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5 Steps to Finding Your Next Home

5 Steps to Finding Your Next Home

Whether you’re a first-time buyer or a seasoned homeowner, shopping for a new home can feel daunting. In fact, 56% of buyers said that “finding the right property” was the most difficult step in the home buying process.1

Buying a home is a significant commitment of both time and money. And a home purchase has the power to improve both your current quality of life and your future financial security, so the stakes are high.

Follow these 5 steps to finding your next home to assess your priorities, streamline your search, and choose your next home with confidence.

STEP 1: Set Your Goals and Priorities

The first step to finding your ideal home is determining WHY you want to move. Do you need more space? Access to better schools? Less maintenance? Or are you tired of throwing money away on rent when you could be building equity? Pinpointing the reasons why you want to move can help you assess your priorities for your home search.

Don’t forget to think about how your circumstances might change over the next few years. Do you expect to switch jobs? Have more children? Get a pet? A good rule of thumb is to choose a house that will meet your family’s needs for at least the next five to seven years.2 Be sure to set your goals accordingly.

STEP 2: Determine Your Budget

Many financial professionals recommend following the “32/40 Rule” to determine how much you can afford to spend on a home. The rule states that you should spend no more than 32% of your gross monthly income on housing expenses (e.g., mortgage, taxes, insurance) and a maximum of 40% of your gross monthly income on your total debt obligations (i.e., housing expenses PLUS any other debt obligations, like car loans, student loans, credit card debt, etc.).3

Of course, the 32/40 rule only provides a rough guideline. Getting pre-qualified or pre-approved for a mortgage BEFORE you begin shopping for homes will give you a much more accurate idea of how much you can borrow. Add your pre-approved mortgage amount to your down payment to find out your maximum purchasing potential.

STEP 3: Choose a Location

When it comes to real estate, WHERE you choose to buy is just as important as WHAT you choose to buy.

Do you prefer a rural, urban, or suburban setting? How long of a commute are you willing to make? Which neighborhoods feed into your favorite schools? These decisions will impact your day-to-day life while you live in the home.

Another important factor to consider is how the area is likely to appreciate over time. Choosing the right neighborhood can raise the profit potential of your home when it comes time to sell. Look for communities that are well maintained with high home-ownership rates, low crime rates, and access to good schools, desired retail establishments, and top employers.4

STEP 4: Decide Which Features You Need (and Want) in a Home

Start with the basics, like your ideal number of bedrooms, bathrooms, and square footage. Do you prefer a one-story or two-story layout? Do you want a swimming pool?

Keep in mind, you may not find a home with all of your “wants,” or even all of your “needs” … at least not at a price you can afford. The reality is, most of us have to make a few compromises when it comes to buying a home.

Some buyers will opt for a longer commute to get a larger, newer home in the suburbs. Others will sacrifice hardwood floors or an updated kitchen so that their kids can attend their desired school.

If you’re faced with a tough choice about how or what to compromise in your home search, return to STEP 1. What were your original goals and motivations for moving? Reminding yourself of your true priorities can often provide the clarity that you need.

STEP 5: Meet with a Real Estate Agent

A good real estate agent can remove much of the stress and uncertainty from the home search process. From setting goals to securing a loan to selecting the best neighborhood to meet your needs, we will be there to assist you every step of the way.

And no one has more access to home listings, past sales data, or market statistics than a professional agent. We can set up a customized search that alerts you as soon as a new listing you might like goes live. Better yet, we get notified about many of the hottest homes even BEFORE they hit the market.

You might guess that the VIP service we provide is very expensive. Well, the good news is, we can represent you throughout the entire home buying process at NO COST to you. It’s true; the home seller pays a buyer agent’s fee at closing. So you can benefit from our time, experience, and expertise without paying a dime.

And although we’ve listed it here as STEP 5, the reality is, it’s never too early (or too late) to contact an agent about buying a home. Whether you plan to buy today, next month, or next year, there are steps you can (and should) be taking to prepare for your purchase.

Call us today to schedule a free consultation!

The above references an opinion and is for informational purposes only.  It is not intended to be financial advice. Consult a financial professional for advice regarding your individual needs.

Sources:

  1. NAR 2019 Home Buyers & Sellers Generational Trends Report –
    https://www.nar.realtor/sites/default/files/documents/2019-home-buyers-and-sellers-generational-trends-report-08-16-2019.pdf
  2. Architectural Digest –
    https://www.architecturaldigest.com/story/this-is-how-long-you-should-live-in-your-house-before-selling-it
  3. Canada Mortgage and Housing Corporation https://www.cmhc-schl.gc.ca/
  4. Money Talks News
    https://www.moneytalksnews.com/20-clues-youre-buying-home-the-right-neighborhood/

Increased sales for third month in a row. Is this a trend?

