home buying; purchasing real estate; buying a home;

It’s cold now but is the market about to heat up?

Real Estate Update Jan 2020

What is the forecast for real estate in 2020? The real estate market in the Fraser Valley ended 2019 with average sales and a mostly sellers market due to very low inventory. This was a stark contrast to the first half of 2019 where sales were well below average. Prices in many areas have stabilized over the past three months after 12 months of decreases. Typically, the spring season is where we see the greatest number of sales however, in 2019, sales were down in the spring and up during the fall months.This contrary scenario has many people wondering about the upcoming spring market.  Will this trend of increasing sales continue into the spring? Will we see prices increase over the next six months? 

2020 starts the year with very low inventory levels throughout the Fraser Valley and Vancouver area. Sales have been increasing since July 2019. If demand continue to grow, low inventory levels may push prices up. In North Delta, 45 detached homes were sold in December 2019 out of 84 properties listed on the MLS. With a 54% turnover rate in December, that put North Delta in a sellers market for detached properties. Compare this to December 2018 when only 16 detached homes sold out of 142 properties listed on the MLS. The change in supply and demand has resulted in a price increase of about 3.3% over the past three months for detached homes in North Delta. Cloverdale, Mission and Langley have also shown an increase in prices for detached homes, ranging from 1% to 1.5%. 

Vancouver area prices for detached homes have also stabilized over the past three months. Even the most expensive areas of Vancouver: West Vancouver, Richmond and Vancouver west side are experiencing stable prices. Attached properties in the Vancouver area are seeing prices increase in many areas. 

The strongest demand for housing in the Fraser Valley and Vancouver area continues to be for townhouses and condos. The Canadian Mortgage and Housing Corporation recently reported that in 2019, Vancouver (includes Fraser Valley) had a 31% increase in new construction for townhouses and condos compared to 2018. This increase in new construction may help to maintain stable prices throughout the region. 

Many economists expect the overnight bank rate to remain at 1.75% for now. The economy continues to grow at a sluggish rate but a recession is not expected to hit Canada in 2020. High immigration into Vancouver is expected to bolster demand for housing in the area. 

The Conference Board of Canada forecast in December that Canada’s economy will grow by 1.8 per cent in 2020, a modest uptick from the 1.7 per cent growth seen last year.

Regionally, British Columbia and Quebec are expected to see the strongest economic growth, according to the Business Development Bank of Canada.


Buyer Opportunities (Detached)

Prices in South Surrey remain particularly low. Compared to central Surrey, the price difference between the two areas is only 30% – the smallest gap in over 15 years.  In July 2017, the price difference between the two areas was 54%. In the past three years, South Surrey is the only area in the Fraser Valley that is showing a loss in value (down 7.5%) while all other areas have posted price gains of 8% to 18%. 


Buyer Opportunities (Attached)

South Surrey had the smallest turnover of attached properties in December compared to the rest of the Fraser Valley. The inventory is still decent and price increases over the past three years are the lowest in the Fraser Valley. 
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If you are thinking of selling in the spring, now is the time to speak with me. Preparing your home for sale takes time and you may require the help of several different trades and services. Over many years, I have put together a list of highly recommended companies to serve your needs in this regard.  Call or email, I’d be happy to send you my recommendations. 

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/