Fixed term mortgage rates see largest one-day increase since 1996

The threat of higher fixed term mortgage rates became a reality this morning as the Royal Bank and TD Canada Trust announced significant hikes. The Laurentain Bank followed suit and it’s believed that other major lenders will quickly fall in line.

Effective tomorrow, the posted rate for a five-year closed mortgage climbs by six-tenths of a percentage point with all three lenders, the largest one-day rate hike since 1996. Shorter-term fixed rate mortgages will also increase as much as four-tenths of a percentage point.

Fixed term mortgage rates are impacted by five-year bond yields, which have been climbing in recent months. Still, as early as just last week major lenders have been aggressively competing for market share. Just last week, the TD dropped its ten-year fixed rate to its lowest point ever, 4.99 percent. Today’s announcement represents a sudden and sharp change that seems to have taken the market by surprise.

All three lenders are currently offering promotional rates on their five-year fixed product that range from 4.54 percent to 4.59 percent, but effective April 19 when new mortgage rules take effect buyers selecting terms of less than five-years, fixed or variable, will be required to qualify using the five-year posted rates. A Saskatoon home buyer who qualifies for $300,000 in mortgage debt based on the current posted rate of 5.25 percent amortized over 25 years, will see their maximum allowable mortgage drop to $283,000 at the new rate, assuming it’s still in effect on April 19.

I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Saskatoon real estate week in review: March 22-26 2010

The black line continued to climb developing what’s beginning to look like a fairly steep pitch as Saskatoon real estate agents reported ninety-four firm house and condominium sales to the local MLS. That figure represents an increase of fourteen homes compared against the previous week, and a gain of thirty properties compared to the same week last year.

New listings of Saskatoon homes remained stable on a week-over-week basis with 132 properties being offered for sale, up from 113 for the same period in 2009.

Click the image for a larger version of the graph.

Total active MLS listings (residential) continued to build some numbers breaking the one thousand mark for the first time since total inventory fell below the four-figure level during the week of October 19-23 last year. The inventory line on our chart appears to be following a growth trend that is similar to 2009, albeit at lower levels. At this time last year there were a total of 1,422 active residential listings available on the Saskatoon MLS system compared to 1,016 today. As of this morning, we have a total of 595 single-family detached houses and 368 condos showing an active status. Nearly all of the gains were in the house category, which moved higher by forty units over the course of the week (a hefty increase for one week) while the condo inventory moved by just one. Last year at this time, those numbers were at 877 and 459 respectively.

Click the image for a larger version of the graph.

Cancelled and withdrawn listings were at twenty-four units once again with fifteen of those home sellers immediately changing their minds and re-listing, making it completely impossible to ascertain accurately how many days it takes to sell a house in Saskatoon. Forty-seven Saskatoon homes saw price adjustments this week.

The average selling price of a Saskatoon home bounced back again to finish the week at $289,405, up nearly fifteen thousand dollars over the previous week. The six-week average moved lower to $285,964 falling roughly seventeen hundred dollars from last week to finish about seventeen thousand dollars higher than it was during the same period in 2009. The four-week median slid nearly eight thousand dollars over the week to $271,000 to trump last year’s number by twelve thousand dollars.

Click the image for a larger version of the graph.

Overbidding activity dropped just a bit from last week as eight Saskatoon home buyers offered more than the seller was asking by an average of just $2,481. Nineteen home sellers managed a deal at their full asking price while sixty-seven buyers negotiated a final firm deal with an average drop of $7,263, a discount of about 2.4% of the asking price.

Click the image for a larger version of the chart.

