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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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Real Estate Market Review for October 2018

The Sky is Not Falling

Fraser Valley

Sales increased 11.6% compared to sales in September 2018 which is the first time we have seen an increase in sales since May.  Sales are still considerably lower than last year – down 35%. Inventory continues to increase in the Fraser Valley however, there were 5.8% fewer new listings posted to the MLS compared to September 2018.

The market for condos and townhouses remained in a sellers market for Cloverdale, Langley and Surrey while all other areas experienced balanced markets. The market for detached homes remained in a balanced market across the valley with the exception of South Surrey/White Rock which continued in a buyers market.

“We’re in a much better spot in terms of overall inventory compared to this time last year, and now closer to a more balanced market. Attached inventory in particular has seen notable gains, doubling year-over-year for townhouses and nearly tripling for apartments.”   said John Barbisan, President of the Fraser Valley Board.

For the Fraser Valley region, the average number of days to sell both a condo and townhouse in October was 31. Single family detached homes remained on the market for an average of 39 days before selling.

Sales of detached homes in the South Surrey/White Rock area were up 61% compared to September.  While most areas saw the benchmark price drop compared to September, the benchmark price for South Surrey/White Rock remained unchanged. This is a good sign for sellers but it is only one month of data.

HPI® Benchmark Price Activity

  • Single Family Detached: At $986,700, the Benchmark price for a single family detached home in the Fraser Valley decreased 0.2% compared to September 2018 and increased 1.1% compared to October 2017.
  • Townhomes: At $538,400, the Benchmark price for a townhome in the Fraser Valley in the Fraser Valley decreased 1.4% compared to September 2018 and increased 7.1% compared to October 2017.
  • Apartments: At $432,800, the Benchmark price for apartments/condos in the Fraser Valley decreased 1.3% compared to September 2018 and increased 17.2% compared to October 2017.

 

Greater Vancouver:

The Greater Vancouver area also experienced an increase in sales compared to September. Sales for the month of October were up 23% compared to September but were 34.9% lower than recorded in October 2017.

Last month’s sales were 26.8% below the 10-year October sales average.

The market for condos and townhouses remained strong throughout the Greater Vancouver area with most areas in a balanced or sellers market. The market for detached homes varied across the region with most areas being in a buyers market with Pitt Meadows in a sellers market and Maple Ridge in a balanced market.

HPI® Benchmark Price Activity

  • Single Family Detached: At $1,524,000, the Benchmark price for a single family detached home decreased 5.1% compared to October 2017 and decreased 3.9% in the past three months.
  • Townhomes: At $829,200 the Benchmark price for a townhome increased 4.4% compared to September 2017 and decreased 2.8% in the past three months.
  • Apartments: At $683,500, the Benchmark price for apartments/condos increased 5.8% compared to September 2017 and decreased 3.1% in the past three months.

Home Inspectors – Who, What, Why

Who inspects the inspectors? Published by News Real for Reators

BC and Alberta are currently the only jurisdictions in Canada that regulate home inspectors through legislation. In BC the approximately 480 home inspectors are regulated by Consumer Protection BC (CPBC) as are many other businesses including debt collectors, fitness gyms, telemarketers and travel agencies to name only a few. The CPBC is an agency of government responsible for administration of the Business Practices and Consumer Protection Act. (BPCPA). CPBC also administers the Home Inspector Licensing Regulation which together with the BPCPA governs the home inspector trade.

Licences

CPBC licenses home inspectors, (whose licences must be renewed annually) and responds to consumer inquiries, investigates alleged violations of consumer protection laws and educates consumers and businesses about their rights and responsibilities. The CPBC has an online directory where you can confirm whether the person you want to hire is licensed.

