It's a seller's market out there folks.

REW.ca recently published my artice about what it really takes to win a bidding war. Read the article here.

There is an article in the March 2015 edition of BC Business that shows how hot (or not) each market is. Can you guess which area is number one right now in terms of hotness? (I feel like I'm writing a blog post on a completely different topic right now and not one involving real estate!)

East Vancouver!

In the article they list 20 different areas and show their "hotness" scale from Scorching (East Van) to Lukewarm (Whistler and the Sunshine Coast). This is based on sales price for typical homes and how much they have changed from January 2005.

After Vancouver East (east of Main street), the "Very Hot" markets are Vancouver West (west of Main street), West Vancouver and Richmond.

I didn't need an article to tell me that East Vancouver is hot. I see it every day. Detached and semi-detached homes are a hot commodity over here. Of course there aren't bidding wars on every single one of them, but if it's a good home in a desirable neighbourhood...chances are that more than one family wants it. In fact, it's not uncommon for several families to want it, and we are seeing places sell for over asking...at times, well over asking.

For example, when I look at a recent sale in the Commercial Drive area, a 4 bedroom house on a standard lot was listed at $1,288,000 and sold in 7 days for $1,436,000. In 2008 this same house sold for $920,000. In 2001? A mere $274,950. 

A 3 bedroom 1/2 duplex in the same area was recently listed for $759,000 and sold within 6 days for $911,850. In 2010, this sold for $659,000. In 2004? $349,000.

I saw this same trend happen in Kitsilano and knew a few people who "were waiting for the prices to go down" before they bought. They thought a million dollars was a crazy price to pay for a house. Those same people are still renting! Those million dollar houses are now two million and in the last 5 years, houses in Kits have gone up 25.8%.

In East Vancouver, houses have gone up 17.5% overall. In Grandview, that increase is 22.6%.

Still waiting to buy? With interest rates at an all time low and East Van showing no signs of slowing down, you may wish to reconsider. Don't let yourself get priced out of the market.

I am excited to announce that this year, in addition to my contributions to the Children’s Miracle Network, that I will also be contributing to Backpack Buddies.

Backpack Buddies is a unique program that addresses a very real need in the Vancouver community while providing a tangible opportunity for kids to help other kids.

Many students in Vancouver’s inner city schools, which are all located in East Vancouver, rely heavily on free or reduced price breakfast and lunch programs during the school week. Sadly, “hunger doesn’t take the weekend off” and these same kids go home to meager or no meals on the weekend. It is proven that without adequate nutrition, kids have difficulty learning and are at risk of developing serious health conditions.

The concept of Backpack Buddies is simple. Kids that are fortunate enough to be attending school without worrying about where their next meal will come from, are invited to join the program. They have fundraisers, hold food drives and pack backpacks full of enough food to feed the kids throughout the weekend. Then, Community First volunteers pick up the backpacks and deliver them to the schools that need them.

What a great way for kids to help other kids and teach them about contributing to their own community!

Backpack Buddies started with 1 donor school (20 backpacks) and 1 recipient school. Now, they have 7 donor schools (400 backpacks) and 5 recipient schools. Every week they are providing over 400 kids in inner city schools with enough food to last an entire weekend.

A portion of every one of my transactions, whether it is helping a buyer or a seller, will be going to this very worthwhile cause.

For those of you who have already purchased a home or just aren't ready to at this time, you can still help. Simply refer me to your family or friends, and in addition to you receiving my thank you gift, I will also donate $100 to Backpack Buddies.  

Home sale and listing activity reach historical norms in 2014

Home buyers were active in Metro Vancouver last month, with home sales well exceeding the 10-year average for September.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 2,922 on the Multiple Listing Service® (MLS®) in September 2014. This represents a 17.7 per cent increase compared to the 2,483 sales in September 2013, and a 5.4 per cent increase over the 2,771 sales in August 2014.

Last month’s sales were 16.1 per cent above the 10-year sales average for the month and rank as the third highest selling September over that period.

“September was an active period for our housing market when we compare it against typical activity for the month,” Ray Harris, REBGV president said.

New listings for detached, attached and apartment properties in Metro Vancouver* totalled 5,259 in September. This represents a 4.6 per cent increase compared to the 5,030 new listings in September 2013 and a 33.5 per cent increase from the 3,940 new listings in August. Last month’s new listing total was 0.4 per cent above the region’s 10-year new listing average for the month.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 14,832, an 8 per cent decline compared to September 2013 and a 0.4 per cent increase compared to August 2014.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $633,500. This represents a 5.3 per cent increase compared to September 2013.