Highlights from the news this week

Real estate agents poised to vote on shake up of industry
Competition Bureau firm in MLS fight
Developers tour plan (River Landing, Saskatoon)
Nasser and Lobsinger want first dibs on development
Overhaul of Fannie Mae, Freddie Mac faces hurdles
House prices to hit record: Scotiabank
Bankers urged to get tough
Canadians worried about home prices
Housing key to fixing social ills: Sally Ann
City eyes land sales to soften budget blow
Competition bureau charges misconceived: CREA
U.S. unveils home aid plan
Realtors argue system is already competitive
Tone down the real estate speeches

A map displaying the boundaries of Saskatoon real estate areas is here.
An overview of data collection and calculation practices for our statistical reports is here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

River Landing fat lady refuses to sing

Lake Placid Developments CEO Michael Lobsinger appeared before Saskatoon City Council last night and made an appeal seeking resurrection of a deal his company had made with the city to purchase “Parcel Y” in Saskatoon’s Central Business District. Lake Placid had plans to build River Landing Village, an upscale hotel and condominium development. That deal died on October 30 of last year when the company failed to meet the payment deadline for the land following a number of extensions granted by the city. Lake Placid ultimately faced challenges in securing financing for the project after the global economy went south and lenders tightened the purse strings.

So, what has changed and why should we care?

Well, most importantly, the money is reportedly in the bank according to Lake Placid’s new partner, Dr. Karim Nasser who also attended the council meeting and provided assurances that he has the goods to immediately deliver up full payment for the parcel and to see the project through to its completion. Dr. Nasser is best known to be a respected professor and a generous philanthropist having donated $12 million dollars to the University of Saskatchewan. That kind of gesture should provide some assurance that the guy has access to cash. People don’t often give $12 million bucks away, and those that do probably feel some measure of confidence that money won’t be a big problem for them in the future. I think this guy is the real deal.

Also on hand at last night’s meeting was Manilo Marescotti, vice president of development for Marriot Hotels. Mr. Marescotti has indicated publicly that Saskatoon is a “development priority” for the upscale chain of hotels, and more importantly, that the chain is keenly interested in this particular development. This also strikes me as good news, and if I may say so, a darned good fit for this awesome project.

So what’s a city council to do?

After all, they did give Lake Placid its very “last chance” back in August of 2009 with a pay up or get lost kind of ultimatum, and who can blame them for that? At almost every given moment through the final months of the last chapter, Lobsinger claimed that Lake Placid was just days away from coming through with the cash. He said it like he believed it. I suspect he probably did. Still, council could only stand behind the guy for so long before they all started to look like clowns who had completely misread the situation. They finally dropped Lake Placid like the proverbial hot potato and brought Parcel Y back to the drawing board seeking new appraisals and beginning preparation for a new “request for proposals.” They had little choice at the time.

But…but…here he his again and this time he apparently has the cash!

I say, “Take the money baby! Take the money and run!”

Why?

1. Well, for starters, Saskatoon could really use another $200 million dollar project right now, and apparently cash is still hard to come by, at least at the quarter billion dollar level.

2. We’ve been trying hard to get something going on this land for a long, long time. Starting the process from scratch could easily take another 3 years, if someone else steps forward who wants to take a bite of this one. If it fails again, you and I could be long gone before this parcel sees further improvements. We’ve already jumped through the hoops to make this deal fly. What realistic benefit could we see by turning this opportunity away? It seems like a big risk to float given the history of “Parcel Y.”

3. Lake Placid has an ultra cool plan that has already been approved for the site and it appears that they’re ready to turn some dirt. In the world of $200 million developments, it doesn’t get much better than that.

4. The other guys don’t appear to be lining up to stake a claim. I mean, for goodness sakes, 200 million dollars doesn’t grow on trees, ya know?

5. Michael Lobsinger deserves this project. I know he really pissed us off when he kept promising to show up with the cheque but this is what we ought to expect from passionate people who put everything they have into really big ideas. They get so deeply invested that they can’t accept that they might fail. This is the kind of brain that you must have to get huge projects like River Landing Village off the ground. This is the kind of spirit and determination that it takes to crack tough nuts and do big stuff. Those failed promises weren’t lies. They were the words of a committed man who had already invested millions of dollars and hundreds of hours. Lobsinger is the kind of person who has the ability to believe even when he’s facing of the worst kinds of adversity, and that’s exactly what he faced when we fell into what many have called “the greatest financial crisis since the great depression.” And, while we were busy kicking him back to Calgary, telling him that the deal was dead, and that he’s a deadbeat, he was still getting up every day looking for $200 million dollars. He still believed that he could pull this thing off. That takes a lot of guts! There’s a certain coolness factor to that, so I love this nearly perfect ending.