Sales across BC were up 24% compared to September 2018! This may be an indication that buyers have now adjusted to the mortgage stress test.  

Fraser Valley 

The Fraser Valley Real Estate Board processed 1,343 sales in September, a 3.5% increase compared to sales in August 2019, and a 29.8% increase compared to September 2018. These sales numbers put the Fraser Valley back to average sales for September. Last September’s numbers were one of the lowest in the past ten years.  

September is now the third month in a row that we have seen sales increase significantly over the same period last year. We are not yet seeing an increase in prices however if this trend continues, we could see prices increase in 2020. 

What’s Your Home Worth?
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The attached market throughout the Fraser Valley, with the exception of Mission, continued in a sellers market in September. Over the past three months, the Benchmark price has dropped about 1% for both townhouses and condos.

The detached market continues to be varied throughout the valley. Cloverdale was in a strong sellers market in September while South Surrey remained in a buyers market. Overall, most areas experienced a balanced market. 


HPI® Benchmark Price Activity

  • Single Family Detached: At $950,000, the Benchmark price for a single‐family detached home in the Fraser Valley decreased 0.4% compared to August 2019 and decreased 3.9% compared to September 2018. 
  • Townhomes: At $520,000 the Benchmark price for a townhome in the Fraser Valley decreased 0.3% compared to August 2019 and decreased 4.8% compared to September 2018. 
  • Apartments: At $405,500, the Benchmark price for apartments/condos in the Fraser Valley decreased 0.9% compared to August 2019 and decreased 7.6% compared to September 2018.

Greater Vancouver:

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totaled 2,333 in September 2019, a 46.3% increase from the 1,595 sales recorded in September 2018. Last month’s sales were just 1.7% below the 10-year September sales average. That’s a huge change from September 2018 when sales were 36% below the 10-year average. 

The detached market in Vancouver, west side, West Vancouver, Richmond and Tsawwassen remained in a buyers market in September. The rest of the Greater Vancouver area were in a balanced market for detached properties. Sales in Maple Ridge were double that of last September. 

The attached market from East Vancouver, and east to Maple Ridge, was in a sellers market. North Vancouver and Downtown Vancouver were also in sellers markets with the remaining areas in balanced markets. 

There were 1,588 sales of condos and townhouses in September and 745 sales of detached homes. 

Real Estate Market Update September 2019

School is back in session and buyers are back in the market.

Besides some great weather over the past two months, we also saw real estate sales increase across the Lower Mainland. August is typically the second slowest month of the year in real estate sales, however, sales across the Fraser Valley and Greater Vancouver area were up about 13% over August 2018. This follows a similar increase in July. The fall is the second busiest season of the year in real estate. The increased sales of the last two months could be an indication of a stronger fall season.

One factor behind increased sales may have been the drop in the mortgage qualifying rate, from 5.34% to 5.19%. Also, the major banks all dropped their 5-year fixed-term mortgage rates over the summer and you can now find a 5-year rate lower than a variable rate. I have recently seen 5-year rates as low as 2.66%.

Another factor leading to increased sales may have been the decrease in prices over the past 12 months. We can’t deny that prices rose to extreme levels in 2018 and the decrease in prices seen over the past year was to be expected and welcomed by many.  The question now is, have we reached the bottom?

There are many factors affecting our economy and the real estate market. The Bank of Canada recently decided to hold the overnight bank rate at 1.75%. Many economists believe that a future rate cut is still coming. The Bank has said that any rate changes will depend on data available and not future projections. The latest report on jobs in Canada just came out and shows a gain of 81,100 jobs in Canada in August. The dollar is also up slightly to 76 cents U.S. and our inflation rate is 2%, right where the Bank wants it.  So while the U.S economy shows signs of struggling, Canada’s economy still looks steady.

Fraser Valley 

Over the months of July and August, condos and townhouses have been in a sellers market. For detached homes, North Delta, Cloverdale, Langley, Abbotsford and Mission all experienced strong balanced to sellers markets. South Surrey continued in a buyers market while Surrey was solidly in a balanced market. On average, prices for all property types have posted a 1.1% decrease over the past three months. 

HPI® Benchmark Price Activity
  • Single Family Detached: At $954,100, the Benchmark price for a single‐family detached home in the Fraser Valley decreased 0.3 per cent compared to July 2019 and decreased 5.4 per cent compared to August 2018.
  • Townhomes: At $521,400, the Benchmark price for a townhome in the Fraser Valley in the Fraser Valley increased 0.1 per cent compared to July 2019 and decreased 4.9 per cent compared to August 2018.
  • Apartments: At $409,200, the Benchmark price for apartments/condos in the Fraser Valley decreased 0.1 per cent compared to July 2019 and decreased 7.7 per cent compared to August 2018.