Education and Training

A licensed home inspector must meet certain education and training requirements, be insured and have a criminal record check. They spend a minimum of 150 hours to learn about topics such as roofing, flashing, chimneys, heating and cooling, plumbing, electrical and structural systems, etc. The education must be completed at one of the approved home inspector programs in BC.
Once a person passes a home inspectors exam, she/he is provided with a certificate demonstrating competency in home inspection, which is followed by 50 hours of training.
Next comes a CPBC evaluation, followed by a letter of recommendation based on the home inspector’s knowledge and demonstrated ability.

Insurance

The home inspector must obtain insurance coverage to protect against errors, omissions, personal and property damage. The policy must include:
• $1 million occurrence/limited/aggregate professional liability (E&O) coverage
• $1 million occurrence/limited/aggregate general liability coverage
• coverage for common issues to home inspection in BC including water ingress
Only then can they apply for a home inspector licence.

Contracts

A home inspection must begin with a signed contract that includes:

  • Exactly what will be covered by the home inspection including garages and carports, and whether the inspector will look for mold and asbestos and other hazardous materials. Detecting mold and asbestos is sometimes difficult and may require a secondary mold/asbestos specialist to establish whether it’s present in a home.
  • Inspectors are not limited to residential property inspections. They also provide commercial inspections, indoor air quality investigations, new construction deficiencies, building envelope surveys, WETT (wood stove) inspections and so on.
  • Most home inspections comprise a visual examination to determine if there are problems with specific aspects of the home. But for invasive inspections, the contract must state what methods will be undertaken. (A seller will not appreciate coming home to ripped out wallpaper and plaster lying on the floor unless previously agreed to)

Fees

Home inspectors can charge what they like but they must give customers a firm quote along with a detailed contract. The fees vary depending on several factors including the scope of the inspection and the experience of the home inspector but likely it will cost a few hundred dollars.
A typical home inspection takes from one to three hours depending on the size of the home, the scope of the inspection, and the number of areas they are inspecting.
The inspector must provide a detailed report of their findings which the client may retain to direct repairs or for disclosure purposes.

Home Inspectors Association of BC

On its website the Home Inspectors Association of BC (HIABC) includes this disclaimer.
“A home inspection does not guarantee future condition, efficiency, or life expectancy of systems or components. It is not [necessary for] an inspection to verify compliance with any applicable building codes, municipal bylaws or other regulations. A home inspection will not reveal every problem that exists or could ever exist and is not a technically exhaustive inspection.”

Professional standards

The home inspection industry did not come under provincial regulation until 2009 and when it did HIABC claimed some of the credit for the change, having lobbied for regulation several years. However, the association was not so happy when in September 2016 the Ministry responsible for Housing under Rich Coleman, had the CPBC remove the need for mandatory continued education for home inspectors. As a result, there are no longer any continuing education requirements, Standards of Practice or Scope of Inspection which they must adhere to, though HIABC still requires it of their members. Note that in its Code of Ethics HIABC says: ‘No member shall be actively engaged as a broker or agent in the sale, purchase or listing of Real Estate’

Consumer protection

If a person is unhappy with the conduct or performance of a home inspector, they can seek to have the issue resolved by communicating with the home inspector, or go directly to the CPBC for information and advice, or to submit a formal complaint, and in some cases receive a refund for monies paid.

Through its investigative / inspection process, the CPBC may impose a financial penalty on a home inspector for violating the laws it oversees. Every contravention has a base penalty amount, determined by the seriousness of the infraction.

If the claim is under $35,000 customers may also seek redress in Small Claims Court. Claims above that amount would usually require a lawyer to pursue.

If a home inspector is a member of an association, the association could also assist with service complaints that do not fall under provincial laws.

Referral tips

The CPBC recommends checking its website to confirm that a home inspector is licensed, or if they have had any enforcement actions against them. It also suggests a minimum of three written estimates from different home inspectors before choosing one.

 

Market Review – Summer 2018

Real Estate Market Review

Fraser Valley 

The new mortgage rules and higher interest rates continue to decrease the demand for housing. Some buyers are now waiting to purchase in hopes that prices will continue to drop. July and August sales, for all property types, were down about 35% compared to the same months last year.  Sales of townhouses and condos continued to make up over half of all residential sales.

