With another drop today in the overnight lending rate it is obvious that Canadians are feeling the pinch related to a higher cost of living. I've seen this circulating on social media, and unfortunately, it does seem to be true.
“My gas tank bill is starting to look like a grocery bill and my grocery
bill l is starting to look like a Costco bill and my Costco bill is starting
to look like a mortgage payment”
With the rising cost of living, many people are feeling the squeeze. Lately, I've been getting a lot of questions about foreclosure sales and whether we should expect more of them. While it appears we’re seeing more foreclosures hitting the market, is this really an unusual number?
Currently, there are 45 foreclosures or court-ordered sales listed on the market, spanning from Osoyoos to Blind Bay. Zooming in on the Central Okanagan, this area accounts for 17 of the properties that are in foreclosure.
These numbers don't mean much without some perspective on what's normal. For instance, at the end of July 2023, there were 23 active foreclosures. Over the past year, 26 foreclosed properties have sold in the region, with 12 of those in the Central Okanagan. However, not all listed properties have sold. In the past year, 24 listings expired or were canceled.
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The foreclosure market inventory seems to have returned to pre-pandemic levels. Since the pandemic, lower interest rates and a rising market meant fewer properties reached foreclosure stage. However, looking at a broader 10-year timeline, foreclosure inventory has dropped by 75%. For example, in January 2014, there were 204 active listings, which is as far back as my sales data goes.
In July 2019, there were 56 active foreclosures on the market, and that month saw 5 sales. Today, while we see higher inventory, there's still competition for certain properties. In June 2024, the average sale-to-list price was 103.1%, meaning the 3 sales that month went for 3.1%over the asking price. This isn’t always the case. For example, May had 7 sales at 97.3% of the asking price, and April had 6 sales at 103.2% of the asking price. The numbers vary, but it shows there is some competition for foreclosure sales right now.
So to answer the initial question if we are seeing higher foreclosure rates? It depends on what you compare it with. If you compare it to the last 4 years, then yes we are. If you are comparing to 2018 and 2019 we are about the same and if you compare it to prior to 2018 then we are seeing for the most part a decrease in the amount of foreclosures.
With many mortgages coming up for renewal at much higher rates than they were 4-5 years ago, we might see more properties hitting the market soon. Only time will tell.
Something if your interested in watching and want to get foreclosure properties emailed to you as soon as they come up. Let me know what your looking for here.
