What’s behind your mortgage rate

Here’s what determines the interest rate on your mortgage—and why that rate can go up and down.

Buying a home is probably the biggest purchase you’ll ever make. If you’re like most people, you won’t pay cash—you’ll borrow most of the money by taking out a mortgage. And over the life of the mortgage, you’ll pay a lot in interest.

Small changes in interest rates can make a big difference in how much you’ll pay. So it’s important that you understand what determines the interest rate on your mortgage, even if you already own a home.https://www.youtube.com/embed/MZjok5geNz4?rel=0&wmode=transparent

Many factors go into the interest rate you pay.

Some factors are part of the cost of all mortgages

Think of a mortgage as a product you buy. Any business that sells you something tries to make a profit. To do that, the price they charge for the product has to be higher than the cost to make it. A lender profits on your mortgage because you pay more in interest (the price it charges) than what they paid to borrow the money themselves (their funding cost).

This funding cost makes up most of the interest rate on your mortgage. Other factors include your lender’s operating costs and how much the lender needs to cover the risk that you won’t repay the loan. But funding cost is the most important factor.

So, what determines funding cost?

The state of the economy, in Canada and elsewhere, matters a lot

The money that banks lend out comes from depositors and investors, both here in Canada and in other countries. So, funding cost is largely driven by the interest rates in these places. And these rates move up and down for several reasons.

Strong economic growth means more demand for money

In general, strong economic growth tends to lead to higher interest rates, while weak growth leads to low interest rates. Here’s why: When the economy is strong, more companies want to borrow from investors to expand their business. So, a mortgage provider has to pay a higher interest rate to get investors to lend to it. And when the economy is weak, the reverse is true.

The global economy matters

Many Canadian banks borrow money in other countries, particularly the United States. And keep in mind that the world’s financial markets are interconnected. Interest rates in Canada respond to what happens elsewhere. For example, foreign interest rates fell during 2019. Interest rates for Canadian five-year fixed mortgages dropped in response.

The Bank of Canada influences interest rates

The Bank of Canada also affects interest rates, mainly through changes in our policy interest rate.

When the economy is strong, we may raise this rate to keep inflation from rising above our target. Likewise, when the economy is weak, we may lower our policy rate to keep inflation from falling below target. Changes in the policy interest rate lead to similar changes in short-term interest rates. These include the prime rate, which is used by the banks as a basis for pricing variable-rate mortgages. A policy-rate change can also affect long-term interest rates, especially if people expect that change to be long-lasting.

In the past, high and variable inflation eroded the value of money. In response, investors demanded higher interest rates to offset those effects. This increased funding costs for mortgage lenders. But since the Bank of Canada began targeting inflation in the 1990s, interest rates and uncertainty about future inflation have declined. As a result, funding costs are now much lower.

Mortgage rates and the pandemic

It looked like a puzzle: As the COVID-19 pandemic spread, central banks—including the Bank of Canada—quickly cut interest rates to cushion the blow. But rates on new mortgages didn’t decline much, and some actually went up. Why?

Remember that your lender’s funding cost determines most of the mortgage rate. The cost of funding jumped in the early days of the pandemic as investors became nervous. Many simply wanted to hold on to their cash given how uncertain everything was. So, the funding that is normally easy for lenders to get slowed to a trickle. This drove up the funding cost, even as the Bank of Canada’s policy interest rate fell.

The Bank of Canada has taken many steps to help financial markets work better during the pandemic, along with the federal government and other public authorities. The goal is to ease strains in funding markets, so lenders can keep supplying credit to households and businesses.

These steps include launching programs to make sure lenders can access the funding they need. As a result of these actions, funding costs fell and some mortgage rates on new loans started to decline.

Keep in mind: existing mortgages didn’t become more expensive during the pandemic. They either have an interest rate that is fixed until its next renewal, or a variable interest rate that declined along with the Bank of Canada policy rate.

You and the characteristics of your mortgage also affect how much you pay

Your past credit history and some of the features you choose for your mortgage determine how much risk lenders face when lending to you. More risk means a higher interest rate.

Repayment or credit risk

The most important risk for the lender is that you won’t repay the loan. A high credit score can help lessen this concern, as it shows the lender you’ve been good at repaying your debts. So, you may pay a lower interest rate than those who have a lower score.