Prices for attached properties are dropping across the Fraser Valley. Most areas have now shown two consecutive months of falling prices for both townhouses and condos. Even though prices have started to drop, most areas remained in a sellers market over July and August. The difference however was the rate of sales. Last year, 80% to 100% of inventory for attached properties would sell in a month. Today, the turnover rate is between 18% and 33%.

In the detached market, most areas have settled into a balanced market. South Surrey however has been in a buyers market since May. Prices have dropped in all areas over the past three months. Cloverdale prices for detached homes have dropped 3.5% in the past three months while South Surrey prices have dropped over 5% in the past 12 months.

The Canadian economy remains strong and has grown at an average rate of 2.6% over the past 8 quarters. The B.C. Real Estate Association is forecasting that the Bank of Canada will raise its overnight rate to 1.75% in October.

HPI® Benchmark Price Activity

  • Single Family Detached: At $1,008,700, the Benchmark price for a single family detached home in the Fraser Valley decreased 0.9% compared to July 2018 and increased 2.9% compared to August 2017.
  • Townhomes: At $548,300 the Benchmark price for a townhome in the Fraser Valley in the Fraser Valley decreased 1.7% compared to July 2018 and increased 11.5% compared to August 2017.
  • Apartments: At $443,200, the Benchmark price for apartments/condos in the Fraser Valley decreased 1.6% compared to July 2018 and increased 26.9% compared to August 2017.

 

Greater Vancouver:

Overall, sales were 25.2% below the 10-year average for the month of August.  Like the Fraser Valley, the Greater Vancouver area has seen prices drop over the past two months for all property types.

For attached properties, all areas in Greater Vancouver, except Tsawwassen, Ladner and West Vancouver, remained in sellers markets over the summer months. Despite this, prices have decreased in most areas.

For detached properties, Maple Ridge and Pitt Meadows were the only areas that continued in a sellers market however, both these areas have seen prices drop over the past three months.  Vancouver, east and west, West Vancouver, North Vancouver, Richmond, Burnaby, and Port Moody were all in buyers markets in August. West Vancouver and Vancouver, west side, are both showing price decreases over 10% in the past year. Even with a 10% price drop, the benchmark price for a detached home on the west side of Vancouver is still $3,278,500.

HPI® Benchmark Price Activity

  • Single Family Detached: At $1,561,000, the Benchmark price for a single family detached home decreased 3.1% compared to August 2017 and decreased 1.5% compared to July 2018.
  • Townhomes: At $846,100 the Benchmark price for a townhome increased 7.9% compared to August 2017 and decreased 0.8% compared to July 2018.
  • Apartments: At $695,500, the Benchmark price for apartments/condos increased 10.3% compared to August 2017 and decreased 1.4% compared to July 2018.

Foreclosures and Distress Sales

Buyer Opportunities

There will be plenty of buyer opportunities this fall. Prices may be falling now but eventually they will stabilize and start to rise again. For example, when the Provincial Government brought in the foreign buyer’s tax of 15% in August 2016, prices dropped. This decrease didn’t last for long. In the Spring of 2017, prices in the Fraser Valley rose to levels higher than they were before the tax was brought in.

There is a large group of buyers that will need to purchase homes in the next 10 years. This group is referred to as Millennials. In my opinion, townhouses and condos will continue to drive the market here in the Lower Mainland as Millennials look to buy their first home and Baby Boomers look to downsize.

What’s the best use of your rental property: short term or long term rentals?

Renters for a Weekend or a While: What’s the Best Use of Your Investment Property?

