Another great month of Data for the Calgary Real Estate board.  This month i gp into more detail and ook at some graphs so we can see the trend line over time.  Let me know your thoughts.

March 09 CREB Analysis from Greg Williamson on Vimeo.

Genworth Financial announced that they are making sweeping changes to tighten up their credit requirements for insured motgages.

1. Bringing in a new credit beacon score requirement for people buying a high rise apartment condo (over 4 floors).

• 660 for Loan to Values of 85% to 90%
• 700 for Loan to Value of 90%.01 to 95%

2.   Increasing Credit Beacon score requirements for it’s business for self Alt. A program

• increasing from 650 to 700 (that is really a big jump, believe me) for 85.01% to 90% LTV
• increasing from 650 to 680 for LTV of 80.01% to 85%
• eliminating business for self applications with LTV over 90%.  Previously they allowed up to 95%

3.  Increasing Credit Beacon Score Requirements for it’s Cash-Out Refinance Program

• increasing from 650 to 700 for LTV 90.01% to 95%
• increasing from 600 to 660 for LTV 85.01% to 90%

4.  Lowering it’s maximum allowed Total Debt Service ratio for all applications from 44% to 42%

5.  Elimination of both the Credit Assist program and their high ratio Rental program

The only thing Genworth is saying is that of course they are blaming the economy for the decision to tighten their guidelines, which on the surface makes sense.  Except that they are fightng the fight of their lives to stay relevant and get ANY market share let alone their fair share due to the unfair competition that is happening in the insurance sector.

This unfair competition results from the fact that CMHC has a 100% gurantee from the government and Genworth has a 90% government guarantee.  Therefore Investors who accept a Genworth insurance product will have to keep 10% on the books to cover any loss, in these tough capital times that is to much for many mortgage companies to do when they can just easily go to CMHC which they do.

Back to Genworth, so given this uphill battle why make it even more difficult to get business by tightening yout guidlelines against CMHC?

The answer?  Only if they know from other sources that CMHC is about to tighten up as well, OR they are trying to appease the government in order to get the 100% guarantee that they have been voraciously lobbying for?

Time will tell…

What do you think of these changes, and how will it affect our market?  Do you think CMHC will follow suit?

Good Post from The Globe about all the things you should be considering if you are thinking of moving for a better job or btter life.

Made me think, where will all the people in Ontario go if they lose their manufacturing job?

What do you think, will western Canada still see net in-migration due to the losses of jobs in Ontario?

As reported by CTV on Thursday wells Fargo schocked the street by reporting they are expecting a record profit in the first quarter of $3 billion dollars, owing to their, wait for it….SURGING mortgage business.  They are setting records for applications and fundings.  Wow.

This is important, because there are still may people thinking we are heading down still, when there are many indicators suggesting not.

The other real good part of this was how this news affected the stock market.  Investos are believing in the mortgage market again, albeit it will be a slow advance.

Barack Obama mentioned that refinance mortgage applications are up 88% in the the past 3 weeks alone. In fact Fannie Mae refinanced more applications in March then in any month SINCE 2003.  YES BEFORE the refi boom of 2005-2008.

There are many correlations to our market here in Canada.  The biggest one is that in the boom times this type of mortgage business (refinancing at lower rates) was bad for banks and thus their profitability.  Wells Fargo and many of the other banks have shown that even these kinds of loans can be very profitable.  Why you ask?  Here is where the correlation to our market.  The spreads are so good for lenders right now that the loans they are making are much more profitable.  The reason for this is mainly because many of the irrational lenders are gone and who is remaining are returning back to sound conservative lending and investors are willing to come back and give them money.

This coming week will have more good news as all the other major banks will be reporting their quarterly earnings and expectations are that they will be much better then people expected.  Once the banks prove to the markets that they are solid and profitable, the market will soar, mark my words.

This is yet another sign of a recovery being imminent. Those that don’t like this talk just go back and read Garth Turners blog and you will get your fill of negativity.

For the 4th time in a row the CMHC auction was unsubscribed.  They offerred $4 Billion to the market and was only able to sell $1.57 Billion.

This is good news to the market.  Karen Kinsley, President of CMHC told a senate committee that “We believe at this point in time there is a fair amount of liquidity in the system.”

The good news keeps coming…

Click on the song link as you read this today, enjoy

Thanks to radley 77 at Calgary Real Estate Market blog who has worked out an incredibly important graph that shows that as og January ‘09 we are now below the historical average for housing affordability in Calgary.

The three reasons for this:

1. Rising Income levels in Calgary.  Before you go on about the rising unemployment, remember that we still have historically a very low unemployement figure and there is still the highest % of people EMPLOYED per capita then anywhere else in Canada, and the facts are our real wages grew significantly recently
2. Lowered Interest rates.  Enough said here.  Year over Year same home cost for an average home in Calgary per month has dropped 33%.
3. Correction in the real estate market.  Yup.  As we know there has been as high as 18% come out of the average price in Calgary metro.

Buyers, what more do you want?  Don’t miss this glorious opportunity go by.  Are we at the bottom? Cause that is what everyone seems to be saying, “I will get in when we are at the bottom?” Really.  Well if the last 90-120 days of stabilized prices, reduced sales to new listings ratio, and less overall inventory, coupled with this latest news that shows affordability is at early 1990’s level is not enough, what is?