POSTS BY DATE:

November 2023

September 2023

July 2023

May 2023

March 2023

January 2023

Market Update for November 2023:

More properties have come on the market in recent months, at the same time that sales have slowed. The numbers for last month indicate that sales were nearly 30 per cent below the 10-year average for that period.
The trend towards slower sales will likely continue as we get closer to Christmas, but watch for things to change early in the new year.Lending institutions are holding a large number of mortgages that come up for renewal in the next 12 to 18 months, and for many homeowners that’s a problem.
They may have stretched themselves financially to purchase a home when the rates were so low, and with renewal will be looking at rates that are double (or even more) of what they’re currently paying. That’s likely to be problematic for many, and we’re likely to see a flood of homes coming onto the market. Especially when those same homeowners have likely made some good equity during that same period.
It’s been a seller’s market for a long time, recently moving into more balanced conditions in some communities, but we may see the return of the buyer’s market in 2024.
In spite of conditions that would normally have downward pressure on prices, the cost of homeshas been fairly stable over the past months.
Interest rates have also been more stable, as the Bank of Canada has passed on further increases in their most recent rate reviews. Their next review is December 6, and they’re likely to hold the rate again for into the new year.
We may see a lowering of rates later in 2024, but it will likely be midway through 2025 before we see some positive change in lending rates.
In the meantime, interest rates are sitting between five and seven per cent, with some lenders considering a longer amortization period to keep payments more affordable.
I’m happy to give a referral to some trusted mortgage brokers if your mortgage is coming up for renewal and you need some advice.
And if there’s ever anything else I can do to help, please just let me know.

Market Update for September 2023:

The stats aren’t out for September yet, and it’s early days into the fall market, so we’ll have towait and see what happens, but we’re expecting a fairly robust fall market, depending on what interest rates do.
August saw a decrease in both the number of listings and the number of sales from July, but this is a fairly typical summer pattern, as both buyers and sellers tend to shift focus in August towards squeezing in some extra vacation time prior to summer’s end or to getting ready for back to school or work.
It was a busier August than last year, however, with sales up more than 20 percent from August 2022 and listings up more than 18 percent from one year ago. Even so, both numbers are still below the 10-year average.
As you’re likely aware, it’s been a Seller’s market for quite some time, but we’re seeing a shift now, especially with regards to detached houses. With an increase in inventory and higher interest rates, detached homes have moved into more balanced conditions in most markets.
That’s good news for Buyers. Even better, prices seem to be stabilizing.
The Vancouver market continues to see modest price increases month over month, but as one travels out into the suburbs, prices are beginning to inch downwards. In the Fraser Valley, the decrease is a little more than it is closer to town.
It’s a welcome shift for Buyers, but I would caution that we don’t expect to see large drops in pricing… there’s just too much demand for housing in the Lower Mainland.
Sellers can also feel confident… there’s not likely to be significant change in pricing, and all it would take is a drop in interest rates to reverse the downward trend and start pushing prices up again.
The mortgage brokers I’ve spoken to predict lower interest rates in the latter part of 2024 and into 2025, but unexpected outside events or changes in policy can put pressure on rates.
We’ll have to wait and see what happens, but in the long run, we can expect prices to go up.

Market Update for July 2023:

Most people will have heard by now that the Bank of Canada raised the interest rate again this month, making the prime borrowing rate now 7.2 percent. This rate increase would result in about $15 - $20 more per month on a mortgage payment, for every $100,000 of mortgage.
The rising interest rates are an attempt to curb high inflation, and it has been effective to a point, because inflation is down from what it was a year ago.
Next review of the prime rate will be in September, and there is speculation on whether Bank of Canada will raise the rate again. I heard from two mortgage brokers this week; one thinks the Bank will hold the current rate in the fall, the other is anticipating another increase.
Either way, mortgage rates are not likely to come down anytime soon.
There is talk of tightening up mortgage qualifications, and that is likely to happen sooner rather than later. That will make money harder to get… as if it isn’t hard enough to get into the housing market already.
As far as housing itself goes, it’s still a Seller’s market in almost every part of the Lower Mainland. Inventory is nudging upwards as more homes come onto the market, and that would normally have a softening effect on pricing. Instead, although we’re not seeing large gains, prices are continuing to inch up in most markets. The exception right now seems to be Mission and possibly Abbotsford.
I watched an interesting video this week on the affordability crisis in our housing market. The presenter referred to legislation introduced in 2011, that limited the purchase price of homes that qualify for an insured mortgage (for home purchases with less than 20 percent down).
The presenter stated that in 2011 when the legislation was introduced, just three percent of homes in the Greater Vancouver area were valued at over one million dollars. That meant that the majority of homes could be purchased with as little as five percent down.
Today, he states, the number of homes valued at over one million is 36 percent. That means that more than one-third of homes don’t qualify for the assistance.
And how many first-time buyers do you know who are able to save $200,000+ for a down payment… all while paying record high rents.
No wonder getting into the market is so hard! The good news is that all it would take is another piece of legislation to make it easier for first-timers to buy... presuming the political will is there.

