Welcome May ! And none to soon. April had its moments but after last weekend - a combination of two excellent days of sun and the BMO Marathon - my bike and I spent 6 hours together - welcoming the month of May (in between work of course) forced into action by all the runners who took over the City streets early Sunday morning. A perfect day all round.
I did notice in the West End and Coal Harbour - some of the open houses were generating steady traffic. I did speak to some buyers on the street and simply asked what their perception was of the market, local pricing and what would motivate them to make a move on a home. Most were saying the same thing - "just looking, just starting a search, research on what the dollar will purchase in specific areas, etc." Most questions were standard for both first time buyers and those not familiar with the area's in question - looking to either up or down size. But one issue did stand out - mortgage rates and how long will they hold and what truly affects them.
The interest rate question is not too complicated. This is used (and adjusted) by the Bank of Canada to control inflation and after being at "emergency" lows for so long - the first excuse to start a slow increase has already reared it's head - with the release of the inflationary numbers just over 2 weeks ago. Yes it did go up and in a "normal" world - this would cause the BOC to consider a rate increase. But... 3 other major factors - in combination with inflation at home - will have much more influence in today's world.
The work "recession" has NOT gone away and is still making the rounds. There are those predicting we have no choice - round 2 is just about to enter the fight. Our American friends - albeit in complete celebration today on the demise of Mr Bin Laden - have an incredible hill to climb to see "recovery" back on the radar. We cannot simply - no matter how well we did in comparison to economic circumstances south of the border - think their situation will not affect us. It has and it will. The second is global uncertainty. Crisis management in Europe, natural disasters, political chaos in Lybia (notice your gas prices lately ? They went up 3 cents a liter last Friday night - while I was having a salad ! And that is no joke). This most definitely affects us all. Higher gas, higher food prices - decreasing disposable income. Third of course is the Canadian dollar - at or above par. Who would have thought. This hinders the overall economy - investment, cost of goods, exports, etc. So the latest prediction is by July - we will begin to see some interest rate movement. But as in the past - the events listed above will dictate the direction we finally take.
We are not alone.