The residential rental market is now the fastest-growing segment of the housing market. In the United States, the demand for single-family rentals, defined as either detached homes or townhouses, has risen 30 percent in the past three years.1 And in Canada, rental units now account for nearly one-third of the country’s homes, with particular demand for multi-family units, including apartments and condominiums.2

At the same time, the short-term, or vacation, rental market is also booming. The popularity of online marketplaces like Airbnb, HomeAway, and VRBO has helped the short-term rental market become one of the fastest-growing segments in the travel industry.3

Now, more than ever, there is an abundance of opportunity for real estate investors. But which path is best: leasing your property to a long-term tenant, or renting your property to travelers on a short-term basis?

In this post, we examine the differences between the two investment strategies and the benefits and limitations of each category.

 

WHY INVEST IN A RENTAL PROPERTY? The Top 5 Reasons

Before we delve into the differences between long-term and short-term rentals, let’s answer the question: “Why invest in a rental property at all?”

There are five key reasons investors choose to real estate over other investment vehicles:

  1. Appreciation

Appreciation is the increase in your property’s value over time. And history has proven that over an extended period, the cost of real estate continues to rise. Recessions may still occur, but in the vast majority of markets, the value of real estate does grow over the long term.

  1. Cash Flow

One of the key benefits of investing in real estate is the ability to generate steady cash flow. Rental income can be used to pay the mortgage and taxes on your investment property, as well as regular maintenance and repairs. If appropriately priced in a solid rental market, there may even be a little extra cash each month to help with your living expenses or to grow your savings.

Even if you only take in enough rent to cover your expenses, a rental property purchase will pay for itself over time. As you pay down the mortgage every month with your rental income, your equity will continue to increase until you own the property free and clear … leaving you with residual cash flow for years to come.

  1. Hedge Against Inflation

Inflation is the rate at which the general cost of goods and services rises. That means as inflation rises, the money you have sitting in a savings account will buy less tomorrow than it will today. On the other hand, the price of real estate typically matches (or often exceeds) the rate of inflation. To hedge or guard yourself against inflation, real estate can be a smart investment choice.

  1. Leverage

    Leverage is the use of borrowed capital to increase the potential return of an investment. You can put a relatively small amount down on a property, finance the rest of the investment with a mortgage, and then profit on the entire combined value.

  2. Tax Benefits

    Don’t overlook the tax benefits that can come with a real estate investment, as well. From deductions to depreciation to exemptions, there are many ways a real estate investment can save you money on taxes. Consult a tax professional to discuss your particular circumstances.

 These are just a few of the many perks of investing in real estate. (For more detailed information, visit our previous post: Why Real Estate Investing Makes (Dollars and) Sense. [Link to October 2017 blog post.]) But what’s the best strategy to maximize returns on your investment property? In the next section, we explore the differences between long-term and short-term rentals.


LONG-TERM (TRADITIONAL) RENTAL MARKET

When most people think of owning a rental property, they imagine buying a home and renting it out to tenants to use as their primary residence. Traditionally, investors would use their rental property to generate an additional stream of income while benefiting from the property’s long-term appreciation in value.

In fact, that steady and predictable monthly cash flow is one of the key advantages of owning a long-term rental. And as an owner, you don’t usually have to worry about paying the utility bills or furnishing the property—both of which are typically covered by the tenant. Add to this the fact that traditional tenants translate into less time and effort spent on day-to-day property management, and long-term rentals are an attractive option for many investors.

However, there are also limitations to long-term rentals, which often come down to your ability to control the property. Perhaps the most obvious one is that you do not get to use the home or closely monitor its upkeep (this is different from a short-term rental, which we’ll share in the next section).

In addition, while you can usually generate a steady, predictable income stream with a long-term rental, you are limited in your ability to adjust rent prices based on increasing or seasonal demand. Therefore, you may end up with a lower overall return on your investment. In fact, according to data from Mashvisor, in the 10 hottest real estate markets, short-term rentals produced “significantly higher rental income” than long-term rentals.4

 

SHORT-TERM (VACATION) RENTAL MARKET

Short-term rentals are often referred to as vacation rentals, as more and more travelers enjoy the benefits of staying in a home while on vacation. In fact, according to Wells Fargo, vacation rentals are steadily growing and predicted to account for 21% of the worldwide accommodations market by 2020.5

Investing in a short-term rental or funding your second-home purchase by renting it out can offer many benefits. If you purchase an investment property in a top travel destination or vacation spot, you can expect steady demand from travelers while taking advantage of any non-rented periods to enjoy the home yourself. In addition to greater control over how your property is used, you can also adjust your rental price around peak travel demand to maximize your returns.