If your mortgage is worth more than 80 percent of the value of the home, you’ll have to buy mortgage default insurance. But since insurance protects the lender from the risk of default, you may get a lower interest rate than if you go for an uninsured mortgage with a bigger down payment.

Interest rate risk

Most mortgage loans in Canada are renegotiated every 5 years, but they can be as short as 6 months or as long as 10 years. The more often you renegotiate, the more often you face the risk that the new interest rate will be different than the old one. If you are more comfortable with having your rate fixed for as long as possible, prepare to pay a premium for that peace of mind.

Prepayment risk

The lender risks losing money if you repay your mortgage early—known as prepayment risk. That’s because the lender won’t be able to profit as much from the funds they raised, particularly if interest rates have dropped since the mortgage started. So, an “open” mortgage, which lets you repay all of the loan early, usually has a higher interest rate than a “closed” mortgage, which limits how much you can prepay.

It’s important to shop around!

You’ll most likely find a lower interest rate if you do your homework and are willing to negotiate. Remember, you have a choice of lenders—large banks; smaller, regional banks; credit unions; or mortgage financing companies.


Monthly Showing Report

The first two months of 2021 rival even the busiest of markets that Alberta has ever experienced! 

With sales in February rising 56% year over year, and new inventory selling faster than it can come onto the market, the conditions are quickly changing to favour sellers in many markets across the Province.

The hot spots in the Province continue to be Cochane, Canmore, Okotoks and Airdrie. With notable mentions to Camrose, Brooks, Rocky Mountain House and Sundre who all had strong months compared to February’s past. The slowest markets continue to be our more Northern communities like Grand Prairie and Fort McMurray.

Over the past few years most of the buyers that wanted to buy, also had a home they needed to sell. With many first time buyers finding improved buying power and entering the markets, due to low interest rates, the disposable income savings rate remaining around 13%, strengthening confidence in the energy sector and other areas of employment, along with a new appreciation for home they continue to feed the property ladder as homeowners are now able to move up.

Another real challenge for the Alberta Real Estate Market over the past six years has been consumer confidence. With other major Canadian cities price points rapidly climbing, and buyers being priced out of the markets, we are seeing investors shifting their focus to Alberta. Whether it is in the energy sector or the pandemic, there is returning confidence and consumers are once again seeing value in Alberta’s market. 

As always, there are many variations and conditions within each market that help determine what is happening in each “micro” market.  Understanding these variances are critical in proper pricing to achieve the best results for our clients.

CIR Realty’s activity continues to skyrocket!   With the showing activity increasing 31% month over month, and over 42% higher than February of 2020, it continues to improve the markets.  The activity increased across all price ranges month over month, and we are seeing a larger percentage of showings occuring in the middle and upper price ranges.  The activity has led to higher transaction counts as our Brokerage exceeded February of 2020 sales numbers by 69% and has set a new company record for February,  as well as being the fourth highest sales volume for any month in our company history!  This sales activity is carrying over into the first week of March exceeding sales by 85% compared to the same week last year. This marks a 34% increase in transactions over any other year for the first week of March .

Airdrie experienced an incredible month in having the largest amount of sales recorded for the month of February! This marks one of the top five months over all in the past decade! With the months of supply dropping into sellers markets across all sectors with the exception of the Apartment sector, which has moved into a balanced market, the Benchmark price is now rising and the average days on market is lowering.

The sales in Brooks have been strong for the month of February, and have continued to outpace new inventory coming onto the market.  This has helped continue to lower the months of supply as the market edges closer to a balanced market.

Calgary’s market is one of the most affordable major Cities in Canada, and buyers from across the country are recognizing the value here.  The sales activity in all price ranges increased in February, while new inventory once again failed to keep up to the volume of sales.  With the detached sector being the most competitive and in a sellers market, prices are edging upwards and days on market are dropping.  The Semi-detached and Row sectors are all in competitive balanced markets, while the Apartment sector continues to make large improvements getting closer to balanced territory.

Camrose a big jump in sales activity in February and is on record as one of the strongest February’s in history.  With less inventory coming onto the market, and the increase in sales the inventory levels have dropped bringing the market into a healthy balanced market.  If continued, these trends will improve pricing and lower days on market.

Canmore is on the verge of all sectors moving into a sellers market as the months of inventory continue to drop across the board.  With sales over $700,000 having the largest jump in activity the Median and Average prices are moving up but the Benchmark price for the area remains relatively stable for the time being.

