My last blog was March 13th of this year. If you are on this page, you have probably read it. My predictions were quite accurate even if I say so myself. Nanny, nanny bo-bo to you! At the same time, I was wrong on “rents stay the same”. Rent, in B.C., has increased 10% on average across the province year to date.
As a local real estate agent I have been busy since mid-May. At times, it crazy busy and at other times just steady. Any “losses” from March, April and May have been recovered and surpassed by production from late May, June, July and August. The past three months have set sales records in my area. The gains cannot be passed off as “buyer frenzy” from the lack of April and May activity. Something has changed. People have changed.
Not all real estate is booming. Yet, some real estate is experiencing multiple offer bidding wars.
Location: “Better” locations are seeing more action. Quiet streets, cul-de-sacs, views and higher end neighbourhoods are winning.
Features: Buyer’s want what they want. Newer single-family homes, pools, triple car garages, waterfront, views and “extras” are helping sellers get multiple offers.
Homes with Suites: Legal suites are helping buyer’s borrow more money-yes. At the same time, having secondary accommodation in a home is a strong trend. Stay at home pandemic orders help.
Why suites? One aspect of interest suited homes that people often ignore is tax creep. Utility costs, increases in taxation and homeownership expenses are pushing people to seek extra income. Growing up my mom could afford a home in a single income – No suite needed. Not today. Local taxation and utility costs are rising more than incomes and a large part of the interest in secondary suites is clearly monthly cashflow.
What’s not hot?
Higher priced older homes that need work are not hot. “Project” homes that require work prior to moving in are still selling but buyer’s are negotiating and expecting a discount. On the opposite end, a “move-in ready” house which is priced a little high will most likely get good activity (showings) and even an offer. If the price is too high but the house is “nice” it would likely see a buyer take a run at a “lowball” offer.
Condo’s and some Stratas are not hot. Recent strata insurance issues have dampened sales of older wood-frame building units. Lenders have also been reluctant to lend on older buildings and we have even seen lenders request a copy of the home inspection reports and deny lending if they don’t like what they see.
Yet, concrete construction and “rentable” condo’s are still a solid play in my opinion.
What does the future hold?
It’s a great time to be working with an experienced real estate agent.
More than ever, prices are in flux. Some up, some down.
The value of features are in flux. Some up, some down.
The number of moving parts in a deal these days is the highest I have ever witnessed. Prices will modulate up and down for the next 12 months. Interest rates, CMHC and gov’t tinkering will have an impact and these changes will appear in 30 to 60 days cycles. So, consult with your agent regularly if you are planning to buy or sell in the near future. Timing the market is not possible yet it is possible to create a flexible plan and see what happens.
Good luck out there!