Greater Vancouver:

Sales in the Greater Vancouver area increased over the past two months to just 9.2% below the 10 year average. Compared to 40% below the 10 year average, which we saw for many months last year, this is a big improvement.

Across the Greater Vancouver area, over the past two months, townhouses have been in a balanced market, condos have been in a balanced/sellers market and detached homes have been in a buyers market.

Prices in most Vancouver areas are still slowly dropping.  In the past three years, prices for detached homes in Vancouver, west side, have dropped a whopping 20%. Maple Ridge on the other hand has seen prices increase almost 15% in the past three years. All property types, in all Vancouver areas are showing price decreases in the past 12 months.

Will Your Remodel Pay Off? The best and worst.

 

Will Your Remodel Pay Off? The Best (and Worst)
Ways to Spend Your Budget

Most new homeowners have something about their property that they want to change. And as family needs and design trends shift over time, many will eventually choose to remodel. Some homeowners make updates to their property before listing it to maximize their potential sales revenue.

Whatever your reasons are for taking on a home improvement project, it’s wise to consider how the money you invest will impact your home’s value.

We’ve taken a look at six popular home renovations and identified those that—on average—have the best and worst returns on investment. So before you lift a hammer or hire a contractor, take a look at this list and see if your remodeling efforts will reward you when it comes time to sell.

 

RENOVATIONS THAT PAY OFF

These three common home improvement projects not only add function and style to your home, but they also offer a strong return on investment. Making strategic upgrades to your property will help you increase its value over time.

Minor Kitchen Remodel

The kitchen is often referred to as the “heart of the home,” and for good reason. Traditionally used for preparing food, it has morphed into so much more. Many of us now eat our family meals in the kitchen, it serves as a favorite spot for homework and kids’ art projects, and it’s the place guests tend to gather when we host events.

Because we spend so much time in our kitchens, it’s natural that we will eventually want to make updates and upgrades to better suit our needs and changing style preferences.

Luckily, a minor kitchen remodel is one of the best investments you can make in your home. According to Remodeling Magazine’s annual Cost vs. Value Report, it has an average 80.5% return on investment.1

The key to making a kitchen remodel pay off is to keep it modest in scale. Spend too much on custom or high-end selections, and you are less likely to recoup your investment. Instead, make an effort to keep your existing layout if it works for you and your family. Paint or reface cabinets instead of replacing them. Update countertops with low-maintenance quartz and swap out old light fixtures with modern alternatives. Replace outdated appliances with energy-efficient models. The average cost for a minor kitchen remodel is $22,500, and it’s likely to recoup more than $18,000 at resale.1

Wood Deck Addition

A deck addition is a popular way to extend and enhance the use of your outdoor space. It’s the perfect spot for grilling, dining alfresco, and entertaining. In fact, 81% of surveyed homeowners said they have a greater desire to be home since completing a deck addition.2

For a 16 x 20-foot wood deck, you can expect to spend around $13,000. Fortunately, the money you invest offers an average return of 76%.1

Decks made of composite material are a popular alternative these days, as they don’t require the regular sanding and staining that wood decks need. However, at an average cost of $19,000 for a 16 x 20-foot composite deck, they are significantly more expensive. Plus, the expected return on investment is only 69%.1 Still, if you plan to hire someone to provide regular maintenance to a wood deck, then a composite deck may offer cost savings over time.

Siding Replacement

Everyone knows good curb appeal is important when selling your home. And while it may not be the most exciting way to spend your remodeling budget, new siding can make a big impression on buyers … and your selling price.

Your home’s exterior is one of the first things buyers see when they view your home. It sets the tone for what they are going to see inside. It also gives an impression of how well the property has been maintained. Worn, peeling, or rotted siding can be a major red flag for buyers.

Replacing 1,250 square feet of siding costs around $16,000 and will net you an average of 76% at resale.1

For an even greater impact, consider replacing a portion of your siding with manufactured stone veneer. It can have a dramatic effect on the visual appeal of your home. A 300 square foot area will run you around $8,900, but you can expect to see a nearly 95% return when it comes time to sell.1

 

RENOVATIONS WITH WEAK RETURNS

These three popular remodeling projects are homeowner favorites. However, don’t expect to see a high rate of return at resale. Instead, consider them an investment in your current quality of life. Just make sure you’ll be living in the home long enough to make them worthwhile.

