Many are asking about how the BC Market will be affected by the downturn in the US Market. From a recent article put out by the REBGV, here are the facts:
Beginning in 2003, homebuyers with poor or no credit were getting mortgage loans offering very low "teaser rates" for the first 2 or 3 years for 100% or more of the homes value, speculating that the market value of the home would increase. They did increase for a few years, but around 2005 the "teaser rates" started expiring and homeowners were faced with mortgages around 10 to 11%. Mortgage payments that were around $2100 jumped to $4400 overnight, and some of these mortgages were for more than the value of the home!
Could this happen here? No. As opposed to the lax lending and easy financing practices of the US, Canada's mortgage lending standards and practices are rigorous and don't emcompass sub-prime loans or loans for more than the value of the home.
Overall, BC Real Estate Assciation Chief Economist, Cameron Muir, is optimistic, explaining that the health of the housing market has a great deal to do with the confidence of those who live, work and raise families in our communities. "We have high employment and rising wages and the economy is growing. Barring any unexpected shocks, home sales should remain strong in 2008."