Mortgage Watch

Entry level purchasers are now the engine driving home buying activity in almost every major centre throughout the country and Grand Falls-Windsor is no exception.

Real estate companies in Grand Falls-Windsor say despite the collapse of the forest products industry in central Newfoundland it's still a good time to buy or sell a home.



Improved affordability is prompting many first time buyers to get off the fence, out of rentals and into the housing market.

While a sense of caution prevails because of the world wide economic recession and the closure of the AbitibiBowater paper mill, low lending rates are presenting opportunities that have not been seen in a while.

John Locke of Royal Lepage Generation Realty says it's an excellent time to look at a new home.

"A healthy mix of first time buyers and retirees returning from Alberta are driving the housing market right now," he said. "While it's hard to predict where the market is heading new home sales are hopefully going to remain strong. While real estate generally is not as brisk as say the past two years it's not all that bad-not yet."

Mr. Locke points out that the past two years were probably above average in this region and while he admits it's probably too early to tell where things are going this year low interest rates are a big help.

"You can probably pick up a mortgage for as low as three per cent variable or lock in for five years at five and a half per cent. That's a big help, especially for first time homebuyers. I'm optimistic, despite the economy, that we will still be on track for a healthy summer market," he said.

Mr. Locke, who has over 15 years experience in real estate, says the market is still relatively solid despite the doom and gloom. He says there appears to be a strong level of consumer confidence despite the mill closure.

A real estate veteran for over 20 years, Doug Barnes of Home Finders Real Estate in Grand Falls-Windsor says the negativity of the local economy certainly hasn't impacted the real estate market here.

While he admits there are less overall transactions year to date it's still a good time to sell or purchase a home.

"The bottom certainly hasn't fallen out of the real estate market in Grand Falls-Windsor," he said. "There are a lot of out of the region inquiries, which is a positive sign. There is even a waiting list for cottage properties. While it could change overnight, so far the market is holding firm."

Mr. Barnes said that with low interest rates expected to remain reasonable, that could be what is needed to keep the housing market here solid for the immediate future. He says there is also a strong interest in land sales that indicates there are people who believe Grand Falls-Windsor has growth potential.

"It doesn't appear to be as strong as previous years, but the recession hasn't turned everything upside down either. I'm optimistic we will see positive growth by year end," he said.

Dorothy Woodd of Exit Reality On The Rock said the market isn't weak by any means. In fact, she said it's still relatively strong given the local economy has taken a severe hit with the closure of the paper mill.

"We're finding that towns that have access to services such as hospitals, schools and even close proximity to airports tend to do well. There is interest from first time buyers and seniors which is also a good sign."

The only negative, said Ms. Woodd, is that first time homebuyers still need the down payment needed to purchase a home.

"That turns out to be a catch-22 situation for potential buyers," she said. "If their employment situation is uncertain in any way it's hard to make that down payment and will tend to drive them away from a new home purchase. We will just have to wait and see what happens with the economy."

Robert MacDonald of Re/Max Real Estate in Grand Falls-Windsor declined an interview, but he told the Advertiser it's hard to speculate in light of the regional economy and the closure of the paper mill here.

An Atlantic Canada Market Trend Report published by Re/Max, however, says Alberta's red hot economy the last few years is still fuelling demand and while it has cooled considerably the spill over effect continues to drive new home purchases throughout Atlantic Canada. The report says Grand Falls-Windsor, Corner Brook and St. John's led the Newfoundland region in both unit sales and average price with the number of homes sold up close to 18 per cent and average price up almost 15 per cent.

That was over a year ago, and while things have changed, there is a feeling of confidence real estate sales will hold their own as the economy adjusts itself.

Michael Polzler, executive vice president and regional director Re/Max Ontario-Atlantic Canada said the tremendous growth opportunities in Alberta that allows commuting to and from the east coast have served to further strengthen home buying activity in the region. Just how long that trend will continue, however, isn't known.

"While the current economic crisis has caused some first time buyers to either take it slowly or apply the brakes, home ownership remains a top priority for those who are able to take advantage of reduced carrying costs, rock bottom interest rates and lower house prices," he said.

In a March 11, 2009 report released by Re/Max, Polzler said while the year got off to a slow start, February home sales were ahead of those reported in January of this year. The upward trend, the report said, is expected to continue as more first time buyers enter the market despite the weak economy.

If that trend continues it could spell good news for Grand Falls-Windsor as it attempts to recover from the blow left by AbitibiBowater.