“Gains in home values are being led by the detached home market. Condominium and townhome properties are not experiencing the same pressure on prices at the moment,” Harris said.  “Individual trends can vary depending on different factors in different areas, so it’s important to do your homework and work with your REALTOR® when you’re looking to determine the market value of a home.”

Sales of detached properties in September 2014 reached 1,270, an increase of 24.1 per cent from the 1,023 detached sales recorded in September 2013, and a 113.8 per cent increase from the 594 units sold in September 2012. The benchmark price for detached properties increased 7.3 per cent from September 2013 to $990,300.

Sales of apartment properties reached 1,188 in September 2014, an increase of 16.7 per cent compared to the 1,018 sales in September 2013, and a 75.7 per cent increase compared to the 676 sales in September 2012. The benchmark price of an apartment property increased 3.3 per cent from September 2013 to $378,700.

Attached property sales in September 2014 totalled 464, a 5 per cent increase compared to the 442 sales in September 2013, and an 88.6 per cent increase over the 246 attached properties sold in September 2012. The benchmark price of an attached unit increased 4.2 per cent between September 2013 and 2014 to $477,700.

* Areas covered by Real Estate Board of Greater Vancouver include: Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, New Westminster, Pitt Meadows, Maple Ridge, and South Delta.

July 30, 2014

Buy a Home vs. Rent & Invest

There was an interesting article recently in the Globe and Mail. What is the best financial decision - to buy or rent a home?

It used the following scenario; save up for five years for either a down payment on a home or take the money and invest in stocks and then continue to buy stocks every month as you save money being a tenant. The finer details can be found in the article itself (see link below), but the conclusion was that it is financially more prudent to rent than to buy. Yes. This might surprise quite a few, including us realtors who tend to rave about the financial benefits of owning your own home. So, are we all idiots having bought our home? Well, not so fast. Here’s why:

- Theory vs. reality. The assumption in the rent & invest scenario is that you take the money saved by renting and add that to the stock portfolio. Great in theory, but how many have the opportunity and discipline to do that? The vast majority of renters we come across do not put money aside every month based on theoretical savings compared to “if-I-owned-my-home”. Paying into your home is almost a forced savings plan that continuously builds your equity base and thereby improves your financial situation.

- Leverage. One of the financial advantages of owning your home is that it gives you access to equity and at the same time preserves the asset itself. An example; You buy a car with a line-of-credit on your home as opposed to selling stocks in the same amount (if you were renting). The long term appreciation on your home will continue to be on the full market value, not affected by the line-of-credit, or mortgage for that matter, but had you sold the same amount in stocks, the future dividends would have been negatively affected by the diminished stock portfolio.

- Feel good factor. It just feels better to sit in your own living room. It’s a very subjective and emotional factor, but based on the conversations we have with our clients contemplating to buy a home, its significance cannot be ignored.

Besides that, life as a tenant comes with the uncertainty of not knowing how long you can stay in your rental home. Your landlord is in control and most likely cares more about the profitability of his or her income property than your peace of mind. So, in relation to the comparison of buying vs. renting a home, this might help to explain why people become homeowners despite the financial conclusions in the mentioned article.

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/renters-make-for-wealthier-investors/article17834799/

Here is an article with a list of FREE (or nearly free) activities, tours, and attractions to do around Vancouver.

Free things to do in Vancouver

There is a little something for everyone here. From Salsa and Ballroom dancing lessons at Robson Square to the free outdoor movies at Stanley Park.

Go enjoy our beautiful city this summer!

The reality of buying real estate in Vancouver has changed over the past couple of years. The perception in Vancouver for the past 10 or so years has been that you are going to make money on anything to do with real estate, whether pre-sale or resale.

In most cities in the world, people haven’t been “trading up” every few years. Historically purchasers would buy a property and keep it long term. In Vancouver, that changed when real estate started to appreciate rapidly and our city saw an abundance of smaller homes become available (bachelor pads and one bedrooms), with the big push for densification.

It used to be that you would make money on real estate twofold. Not only were you reducing your debt by paying down your mortgage, but you were also seeing a substantial increase in the value of your property.