But short-term rentals also have risks and drawbacks that may dissuade some investors. They require greater day-to-day property management, and owners are typically responsible for furnishing the property, upkeep, and utilities.

And while rental revenue can be higher, it can also be less predictable based on seasonal or consumer travel trends. For example, a lack of snowfall during ski season could mean fewer bookings and lower rental revenue that year.

In addition, laws and limitations on short-term rentals can vary by region. And in some areas, the regulations are in flux as residents and government officials adapt to a new surge in short-term rentals. So make sure you understand any existing or proposed restrictions on rentals in the area where you want to invest.

Urban centers or suburban communities may be more resistant to short-term renters, thus more likely to pass future limitations on use. To lower your risk, you may want to consider properties in resort communities that are accustomed to travelers. We can help you assess the current regulations on short-term rentals in our area. Or if you’re interested in investing in another market, we can refer you to a local agent who can help.

 

WHICH INVESTMENT STRATEGY IS RIGHT FOR YOU?

Now that you understand these two real estate investment options, how do you pick the right one for you? It’s helpful to start by clarifying your investment goals.

If your goal is to generate steady, predictable income with less time and effort spent on property management, then a long-term rental may be your best option. Also, if you prefer a less-risky investment with more reliable (but possibly lower) returns, then you may be more comfortable with a long-term rental.

On the other hand, if your goal is to purchase a vacation or second home that you’ll use, and you want to defray some (or all) of the expense, then a short-term rental may be a good option for you. Similarly, if you’re open to taking on more risk and revenue volatility for the possibility of greater investment returns, then a short-term rental may better suit your spirit as an investor.

But sometimes the decision isn’t always so clear-cut. If your goal is to purchase a future retirement home now to hedge against inflation, rising real estate prices, and interest rates, then both long- and short-term rentals could be suitable options. In this case, you’ll want to consider other factors like location, market demand, property type, and your risk tolerance.

 

HERE OR ELSEWHERE … WE CAN HELP

If you’re looking to make a real estate investment—whether it’s a primary residence, investment property, vacation home, or future retirement home—give us a call. We’ll help you determine the best course of action and share insights and resources to help you make an informed decision. And if your plans include buying outside of our area, we can refer you to a local agent who can help. Contact us 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 the appropriate professionals for advice regarding your individual needs.

 

Sources:

  1. USA Today –
    https://www.usatoday.com/story/money/personalfinance/real-estate/2017/11/11/renting-homes-overtaking-housing-market-heres-why/845474001/
  2. The Globe and Mail –
    https://www.theglobeandmail.com/real-estate/the-market/article-demand-for-rental-housing-in-canada-now-outpacing-home-ownership/
  3. Phocuswright –
    https://www.phocuswright.com/Travel-Research/Research-Updates/2017/US-Private-Accommodation-Market-to-Reach-36B-by-2018
  4. com –
    https://www.rented.com/vacation-rental-best-practices-blog/do-long-term-rentals-or-short-term-rentals-provide-better-investment-returns/
  5. Turnkey Vacation Rentals –
    https://blog.turnkeyvr.com/short-term-vs-long-term-vacation-rental-properties/

 

 

 

Staging Tips from the Pros

The Real Estate Staging Association estimates that professionally staged properties spend 73 percent
less time on the market, receive more foot traffic, and typically sell for more money.