Major Kitchen Remodel

If there’s one room the majority of homeowners dream about making over, it’s their kitchen. From custom cabinetry to high-end appliances, the possibilities are endless. But those dreams can come at a cost.

An upscale kitchen remodel with high-end cabinetry and countertops, commercial-grade appliances, and designer features can cost upwards of $130,000. And unfortunately, you’ll only get back around 60% at resale. Even a mid-range kitchen remodel that includes new semi-custom wood cabinets, laminate countertops, and energy-efficient appliances could run you around $66,000 and net you a mere 62% at resale.1

Of course, an outdated or non-functional kitchen could turn buyers off from your home completely …  and keep you from enjoying it yourself! So if your kitchen needs a major remodel, you shouldn’t necessarily scrap your plans. Just go in with the realization that you may only get back a fraction of what you invest. Then you can decide which upgrades are worth the splurge.

In-ground Pool

Few additions deliver more entertainment or enjoyment than an in-ground pool. It brings families and friends together, provides a break from the summer heat, and offers a fun and convenient way to stay fit. Plus, you’ll be the envy of your neighbors! But before you dive into a pool addition, consider whether the benefits outweigh the (substantial) costs.

The average expense to install a standard 18 x 36-foot in-ground pool is $57,500. And the estimated return at resale is only or 43%.2 In addition to the installation cost, plan to spend money each year on maintenance, repairs, and additional insurance.

However, 92% of surveyed homeowners said they “have a greater desire to be home” since installing a pool, and 83% have “an increased sense of enjoyment when they are at home.” For you and your family, the perks of a pool may be priceless.2

Master Suite Addition

If you own a house built before the 1980s, there’s a good chance it lacks a master suite, which is a feature that has become commonplace in most newly constructed homes.3

Master bedrooms have evolved from a simple place to sleep into a homeowner’s retreat—often featuring a sitting area, his-and-hers walk-in closets, and an attached bathroom with double vanities, a soaking tub, and a walk-in shower.

And master suite additions have become increasingly popular—both in homes that lack one as well as those with aging owners who can no longer accommodate stairs to an upper-level bedroom.

But what’s the typical return at resale? Unfortunately, a master suite addition offers one of the lowest returns of any remodeling project. With a median cost of $125,000, most sellers will only recoup around 52% of their investment. Nevertheless, in a survey of homeowners, the majority were satisfied with their decision to add a master suite, giving it a “Joy Score” of 10 out of 10.4

WEIGHING COST VS. BENEFIT

It’s always wise to enter into a remodeling project with knowledge of how it will impact your home’s value. In most cases, upscale or highly-customized upgrades are less likely to offer a high rate of return. That said, home renovations that improve your quality of life and enhance your enjoyment may be worthwhile no matter the cost.

 

GET A CUSTOMIZED ANALYSIS OF YOUR PROJECT

 

We’ve been talking averages. But the truth is, the actual return you can expect on a home improvement project will vary depending on your particular home and neighborhood. If you have plans to remodel, call or send us the details. We’d be happy to conduct a free analysis to determine how the renovations will impact the value of your home!

Sources:

  1. 2019 Cost vs. Value Report –
    https://www.remodeling.hw.net/cost-vs-value/2019/
  2. NAR’ Remodeling Impact Report – https://www.nar.realtor/sites/default/files/documents/2018-05-remodeling-impact-outdoor-features-05-23-2018.pdf
  3. Zillow –
    https://www.zillow.com/blog/evolution-of-the-master-bedroom-48286/
  4. House Logic –
    https://www.houselogic.com/by-room/bedroom-closet/master-suite-addition-return-investment/

SALES ARE UP – Market Review June 2019

Sales are up. Prices are stable in the Fraser Valley but continue to fall in many areas of the Greater Vancouver.
The real estate market in the Lower Mainland started off 2019 with decreasing prices and lower than average sales. High prices and the mortgage stress test were named as the causes for keeping buyers on the side lines. Buyers were also concerned about further decreasing prices and rising interest rates.  In the past few months, many economic factors have changed and the Bank of Canada has indicated their overnight rate may remain at 1.75% for the rest of 2019. Banks have also decreased their mortgage rates in the past few months. While Spring is typically the busiest season for real estate transactions, the changes in the lending rates may have added to the increased sales in the past two months. Sales were up significantly in May compared with April, in both the Fraser Valley and Greater Vancouver markets.

Price point remains the significant factor in determining activity in a market. That price point is different in each area. In Vancouver, west side, detached homes priced under $3.5M were selling at a rate of 24% (which is a sellers market) but in Richmond, Surrey and South Surrey, you only saw a sellers market for detached homes priced under $1,250,000.  In North Delta and Abbotsford, detached homes under $900,000 experienced a sellers market in May.