Cochrane’s market has had dramatic upticks in sales across all price points with the exception of under $200,000 year over year for the month of February.  With the continued hot streak, and the strongest sales for February in history, the days on market for listings continue to drop, and price points are rising.

Crowsnest Pass had a large jump in activity in the under $200,000 price point in February.  With the steady sales activity continuing, the balanced market conditions persist.

Lethbridge’s markets between $200,000 – $400,000 continue to move at a fast pace. Due to the increased sales activity thedetached and semi-detached markets are continuing to get closer to sellers market conditions while the Row and Apartment sectors remain in a buyers market.

The Row sector in Okotoks is the only sector that remains in a buyers market and has signs of continued challenges ahead.  The Detached and Semi-detached sectors are in sellers markets with prices increasing and days on market dropping, while the Apartment sector remains in a balanced market but has signs of moving closer to a sellers market.

Olds continues to have a strong start to the year. With sales outpacing the new listing inventory coming onto the market, the overall markets are edging closer to a healthy balanced market.
Red Deer’s market was largely carried by the sales in the $200,000 – $400,000 prince ranges. This has led to solid improvements year over year in the higher price points as well. The increased sales activity, and tightening inventory levels has led to much more balanced conditions across the market but the Row and Apartment sectors remain in buyers markets. The overall market is seeing price improvements and lowering days on market.

Rocky Mountain House continues to have a strong start to the year. The increase in sales activity, and lower amount of inventory has led to the lowest months of inventory in over two years.  This should lead to further balancing of the markets providing more stabilized prices.
 The Strathmore market continues to show signs of strength after a brief slow doesn in January.  The detached sector is the strongest sector in the area, and edges to more competitive conditions of a seller’s market.

Sundre had a pretty standard month as far as February goes.  The market conditions remain in a buyers market but if sales continue, and inventory remains in check there should be more balanced conditions on the horizon.

-Steve Phillips, CIR Realty

Bank of Canada will hold current level of policy rate until inflation objective is sustainably achieved, continues quantitative easing

The Bank of Canada today held its target for the overnight rate at the effective lower bound of ¼ percent, with the Bank Rate at ½ percent and the deposit rate at ¼ percent. The Bank is maintaining its extraordinary forward guidance, reinforced and supplemented by its quantitative easing (QE) program, which continues at its current pace of at least $4 billion per week.

The global economy is recovering from the economic effects of COVID-19, albeit with ongoing unevenness across regions and sectors. The US economic recovery appears to be gaining momentum as virus infections decline and fiscal support boosts incomes and consumption. New fiscal stimulus will increase US consumption and output growth further. Global yield curves have steepened, largely reflecting the improved US growth outlook, but global financial conditions remain highly accommodative. Oil and other commodity prices have risen. The Canadian dollar has been relatively stable against the US dollar, but has appreciated against most other currencies.

In Canada, the economy is proving to be more resilient than anticipated to the second wave of the virus and the associated containment measures.  Although activity in hard-to-distance sectors continues to be held back, recent data point to continued recovery in the rest of the economy. GDP grew 9.6% in the final quarter of 2020, led by strong inventory accumulation. GDP growth in the first quarter of 2021 is now expected to be positive, rather than the contraction forecast in January. Consumers and businesses are adapting to containment measures, and housing market activity has been much stronger than expected. Improving foreign demand and higher commodity prices have also brightened the prospects for exports and business investment.

Despite the stronger near-term outlook, there is still considerable economic slack and a great deal of uncertainty about the evolution of the virus and the path of economic growth. The labour market is a long way from recovery, with employment still well below pre-COVID levels. Low-wage workers, young people and women have borne the brunt of the job losses. The spread of more transmissible variants of the virus poses the largest downside risk to activity, as localized outbreaks and restrictions could restrain growth and add choppiness to the recovery.

CPI inflation is near the bottom of the 1-3 percent target band but is likely to move temporarily to around the top of the band in the next few months. The expected rise in CPI inflation reflects base-year effects from deep price declines in some goods and services at the outset of the crisis a year ago, combined with higher gasoline prices pushed up by the recent run-up in oil prices. CPI inflation is then expected to moderate as base-year effects dissipate and excess capacity continues to exert downward pressure. Measures of core inflation currently range from 1.3 to 2 percent. 