Following are 10 tips you can use to get your home “show ready” prior to hitting the market. These easy
and cost-effective ideas will help your house look its best—and help buyers visualize themselves living
there. Even if you’re not currently in the market to sell, you can use these tactics to breathe new life
into your existing home decor.

Market Review for April 2018

Fraser Valley

For the second month in a row, overall sales were significantly lower than the same month last year. For the month of April 2018, sales of detached homes saw a drop of 38.9% compared to April 2017. The sales of condos were down 12.2% and the sales of townhouses were down 5.7%.

Prices are still rising. The benchmark price for detached homes increased 0.8% last month while prices for townhouses rose 1.5% and prices for condos rose 1.6%. We haven’t seen condo prices increase less than 2% over a one-month period since February 2017.

The number of new listings posted to the MLS in April 2018 was up 16.2% compared to April 2017. More listings on the market is good for buyers and is one factor behind the slowing of increasing prices.

For detached properties, all areas throughout the Fraser Valley remained in sellers markets, with the exception of South Surrey which remained in a balanced market.

For attached properties, all areas continued in hot, sellers markets.

Generally, analysts say that prices can begin to drop when an area has been in a buyers market for a sustained period, while home prices will increase when an area has been in a sellers market for a sustained period. Although the market is shifting away from the frenzied, sellers market of the past two years, most of the Fraser Valley is not in a market where we would expect prices to drop. In fact, the numbers indicate that prices will continue to rise in most areas.

HPI® Benchmark Price Activity
Single Family Detached: At $1,009,200, the Benchmark price for a single family detached home in the Valley increased 0.8 per cent compared to March 2018, and increased 13.5 per cent compared to April 2017.
Townhomes: At $549,900, the Benchmark price for a townhome in the Fraser Valley increased 1.5 per cent compared to March 2018, and increased 23 per cent compared to April 2017.
Apartments: At $447,500, the Benchmark price for apartments/condos in the Fraser Valley increased 1.6 per cent compared to March 2018, and increased 45.8 per cent compared to April 2017.
Greater Vancouver:

Overall, sales were 22.5 % below the 10-year average for the month of April. New listings to the MLS were up more than 18% compared to April 2017.

For attached properties, all areas in Greater Vancouver remained in sellers markets.

The detached market varied from region to region. Vancouver West, West Vancouver and Richmond were all in buyers markets for April. Port Coquitlam to Maple Ridge continued in sellers markets. New West and Ladner were experiencing a sellers market in April. The other areas all remained in balanced markets.

Prices have dropped 2.6% in the past year for detached homes in Vancouver West. On the flip side, Maple Ridge and Pitt Meadows have both seen prices for detached homes increase 18.5% in the past year.

HPI® Benchmark Price Activity

Single Family Detached: At $1,605,800, the Benchmark price for a single family detached home increased 5.1% compared to April 2017 but decreased 0.2 per cent compared to March 2018.
Townhomes: At $854,200 the Benchmark price for a townhome increased 17.7 per cent compared to April 2017 and increased 2.3 per cent compared to March 2018.
Apartments: At $701,100, the Benchmark price for apartments/condos increased 23.7 per cent compared to April 2017 and increased 1.1 per cent compared to March 2018.

Real Estate Market Review – Winter 2017/2018

Fraser Valley

Recent headlines would make anyone think that the real estate market in the Fraser Valley is slowing down but one month’s overall statistics aren’t enough to make that conclusion. Sales transactions for February were down 0.8% compared with February 2017, so basically unchanged. While sales of townhouses were down 8.9% and sales of apartments were down 3.1%, detached homes actually went up 6.7%. To date, the Fraser Valley has recorded 9.5% more sales for 2018 than the same time last year.

2017 was the second busiest year ever in the Fraser Valley with sales numbers just below 2016. Looking back, December recorded the second highest transactions ever for the Fraser Valley and January recorded the third highest transactions. The new mortgage rules may have been behind some of those high numbers.

