Despite historic low interest rates buyers don't meet the criteria
STEVE LERIGNY—VOICE FILE PHOTO
he federal government’s “Stress Test” imposed on potential home buyers is certainly living up to its name, as up to 20% of previously potential buyers are being shut out of the housing market.
Statistics released by the Chilliwack and District Real Estate Board (CADREB) reveal that home sales were down 22% from April of 2018, a month which is typically a robust one for real estate transactions. A total of 280 homes sold in Chilliwack and Area, down from 361 sales the same month one year ago.
“Despite interest rates continuing to be historically low, the stress test, which was imposed in the new year has prevented many from achieving their dream of home ownership,” said Kyle Nason, CADREB President. “It’s proving to be frustrating to buyers and sellers”.
Mr. Nason added that the local Board has now met with both the provincial and federal governments, asking for help for consumers to help offset the negative effects of the stress test. The test not only takes into account what a person can qualify for now in a mortgage payment, but what could be withstood in the event of a rate hike (currently based on 5.9%).
While sales are down, listings are up 35%. Lack of sales has started to put a slight downward pressure on prices however, as the average sales prices are up 3.4% across the board – Chilliwack is down 3.15%, but Sardis is up 5.1%. The best bargains are in Hope, where the median price has decreased by 15.6%.
As for the average number of days a home is on the market, the time has increased across the area by 145%, while decreasing by 40% in Hope, perhaps a reflection of the decrease there in home prices.
The highest number of sales last month (35) were homes in the $550,000-$599,999 range, followed by 26 sales in the $600,000-$649,999 range. There were 13 sales of homes with acreage.
For those who are pre-qualified, there is an abundant choice of homes on the market. The current number of listings is 1,529, compared to just under 1,000 at this time last year.
More than ever, sellers need to heed the advice of their qualified and experienced REALTOR®, who has experienced or is aware of all types of real estate cycles.