It’s been a while since my last post, and I thought it was time to get back into the swing of things now that summer is coming to an end.  This is the time of year when kids start to grumble because it’s back to school.  Parents are running around buying back to school clothing.  Summer homes will be visited less frequently as we move into September.  In no time we’ll be digging out our fall clothes, and giving our winter jackets a second glance.  The end of summer usually brings on a touch of melancholy.  Summers are supposed to happy and fun filled months.  I’m not sure if the summer of 2013 will looked upon with any degree of fondness.   My memories of this summer will be of the devastating floods in Alberta, the loss of life in a terrible train explosion in Quebec, Mother Nature wreaking havoc in Ontario, and the freighting thought that a country in the Middle East may have used chemical weapons on their own citizens.  The summer of 2013 was filled with fun, sun and madness. 

Comparing what we’re experiencing in our industry to that of mother nature’s destructive powers, and geopolitical issues, seems inconsequential.  Theoretically it is, but when livelihoods are impacted the challenges are real.  Over the summer of 2013 we’ve seen a steady rise in interest rates.  Since April of this year, interest rates have risen by 80 bps.  Normally that would have caused howling from the hilltops.  But there’s nothing normal about this summer, thus the muted commentary about rising interest rates.  This is the summer where we had to accept the fact that we have a liquidity issue, not a crisis, yet.   This is impacting everyone, borrowers, brokers, the oligopoly and smaller mono-lines.  This is the summer where the self-fulfilling prophesy may have turned into reality.  Condo prices appear to be contracting, while the average price for a single family home is on the increase.  Condo sales are down 34% below their 10 year average.  No one should be surprised by this.   When mortgage rules are tightened, first time home buyers are impacted the most.  The point of market entry for first time home buyers is now further from their grasp.  First time home buyers fuels the entire real estate market.  Impact them, and you’ve impacted the entire market.  There are those who are now predicting that two very distinct market sectors are a way of the future.  Sales and price for single family homes will be very different from the condo market.  Owning dirt is always preferable, and will be even more so in the near term. 

Our industry is very fluid, and constantly changing.  We’ve seen numerous changes during the summer of 2013, and we should expect more.  In the same fashion we expect a change in seasons.  Good riddance summer of 2013.

Enjoy the long weekend.

Until next time

Cheers