MARKET UPDATE – SPRING 2017

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Thanks to last year’s heavy government interference in the real estate market, we hit all-time lows in August 2016. Foreign homebuyers tax provincially, the vacant home tax locally and the revised and more stringent loan regulations federally caused a significant drop in pricing in our market last year. In many cases as much as a 15% drop in pricing across Vancouver. Through Fall we experienced some moderate price recovery mainly due to the lack of product on the market.

From the onset of our market in 2017 we have experienced a great shortage of product across all levels of our market and increased demand. As a result prices have continued their gradual recovery.

Consumer confidence has returned for a number of reasons. Firstly, bank and mortgage specialists have figured out the new loan regulations and are more confidently approving clients. Secondly, there is a significant number of buyers who did not buy last year and followed the market on its downward decline who have now jumped back into the market taking advantage of current pricing so the pent-up demand from last year is letting loose. And thirdly, the entry level segment of our market in condos, town homes and half duplexes has become extremely hot allowing sellers in that market to upgrade to higher more expensive detached product. When the entry portion of our market becomes active it feeds the upper end detached market eventually.

The interesting thing we are experiencing currently is incredible market compression in pricing. In plain English, this means that upgrade buyers are in a very unique window to jump from entry and middle end product into more expensive detached housing. There’s never been a better window to do this than right now so upgrade buyers are benefitting greatly in this market.

As these buyers feed into the upper end of our market, the current market compression will begin to unravel and prices in houses will start to take off. And this will happen rather quickly. As prices climb in the detached market, many downsizers will also take advantage of this window while the demand for their homes is high.

The catalyst in our market decompressing will be the onslaught of houses hitting the market. This usually takes place in March / April. It’s complicated to follow precisely unless you’re doing it every day like us. But our Real Estate Timing Analysis which we cover in detail with every client that we meet with has become an invaluable tool in precisely targeting the perfect times to hit the market for a sale or a purchase depending on the specific product in question. The graph below shows the annual cycle of activity throughout the year, clearly defining our spring and fall peak market activity periods.

MLS Homes Sales ActivityDespite negative forecasting in the media about our Vancouver market, I believe we are going to see an excellent year of market recovery and appreciation in all segments of our market. Canada and specifically Vancouver will continue to be targeted as one of the destination cities to live in, invest in, and enjoy the benefits.

My prediction, I can very easily see prices appreciating by 10% by year’s end in 2017.Marty & Adam

 

BC GOVERNMENT ANNOUNCES BC HOME OWNER MORTGAGE DOWN PAYMENT ASSISTANCE LOAN PARTNERSHIP – FOR FIRST-TIME HOMEBUYERS

What is this program?

The government of British Columbia has introduced a program designed to help first-time homebuyer clients buying residences located in BC. Repayable down payment assistance loans will be made available between February 15, 2017 and March 31, 2020 to eligible first-time homebuyers requiring a high-ratio insured first mortgage.

How does it work?

After a Buyer is pre approved for their mortgage with their mortgage broker they can apply for the program using the online application form on the program website.

The program will match Buyer’s down payment amount for up to 5% of the purchase price of the home. For the first five years, the 25-year loan is interest-free and payment-free. Afterwards, they will need to make principal and interest payments, amortized over the remaining 20 years. Our understanding is that this interest rate will be based on today’s rates.

Eligibility Requirements Include:

* Clients on title must be first-time homebuyers.

* Client must have been a Canadian citizen or permanent resident for at least five years and have lived in BC for the last 12 months.

* Client plans to purchase a home for $750,000 or less.

* Client has saved at least half of the minimum down payment required.

* Client has a total household income of $150,000 or less.

* Client is making the home their principal residence.

* Clients that are currently approved for a mortgage and meet the qualifications can apply for down payment assistance.

* Maximum amount available though the program is $37,500.

Other terms and conditions of the loan program apply. For information about the program, visit BC Housing at www.bchousing.org/housing-assistance/bc-home-partnership.

