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Spring housing market predictions and what SVB’s collapse means for rates

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The collapse of Silicon Valley Bank and Signature Bank could reverse interest rate trends in U.S. and Canada, potentially bringing down mortgage costsZoon Media

Here are The Globe and Mail’s top housing and real estate stories this week, with the lowest mortgage rates available in Canada today, commentary from our mortgage expert and one home worth a look.

What housing crash? What Canadian markets look like for the spring

Prospective home buyers held their breath in anticipation last year as real estate prices declined across the country, hoping to enter the market as prices would plunge. But the housing crash didn’t happen. A year after the Bank of Canada started raising interest rates, houses remain unaffordable, mortgages cost more, and homeowners are holding on to their properties, making real estate listings scarce. Erica Alini and Rachelle Younglai look at what to expect from the market this spring.

The collapse of Silicon Valley Bank could reverse interest rate hike trends

The U.S. Federal Reserve was widely expected to raise interest rates at its next meeting on March 22, but the sudden failure of Silicon Valley Bank (SVB) – the largest collapse of a U.S. bank since the 2008 crisis – has investors slashing their bets, Mark Rendell reports.

The bank’s failure is sharpening the tensions between fighting inflation and managing risks of financial instability, leading markets to believe the Fed will hold off on further interest rate increases to stabilize the economy.

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Why the SVB collapse is the best news for mortgage renewals and homebuyers

The failure of SVB could ripple through the economy, but for now, fear is manifesting itself through a rush of money into government bonds. The rush to the market is raising prices and bringing down interest rates on bonds.

The cost of fixed-rate mortgages is heavily influenced by interest rates in the bond market, which makes this the best news in a while for anyone renewing their mortgage or buying a house, writes Rob Carrick. Plus, the fear of economic instability triggered by the bank’s failure could push central banks to lower interest rates sooner than anticipated.

Mortgage specials start arriving, just in time for spring

This week’s market news could lead mortgage rates to go on sale, writes Robert McLister.

Lowest nationally available mortgage rates

TERM UNINSURED PROVIDER INSURED PROVIDER
1-year fixed 5.74% Ratehub 5.74% Ratehub
2-year fixed 5.64% Ratehub 5.44% Nesto
3-year fixed 5.24% Ratehub 4.99% Radius Financial
4-year fixed 5.19% Ratehub 4.64% MCAP
5-year fixed 5.14% QuestMortgage 4.69% Nesto
10-year fixed 5.94% HSBC 5.24% QuestMortgage
Variable 6.10% HSBC 5.50% True North
5-year hybrid 5.65% HSBC 6.06% Scotia eHOME
HELOC* 6.70% HSBC n/a n/a

Source: Robert McLister; data as of March 16.

Canadian home sales are up slightly as prices continue to fall in February

Home prices in Canada fell in February for the 12th month, but sales volume is rising slightly in a potential sign that buyers are adjusting to higher interest rates, reports Rachelle Younglai.

The Home Price Index, which adjusts for pricing volatility, reached $704,300 last month, a 1.1-per-cent fall from January and a 16-per-cent loss from last February, when values hit their record high, according to the monthly report from the Canadian Real Estate Association (CREA.)

Decoder: The hit to Canadian house prices is deeper than it seems

While February’s housing report contained signs that the market may be stabilizing, it also cemented this as the steepest house price correction at the national level in decades, reports Jason Kirby.

According to CREA data, the typical home price in Canada has fallen by $132,000 since February 2022, and the drop is actually worse once inflation is factored in. In real, or inflation-adjusted terms, national house prices have fallen nearly $168,000, a more-than-19-per-cent decline.

Home of the week: A Calgary home for the tech lover

  • Home of the Week, 530 Crescent Rd. NW CalgaryZoon Media

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530 Crescent Rd. NW Calgary

The Crescent area of Calgary, just a 15-minute walk to downtown, offers stunning vistas and a mix of more traditional and newly built homes. The lot size is 28.9-by-120 feet, and the entire house is oriented toward the view: a modernist building with 13-feet high windows – made in Belgium – and outdoor spaces with built-in fireplaces.

On the very back of the house is a screened-in back deck and an office workspace. Sitting in the office, you can turn around and look straight through to the front terrace and beyond. “The idea was, wherever you are, you have a view to the downtown,” the owner said.

What do you think is the asking price for this house?

a. $995,000

b. $1,899,000

c. $3,550,000

d. $2,350,000

a. The asking price is $3,550,000.

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Three unique real estate listings that caught our eye this week – Western Investor

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Western Investor is famous for the breadth of its commercial real estate listings. It is perhaps the only publication in Canada where investors can find a high-rise office tower, a remote waterfront lodge, a golf course, an industrial warehouse or a small-town bowling alley for sale within its pages.

We often have unique listings and there are three this month that stood out.

First is an entire city block for sale in downtown Calgary.

The 2.83-acre site borders the popular East Village, and the land is rezoned for a high-density mixed-use project with a generous floor-ratio-area (FAR) of 20.

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Flexible commercial zoning allows for residential rentals, condos or hotel and a variety of commercial uses. Current visions include four high-rise towers, but all options are on the table. It is listed by Goodman Commercial, Vancouver, and NAI Commercial, Calgary, at an asking price of $32.4 million.

Second is a rare listing in B.C.’s Central Okanagan.

The property is the 11.3-acre Vibrant Wine vineyard estates in east Kelowna. The property includes a luxury 9,000-square-foot Italian-style villa. The eight-acre vineyard was named the No.1 winery on Trip Advisor and its product was ranked the Best White Wine in the World in 2013. A proven venture that can be expanded, the entire property and equipment is co-listed by HM Commercial and Jane Hoffman Realty, Kelowna, at $13.5 million.