Fraser Valley 

The Spring season began with March posting 26% fewer sales than March 2018, sales picked up in April and posted only 19% fewer sales than April 2018. May sales were higher again with only 13.7% fewer sales than May 2018. There were more active listings on the market because of the fewer sales and listings taking longer to sell. In May, there were 26% more active listings on the market than in May 2018.

In the past three months, prices have been stable with some small gains. Detached homes and townhouses are generally 5.9% less than May 2018 while condos have been hit a little harder and are about 8% less than May 2018.

The market for townhouses and condos were in sellers markets in May while the market for detached homes was generally balanced with Cloverdale experiencing a sellers market in May and South Surrey in a buyers market for May.

HPI® Benchmark Price Activity
  • Single Family Detached: At $964,200, the Benchmark price for a single family detached home in the Fraser Valley remained unchanged compared to April 2019 and decreased 5.9 per cent compared to May 2018.
  • Townhomes: At $522,500, the Benchmark price for a townhome in the Fraser Valley in the Fraser Valley increased 0.1 per cent compared to April 2019 and decreased 5.9 per cent compared to May 2018.
  • Apartments: At $416,800, the Benchmark price for apartments/condos in the Fraser Valley decreased 0.9 per cent compared to April 2019 and decreased 8.0 per cent compared to May 2018.

Greater Vancouver:

Sales for May increased 44.2% compared to sales in April. Overall, sales were 22.9% below the 10-year average for the month of May which is a marked improvement from what we have seen in previous months. From Burnaby to Maple Ridge, the market for attached properties was in a sellers market for May. The detached market from Burnaby to Maple Ridge was generally balanced. Moving into Metro Vancouver, North Vancouver experienced a sellers market in May in both the detached and attached market. The rest of the area remains very mixed. Ladner and East Vancouver experienced sellers markets for attached properties while West Vancouver experienced a buyers market for both detached and attached properties. Prices in some areas have continued to drop in the past three months while other areas have shown price increases.

Greater Vancouver Area Stats May 2019

HPI® Benchmark Price Activity

  • Single Family Detached: At $1,421,900, the Benchmark price for a single familydetached home decreased 11.5% compared to May 2018 and decreased 0.5% compared to April 2019.
  • Townhomes: At $779,400 the Benchmark price for a townhome decreased 7.6% compared to May 2018 and decreased 0.5% compared to April 2019.
  • Apartments: At $664,200, the Benchmark price for apartments/condos decreased 7.3% compared to May 2018 and decreased 0.6% compared to April 2019.

Staging a Vacant Home

 

Redfin, a U.S based real estate brokerage, recently published the results of their in-house study which showed that across the U.S., vacant homes sell for less money and spend six more days on the market than comparable occupied homes. The study compared the sale prices and time spent on the market for home listings that were marked vacant at the time they were sold with those that were not. Only metro areas where the listings for at least 70 percent of homes sold in 2018 were clearly marked as either vacant or not vacant were included in the study.

“Although vacant homes are easy for buyers to tour at their convenience, the fact that the sellers have already moved on is often a signal to buyers that they can take their time

making an offer,” said Redfin chief economist Daryl Fairweather.

Many buyers find it difficult to visualize the full potential of a home when it is vacant. Staging or virtually staging a vacant home will help many buyers see how layout and rooms may function for their own needs.  Staging involves hiring a company to bring and arrange furniture in the home to showcase its potential to buyers. Staging can be particularly beneficial for homes with open spaces or unusual layouts, where buyers most often need help to see how furniture could be arranged. Professional staging can cost several thousand dollars, depending on the number of rooms staged and the length of time. Virtual staging can provide a cost-effective option for vacant homes and provides a realistic view of what the vacant home can look like fully furnished. With over 90% of buyers looking online before setting foot into a house, virtual staging can increase the number of buyers who choose to view the home in person.

Staging a home also provides a certain ambiance that can not be achieved in a vacant home. Staging can be targeted to specific buyers most likely to purchase that particular home. Staging a home for sale has become standard business in the real estate market and for good reason.

Before staging:

After staging:

Spring is here, what’s happening in real estate?

The big news this month is the report on money laundering recently released by the provincial government’s new expert panel, chaired by former deputy attorney general Maureen Maloney.  The report concluded “that almost five percent of the value of real estate transactions in the province result from money laundering investment.” “Successfully reducing money laundering investment in B.C. real estate should have modest but observable impact on housing affordability,” read the report. In other words, if the government is indeed successful in reducing the amount of money laundering investment, real estate prices will go down. The report suggests that money laundering in real estate happens across the country with Ontario seeing the largest amount of money laundered through real estate. Attorney General, David Eby, now acknowledges that when a “student” purchased 15 properties in the same Vancouver condo building in 2001 for $2.9 million, that was an example of money laundering.  Today, the B.C. government announced there will be a public inquiry into money laundering in the province’s economy.