While economic prospects have improved, the Governing Council judges that the recovery continues to require extraordinary monetary policy support. We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved. In the Bank’s January projection, this does not happen until into 2023. To reinforce this commitment and keep interest rates low across the yield curve, the Bank will continue its QE program until the recovery is well underway.  As the Governing Council continues to gain confidence in the strength of the recovery, the pace of net purchases of Government of Canada bonds will be adjusted as required. We will continue to provide the appropriate degree of monetary policy stimulus to support the recovery and achieve the inflation objective.


House prices are going bonkers again. Where is the outrage?

Even by Vancouver’s ridiculous standards, it seems absurd. A home on the east side of Vancouver selling for $872,134 over asking?

But that’s what happened late last month. The house, listed for $1.72-million, went for $2.6-million after nine days on the market. And while that transaction seems shocking, it actually seems to be part of a trend. Homes going for a half-million dollars or more than the list price isn’t uncommon these days. Sales of places getting snapped up in 24 hours amid multiple offers aren’t unique either.

And it’s not just happening in Vancouver. It is a phenomenon taking place, to varying degrees, across the country.

It’s almost like it’s 2016 again – except, strangely, without all the anger and outrage.

You remember this period, don’t you? When foreign investors were blamed for driving prices beyond the grasp of young Canadians? When governments were forced into action to quell the anger of a citizenry furious that so many of our young people were apparently having their middle-class dreams crushed by mercenary investors from China?

Well those investors have, for the most part, been deterred from returning, but the market is no more accessible to Canada’s young home buyers. Which would suggest we all think an insane housing market is just fine – as long as it’s homegrown Canadians (and domestic monetary policy) that are responsible for it.

According to the Canadian Real Estate Association, January marked an all-time record in home sales across the country, with actual average sale prices increasing 22.8 per cent from a year earlier.

Vancouver also recently maintained its spot in Demographia International’s latest Housing Affordability Survey as the second-most expensive housing market in the world, following Hong Kong. Median property values rose to 13 times the household income in 2020, compared with 11.9 per cent in 2019, according to a report from the Urban Reform Institute and Frontier Centre for Public Policy.

There now seems little doubt that the Bank of Canada’s decision to keep interest rates low to help a pandemic-battered economy stay alive may have had unintended consequences.

Bank Governor Tiff Macklem himself recently alluded to what he called “excess exuberance” in the market, and suggested low interest rates were likely the reason. He promised to keep an eye on things. Well, we’re glad he’s on it.

Still, my question is: Where is all the fury? Surely, these insane prices are locking out tens of thousands of potential home buyers, no? People from whom dreams are being robbed anew?

Josh Gordon, a professor at Simon Fraser University’s (SFU) School of Public Policy, said there are likely a few reasons why this housing frenzy isn’t accompanied by the same degree of protest. While low interest rates are fueling demand, he said, those same rates also mean price increases aren’t being felt as acutely. He also believes that the massive amounts of foreign capital we saw in the 2016 house price era created a sense there was a one-sided competition in the marketplace. That has since been allayed.

“With that dynamic less prominent, the sense of unfairness is less pronounced and hence anger is mitigated,” he said.

Andy Yan, the director of the city program at SFU, says millennials – who now comprise the largest population of Canadians – are driving the market. Some are settling down and starting families and the oldest among the cohort are now 40. Many have excellent-paying jobs and have saved a ton during the pandemic. “What we still don’t know is how much of this demand is first-time buyers versus those who are moving up the property ladder,” he said.

Another factor could be a lack of single-family detached homes, which are in high demand right now because of a pandemic that has incited a craving for more space and privacy. COVID-19, however, has simultaneously made many older Canadians reluctant to give up what they have to move into something that resembles a seniors’ complex, particularly given the disturbing images they have seen over the past year.

Meantime, new supply is coming on stream, including townhomes that were seen as the “missing middle” of the market a few years ago. Build more of that kind of density, developers had promised, and that would be the end of these massive price surges.

Right. Townhome projects are going up all over the place in Vancouver, with modest 1,100-square-foot units starting at $1.5-million and rising quickly from there. That they were ever going to solve housing affordability in our major cities was always a cruel joke.

So utter madness has returned to the housing market. Who could have imagined a pandemic would fuel it?

-Globe and Mail

Calgary home sales, prices spike in February while inventory remains low, CREB says

The Calgary Real Estate Board said Monday that the market has faced low inventory levels compared to sales for the past several months, while prices continued to climb.

The board’s February numbers show that prices jumped by about 8 per cent to reach an average of $485,870, up from $446,690 the year prior.