Despite a drop in sales for townhouses and apartments, prices continued to rise in February. In the past three months, we have seen townhouse prices rise 5% and apartment prices rise a staggering 12%. Prices for detached homes also rose 2%. Cameron Muir, chief economist for the BC Real Estate Assoc., reminded us today that we cannot expect prices for apartments to continue to rise at such high rates forever. There has been extremely low inventory of apartments and townhouses for sale over the past couple of years but that will change as new construction projects complete.

For detached properties, all areas in the Fraser Valley, except South Surrey, continue to be in a sellers market. It is important to note that the price point changes everything. South Surrey is in a strong, sellers market for properties priced under $1,750,000.

For attached properties, all areas and almost all price points continue in hot, sellers markets.

HPI® Benchmark Price Activity

• Single Family Detached: At $992,100, the Benchmark price for a single family detached home in the Valley increased 1 per cent compared to January 2018, and increased 15.7 per cent compared to February 2017.
• Townhomes: At $531,000 the Benchmark price for a townhome in the Fraser Valley increased 2.2 per cent compared to January 2018, and increased 25.4 per cent compared to February 2017.
• Apartments: At $422,300, the Benchmark price for apartments/condos in the Fraser Valley increased 4.5 per cent compared to January 2018, and increased 46.7 per cent compared to February 2017.

Greater Vancouver:

February sales in the Greater Vancouver area were below the 10-year average for the month of February. Sales last month were 9 per cent lower than February 2017.

Overall, townhouses and apartments continue to be in sellers markets across all areas. Most areas from New Westminster and east to Maple Ridge are in sellers markets. Moving west, Burnaby, South Delta, East Vancouver and North Vancouver are in balanced markets while Vancouver West, West Vancouver and Richmond are now in buyers markets. Vancouver West has been in a buyers market since July 2017. This situation has resulted in a price decrease of 4.2% over the past six months. The recent provincial budget may have further negative affects on the Vancouver market.

HPI® Benchmark Price Activity

Single Family Detached: At $1,602,000, the Benchmark price for a single family detached home increased 8.2% compared to February 2017 but decreased 4.2 per cent in the past six months.
Townhomes: At $819,200 the Benchmark price for a townhome increased 18.1 per cent compared to February 2017.
Apartments: At $682,800, the Benchmark price for apartments/condos increased 27.2 per cent compared to February 2017.

Buyer Opportunities (Detached)

Abbotsford – get in while you still can. The average home in Abbotsford is still more than $200K less than in Langley.

Buyer Opportunities (Attached)

There is much less competition for properties built prior to 2010. Older properties tend to have rental restrictions but if you are purchasing to live in, you will get much more square footage for your dollar. Also, there is less competition for units that need renovations. Save money and earn some sweat equity.

2018 starts the year with extremely low inventory.  

Fraser Valley:

Inventory levels for attached properties throughout the Fraser Valley were significantly lower in January compared to a year ago. This could mean that we will continue to see steady price increases for townhouses and condos for the next few months.  Demand for condos and  townhouses remains high. It is unlikely we will see a drop in demand while the rental vacancy rate remains at 1 percent and the unemployment rate also remains low.

The inventory for detached homes was also down for January compared to January 2017. Most areas in the Fraser Valley remain in a sellers market for detached homes with prices showing gradual increases.

Overall sales for January were 1,210, 24 percent higher than last January and the third highest sales total for a January in the Board’s history, behind only 2016 (1,338) and 1992 (1,270). Changes to the mortgage rules and interest rate increases have not yet affected the market.
HPI® Benchmark Price Activity

  • Single Family Detached: At $982,700, the Benchmark price for a single family detached home in the Valley increased 0.6 per cent compared to December 2017, and increased 15.1 per cent compared to January 2017.
  • Townhomes: At $519,400 the Benchmark price for a townhome in the Fraser Valley increased 1.2 per cent compared to December 2017, and increased 23.4 per cent compared to January 2017.
  • Apartments: At $404,100, the Benchmark price for apartments/condos in the Fraser Valley increased 4 per cent compared to December 2017, and increased 44.1 per cent compared to January 2017.