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NEW CMHC PREMIUMS

CMHC/Genworth/Canada Guaranty Increases Their Premium AGAIN
If you’re in the market for an insured mortgage, then you might want to get that mortgage before March 17.
Canada Mortgage and Housing Corporation (CMHC) is raising premiums for insuring mortgages on Canadian homes for the third time in three years. Canadian homebuyers are required to have mortgage insurance if they have less than a 20 per cent down payment. The insurance provides protection for the lender in the case of a default.
How will it hit your wallet? The increase is not too significant for those making the minimum down payment required. A homebuyer with a $250,000 mortgage and a 5 per cent down payment will pay about $5 per month more in insurance premiums.
The increases are actually more substantial for larger down payments of 15 per cent or more. Those with 20 per cent or more down payment aren’t required to have mortgage insurance, although it’s used by lenders that securitize their mortgages. As a result, any increased cost will likely be passed on to customers through higher rates.
Premiums are also increasing for “non-traditional” insured mortgages i.e. home buyers with borrowed down payments, a type of mortgage down payment that could grow in popularity as homebuyers strive to gain entry in the housing market.
The premium change will come into effect on March 17. Homebuyers will be able to access the current lower rates if they have bought a home and are approved before the March 17 deadline, even if they have a later closing date.
Standard Premiums                  Premium         New Premiums
Up to and including 65%                0.60%                    0.60%
up to and including 75%                1.70%                    5.90%
up to and including 80%                2.40%                    6.05%
up to and including 85%                2.80%                    6.20%
up to and including 90%                3.20%                    6.25%
up to and including 95%:
Traditional equity                           4.00%                    6.30%
non traditional equity                    4.50%                    6.60%

CHANGES TO UNDERWRITING GUIDELINES

On November 30, 2016 the Federal Government implemented their last set of mortgage underwriting changes. The purpose for the changes was to make borrowing more difficult and to slow down real estate investment in Canada. These changes may have had a greater  impact than what the Federal Government had intended and there could be revisions coming later this year.
The biggest change is that for any insured mortgages regardless of their loan to value – LTV – the mortgage application must be approved using the Mortgage Qualification Rate (MQR) which is currently 4.64% and a 25 yr amortization.
The second big change is that no refinances can be insured and no rentals can be insured through the bulk insurance program, creating a price increase for refinances and for rental properties applications.
All opaul-rate-feb-2017f these changes have resulted in a multi rate marketplace. i.e. the rates available for an owner occupied 5% down are the best rates, with refinances and rentals being the worst rates. It is now standard for many lenders to charge a rate premium for any amortizations that exceed 25 years.

Global Real Estate Marketing Partnership – Knight Frank

As a member of the Knight Frank global network, we are able to offer you access to over 12,700 of the very best properties for sale and rent in the most sought after locations around the world. Together we can look after your personal and professional needs as a result of our global reach, exceptional people, enviable track record, award winning technology and in depth research.

Knight Frank is the largest independent property consultancy in the world with a global reach of over 370 offices across 52 countries. Established more than 115 years ago, Knight Frank is renowned for delivering consistent, professional advice and its network of overseas offices possess first-hand knowledge of the local markets whilst working closely with the global headquarters in London to provide a seamless service to clients. Through an international network and a shared global database they can access the wealthiest buyers and finest properties around the world.

With over 12,100 people across the globe, Knight Frank’s partnership culture puts clients’ needs at the heart of everything they do. This unique environment nurtures the best people in the business, who are genuinely able to give the quality of advice that one would give to family and friends. This ensures that a life-changing process for many, whether buying, renting or letting a property, is handled with care, discretion and unrivaled professionalism.

It is not just about years of experience, but an impressive track record. Knight Frank is well known for marketing the “best in class” property around the world and when it comes to choosing a property agent they know you want to work with the very finest. The statistics speak for themselves and provide evidence of consistently strong performance, which keeps clients coming back again and again.

Technology, when it comes to using it intelligently to drive the buying, renting and selling of property, Knight Frank stands apart. With nearly 1 million visitors to their award-winning website with its multi-lingual function, which automatically translates over 12,700 properties into 18 languages, they can reach a much wider audience. Clients use ‘My Knight Frank’ to register and manage their own requirements, receive personalized alerts for property and research, as well as create their own property library to rate and review. On top of all this the App searches for property by lifestyle or GPS location and features all of their research reports.

Knight Frank’s world-class research team leads the field in understanding the key drivers of the international markets. As well as providing regular research reports from the Global Residential Market Forecast to the Prime Global Rental Index their analysts offer bespoke consultancy services to developers, lenders, investors, government departments, institutions and public sector bodies. The highly regarded Wealth Report, which is produced once a year, is the definitive global perspective on prime property and wealth, while the Global Briefing blog provides market updates, feature articles and topical interviews relating to all things property. Working closely with the overseas offices, their indices track the dynamics of market cycles and help clients to make the right decisions. These sophisticated forecasting tools support their work and maximize the value of clients’ properties and shape strategy.

