Friday, October 18, 2013

The View from Richmond - James Wong's monthly real estate update

Richmond real estate agent James Wong is out with his mid October report on the end of September sales data.
Richmond’s housing market is stabilizing.

Richmond experienced one of the highest run-up in home prices the past 10 years. The fear of a impending collapse in home prices in 2013 did not happen. The built up in the supply of homes in the second half of 2012 slowed down through 2013, aided by improved sales since March, 2013. The MOIs for detached homes, townhomes and condos are now at more balanced levels.

The double digits MOIs for detached homes, townhomes and condos a year ago declined gradually to around 7, 5 and 6 respectively towards the end of September, 2013.

What to expect of 2014?

The 5-year mortgage rate jumped moderately and currently it is about 0,5% higher than 6 months ago. Home prices in Richmond managed to hold at current level after suffering from around 12% drop in values compared to their peaks around the middle of 2011.

When home ownership is reported to be at the 70% level, and average annual household income just over $60,000, the demand for homes are depending on interest rates remaining low for extended period of time. The housing market is fragile. At current price levels, any further spike up in interest rates would defer many first time and move-up buyers from buying.

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1 comment:

  1. Not so fast, let's see how things look at the end of Dec.2013 - that is 3 months from now. There was a lot of rush buys with pre-approved rates from 3 months ago. These are the sales that will not take place later this year. Wait and see.It sure have been fun year if you had a chance to sell your place and rent for now.