September saw improved residential sales results in Kitchener Waterloo and this was reflected in the MLS power of sale activity. There were 11 residential sales under power of sale on the K-W MLS versus 8 in August. Of note, 3 were in Waterloo and 8 in Kitchener. The property shown above attracted multiple offers and sold under power of sale at a signifiicant premium to the asking price. It is located in the exclusive area of Upper Beechwood in Waterloo and homes sold under power of sale in this neighbourhood are rare.
Also of note, the lenders at the Toronto Dominion Bank are breathing easier as 45% of the sales noted above were TD power of sales. This bears watching as a disproportionate number of power of sales may indicate lower lending standards in search of increased market share. I couldn't find any numbers indicating their mortgage market share in Canada but we can be certain it's not near 45%. Watch for an upcoming post on the big change TD recently made to register all their mortgages as collateral charges and what that means for the consumer.
Active residential MLS listings in K-W under power of sale moderated to 15 as of October 15th, down from mid-September's 18 and well off the peak of 20 in mid-August. What has accounted for the drop? The local real estate market remains a seller's market and those properties coming on the market are selling relatively quickly and for top dollar. This allows potentially distressed sellers to liquidate their real estate and pay out their mortgage arrears and other obligations with home equity rather than defaulting on their mortgage.
So what does the near future hold? The local economy remains relatively strong and long term fixed interest rates are at record lows. The Bank of Canada appears committed to holding the line on rate increases. Lenders will be active in getting their power of sale properties on the market well in advance of the coming Christmas season. This is done to avoid the bad publicity generated by forcing a defaulted homeowner to vacate near Christmas. So expect increased power of sales in the short term before moderating near Christmas. Keep an eye out for increased power of sale activity in the New Year and watch for a rising number of properties for sale.
As always, for sound advice on your real estate needs, feel free to call or email 519-505-4488 firstname.lastname@example.org.
Century 21 Home Realty Inc. Brokerage