They say rats are the first to abandon a sinking ship: mortgage brokers diversifying out of mortgage business as sales plummet

The big news for those that follow daily real estate sales data is that it appears that not one single sale was recorded on either the East Side of Vancouver or in the toney confines of West Vancouver yesterday for single family houses.

Zero!

More interestingly large numbers of pre-July 9th sales still seem to be filtering through the system, presumably due to delays with CMHC approval.

On Wednesday we had 98 listings sold. But strip away the sales that took place before July 9th and the abysmal 98 sold listings plunges dramatically to only 35 post July 9th sales!

Yesterday of the 87 sales, only 27 were post July 9th!

What is that old saying?  That rats are the first to abandon a sinking ship?

If you're looking for a harbinger of what lies ahead as real estate stagnates, glance your eye at the mortgage brokerage industry.

In a recent industry news article we are told that some brokers are in the process of extending their reach beyond mortgages." 

It seems the brokerage industry has been anticipating these abysmal numbers quoted above and are preparing for a huge slowdown in the mortgage market...

Some mortgage brokers are now moving to diversify their product offerings as signs of a market slowdown begin to appear.

“Many operators are beginning to add commercial and personal insurance to their product mix,” said Gord McCallum, president and CEO of First Foundation Residential Mortgages in Edmonton. “For some it’s a strategic move; for others it may be a hedge in anticipation of the eventual cooling of the market.”

Six months ago, McCallum’s firm began offering clients home, business and auto insurance as well.

“It is a value-added service we want to offer clients to differentiate our firm from the competition,” he said.

The product offering is additional ammo in the firm’s battle against banks, and relies on employment of a licenced insurance broker to operate the firm’s auto insurance business. Mortgage brokers occupy the top floor of the office while the auto insurance is handled at the ground floor, he said.

“We are fighting fire with fire,” said McCallum. ”Auto insurance is an advantage because banks by law can’t offer general and auto insurance in-branch.

The article makes no bones about the looming reality in the Canadian housing market... tough times are coming.

And by tough times they mean dramatically less sales as the year moves along.

Given how dismal the figures are as the pre-July 9th sales wind down... it's clear that even the brokers know what we are seeing today is nothing compared to what's coming.

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