Everyone sells their home for different reasons; what is yours? Here is who I forecast will be buying in 2023!!!

The sandwich generation, Empty Nesters, Downsizers, Investors.  

Multiple family members purchasing ( To Qualify and get into the market),   

Growing families with a need for a larger footprint

Two colleagues or friends!

6 Sanity Saving considerations,  in the throes of deciding to sell your home in 2023.

Homeowners, here is what we know.  For 2023 we can expect to see a different market than what we have witnessed in the past 2.5 years. A mindset shift is necessary for you to be successful to sell in 2023. A profitable sale and purchase of a new home are still possible — but proper preparation and realistic expectations are key.  

The rapid rise in home prices, along with record-high interest rates and inflation has shaken consumer confidence in the Real Estate market. This has resulted in many Buyers leaving the market altogether.

As we enter the first quarter in 2023, take careful consideration in selling.  You will quickly realize, the opportunity is waiting for those who choose to sell. 

Considerations as to why 2023 could be the right time to sell. 

1. Low Housing Inventory:  This gives sellers an upper hand going into the market as demand continues to be prevalent. Unfortunately, there is not enough variety to meet the buyer's demand.

 2. Investors (Cash Buyers): The diversity of cash buyers out there improves your chances of selling a home in any condition or market. Cash home sales boomed during the pandemic. As the market holds steady, these cash buyers are still keen to snap up homes to fix and flip.

3. Rental Market: Over the course of the pandemic there were multiple bids on rentals and rapid rent increases.  The savvy investor knows this is an opportunity. Not enough rental inventory creates an ideal environment for investors,  who are willing to pay cash to snap up homes suitable to fix and rent. 

4. Cashed in During the Boom: If you can believe it, there were some Buyers who sold their homes during the boom but were unsuccessful in making a purchase. Those buyers are still out there and have cash available for a replacement home.

5. Forecasts of Challenging Times/ Estate Sales -  2023 could be a good reason to sell an inherited home you’re not using.  Along with decreasing the holding costs to maintain the property,  the extra money from a home sale might also come in handy if your financial circumstances change. 

6. Financial Strategy - 2023 might be the time you want to downsize and liquefy a secondary asset. This is maybe your time to travel now that you can. 

Over the course of the Pandemic, there were many buyers who developed buyer fatigue and stepped away from the bidding wars. When consumer confidence increases and we continue to see Inflation ease, those buyers will be back! And the millennials who have been working hard and saving up will be soon behind them. 

        Grappling with Buying in 2023.

Aspiring buyers let it be known, with solid financial footing you can still make a responsible purchase this year. If you’re ready to buy, you might put your mind at ease by simply buying a home when you’re ready, instead of trying to predict the perfect time! 

You are bombarded daily with talk of inflation, rising interest rates, higher cost of ownership, employment rates, all of which can confuse the average buyer. 

Eventually there will be a large correction. Trying to time the market is a game for developers and investors, not for buyers of primary residences.

Financial Advisors, Lending Brokers and other experts agree that if you save up for a down payment, have secure employment, a solid credit rating, and have considered pre and post liquid costs of the your purchase, then you are almost ready to buy. Phew…

To really seal the deal, the most crucial step expected of all buyers is to have a financial lender or broker pre approval in place. This will enable you to know exactly where you stand before you start your search.

 BTW- A Pre Approval is not filling out a two minute affordability calculator on Ratehub.ca. 

 A pre approval involves a lengthy process in which the the bank or lender will provide you with a commitment letter or a dollar value of what exactly your purchase price can be. These letters are generally valid for 3-6 months and also have the added bonus of locking in the interest rate!

Doing this empowers in the negotiating a purchase,  and helps you search with ease and confidence. In saying all that, 2023 maybe as good a time as any, to purchase. 

The shift to a buyer’s market is evident by the longer days on the market for homes coupled with price reductions on homes. Some markets are more insulated from the housing slowdown, but still see a decrease in sales. 

Make sure to find out how the market is performing in the area you are considering a purchase in.          