The Bank of Canada continues to hold the overnight rate to 1.75%. The bank is now projecting growth in the economy at 1.2% for 2019, which is down from its January projection of 1.7%. Analysts do not expect the bank to raise its rate again in 2019.

We are now in the middle of the spring, real estate market. Prices in the Fraser Valley have stabilized with some areas and property types showing price increases. In the Greater Vancouver area, prices are still falling in many areas.

Fraser Valley

Sales are picking up in the Fraser Valley – sales for April were only 19% lower than they were one year ago. Although that doesn’t seem like an improvement, sales were down 26% in March, 29% in February and 35% in January. So sales are picking up. The majority of the Fraser Valley experienced a sellers market in April.  Prices for condos have gone up about 3% in the past three months while townhouse prices have remained unchanged. Prices for detached homes have increased in many areas over the past three months. Even South Surrey showed a 1.8% increase in the past three months despite being in a buyers market. Note, over the past three years, the benchmark price for a detached home in South Surrey has gone up 8% where most other areas in the Fraser Valley have gone up about 25%. With prices stabilizing, now is the time to buy in South Surrey.

Cloverdale, Langley, Abbotsford and Mission all experienced strong, sellers markets in April, especially for attached properties. The average days on market for all property types in these areas was 17.

HPI® Benchmark Price Activity

  • Single Family Detached: At $964,600, the Benchmark price for a single family detached home in the Fraser Valleyincreased 0.2% compared to March 2019 and decreased 4.8%compared to April 2018.
  • Townhomes: At $521,800 the Benchmark price for a townhome in the Fraser Valley in the Fraser Valley increased 0.9% compared to March 2019 and decreased 5.1% compared to April 2018.
  • Apartments: At $420,700, the Benchmark price for apartments/condos in the Fraser Valley increased 0.6% compared to March 2019 and decreased 6% compared to April 2018.

Greater Vancouver

Below average sales continued to plague the Greater Vancouver area. Last month’s sales were 43.1% below the 10-year April sales average. Richmond had the lowest sales ratio with only 5% of listings for detached homes selling in April. Most areas continued in buyers markets for detached properties. Coquitlam and east of Coquitlam were in balanced markets. Prices for detached homes in Vancouver, west side, Richmond, North Burnaby and West Vancouver continued to fall last month while other areas remained stable.  Vancouver, west side, prices are now 8% below where they were three years ago. Richmond and North Burnaby prices are about 3% below where they were three years ago and West Vancouver prices are 14% lower than three years ago.

The attached market remained in a balanced to sellers market with the exception of West Van and Tsawwassen which were in buyers markets last month.

Greater Vancouver Stats Package – April 2019

HPI® Benchmark Price Activity

  • Single Family Detached: At $1,425,200, the Benchmark price for a single familydetached home decreased 0.8% compared to March 2019 and decreased 11.1% in the past year.
  • Townhomes: At $783,300, the Benchmark price for a townhome was unchanged compared to March 2019 and decreased 7.5% in the past year.
  • Condos: At $656,900, the Benchmark price for a condo was unchanged compared to March 2019 and decreased 6.9% in the past year.

Real Estate Market Review April 2019

Every month it’s the same comment: the B20, mortgage stress test is keeping many buyers out of the market, decreasing the number of sales and resulting in an increase in inventory. While an increased inventory is exactly what buyers needed after the madness of 2016/2017, prices have not fallen enough to counteract the B20, mortgage stress test.  While sales are down, detached properties in the Greater Vancouver area is the only property type experiencing big price decreases. Detached properties in the Fraser Valley have fallen about 5% in the past six months but are now stabilizing. The Fraser Valley may never experience the buyer’s market that Vancouver is currently experiencing because of the difference in property values.

The average contract rate for 5-year mortgages has declined about 30 basis points from its peak in 2018, reaching 3.44% in March. Unfortunately, this still means a stress test rate of 5.44%, even for the highest quality borrowers. The BCREA (BC Real Estate Association) has forecast that the average 5-year mortgage rate will fall to 3.30% by the summer.  The Canadian economy has slowed since the end of 2018 and the Bank of Canada has held the overnight rate at 1.75% since October 2018. It is no longer expected that the Bank of Canada will raise the rate again in 2019.

