Home foreclosures are on the rise in B.C.’s Central Okanagan in recent months. … There are more than 170 court-ordered sale properties on the market in the Central Okanagan, more than 10 times more than three years ago.
Real estate agent Jason Neumann says according to his estimates, in the last 30 days alone 60 new foreclosures were put on the market, and he calls it a disturbing trend.
Neumann is worried the number of foreclosures will bring the overall market down, hurting anyone who wants to sell their home.
“What do you tell your sellers that are not in foreclosure that are now up against something they didn’t see coming? It’s one of those things where the bank is going to have to do what it’s got to do to get it sold.”
- ‘Home foreclosures skyrocket in Kelowna’, CBC, 15 Feb 2012
Almost everybody has heard that “prices are set at margin”, but the majority of market participants don’t really get what that means; they don’t have an understanding of the full implications.
It doesn’t matter that 70%, or 80%, of owners may be very happy with their homes, and sitting tight: it only takes about 5%-7% of owners with an eager desire to sell to crash a market.
This is very relevant to Vancouver: we often see bulls arguing that most owners are very happy in their homes, they’re in it for the long run, they don’t care about price fluctuation, etc … even if all that were true, the market doesn’t really know or ‘care’ about these happy holders…. It’ll crash based purely on the behaviour of a small minority.
And, of course, the resultant price action may change the way the happy 70% or 80% feel; and so on.