One more consideration before making a purchase in 2023. There are times when there are shifts in the market that could mean you aren’t able to buy a house even if you wanted to. And it usually has to deal with underwriters expectations, debt to income ratios, and lenders tighten credit scores. Inflation, and interest rates will determine in 2023 if any of these considerations will change for buyers. Staying informed on these topics is advantageous. Buying Real Estate: Builds Equity, Improves your Financial Portfolio, Can provide Stable Payments, Creates a Sense of Community, Fosters Independence, Helps Build Wealth, and Tax Perks.

Real Estate has always been a solid long-term investment and everyone needs a place to live. Why not improve “your” financial portfolio in 2023. 

Are you ready to purchase? 

OSFI proposes new mortgage restrictions

Article written by Steve Huebl - Canadian Mortgage Trends

Canada’s banking regulator has unveiled three new regulatory proposals that could further restrict mortgage lending pending a newly-launched consultation period.

The Office of the Superintendent of Financial Institutions (OSFI) announced the proposals Thursday in response to what it says are building risks in Canada’s residential mortgage market.

“Unprecedented house price increases have been accompanied by record levels of household indebtedness, of which residential mortgages account for a large share,” OSFI said in its consultation document. “Federally regulated financial institution (FRFI) lenders, which hold approximately 80% of all residential mortgages in Canada, are exposed to heightened risks from this indebtedness.”

OSFI’s three proposals include:

• Loan-to-income (LTI) and debt-to-income (DTI) restrictions

This would involve measures that restrict mortgage debt or total indebtedness as a multiple or percentage of borrower income.

Federally regulated financial institutions current don’t have prescribed LTI or DTI limits, however OSFI notes an LTI of 450% is typically considered “high” and has been on the rise since the start of the pandemic.

OSFI is therefore proposing a “lender-level” limit that would restrict lenders to a certain volume of loans that exceed a “prudent” threshold.

“Imposing such limits may also reduce the potential for policy leakage and migration of lending activity to the unregulated lending sphere,” OSFI says.

• Debt service coverage restrictions

This would involve measures that restrict ongoing debt service (principal, interest and other related expenses) obligations as a percentage of borrower income.

Lenders must employ Gross Debt Service (GDS) and Total Debt Service (TDS) limits on insured mortgages (those with a down payment of less than 20%), which are currently 39% and 44%, respectively.

However, this doesn’t apply to uninsured mortgages, but that’s now being considered by OSFI, including the implementation of graduated or tiered limits.

Additionally, OSFI said it could limit lenders to a certain volume of loans with high debt-service ratios.

• Interest rate affordability stress tests

The final proposal could see OSFI adopt more “risk-sensitive” tests of affordability beyond the current Minimum Qualifying Rate (currently 5.25%) used in the existing mortgage stress tests.

OSFI suggested lenders could be asked to implement varying MQRs based on different risk characteristics and product types, such as different mortgage terms.

Despite its concerns about risk in the market, OSFI head Peter Routledge told the Globe and Mail that borrowers are currently in good shape and that these proposed changes are about ensuring it stays that way.

“Debt serviceability is among the strongest it’s ever been,” he was quoted as saying. “99.86 per cent of Canadians are current on their mortgages,” an all-time low arrears rate.

“We’d like to keep that going,” he added, but acknowledged delinquencies are expected to “deteriorate a little bit from here.”

Consultation period

None of the proposed changes will be finalized until after OSFI’s consultation period, which is now open until April 14, 2023.

“Sound mortgage underwriting remains the cornerstone of a healthy residential mortgage lending industry,” said OSFI’s assistant superintendent, Tolga Yalkin. “We look forward to stakeholder views on how different debt serviceability measures can support this important policy objective.”

OSFI said it may choose to pursue “one or more of these measures or others that meet OSFI’s prudential policy objectives.”

By Barbara-ann Maceachern - Peterborough Examiner

With a forecasted population of 117,000 in the City of Kawartha Lakes by 2051, an increase of 35,800 from 2021, a task force has been hard at work trying to anticipate — and alleviate — the growing pains that can come along with such significant expansion.

