Market Update on Grande Prairie, Peace River, Lethbridge, and Local Areas

Latest News Gert Martens 21 Jan

With 2020 coming to a close and news of a COVID vaccine, many people are looking towards 2021 with a bit more hope and optimism. Different areas have been affected in different ways, with some having a seller’s market and others that are better for buyers. Our Grande prairie mortgage broker team has the current figures for December.

 

Market Update for December 2020

Last month saw a slight drop in average price sales, especially for single detaches properties. This made it a better market for buyers. Homes were selling for around $313K, which was down from the $331K figure from this time last year. The past few months have seen sales staying pretty flat for the past few months and have remained a buyer’s market to date. An average of 400 new listings has come onto the market each month, which is much higher for this time of the year.

We are still seeing home viewings down though, as a result of the pandemic. This may be down to buyer’s only going to the homes they are most interested in buying. A lot of people have also been experiencing a tougher financial year, with the unemployment rate still being high.

 

Grande Prairie and Surrounding Areas

Grande Prairie’s average sales price for homes is currently $301K, which is down 2.2% from last month, down 6.8% from last quarter, and down 0.4% since this time last year. On average, there have been 114 new listings over the past 28 days, with 75% of these selling. Homes are spending an average of 57 days on the market with a sales to price ratio of 98%.

It’s a different story over in Peace River, homes are selling for around $148K, with a larger drop of 29.9% since last month, a 49.6% drop since last quarter, and a 32.7% drop from this time las year. Over the past 28 days, only 12 new listings came onto the market and only half of those have sold. Homes are spending an average of 56 days on the market with a sales to listing price ratio of 93%.

In Lethbridge County, the average sales price for homes is currently at $575K, down 6.1% from last month, down 3% from last quarter, and figures staying flat from this time last year. Still, the slowdown that the area experienced earlier on in the year has started to move forward, a sign that things will continue to improve as we move into 2021.

Overall, Ottawa and its surrounding areas have seen home sales remaining strong after experiencing a 60% decline in sales between October and November. The market started out pretty slow when the COVID pandemic began at the start of the year, but we have seen it grow stronger over the last few months.

Looking at Ontario as a whole, areas such as Guelph were at the top of the list as the area’s most competitive market. With average home prices at $742K, which was up by 17% in comparison to last month. Inventory has been at an all-time low for the area, with about 2.4 months worth of homes in inventory, with some Ontario markets having as little as 1 month in supply. A lot of people have been leaving the city and looking for homes in the suburbs, with many having has to work from home for a good part of the year.

Where mortgages are concerned, it looks like the low rates will be kept through 2021, with experts believing rates won’t rise again until 2022. This is some good news for homebuyers who can lock in good rates on a mortgage, as well as homeowners who are looking to refinance a current mortgage. If you want to know more about current mortgage rates, give our Grande prairie mortgage broker team a call today!

Time to Check-In with your Mortgage!

General Gert Martens 12 Jan

Time to Check-In with your Mortgage!

There has never been a better time for your annual mortgage health check-up! By organizing a quick mortgage review each year, it may yield you some fruitful financial savings.

Your home loan review this year will examine the most common potential monthly savings opportunities, including high-interest credit card debt or fixed loan payments. Reviewing your mortgage terms and options annually could result in having more money left over at the end of each month – and who doesn’t want that?!

For instance, are you exercising your penalty free extra payment privileges? Do you have any? Prepayment privileges allow you the opportunity to pay up to 20% extra per month and a total of up to 20% lump sum per year – without penalty! This means that for a $300,000 mortgage on a 25-year amortization, a 20% monthly payment increase can generate $18,000 worth of savings AND help you to pay off your mortgage 5 years earlier! When you add-on the annual lump sum of $2,500, the savings are increased to just over $25,000 for the year and bumps you up to being mortgage-free 8 years earlier! You can also use the My Mortgage Toolbox app to calculate the potential savings from an extra payment.

 

When it comes to mortgage payments, another great question for your annual check-up is whether or not you are on the best payment frequency for your cash flow and to best optimize savings! Most lenders offer various payment frequency and an annual mortgage review can help identify the best frequency based on changing needs and cash flow situations. A monthly payment is simply a single large payment, paid once per month; this is the default that sets your amortization. A 25-year mortgage, paid monthly, will take 25 years to pay off but includes the added burden of one larger payment coming from one employment pay period. Alternatively, an accelerated bi-weekly payment pays your mortgage every two weeks. This frequency allows the mortgage payment to be split up into smaller payments vs a single, larger payment per month. This is especially ideal for households who get paid every two weeks as the reduction in cash flow is more on track with incoming income.

These accelerated bi-weekly payments also offer interest savings, as you are actually making an extra payment each calendar year. For instance, a $300,000 mortgage on an accelerated by-weekly payment schedule will pay off your mortgage two and a half years faster and generate approx. $8,000 in savings!

That’s like getting a $10,000 a year raise just by changing your payment frequency! You can use the My Mortgage Toolbox app to also calculate these payment differences.

Another area to look at during your mortgage check-up are your penalties. Breaking your mortgage term early, and before the scheduled contract maturity date, will almost always incur a penalty. The amount depends on various factors such as how far you are into the existing term, your current interest and rate type, your existing lender, etc. However, with today’s rates sitting at such a historical low, there can still be savings! Now, if you break your mortgage early and incur a penalty, you can still come out ahead. For instance, it is possible to save $20,000 with a new low rate and incur a $15,000 penalty, which still puts you $5,000 ahead! Having an annual mortgage review can look at these options and determine if it is a benefit for you to chase these historically low rates.

Beyond your current payments and interest rate, consumer debt outside of the mortgage is another important area for review. Did you know? The average Canadian has $30,000 of credit card debt, at approximately 20% interest?! Reviewing your home equity situation could yield $10,000 savings, per year, by rolling debts into your home equity loan. Contact me today to discuss this further and see if it is an option for you!

 

Pay more to save more, pursue lower rates even with a penalty, and debt consolidation are just three examples of the financial savings an annual mortgage check-up with your mortgage professional can do! With interest rates at historic lows, now is the time to investigate all your options and perhaps save yourself thousands of dollars per year, especially if your current interest rate is over 3%! Imagine what you could do with the savings – anything from renovating or investing to going on a much-needed vacation or putting money towards your children’s education.

Completing a straightforward annual review will keep your home financing as lean and trim as possible. In other words, you will have a clean bill of mortgage health, which is just what the doctor ordered! Contact me to set up a mortgage check-up today!