Sure, let’s make them pony up with today’s fair market value. Let’s have a look at those books and make darned sure these people can pull this thing off. Let’s double check, and heck; let’s even have our smartest accountants count the cash. If and when we’re satisfied that they can do it, let’s let them go build us a village.

More from the Star Phoenix

Developers tout plan

Lake Placid still in contention for River Landing development

I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.

Norm Fisher
Royal LePage Saskatoon Real Estate

Saskatoon real estate week in review: March 15-19 2010

Perhaps it’s the threat of higher interest rates just around the corner; maybe it’s marginal qualifiers eager to beat the mortgage rule changes coming soon. Regardless of the reason, Saskatoon real estate sales continued to gain some traction this week as local agents reported eighty single-family home and condo sales to the MLS, up from sixty-six last week, and fifty-eight for the same week in 2009.

New listings also came on strong as 135 Saskatoon home sellers brought their property to the market, the second highest number for any week this year. That total represents an increase of twenty-two properties compared to last week and a gain of two when measured against the same week last year.

Click the image for a larger version of the graph.

Total active MLS listings (residential) continued to grow, stopping just short of breaking the one thousand mark at 976 units including 555 single-family homes and 367 condominiums. The inventory grew by forty-five properties over the course of the week but still sits roughly thirty percent lower than it was at this time last year when 1,394 residential properties showed an active status on the Saskatoon MLS system.

Click the image for a larger version of the graph.

Cancelled and withdrawn listings came in at twenty-four with thirteen of those homes immediately relisted, most at a lower price. Additionally, fifty-one home sellers adjusted the asking price of their home in hopes of attracting a buyer.

Selling prices continued to swing rather wildly as entry-level condos came on strong. The average selling price of a Saskatoon home this week was $274,625, down nearly $22K from last week when it hit $296,339. The six-week average managed to slip about sixteen hundred dollars on a week-over-week basis to $287,680 but showed a gain of roughly $21,500 when compared to the same week in 2009. The four-week median moved higher by $3,600 over the course of the week to close at $278,603, up $25,000 from the same period last year when it dropped to its annual low of $253,500.

Click the image for a larger version of the graph.

Overbidding activity was consistent with last week with nine of eighty sales going for more than the asking price by an average of $4,250. Six sellers hit their goal number. Sixty-five of the reported sales showed a sale price below list by an average of roughly 2.6% or $7,089.

Click the image for a larger version of the chart.

Highlights from the news this week

Influx of listings set to cool resale housing market
Home sale and prices rise
Frantic housing market ready for calm
Caswell Hill makeover plan takes initial step
Confusion remains over new mortgage rules
Lake Placid revival
More homeowners opting for ‘strategic defaults’
Why Canada avoided a mortgage meltdown
Cash-flush Brookfield set to pounce
A Toronto neighbourhood without children
Home renovators boost retail sales
In Canada, real estate is booming
Inflation surprise gives Bank of Canada reason to hike rates earlier
Negative equity in the U.S. versus Canada
NDP’s dour attack misfires

A map displaying the boundaries of Saskatoon real estate areas is here.
An overview of data collection and calculation practices for our statistical reports is here.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Two elementary schools under one roof in the works for Willowgrove

Premier Brad Wall announced today that government funding is being made available for both a public and catholic elementary school to be built in Saskatoon’s Willowgrove. The two schools will cooperate in a joint venture that has them sharing a building.

The Willowgrove area has grown rapidly and is particularly popular with young families so the need for schools has also grown quickly. Presently, students living in Willowgrove are bused to various east-side locations. Area residents hope that construction contracts may be tendered by early 2011 with construction being completed by 2013 or 2014.

Related post: Completion of Willowgrove school likely delayed – 10/14/2009.

I’m always happy to answer your Saskatoon real estate questions.  All of my contact info is here. Please feel free to call or email.

Norm Fisher
Royal LePage Saskatoon Real Estate