Bidding Wars May Lead to Mortgage Problems

Explanation of how Buyers must be careful when bidding on a house. If they offer SIGNIFICANTLY more than what their mortgage provider appraises the house at, they may not get the mortgage they seek.

Call me, email me, comment here if you'd like more information on this.

March Market Watch - Sales and Prices Up!

Toronto MLS Sales Up in February
TORONTO, March 5, 2014 –

Toronto Real Estate Board President Dianne Usher announced that February 2014 home sales reported by Greater Toronto Area REALTORS® were up by 2.1 per cent compared to the same period last year. Total February sales amounted to 5,731 compared to 5,613 last year.

“Despite the continuation of inclement weather in February, we did see a moderate uptick in sales activity last month. The sales increase was largely driven by resale condominium apartments. New listings of resale condominium apartments were up on a year-over-year basis, giving buyers ample choice. This is in contrast to the listings situation for singles, semis and townhomes, where supply continued to be constrained. Some would-be buyers had difficulty finding a home that met their needs,” said Ms. Usher.

“If we see renewed growth in listings for low-rise home types, the pace of sales growth will accelerate as we move through the year,” Ms. Usher continued.

The average selling price for February 2014 sales was up by 8.6 per cent to $553,193, compared to the average of $509,396 reported for February 2013. The MLS® Home Price Index (HPI) Composite Benchmark was up by 7.3 per cent year-over-year.

“While the strong price growth experienced over the last year should prompt an improvement in the supply of listings, sellers’ market conditions will continue to prevail this year. Home prices, on average, will trend upwards at a pace well-above the rate of inflation. The impact of strong price growth on affordability will be mitigated by low borrowing costs,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

Housing Market Indicators
	Feb '13	Feb '14	% change
Sales	5,613	5,731	2.1%
New Listings	11,005	10,897	-1.0%
Active Listings	15,969	14,019	-12.2%
Days on the Market	28	26	-7.1%
PRICE	$509,316	$553,193	8.6%

My Opinion

These numbers illustrate that even with these poor weather conditions, there are still more Buyers than Sellers out there. As the weather gets better, there will be more properties listed and even more Buyers will spring up to take advantage of these ultra-low mortgage rates, especially now that CMCH has implemented new policies (http://www.cbc.ca/news/business/cmhc-hikes-mortgage-insurance-premiums-1.2555076).

In the coming months, sales, listings, and prices will increase.