Recognized as the trusted advisors of choice, Knight Frank and Dexter Associates Realty combine local knowledge and global expertise to give you the very best property advice.

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MARKET UPDATE – Fall 2015

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MARKET UPDATE – SEPTEMBER 2015

Greetings From Vancouver “The New Sunny California”!

 

Well, to put it simply, the Vancouver real estate market has been as hot as the weather this year.

As usual, there are a variety of expert opinions and reports coming out about the future of Vancouver Real Estate. What’s different about 2015, is that major Canadian banks and think-tanks are reporting a positive outlook on the market moving into 2016.  In separate reports, both RBC and CMHC have called for a continuation of a busy market until the end of the year. Despite concerns about recessionary pressure and volatility in Asian markets, Vancouver property is still viewed as a world class investment.  Many experts are saying that this is just the beginning.

Vancouver’s low seasonal inventory and higher than average sales created the high demand situation which has led us to where we are today.  Our market place has sustained a “Seller’s Market” since January.

As in previous years, demand for detached home and their price gains have outpaced those of condo, townhouses and apartments.  That said, attached homes in specific areas have seen larger gains and activity than we  have seen in a long while.  In fact, we just experienced the strongest August in 20 years according to the Real Estate Board of Greater Vancouver’s statistics!

Inventory is still on the lower side, but this is typical for the opening of the fall market season. As in years past, we anticipate that fall will be a time of more choice for buyers, and sustained demand for sellers’ properties making it a great window of opportunity to make your move.

What does all this mean for you?  When you see a property that looks interesting, let us know right away so that we can guide you through getting your best offer in.  A great offer isn’t only about price; working with you, we will craft the offer that both meets your needs and looks great to sellers.  

Properties priced right for the market will get several offers during the first week or two, and bidders who don’t get their offers in early often miss out.

If you are thinking of putting your home on the market, the activity remains excellent and prices are at an all time high.

What ever your needs, Marty and I are always happy to chat with you, your family, and your friends regarding moves and real estate goals.

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The Referral Force Awakens Contest

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Pending final Disney approval, on December 19th, our best clients will be treated to a Private Screening of Star Wars VII – THE FORCE AWAKENS.

As is the case with well priced properties everyone wants this movie.  The competition is fierce, but we are thrilled to announce that we have secured a 95% commitment from a local theater that Team Pospischil will be able to host our guests on opening weekend.

Our Movie Morning is one of the ways Team Pospischil says “Thank You” to our clients . . . But we still want to do more.  Your referrals are the way you tell us that you trust us to do a good job for your family and friends and people you work with.

Starting September 10th, each referral you send us will qualify as a ballot in our

REFERRAL FORCE AWAKENS PRIZE GIVEAWAY on December 19th.  Please remember to tell us who you are referring to us with all their contact information so we can contact them.  Prize packages include:

Early Bird Prize: ‘Princess Leia Royal Treatment’ ~ A VIP Package at the December 19th screening of The Force Awakens.   Reserved Seating, special snacks served to your seats, and more….

The following great Referral Prizes will be drawn at our Movie Morning on December 19th…

1st Prize: ‘Yoda Does Whistler’ Get Away:  “Relax you must young Jedi”  with a 2 night ski-in/ski-out slope-side accommodation in Whistler for 2 (or family of 4), dinner at Araxi Restaurant and Oyster Bar and a $200 Visa gift card to spend on spas, skiing, anything you can think of.

2nd Prize: ‘Chew with Chewy’ Night Out: Treat your favourite Wookie to a night out at Chewies Oyster bar at Kits Beach with a $150 Gift Card.

3rd Prizes: ‘Clone Trouper Blaster Breaks’ (3 prizes): Win one of three $50 gift cards to a variety of great eateries.

Thanks again for your referrals and, as Yoda would say: “A Friend in the Real Estate Business you have!”

Ride To Conquer Cancer

Some of us may have been eating cold dinners by candle light after the monsoon that hit Vancouver during the last weekend in August. This was five star dining, considering the conditions under which the 10 members of Team Pospischil / Dexter were slogging it out during the 2015 Ride to Conquer Cancer.