Market Update for May 2023:

Residential home sales in April were up from March’s numbers, and new listings coming onto the market were steady, but the number of both sales and listings were down considerably from one year ago.
It continues to be a seller’s market in most communities, and prices are starting to go up again, after the declining prices we saw last fall.
We’re seeing more multiple offers again, especially on condos and townhouses, and that’s driving prices up. Fortunately, we haven’t seen a lot of subject-free offers yet, so buyers have time to do their due diligence, but that may change.
The new three-day recission period may have an inadvertent effect on the subject-free offer.
At some point, especially if the market becomes very competitive, buyers may decide to use that three-day window to do their due diligence. Then, if things don’t pan out (e.g. they can’t get their financing together quickly), they can walk away, paying a relatively small amount to the seller for breaking the contract.
As an example, on an $800,000 purchase, if a buyer decides to exercise their recission rights and walk away, they would have to pay the seller $2,000.
This could be very frustrating for sellers, who think they’ve sold their home, only to find out the buyers changed their mind. And in a case where the sellers have also purchased - contingent on their sale going through - several deals could collapse, in a domino effect.
We will have to see how this plays out, but this may be a case of the government’s changes not being thought through before being implemented.
My advice to buyers is, “Buy Now.”
Sellers may wish to wait, hoping that the price of their home will continue to climb, but if they have to buy again in this market, I suggest they also take action sooner rather than later.
If I can be of assistance to you, or someone you know, please give me a call.

Market update for March 2023:

February saw more listings come onto the market than in January, typical for the beginning of year.
The number of sales was also up considerably throughout the Metro Vancouver area, and early indications point to a robust spring market.
Prices have been adjusting over the past several months, but there are strong indications that they’ve hit bottom in many markets and are beginning to rebound.
Those who’ve been holding off buying so they won’t pay too much, might be well advised to take heed of the opinion expressed in this Globe & Mail excerpt, published March 10, 2023:
“Few of us are good enough to pick exact price bottoms. We should be darn [sic] happy if we buy anywhere close.
“As people in some markets see prices recover, both buyers and sellers gain confidence. Sellers receive more offers and suddenly buyers’ negotiating leverage disappears.
“That’s why the best time to buy – for those who can discretionarily time purchases, like investors – is before the bottom. Always has been. Because once people recognize that the market has turned, it’s too easy to be late.”
Speculation is that interest rates will come down sometime in the next few years, but with house prices on the increase, buyers will be further ahead by buying now, then re-financing when rates come down. If they wait till the cost of borrowing comes down, the price of housing will likely surge past any possible savings.
For those who are looking forward to retirement and downsizing, it’s a smart strategic move to purchase that condo or townhouse now, while the market is low. The unit can be rented out till you’re ready to make the move, then at that time you can sell your larger home, when prices are higher.
If you would like to explore your options, just give me a call. I’m always happy to talk about real estate!

Market update for January 2023:
The New Year started with more changes to how we do real estate in this province.
The change that will affect buyers and sellers the most is the new three-day recission period which the provincial government proposed last year during our busy market.
The goal was to give buyers a chance to do their due diligence and provide ‘an out’ if they had second thoughts after submitting a subject-free offer.
Under the new law, within three clear business days of an accepted offer, Buyers can walk away from the deal provided proper notice is given, and they pay to the Seller 0.25 percent of the agreed-upon price. On a million-dollar home, that amounts to $2500. Provided those two things are done, the Buyer can walk away for any reason… or none at all.
This condition is law and cannot be waived by either party during negotiations.
It’s not likely we’ll see this happen often in the slower market we have now, with most offers containing subjects, but it’s important that Sellers (and Buyers too, for that matter) are aware that the purchase and sale of most residential property can now be overturned for any reason within three days.
Our local real estate board described 2022 as a ‘year of caution’ due to rising borrowing costs.
Sales were down considerably from 2021, and more than 13 percent below the 10-year sales average.
Prices adjusted downward during 2022 to more reasonable levels, but all areas are still up considerably from pre-pandemic pricing.
I don’t think we’re likely to see prices dip much further, as prices in most communities seem to be moderating now.
Watch for another interest-rate hike later this month, likely .25 percent. There is also talk of a new Loan-to-Income restriction on borrowing, as well as a tightening of the Stress Test in the fall… both will make money harder to get for Buyers.
My advice? Don’t put off purchasing, thinking you’ll save a few thousand dollars if you wait. These changes may mean you miss out altogether.
Better the devil you know, that the one you don’t!