To say housing in Prince George is a buyers’ market is an understatement.
Housing values have dropped so significantly that a house sold for $130,000 five years ago now sells for 20 per cent less. Many people, who may have only put five per cent down on the selling price of their home five years ago, are now facing the realization that the selling price of their homes now won’t clear their mortgage.
Instead many former Prince George residents are choosing to walk away from high mortgage payments, allowing the banks to sell off their property for whatever they can get.
More and more Prince George is becoming a foreclosure market.
Foreclosed houses listed in the Prince George area have been steadily growing since August. Back then, only 70 homes on the market were bank-driven foreclosures.
Based on a manual calculation, the number of foreclosed houses listed in the Prince George area in the month of December rose from about 84 to 88 homes roughly five to 10 per cent of the total homes sold on the market.
And recently when at least five foreclosures continued to trickle in during the usually quiet week between Christmas and New Year’s, some real estate agents began wondering when will it stop.
“Anecdotally, I’m hearing we have more foreclosures coming, says Laurie Creak, an agent with 27 years experience selling homes in the city. “It’s not because we have a bunch of people out there who are deadbeats and don’t want to pay. This is due to the fact that the economy is not good and people can not pay.”
Foreclosures generally pull down the prices of homes in the market, and go for a lower than average price. That, in turn, makes it harder for non-foreclosed homeowners to get their purchase price and the problem swings full-circle.
“It’s good value but the effect is it makes it harder to sell people aren’t getting the prices they think they should be getting and some people are holding on and waiting to make sure their homes don’t go for under a certain amount.”
“It means some homes sell far below what we would normally get for them,” says Mr. Creak. “In some subsections of the market judging by the number of sales they are the market.”
But if you think foreclosures only happen to mobile home and trailer court owners, think again. Mr. Creak is seeing foreclosed properties in all price ranges and housing styles.
With all his experience, he can only remember one other time foreclosures were such a high percentage of the market – and that was driven by builders who constructed a large number of homes on speculation and then couldn’t find enough buyers to pay the bank.
That’s not the case any more.
“This time it’s new owners not builders. This is affecting far more segments of the market than the last one did. There’s even some top-end executive homes with pools out there.”
Another unusual aspect of Prince George’s real estate market is the quality. As many as five years ago a foreclosed property were what Mr. Creak calls “really conditioned” or a fixer upper. Owners having trouble making bank payments didn’t, as a rule, spend money on renovations and repairs.
“It used to be foreclosures needed a lot of work done on them, but the foreclosures coming on the market now have new bathrooms, kitchens and roofs. It’s almost like two markets even within the foreclosures.”