Fraser Valley

The Fraser Valley Real Estate Board processed 1,221 sales of all property types in March, a 24.3% increase compared to sales in February 2019 but a 26.6% decrease compared to March 2018. Of the 1,221 total sales, 462 were residential detached homes, 300 were townhouses, and 346 were apartments. This was the lowest sales total for the Board during March since 2013.

Many benchmark prices saw gains last month, particularly for condos. The benchmark price for condos in North Delta, Surrey, Cloverdale and Abbotsford rose between 3% and 4%. Prices remained mostly stable for townhouses. Detached prices remained mostly stable except for North Delta and Abbotsford which posted over 2% gains.

The market for attached properties was in a sellers market last month while the market for detached properties varied. Mission, Cloverdale and North Delta were in sellers markets while Langley, Abbotsford and Surrey were in solid, balanced markets. South Surrey just can’t get out of its buyers market with only 10% of inventory selling last month.

HPI® Benchmark Price Activity

  • Single Family Detached: At $963,100, the Benchmark price for a single family detached home in the Fraser Valley increased 0.4 per cent compared to February 2019 and decreased 4.2 per cent compared to March 2018.
  • Townhomes: At $517,300, the Benchmark price for a townhome in the Fraser Valley in the Fraser Valley increased 0.3 per cent compared to February 2019 and decreased 4.5 per cent compared to March 2018.
  • Apartments: At $418,000, the Benchmark price for apartments/condos in the Fraser Valley increased 2 per cent compared to February 2019 and decreased 5.1 per cent compared to March 2018.

Greater Vancouver

It’s a much bleaker story in the Greater Vancouver area where March sales were the lowest seen since 1986!

“Housing demand today isn’t aligning with our growing economy and low unemployment rates. The market trends we’re seeing are largely policy induced. For three years, governments at all levels have imposed new taxes and borrowing requirements on to the housing market.”
Ashley Smith, REBGV president

For detached properties, most areas continued in buyers markets. Townhomes and condos were in sellers markets in many areas with the exception of West Vancouver, Richmond and Tsawwassen which were in buyers markets.

Greater Vancouver Stats Package – March 2019

HPI® Benchmark Price Activity

  • Single Family Detached: At $1,437,100, the Benchmark price for a single familydetached home decreased 0.4 percent compared to February 2019,  decreased 10.5 percent in the past year.
  • Townhomes: At $783,600, the Benchmark price for a townhome decreased 0.7 percent compared to February 2019, decreased 6 percent in the past year.
  • Condos: At $656,900, the Benchmark price for condos decreased 0.5 percent compared to February 2019 and decreased 5.9 percent in the past year.

What’s Happening in Real Estate? Federal Government doesn’t deliver what buyers need.

The big news of March 19 could be the disappointment of the day. In an effort to help buyers, the mortgage industry had made proposals to the Federal Government to reduce the mortgage stress test from 2% down to 1% and increase the amortization period on insured mortgages from 25 years to 30 years. Neither of these proposals were implemented. The Government did increase the amount of money that can be withdrawn from an RRSP by an individual, first-time buyer. The amount is now $35,000 up from $25,000. Money withdrawn must be paid back into the RRSP within 15 years.

The Government has also introduced an incentive program where buyers who have the minimum down payment for a home can apply for an amount equal to five or ten percent of the purchase price through a shared equity program administered by Canada Mortgage and Housing Corporation (CMHC). Five percent is available for a previously lived in home and 10 percent for a newly constructed home. The money provided through this program would only have to be repaid when the home is sold. To qualify for the program, the buyers would have to make a combined income of less than $120,000 per year. The amount of the mortgage combined with the incentive funds cannot total more than $480,000. If you are a qualifying buyer, this incentive could save you over $200 per month in mortgage payments. That’s a good incentive. The program should be running by September. The plan is to run the program for five years but there is no guarantee of that.

The question that has everyone talking is how will this affect prices in September? The incentive program is aimed at a specific group of buyers.  Most of these buyers will be looking to buy a home under $500,000 so the effects of this program in the Lower Mainland will be seen mainly in the attached property market, which has been the hottest market in the past 24 months. More people would have benefited if the Government had announced a reduction in the stress test.

Fraser Valley

Sales were up over 25% in February compared with January however, sales for February 2019 were almost 30% lower than February 2018. Of the 982 total sales, 354 were residential detached homes, 236 were townhouses, and 288 were condos.

Prices for detached homes were stable in most areas. Cloverdale and South Surrey/White Rock are posted small gains in the Benchmark price. Prices for condos and townhouses still dropped in many areas over the month.

For the Fraser Valley region, the average number of days to sell a condo in February was 40 and 39 for townhomes. Single family detached homes remained on the market for an average of 43 days before selling.

