Last week I had a unique privilege to be able to attend an Economic Forum held in Langley where Cameron Muir, the Chief Economist for the BC Real Estate Association, was speaking.   Here are a few of the points he touch on in his hour long presentation.
 
In the last year, the Untied States has produced only a third of the amount of new homes that Canada has.  We have seen about $1.3 million new homes come on to the market while the US new home market bottomed out at only 475,000. This low number is still rather pathetic if one considers that the US government has been running an incentive plan which offered new home buyers an $8000 kick back.  Still today in the US over half of the homes sold are distressed sales and many people are still going through foreclosure south of the border.  In Canada, we remain at about the same levels for foreclosure and mortgages in arrears (meaning the mortgage is more than 3 months behind in payments) however, the number of bankruptcies did increase. The real economic recovery will not show up until 2011, said Muir, and this is despite a rebounding real estate market that has surpassed expectations.  Prices, he speculated, will likely remain stable as will interest rates until mid-2010, as the Banks of Canada has promised. Come mid-2010 interest rates will increase and Muir said he would not be surprised if by mid-2011 the prime rates has risen from 2.25% to 4.25%.  If the economy is strong, we will likely see increment increases of 0.5% at a time as opposed the traditional 0.25% increases we have seen in the past.
 
What this all means is that rates will increase next year and if you have a variable rate and would like to discuss options, please call Robyn or I and we will be happy to help you makes the best mortgage decision for your situation.