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Vancouver, BC – March 14, 2013. The British Columbia Real Estate Association (BCREA) reports that a total of 4,501 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC during February, down 23.6 per cent compared to February 2012. Total sales dollar volume was down 29.9 per cent to $2.39 million. The average MLS® residential price in the province was $514,134, up 3.1 per cent from January, but down 8.1 per cent from a year ago.

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"BC home sales continued at a modest pace in February,” said Cameron Muir, BCREA Chief Economist. “Despite improved affordability, many potential buyers and sellers remain in a holding pattern. With pent up demand now becoming latent in the market, it’s not a matter of if, but when home sales rise above their current pace."

“An unusual spike in the average MLS® residential price in February 2012 is largely responsible for the year-over-year percentage change,” added Muir. “Most BC markets have experienced relatively stable price levels during the first two months of the year.”

Year-to-date, BC residential sales dollar volume declined 24.6 per cent to $4.1 billion, compared to the same period last year. Residential unit sales dipped 19.6 per cent to 7,911 units, while the average MLS® residential price was down 6.2 per cent at $523,117

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Canadian building permits rose 1.7 per cent in January, following an 11 per cent decline in December. Higher building permits in the residential sector offset a decline in non-residential permits.

BC posted a 10.9 per cent increase in construction intentions compared with December 2012, and a 4.5 per cent increase over January 2012. Residential permits rose nearly 16 per cent over December while non-residential permits dipped 2 per cent lower.


Permit activity in BC's four major metropolitan areas was varied in January. Construction intentions in the Kelowna CMA fell by nearly half from a relatively high level in December but were up 63 per cent over January 2012. Permit values were 14 per cent lower month-over-month in the Abbotsford CMA but rose nearly 25 per cent in the Vancouver CMA and 44 per cent in the Victoria CMA


Copyright British Columbia Real Estate Association. Reprinted with permission 

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It’s Now An Optional Disclosure By Quebec Realtors

 

Financial Post revealed that CMHC had been asking Quebec Realtors to keep quiet about whether the home being sold is a foreclosure, disclosure normally considered mandatory. Quebec Federation of Real Estate Boards which oversees 12 real estate boards in the province, eventually agreed the Crown corporation reached a compromise with the Quebec Realtors to leaves it up to the real estate professional to decide whether to put that fact on the MLS system for buyers, including investors, to see.

 

Why the new ruling?


The CMHC stance has industry experts divided, with some wondering whether the corporation is hoping to dodge low-ball offers by avoiding disclosure, or preparing for a housing market collapse.

For investors and buyers, not knowing a deal is a foreclosure can make the difference between offering market price or going in with a low offer many buyer for a distressed property. When CMHC takes over the responsibility of recovering money loaned to a home owner who defaulted on his or her loan is determined by the financial institution that issued the loan and CMHC.

 

How most banks deal with their foreclosed properties now?

 

When a bank takes over a loan in default through a power of sale or foreclosure, the process is very formal and a process is in place how the property is disposed. First, three appraisals or evaluations are done to establish the value of the property. The property is listed on the mls system indicating the bank as the owner of the property. When an offer is submitted which falls within 5% of that value, a date is booked to deal with the sale through the court. If no offer is forth coming after a period of time the bank might drop the list price by 5% and then wait for an offer within 5% of the new list price.

 

Any low ball offers below the 5% listing price will not trigger an acceptance by the bank. This process safeguards the sale and disposal of the foreclosed property below the price expectation of the bank. An investor or home buyer can submit a low ball offer, but they will be just wasting their time and energy.

 

Loaming danger faced by CMHC

 

In today’s market when home prices are down by 10% or more, CMHC has on it’s book many properties that are worth less than their loan values. CMHC is in danger of holding thousands of properties and tens of millions in potential losses if home owners default on their loans. CMHC’s concern is on too many foreclosed properties undermining the value of all the other properties which they are guaranteeing under their insurance program.

 

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