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Winnipeg's Luxury Home Market STALLS...




Got a house for sale in Winnipeg over $500,000? Well good luck getting your asking price... According to the latest figures from the Winnipeg Real Estate News: 75% of Winnipeg's May 2013 home sales were under $349,000.

Some luxury homes, ($800,000 to $1 million), on the market can't even get a bid, nor a visit during an open house. Others have been on the market now for approaching 200 days with NO offers. And, if there are offers, they tend to be hundred's of thousand under the asking price!

One couple that we spoke to - with a 3800 sq. ft. home on the market for $849,000, (we'll just call them Jim and Mary), have had their luxury home on the market since January this year. They've had ONE offer! That's it!!! And, is was for $249,000 under the asking price - WITH conditions!

Now, when we take into consideration this week's rise in the mortgage interest rates, (both Royal and TD shot their mortgage rates higher), we'll very likely see future sales of homes in the lower-end maintained, (most likely in the under $300,000 range). However, homes that are for sale in the $500,000+ category will likely see serious slow downs, (as if it wasn't slow enough already). And, to all those selling homes in the luxury category, ($800,000+), GOOD LUCK. I don't know for sure what those poor souls will do!

Five year-money has now traveled from a low of 2.89% to 3.29%, and it looks like there’s more to come. The reason is a big surge in bond yields, with both five- and ten-year government bonds bloating to 13-month highs. In barely more than a month the return on five-year debt has jumped about a half point, which means lenders have moved to pass along the costs to their borrowers. (Fixed-rate mortgages are funded in the bond market, while variable-rate loans are tied to the bank of Canada rate).

Needless to say, the mortgage rate creep is about the last thing that Winnipeg real estate needs. And, it's only going to get worse as the summer progresses, home sales get weaker and interest rates rise higher... and then the winter approaches. It doesn't add up to much good news for home sellers with great big palaces for sale right now.

The local real estate board just said this: “Homeowners who are pricing their properties competitively, not expecting the higher sale prices of 2008, are selling their homes." They just neglected to mention that all of the homes selling are at an approx. price point of $249,000. Not great for the sellers of luxury houses.

Kevin
Wpg. Report.

7 comments:

  1. Anonymous says:

    My buddy who had to leave Winnipeg for a new job in Toronto, could not sell his $900,000 home. He's in TO, his wife and kids are still here till June's end, (and the kids school wraps). And, they're all freaking because NOBODY is showing up to the open houses and NOBODY is placing offers... Did I mention he left the city in February! The home bubble is swelling people. YIKES!

  1. Anonymous says:

    I Love how the Real Estate Board lies, and lies and lies. What a joke. Real people are going to have REAL lives ruined because of these pigs. What a bloody mess.

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  1. Thought property market had improved in the USA? It has picked up a little in the UK, not sure for expensive houses though.

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