 Council received an update to the ongoing Growth Management Strategy, spearheaded by Leah Barrie, the City’s manager of planning and Jamie Cook from Watson and Associates Economists Ltd., during its Committee of the Whole meeting Jan. 10.

 According to projections from the province, not only will the Kawartha Lakes population expand by almost 50 per cent in the next 30 years, jobs will also make a jump of 16,000, bringing the total to 39,000.

 “It’s important to recognize that these projections represent minimums,” added Cook, noting that they will be looking at a range of possibilities when creating the long-term strategy.

 Even at the low end however, the population growth rate in the city is expected to at least double from 0.6 per cent in 2021 to 1.2 per cent from 2021 to 2051.

 “Since 2020, COVID has had an accelerating impact on growth; we saw significant development with respect to housing in 2020, 2021 and 2022 but we are now starting to see demand for housing starting to dissipate in the latter half of 2022,” a short-term trend that is expected to continue into 2023, he says.

 “We could see some relative weakness in economic growth and housing growth in the near-term, but the long term trajectory for growth is much stronger than it has been in the past.”

 Cook says there will an average of 540 new housing units a year over the next 30, compared to about 300 annually for the past two decades. And whereas recent growth has primarily consisted of low-density, single and semi-detached homes, Cook says future growth will shift toward more medium and high density housing like townhomes and apartment buildings to account for an aging population and declining affordability of single homes.

 “It’s pretty clear looking at this that we will be growing up, not out,” Deputy Mayor Tracy Richardson said, adding that she looks forward to learning about effective strategies for council to match growth with provision of services.

 Over the next three decades, Watson and Associates estimates there is a potential supply of 19,000 new housing units within the City’s four main urban settlement areas of Fenelon Falls, Bobcaygeon, Omemee and Lindsay, more than enough to meet the projected housing demand of 7,400 in 15 years.

 The total is derived from 6,000 units currently in active application processes, 6,400 possible units on vacant lands and 6,600 units included in developments being fast-tracked through Minister’s Zoning Orders (MZOs), which themselves bring up an entirely new set of factors when considering future growth, adds Barrie.

 “I think we can agree that growth is one of the, if not the most challenging issue ahead of us in the coming years locally; not only infrastructure to accompany growth but also how we keep our communities strong and our charming rural feel which is why we love it here and why people are seeking to move here in the first place,” said Ward 3 Coun. Mike Perry, who sat on the Growth Management Strategy Task Force as a citizen before being elected to council, alongside Richardson and Ward 6 Coun. Ron Ashmore, noting that moving forward he encourages continued public input with an in-person component.

 The employment growth rate in Kawartha Lakes is projected to jump to 1.8 per cent over the next three decades, according to the consultant, compared to a growth rate of just 0.2 per cent over the past 20 years. Employment declines in recent years can be attributed to factors like the 2008/2009 economic downturn and the impacts of COVID, Cook said.

 “We have seen a significant rebound in employment and labour force conditions since 2021 and we are anticipating that the capacity for employment growth will also be significantly stronger over the forecast relative to the historical trends,” he told council.

 The strength of employment growth will come from a stronger population demand in employment involving a wide range of sectors from retail and food to health care and tourism.

 Cook noted a “gradual recovery” in manufacturing in Kawartha Lakes with stabilization rather than high growth expected and moderate growth in advanced manufacturing.

 “We also expect to see growth in wholesale trade, construction, warehousing, transportation, utilities and lastly work-at-home employment factored into this forecast as well which is expected to be quite strong over the projection period,” said Cook.

 However, employment is growing faster than the population in the city which may continue to be a “constraining factor” in employment growth over the long term, he concludes.

 Additional data came from the public through a Growth Management Jump In page online, 17 growth proposal requests and dozens of completed preference surveys. Now that the data collection portion of the initiative is completed, the team will use it to inform recommendations regarding long-term economic and planning policy through the final Growth Management Strategy, expected to be completed by the end of 2023 or beginning of 2024.