CREB’s chief economist Ann-Marie Lurie attributed the spike to pandemic conditions.

“Despite continued COVID-19 restrictions, housing activity continues to improve. Much of the strong sales activity is expected to be driven by exceptionally low mortgage rates,” she said.

“Confidence is also likely improving as vaccine rollouts are underway. Additionally, some of the worst fears concerning the energy sector are easing with recent gains in energy prices.”

Sales totalled 1,836 last month, a more than 54 per cent increase over February 2020 and a volume not seen since February 2014.

New listings, however, didn’t keep up the pace. They amounted to 2,848, a 13 per cent increase from 2,517 the year before.

The gap between sales and new listings is doing little to help the market’s inventory woes, CREB said.

It estimated the area now has fewer than three months’ worth of homes on the market.

Conditions are particularly tight in the detached sector, especially for homes priced below $600,000, said CREB.

That portion of the market alone has less than two months of housing supply, but is also experiencing the most significant price gains.

Detached home sales in February amounted to 1,123, up from 678 the year prior, while prices edged up to $572,670 from $526,084 previously.

New listings for the category were up about 17 per cent, but inventory was down by almost 30 per cent.

At the other end of the housing spectrum, apartments and condos have a relatively high level of inventory compared to sales.

CREB said 272 apartments sold in February, up from 209 the February before.

Inventory in the category reached 1,433, a slight dip from 1,470 the year prior.

-Globe and Mail

Weekly Showing Report

The week over week showings have continued to climb across the Province. 

While we have not caught up to the showing activity of 2020, there is some speculation that restrictions to showings due to the current climate, and how fast new listings are selling are both contributing factors to fewer showings being available.

The activity on CIR Realty’s listings has climber 12% week over week, and is 49% higher than the same week in 2020.  With record amounts of new listings being brought on (and sold), the brokerages showing activity continues to do well.

With showing restrictions, and the pace of the market, there are some solid strategies to host “Live online open houses” prior to launching the listing to allow more people to see the home, which has the potential to increase more interest.

After all, the key to selling anything is to generate the highest amount of exposure possible, to create the largest amount of demand.

-Steve Phillips, CIR Realty

Weekly Showing Report

I don’t think it comes as a surprise to anyone that the showing activity continues to climb week over week as the markets continue to heat up.

The showings across Alberta are actually slower than we experienced in 2020, but they are catching up rapidly! What certainly is not down year over year is the number of transactions, which, as of the 24th of February were up 73% for the month across the Province compared to the same time period last year.

For CIR Realty’s listings, we saw an increase of 7% week over week for showings which is 33% higher than the same week in 2020.

It is very important to understand that even with the increased activity, and the busier markets, pricing is still critical as the average list to sales price ratio through February is at 97.5%! Yes, there are multiple offers causing over list prices sales, but the majority are still seeing price negotiations. Pricing a home properly will have an impact on the time that it takes to sell, even in these busy markets.

This will begin to adjust if we continue to move into sellers markets, so each sector, and each area is critical to examine what is happening in that market, and how to properly price it for the activity occurring.

-Steve Phillips, CIR Realty

Sellers’ market in February leads to rising prices

With gains in every price range, residential sales activity in February totalled 1,836.

This reflects the best February since 2014.

“Despite continued COVID-19 restrictions, housing activity continues to improve. Much of the strong sales activity is expected to be driven by exceptionally low mortgage rates,” said CREB® chief economist Ann-Marie Lurie.

“Confidence is also likely improving as vaccine rollouts are underway. Additionally, some of the worst fears concerning the energy sector are easing with recent gains in energy prices.”

New listings also improved in February, but the gap between new listings and sales narrowed. This is causing the sales-to-new-listings ratio to rise to 65 per cent, keeping the months of supply well below three months.

Conditions are far tighter in the detached sector of the market, especially for product priced below $600,000, where strong sellers’ market conditions are present with less than two months of supply.

The market has faced relatively low inventory levels compared to sales for the past several months and prices continue to trend up. In February, the residential benchmark price rose over the previous month and currently sits four per cent above last years’ levels. 

Detached product has the lowest months of supply and is also exhibiting the most significant gains in prices. On the opposite end of the spectrum, the apartment condominium segment still has a relatively high level of inventory compared to sales, which is impacting price recovery for this property type.



Detached sales improved across every price range this month, but the lack of choice in the lower price ranges likely placed limits on the gains in sales.