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This year’s 250 km ride from Vancouver to Seattle included downed power lines, fallen trees blocking routes, detours,120 km/h winds, outhouses blowing across pit stops and tent accommodations that weren’t there because they just blew away.

Ride 2015 had its own brand of rewards: a sense of accomplishment like no other, the camaraderie that comes from having completed such a challenge, and of course the satisfaction that we, through your support as our clients, are able to make a difference in the constant battle to beat cancer.

Most importantly Team Pospischil / Dexter and our supporters contributed $35,000 to the total $8.4 million raised this year to help conquer a disease that makes Ride 2015 look like a bike ride in a summer drizzle. Worth every wet & stormy minute.

As a Team Marty Homes client, you automatically contribute to raising funds for cancer research and treatment options all year. Through you, we support this cause at every event and with ongoing donations. Thank you for being part of our team.

MARKET UPDATE – Spring 2015

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MARKET UPDATE – SPRING 2015
As I predicted last fall, we have had one of the busiest Spring Market’s on record. March activity was up 38% compared to the same month last year. And detached house prices have been on a steep climb on both the Westside and Eastside. The offshore market is back at full strength for large Westside lots, and the local market has exploded creating a feeding frenzy on Westside entry-level homes, half duplexes, and Eastside houses.

The best way to follow the pricing in our market is to look at the Housing Price Index (*HPI). So, in summary, here is a snap shot of what happened the first three months of 2015:marty banner may 2015

* The HPI benchmarks represent the price of a typical property within each market. The HPI takes into consideration what averages and medians do not – items such as lot size, age, number of rooms, etc. These features become the composite of the ‘typical house’ in a given area.

While sales are increasing, the new listings are decreasing further feeding the rise in prices. This increasing Sales/Listings ratio creates the perfect opportunity to list. If you look at the graphs below you can see how our market pricing is rapidly climbing this year.graphs

 Why are prices climbing so rapidly?
Here are some factors to consider when we speak about Vancouver’s real estate market:

» The fall in oil prices negatively impacts Alberta’s economy and housing market.  When the going gets tough in Alberta, residents flock to BC in droves.
»  The lower Canadian Dollar attracts investors from Asia and the United States
» BC currently has the number 1 economic growth of all provinces in Canada forecasted at 3% for 2015
»BC has delivered a balanced budget for the third year in a row paying its debt down this year by one billion dollars, while the annual deficit of the remaining provinces is expected to break 15 billion dollars
» Rock bottom interest rates make borrowing money so cheap it makes no sense to buy with cash even if you have it.
» Consumer confidence is rising and buyers are much more confident in our economy and the stability of the long-term real estate market in Vancouver.
» When the sun finally shines in Vancouver, there really is no better place on earth to be. We have the ocean, the mountains, good schools, safe neighbourhoods, clean drinking water, a booming free enterprise economy, rock solid banking system, and an ethnic mix creating the flavors and colours we Vancouverites have come to enjoy!

Mamortgage rates May 2015rty’s magic window – What can we expect? If we have already seen 5% increases in detached prices across Vancouver, it is not unreasonable to expect house prices to increase at least 10-15% this year.  As long as that external demand for land continues, and interest rates stay low (and there is no sign they won’t), we can expect a good 3 year run on this market surge.

The Real Estate Timing Analysis
When should I be selling my home? One of the things we cover when we
meet with you is our Real Estate Timing Analysis.  We track all the sales data over the past 5 years and tabulate this data into one easy to follow Stats Package that enables us to make informed timing decisions for our clients.  When the sales activity patterns are graphed year after year we see definite patterns defining ‘Sellers Markets’ and ‘Buyers Markets’ throughout the year.  The interestingTREE MAY 2015 point is that the patterns repeat themselves year after year.

Why is timing important? Well, for example, if you were able to time the sale
of your existing home in a Seller’s Market and offset the purchase of your new
home to a Buyer’s market it will mean substantial gains in both the sell and
buy, in some cases amounting to hundreds of thousands of dollars.  When we
meet with you we will point out these cyclical markets, advise the best timing approach, and show you the tools we use to make this possible without you having to move twice.  Its great stuff!

Fall 2013

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REAL ESTATE MARKET UPDATE

The Vancouver real estate market has begun to heat up with a 40% increase in activity for July 2013 in a month-to-month comparison to 2012.  As I predicted back in spring, we saw a delayed Spring Market due to the BC elections holding back the high pent up buyer demand.  Once the results were in, and some consumer confidence returned, the dam began to open resulting in a hyperactive June/July.

