for the larger work force.

http://www.theglobeandmail.com/servlet/story/LAC.20090207.RJOBSLAGGING07/TPStory/?query=recession

Harper probably told Carney what to say or at least what he was allowed to!

Interesting that Carney’s predecessor has such a pesimistic outlook for the next 3 years. That has to say something about Canada’s economic prospects.

I am one of the Reginan’s you were referring to. I read that article on the LP’s website last night. I’m not too sure what to think of it. I doubt Mr. Archibald would outright lie and say the average for February so far is $235,000 so I can see that. What bothered me a little was how we only get any type of analysis from the him when the news is bad. FOr example, if the average was pushed higher in January because of several Wascana View properties selling at over a million, I don’t think he would have been as quite to point out the reasoning.

I suppose it’s his job to make things appear positive though. However I truly wish that the general public would have access to more information on housing.

Norm, forgive my ignorance, but is the MLS data owned by Realtors? Is there any way that an individual could gain access to the data on homes? Has there ever been a push in the industry to provide the public with more information? I fully understand many of the reasons why the public does not have access to the information, but just wondering if the topic has ever been discussed.

Thanks.

“Our supply levels are about double what they normally are. Inside the city, we’ve got over 800 listings.” — Gee, is that all? Saskatoon hasn’t been near 800 listings for almost a year now, so kwitcherbitchin!

He contradicts himself: “[The buyer is] in a better position.” “There’s lots of choice out there right now. We’re not seeing the same kind of upward pressure on prices.” but “…the average is expected to rise slightly through the year.” So, which is it – high inventory/buyer’s market, or prices going up? Doesn’t make sense to have both.

Lastly, I found it interesting that the Regina average was ‘anomalous’ on the low side due to the mix of low-end homes sold… while Saskatoon had 8 homes in excess of half a mil. I know one month’s sales do not a pattern make, but it’s always odd to see divergences like this. (Mark, are you buying all the low-end properties, bringing the sale price down?

George, I’m with you. Considering so many of our exports go to the US, it’s getting ever scarier. It looks as if Mr. Market just can’t see the recently announced bank bailout plan working either:

Geithner Says Bank-Rescue Plans May Reach $2 Trillion

http://tinyurl.com/b2uz6h

This is supposed to be seperate from the US economic stimulus package? I’d like some of what Mr. Carney is smoking.

http://www.leaderpost.com/business/Regina+home+sales+expected+decline/1271117/story.html

http://news.sympatico.msn.ctv.ca/abc/home/contentposting.aspx?isfa=1&feedname=CTV-TOPSTORIES_V3&showbyline=True&date=true&newsitemid=CTVNews%2f20090210%2fcarney_economy_090210

“We don’t do optimism; we don’t do pessimism; we do realism at the Bank of Canada,” Carney told MPs. “We don’t do spin.”

More than anything I would love for him to be right, I just do not see it.

Sorry, but we’re not having this conversation again here. We’re here to discuss real estate, not real estate agents. If you have an issue with another agent’s behavior please take your complaint directly to that person.

Thank you all for your very wonderful advice. I think I’ve convinced the hubby to hang in there for a bit longer!