New listings did rise, but it was not enough to prevent further tightening in the market, as the sales-to-new-listings ratio rose to 71 per cent and the months of supply fell to under two months. This is the lowest months of supply recorded in February since 2007.

Tighter market conditions occurred across all price ranges, but properties priced below $600,000 saw the months of supply fall to just above one month. These conditions are supporting significant price gains in the detached sector, which recorded a February benchmark price of $502,500. This is nearly two per cent higher than last month and five per cent higher than last year. It is also the first time since 2018 detached prices have risen above $500,000, and currently sits under five per cent below previous highs recorded in 2014.

Prices increased compared to last month and last year in every district of the city. However, the magnitude of those increases varied, with the largest year-over-year gains occurring in the South East district at nine per cent, and the lowest gains occurring in the City Centre at under two per cent. 


Semi-detached sales in February recorded significant gains, pushing sales activity to the highest February levels seen in nearly 13 years. However, like the detached sector, the improvements in new listings were not enough to offset sales, ensuring this sector continues to favour the seller.

With lower levels of supply relative to sales, benchmark prices improved over both last year and last month. However, this was not consistent across all districts. The West district continues to see prices that remain over two per cent lower than last year’s levels. The strongest year-over-year price gains were reported in the South East and North districts.


Despite a significant increase in new listings, improving sales offset the gains and the months of supply fell to three months.

Conditions for row properties are not as tight as what we have seen in both the detached and semi-detached sectors. However, they do reflect an improvement relative to the oversupplied conditions recorded last year. However, when considering activity by price range, pockets of oversupply persist in this market.

Citywide reductions in inventory relative to sales supported some price improvements in this segment. The benchmark price trended up from last month and currently sits just over one per cent higher than last year’s levels. Year-over-year gains did not occur across all districts, as prices remain lower than last year’s levels in the North, North West, South and South East districts.

Apartment Condominium

Driven by product priced mostly under $300,000, apartment condominium sales improved to best February levels recorded over the past six years.

However, the gain in sales was not enough to cause any significant changes in inventory levels. February inventory remained elevated compared to levels we typically see at this time of year.

While the months of supply has trended down in this sector, it remains above five months. This is preventing the same type of price recovery seen in other sectors. On a year-to-date basis, the benchmark price remains similar to levels recorded last year.



February sales reached new record highs for the month.

The largest gain in sales occurred in the $400,000 – $500,000 price range. New listings also increased, but the sales-to-new listings ratio remained elevated at 71 per cent and the months of supply dropped to under two months in February. This is the tightest level seen since 2014.

Persistent sellers’ market conditions have resulted in further price gains in the market. The benchmark price has trended up for the past eight months and, as of February, it is over seven per cent higher than last year’s levels. Most of the price growth has been driven by the detached sector.


Cochrane sales more than doubled compared to last February. This represents the strongest February ever recorded for the town.

New listings also rose for the month, but it was not enough to cause any substantial change in inventory levels and the months of supply fell to below two months. This is the lowest months of supply for February seen since the record low in 2006.

Tight conditions supported price growth in February, as the benchmark price rose to $413,700, a four per cent increase from last year’s levels.


New listings have been trending up from the lows seen at the end of 2020, helping to support a significant improvement in sales in February. February sales reach levels not seen for the month since the record high in 2007. 

Inventory levels remain exceptionally low relative to sales and the months of supply dropped below two months. Like other towns around Calgary, the sellers’ market conditions caused prices to trend up. In February, the benchmark price reached $442,600, nearly five per cent higher than levels recorded last year.


Weekly Showing Report

The showings for CIR Realty’s listings week over week have continued to climb. They have risen 20% week over week, which is up over 31% compared to the same week last year! The largest increase in activity has been in the price points below $500,000. Due to this we can anticipate the higher price points to see increased activity in the weeks to come.

With the inventory continuing to decline with the heightened sales activity, the markets continue to tighten, and are getting more competitive. While some markets are beginning to move into sellers markets, many remain in busy balanced territory. The signs to watch for are when we start seeing months of inventory drop below 2 months, prices increasing and days on markets lowering, then markets have shifted to the sellers territory.

Keep in mind that even with the multiple offers, and the back up offers occurring in the markets, it is still important to price properly as buyers recognise the over priced inventory, and it will sit on the market if not properly priced.

-Steve Phillips, CIR Realty