The ‘months supply’ (number of months to clear out existing inventory) metric for Vancouver’s Westside has dropped from a 9 month supply earlier in the year to a 5 month supply today – yielding a strong seller’s market as we approach September.  The last few months have been busier than we have seen in 18 months.  This rush in sales has cleared out many of the active listings setting the stage for an extremely active Fall Market.

Bottom line is:  we are approaching what looks like a heated Fall Market where we can expect some strong appreciation in prices across the board.

If you have been sitting outside of the market waiting for prices to hit bottom – wait no longer!  Prices are on their way back and your window to buy back in will not be as large as one might hope for.  So jump back in now before you are priced out of the market.

The pent up demand for homes on the Westside is expected to overwhelm the existing inventory causing a sharp price recovery period over September – October.

For those of you wishing to sell your home – September is your month and the earlier in the month the better.  Adam and I are setting aside the last two weeks in August to meet with clients, advise them on what they need to do to prepare their home for sale, and setup a detailed launch schedule for early September.

Laneway Housing in Vancouver – Including Recent Updates

Laneway housing regulations have been expanding in many local cities and municipalities. These homes are typically built on the back yard of an existing lot with an already exiting home on it opening onto the lane. The City of Vancouver passed some new regulation changes in June that affect the size/ style of laneways that can be built.

The BC government since 2009 has amended the Strata Property Act and Regulations a few times.

There are many reasons to build a Laneway, some of them may include:

•To provide housing for many occupants such as aging family members, adult children, caregivers,  and homeowners looking to downsize.

•More rental options in single family neighborhoods.

•More opportunity to live within the City of Vancouver.

Some of the general guidelines are as follows:

•The property must be serviced by an open lane, dedicated lane, or have a street on the front and back of the property.

•The property must have 32.15ft of frontage, or a property greater than 24ft of frontage can be  granted special approval.

•The laneway must be set back 16ft from the main house.

•A 3ft fire access path must run from the front street to the laneway.

Some of the recent changes now allow for:

•Single storey laneway homes with greater floor area

•Basements in laneway homes

•Laneways are allowed in every “RS” single family zoning district (which opens it up to most single  family homes in Vancouver)

•Larger floor area and square footage for many situations

•The maximum floor area of a laneway house is determined by multiplying the lot area by 0.16. I.E.  on a standard 33’X122’ lot a laneway can be around 644sq ft., and on a 50’X122’ lot a laneway can be roughly 900sq ft., also 900sqft is the max regardless of lot size. These square footage limits also include the parking area.

There are several companies that specialize in the construction of laneway homes in Vancouver.

The most recent bylaws can be found in the Zoning & Development Bylaw 3575 section-  11.24  at this website: https://vancouver.ca/your-government/zoning-development-bylaw.aspx or by calling 604-873-7611.

Updates to the Strata Property Act

There have been some more recent updates to the strata property act you may or not be aware of, the changes are to address concerns found in province-wide consultation with owners, managers, and real estate professionals.  There have been some important changes you should be aware of.

►Deprecation Reports – All Strata’s greater than four units must complete a depreciation report by December 13, 2013 unless the strata corporation votes to be exempted with a ¾ vote. Depreciation reports outline capital and mechanical systems in the building, what life is left in them, and approx. costs needed when repair or replacement is required.  Basically it is a great tool for buyers to review and identify upcoming costs for building work. It also will help stratas plan better for upcoming building needs both financially and logistically.

►Form B (Information Certificate) – A Form B information certificate outlines a snap shot of the building, and strata lot it is prepared for. It contains important information like: what the strata fees are, the contingency reserve fund amount, and if there is any pending litigation etc. As of January 1,2014 the following must also be included with the Form B: copies of the rules, the current budget, the most recent deprecation report mentioned above, and any rental disclosure statements. The Form B will also outline the allocation of parking and storage lockers. These are helpful changes in providing buyers more information on the unit, and strata itself.

►Contingency Reserve Fund – By majority vote the strata corporation can now make additional contributions to the contingency reserve fund above 25% of the operating budget.

►Dispute Resolution – Another large change coming is stratas and owners will be able to settle disputes though a Civil Resolution Tribunal System which is under development, this is a large change from the current system in which the only system for dispute resolution is Provincial Court.