Third of the unique listings is a productive gold mine.

With a private residence and a two-title acreage in the Cariboo, the property covers 3.2 acres near the original Gold Rush town of Likely, B.C.

The land includes an updated three-bedroom house, but the attraction is the operating gold mine. A two person operation on a five-year renewable permit that covers a 100-acre bench, only nine acres have been worked so far, but there has been a consistent average return of 1 ounce of gold per 100 yards mined, with the highest return of 8 ounces in under 100 yards. Note: the price of gold now is around US$1,980 per ounce. The entire operation, including all the mining machinery, is listed by 3A Group, Re/Max Nyda Realty in Agassiz, B.C., at $1.45 million.

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Simcoe County's real estate market shows signs of recovery – CTV News Barrie

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Real estate experts paint a cautiously optimistic outlook after a year of downward market trends across the country.

Trends in Simcoe County show an increase in viewings and buyers re-entering the market after key interest rate hikes from the Bank of Canada warded off many last year.

Lance Chilton, the broker of record at Re/Max Hallmark Chilton Realty, calls the local market “more or less balanced.”

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“Inventory conditions are the same as they once were in 2018,” he noted.” From 2020 to 2022, prices rose to about 43 per cent, which was rather rapid.”

Chilton said key interest rate hikes eventually bottomed out the local market by about September – that’s when home prices that peaked at around $1 million dropped to about $730,000.

“Since then, it’s recovered by about five per cent,” Chilton said. “In fact, we actually saw showings increase for the first time in about six months.”

The Barrie and District Association of Realtors (BDAR) confirms that showings have picked up again, with people getting that “spring fever.”

However, the one key issue that remains is low inventory.

“We saw prices dip because of interest rates and people pulling out of the market, but we never saw that supply come back online,” said Luc Woolsey, BDAR president, adding the situation creates multi-offer bids.

“So there’s still a lot of people having to come in firm, waiving conditions and inspections because they’re having to compete.”

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‘Million Dollar Listing’ star warns CA mansion tax will deliver ‘hardest hit’ to market since 2007 – Fox Business

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Though it’s home to some of the most luxurious and expensive real estate listings in America, California is readying to pass a housing bill that one “Million Dollar Listing” agent warned could create the “hardest hit” to the market since the 2007-08 crash.

“In about ten days or so, there’s a measure called the ULA measure that’s going to go into effect, which is going to be probably the hardest hit to the real estate market that we’ve seen since 2007,” broker and television personality Josh Altman said on “Varney & Co.” Monday.

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Altman’s comments come in response to the recently-passed “United to House L.A.” (ULA) measure in California, which adopts a so-called “mansion tax” on property sales or transfers over a certain value to pay for affordable housing.

Properties sold above $5 million but below $10 million are subject to a 4% sales or transfer tax, while properties that sold for more than $10 million will face a 5.5% tax, according to the city clerk’s voter information pamphlet.

‘MILLION DOLLAR LISTING’S’ JOSH ALTMAN GIVES INSIDE LOOK AT ‘BOTCHED’ STAR PAUL NASSIF’S $27.9 MILLION HOME

At least 92% of taxpayers’ money would “fund affordable housing under the Affordable Housing Program and tenant assistance programs under the Homeless Prevention Program,” the pamphlet also clarified.

Luxury home for sale in California

California’s “United to House L.A.” measure will create “the hardest hit to the real estate market” since 2007, “Million Dollar Listing” star Josh Altman said on “Varney & Co.” Monday. (Getty Images)

“The way that this ULA measure was passed is just mind-boggling to me,” Altman added, “and I think it’s one of the most ridiculous bills that I have ever seen in my entire 20-year career.”

The Los Angeles city administrative officer estimated the proposed tax could generate $600 million to $1.1 billion in revenue each year. However, he noted it would “fluctuate” based on how many property transactions with values within the scope of the tax actually occur.

While those who support the measure argue it could help solve L.A.’s housing affordability and homeless crisis, others like Altman caution the tax policy would lead to higher home prices and bureaucracy.

“Think about these people that bought houses three years ago for $5 million and they want to sell now,” Altman hypothesized. “The market’s down, rates are up, that happens. But now they got to cut a check for $200,000 out of their own pocket because there’s no profit on that. So it’s really going to rock the real estate market that we’re in here in Los Angeles.”

California’s real estate market, the “Million Dollar Listing” star further argued, is on “a race to the bottom” over the next 10 days as buyers try to close deals before the mansion tax is enacted.

Josh Altman tours California home

Josh Altman of “Million Dollar Listing” warns California’s “mansion tax” will “trickle down” to working and middle-class households. (Getty Images)

“I’m seeing deals get done that should never have gotten done,” the L.A. agent said. “I’ve even done as much as, on a $28 million listing that I have, we have offered a $1,000,000 bonus for anybody who buys and closes before April 1.”

The “main issue” with the ULA measure remains its “trickle down” effect — not on mansion or luxury homeowners, but on working and middle-class California families.

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“People who voted who said, ‘Oh, I don’t have a $5 million house,’ which by the way, is not a mansion in L.A., we’re talking about a four-bedroom, 4,000 square-foot house in L.A. is $5 million, so this isn’t a mansion tax,” Altman said.

“This isn’t a $30, $40, $50 million house tax – these are regular people that work bill to bill, that have to pay their mortgage just like everybody else, and now they’re being penalized here.”

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FOX Business’ Aislinn Murphy contributed to this report.

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