These days, some sellers can’t quite wrap their head around that what they paid for their property two years ago, is what they are selling it for now. In fact, with transaction and moving costs, they aren’t recognizing the profits that they have grown accustomed to.

If you are looking at purchasing a strata property now, your goal should be to hold onto it for 3 to 5 years, more if possible. If this is the difference between stretching yourself a bit now in order to acquire a home that will suit your needs for a longer period of time, it can mean the difference between realizing a profit or not.

Buying a strata property now is still a winning proposition in terms of building your equity by paying down your mortgage.

Just remember to think long term. Gone are the days of the fast flip for profit.

It's not a seller's market or a buyer's market, it's a balanced market.

The Greater Vancouver housing market maintained a consistent balance between demand and supply throughout 2013. 

The Real Estate Board of Greater Vancouver (REBGV) reports that total sales of detached, attached and apartment properties in 2013 reached 28,524, a 14 per cent increase from the 25,032 sales recorded in 2012, and an 11.9 per cent decrease from the 32,390 residential sales in 2011. 

“Home sales quietly improved last year compared to 2012, although the volume of activity didn’t compare to some of the record-breaking years we experienced over the last decade,” Sandra Wyant, REBGV president said.

Last year’s home sale total ranks as the third lowest annual total for the region in the last ten years, according to the region’s Multiple Listing Service® (MLS®). 

The number of residential properties listed for sale on the MLS® in Metro Vancouver declined 6.2 per cent in 2013 to 54,742 compared to the 58,379 properties listed in 2012. Looking back further, last year’s total represents an 8.1 per cent decline compared to the 59,539 residential properties listed for sale in 2011. Last year’s listing count is on par with the 10 year average. 

“It was a year of stability for the Greater Vancouver housing market,” Wyant, said. “Balanced conditions allowed home prices in the region to remain steady, with just a modest increase over the last 12 months.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $603,400. This represents a 2.1 per cent increase compared to December 2012. 

Let's look at the mood of the real estate market in Greater Vancouver in the later part of 2012 as this set the stage for the start of 2013.

In the final half of 2012 the lower volume of sales relative to the spring market created a gridlock of buyers and sellers who wanted to purchase but were unable to do so as their homes hadn’t sold. By the end of the year, patience and anticipation of garnering the peak prices of 2012 was exhausted. With the start of 2013 many sellers and realtors accepted that a new pricing reality had to be embraced in order to sell the property. Consequently many properties which were re-entering the market in 2013, and new properties on the market were being priced below peak prices of 2012. New prices and sales reflected a 5% – 10% price reduction depending on the community, type and age of home. 

Because of this price adjustment, the percentage of sales to listings in 2013 was up from 2012 in both East and West Vancouver, meaning that more properties that went on the market, actually sold.  

Keep in mind that the Great Vancouver Real Estate market has become a collection of "micro markets", in which pricing trends and activity can vary significantly between communities and types of properties. We have observed some multiple offers and certain neighborhoods and types of properties have performed better than others over the year. 

In 2014, I'm expecting activity to continue to rise with little fluctation in prices, primarily because I believe interest rates will remain stable, there will be continued job growth, economic stability and continued immigration to the province. I believe we can expect to see 2014 continue to build on the momentum and stability of last year. 

If you have any questions about the market in your neighborhood or your personal property, I am more than happy to discuss this with you. Please call me at 604-396-4433.

With the holidays fast approaching, sellers often wonder if they should keep their properties on the market or take them off? Or if they haven't listed their homes yet, should they wait until after the first of the year? Maybe hold off until spring? 

I came across this interesting article that makes a good argument for why you shouldn't wait.  

Serious buyers are always looking, especially online. If you list now before everyone else who is waiting for the Spring market, buyers will be excited to see something new for sale! 

To read the full article, click here.

The Bank of Canada governor, Stephen Poloz, testifying before the senate banking committee said that Canada's housing market is not in a bubble and not likely to suffer a sudden and sharp correction in prices, unless there is another major global shock to the economy.

The central banker said he believes the most likely scenario is a soft landing where home prices stabilize, although he acknowledged that an imbalance in the market and high household debt remain key risks.

"It looks expensive," he said of home prices. "But which markets are expensive? Well those markets have been expensive my whole life,"he said, noting that Toronto and Vancouver both absorb high rates of immigration.

Read more here: http://www.vancouversun.com/business/real-estate/Canadian+real+estate+market+bubble+Poloz+says/9191900/story.html#ixzz2laorAM85