 

Greater Vancouver:

Across the Greater Vancouver area, detached homes remained in a balanced or buyers market while townhouses and condos remained in a sellers market. Sales for detached homes were under the 10 year average while sales for townhouses and condos were well above the 10 year average.

HPI® Benchmark Price Activity

  • Single Family Detached: At $1,601,500, the Benchmark price for a single family detached home increased 8.3 per cent compared to January 2017 but decreased .07 per cent in the past six months.
  • Townhomes: At $803,700 the Benchmark price for a townhome increased 17.5 per cent compared to January 2017.
  • Apartments: At $665,400, the Benchmark price for apartments/condos increased 27.4 per cent compared to January 2017.

 


HOME DESIGN TRENDS TO WATCH FOR IN 2018


Buyer Opportunities (Detached)

White Rock continues in a buyers market.

Abbotsford – get in while you still can. The average home in Abbotsford is more than $200K less than in Langley.

Buyer Opportunities (Attached)

There is much less competition for properties built prior to 2010. Older properties tend to have rental restrictions but if you are purchasing to live in, you will get much more square footage for your dollar.

The spring season is approaching and we are expecting the sellers market to continue and prices to rise.  If you are thinking of selling, I would love to help you prepare. 

2017 Real Estate Market. How will higher interest rates affect real estate in 2018?

The predictions for 2017 were mostly centered around the idea that sales would decline throughout the year and that would result in a drop in prices. That didn’t happen. Prices did drop in many areas during the fall of 2016 (largely a result of the foreign buyer’s tax) but the market began to recover early in 2017. Overall sales transactions for 2017 were just below transactions for 2016, making 2017 the second busiest year on record for the Fraser Valley and the third busiest year for the Vancouver area, in the past 10 years. Overall, prices increased throughout the Vancouver area and Fraser Valley.

Fraser Valley Numbers:

HPI® Benchmark Price Activity

  • Single Family Detached: At $976,400, the Benchmark price for a single family detached home in the Valley increased 14.2 per cent compared to December 2016.
  • Townhomes: At $513,100, the Benchmark price for a townhouse in the Valley increased 23 per cent compared to December 2016.
  • Apartments: At $388,600, the Benchmark price for an apartment in the Valley increased 40.5 per cent compared to December 2016.

Greater Vancouver Numbers:

HPI® Benchmark Price Activity

  • Single Family Detached: At $1,605,000 the Benchmark price for a single family detached home in the Greater Vancouver area has increased 7.9 per cent compared to December 2016.
  • Townhomes: At $803,700, the Benchmark price for a townhouse in the Greater Vancouver area increased 18.5 per cent compared to December 2016.
  • Apartments: At $655,400, the Benchmark price for an apartment in the Greater Vancouver area increased 25.9 per cent compared to December 2016.

All areas and all property types in the Fraser Valley (except detached homes in South Surrey) remained in a sellers market for the month of December. With unusually low inventory and strong economic numbers, the assumption would be for the real estate market to continue in a sellers market however, the new mortgage rules are now in effect and the Bank of Canada just increased the prime lending rate to 1.25 percent, up from 1 percent. These two factors may contribute to a decrease in demand but that is unknown at this time. If the economy continues to grow, we may not see much of a change for 2018.


The Bank of Canada Governor, Stephen Poloz, is uncertain if interest rates will go up again this year. That decision will be based on economic data. “One of the most important (issues) is with the level of debt we have today, compared to what we had 10 years ago. We are absolutely certain the economy will prove to be more sensitive to higher interest rates than in the past,” Poloz added.


Buyer’s Best Bets:

Prices for detached homes in Surrey have remained stable over the past six months. Panorama Ridge and Fleetwood both have good inventory levels and are experiencing balanced markets.

It is a good time to sell right now. Contact me for information on preparing your home for sale.