HPI® Benchmark Price Activity

  • Single Family Detached: At $958,900, the Benchmark price for a single family detached home in the Fraser Valley increased 0.5 percent compared to January 2019 and decreased 3.7 per cent compared to February 2018.
  • Townhomes: At $516,000, the Benchmark price for a townhome in the Fraser Valley in the Fraser Valley decreased 1.2 percent compared to January 2019 and increased 2.8 per cent compared to February 2018.
  • Condos: At $409,700, the Benchmark price for condos in the Fraser Valley increased 0.2 percent compared to January 2019 and decreased 3 per cent compared to February 2018.

Greater Vancouver
Last month’s sales were 42.5% below the 10-year February sales average.

For detached properties, most areas continued in a buyers market. Townhomes and condos were generally in balanced markets for January. Prices for detached homes and townhouses dropped in January while condo prices in many areas, particularly Vancouver East, Port Coquitlam and Coquitlam actually increased.

Greater Vancouver Stats Package – Feb. 2019

HPI® Benchmark Price Activity

  • Single Family Detached: At $1,453,100, the Benchmark price for a single familydetached home decreased 0.7 percent compared to January 2019,  decreased 9.7 percent in the past year and decreased 7.6 percent in the past six months.
  • Townhomes: At $789,300 the Benchmark price for a townhome decreased 1.4 percent compared to January 2019, decreased 3.3 percent in the past year and decreased 6.7 percent in the past six months.
  • Condos: At $660,300, the Benchmark price for condos actually increased 0.3 percent compared to January 2019 but decreased 4 percent in the past year and decreased 5.1 percent in the past six months.

January 2019 – Off to a slow start

Fraser Valley

Sales were slightly lower in January – down 2% – compared with December 2018 but were significantly lower than January 2018 – down 35.2%. The bigger news was that there were more sales of condos last month (257) than detached homes (250).  This was the first time in the Board’s history that condo sales have outsold detached homes in a month.  Moving forward, condos will likely continue to be a very popular property type due to affordability.  So far, we are seeing a big increase in sales for the month of February over January.  While the market was barely holding on to a balanced market in January, February looks like inventory and sales will be in a more solid, balanced market.

Prices in January continued to drop for all property types across the Fraser Valley. Many market forecasters projected that we would see prices stabilize in 2019 so the question is, when will this happen. If sales start to pick up for the spring, we should see prices stabilize.

“Historically, January months start slowly, and 2019 is following that trend,” explains John Barbisan, President of the Board. “Pricing for each of our major residential property types remains either stable or decreased in most areas. This isn’t necessarily indicative of what’s to come in 2019, but it reinforces the need to be aware of what’s happening in your local market in order to be effective.”

For the Fraser Valley region, the average number of days to sell a condo in January was 45, and 44 for townhomes. Single family detached homes remained on the market for an average of 55 days before selling.

HPI® Benchmark Price Activity

  • Single Family Detached: At $954,100, the Benchmark price for a single family detached home in the Fraser Valleydecreased 1.2 percent compared to December 2018 and decreased 3.3 percent compared to January 2018.
  • Townhomes: At $522,100, the Benchmark price for a townhome in the Fraser Valleydecreased 1.8 percent compared to December 2018 and increased 0.5 percent compared to January 2018.
  • Condos: At $409,000, the Benchmark price for apartments/condos in the Fraser Valleydecreased 2.2 percent compared to December 2018 and increased 1.2 percent compared to January 2018.

 

Greater Vancouver

Last month’s sales were 36.3 percent below the 10 year sales average for January and the lowest January sales since 2009. For detached properties, most areas continued in a buyers market. Townhomes and condos were generally in balanced markets for January. Prices for most property types dropped again in January.

In the past 12 months, the benchmark price for a detached home in Vancouver, west side, has gone down over 14 percent. On the other end, Port Moody, Port Coquitlam, Pitt Meadows and Maple Ridge have all seen their benchmark price for a detached home fall less than 4 percent in the past 12 months.

Greater Vancouver Stats Package – Jan. 2019

HPI® Benchmark Price Activity

  • Single Family Detached: At $1,453,400, the Benchmark price for a single familydetached home decreased 9.1 percent compared to January 2018 and decreased8.3 percent in the past six months.
  • Townhomes: At $800,600 the Benchmark price for a townhome decreased 0.5 percent compared to January 2018 and decreased6.2 percent in the past six months.
  • Condos: At $658,600, the Benchmark price for condos decreased 1.7 percent compared to January 2018 and decreased 6.6 percent in the past six months.

 

Foreclosures and Distress Sales
Buyer Opportunities

Prices have dropped for attached properties however, these properties are still in high demand.


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