As night must follow day, prices ultimately are on the heals of supply and demand. The Fraser Valley real estate market was hot this July and that created an interesting situation. Sales in Surrey (which includes Central Surrey, Cloverdale and North Surrey) were up 8.6% from July 2013 (341 vs. 314 sales). White Rock and South Surrey real estate was also heating up with a sales increase of 5.1% over last year’s July (123 vs. 117 sales). But (and you knew that was coming) new listings were slightly down.
The rise in sales is stemming from the demand for single family homes and townhomes. Overall the Fraser Valley had 1,615 sales in July 2014, up 10.9% over last July. Sellers, on the other hand, are still recovering from the downturn in prices from last year and have not yet reacted to demand. That is, sellers are still holding off on listing their home waiting for prices to rebound. Demand is the usher of supply, so sellers will get wind of price increases and new listings will ultimately appear in the MLS listings in the coming months.
The president of the Fraser Valley Real Estate Board, Ray Werger, was quoted as saying that “… our market has fully recovered from last year’s slump and has returned to what we typically see in the Fraser Valley, which is a steady, consistent market”. Good news!
There is a trend towards increasing prices for single family detached homes and townhouses, but a little softening of prices of condos. The reason for this is quite simply, back to the supply and demand concept. The number of new listings of detached homes declined, while there is lots of supply of condos. This creates an excellent opportunity for sellers of single family homes and buyers of single family homes and condos. The South Surrey real estate market has been busy, particularly with all the new developments in the Grandview Corners area.
How can this be? Isn’t it either a buyers’ or sellers’ market, not both. In our complicated real estate landscape you can have both buying and selling opportunities playing out at once. If your home is what the market is seeking, there are tremendous opportunities for a good price. Also, as Mr. Werger said, over time we are in a steady consistent market. The buyer of your home, can look at Fraser Valley trend and feel confident that they too can live in and enjoy a home that is an investment in their future.
In late October, 2013, the first bitcoin ATM in Canada was unveiled at Waves Coffee Shop in downtown Vancouver, BC. On that day, one bitcoin was worth about $200. Today, less than three months later, a bitcoin is worth about $917. Actually, to be specific, at 7pm PST on January 16, 2014, the bitcoin was worth $917.30. I really do have to be specific about the time in case there are fact checkers out there. The value at end of today could be significantly different than the value right now.
Given that volatility, it was interesting that earlier today Global News reported that Quantum Properties, a developer located in Abbotsford, will accept bitcoins for deposits on property purchases of their residential developments. Quantum is not aware of any other developers accepting bitcoins, so they are certainly forging a new path in real estate. Diane Delves, the president and CEO of Quantum, believes that bitcoins are the way of the future and she's willing to accept the volatility in her business model.
Bitcoins are a virtual unofficial currency. They are on a long road towards credibility and acceptability in mainstream currency markets. They are complicated (at first blush) and traditionally were a "bit" shady, pardon the pun. Bitcoins originally made headlines by being the currency of choice for Silk Road, an illegal online black market, which has since been shut down.
The recent arrival of the bitcoin ATM in Vancouver, followed by the annoucement today by Quantum, shows that bitcoins are here to stay. The bitcoin ATM is relatively simple to use and newbies to virtual currency can watch an instructional video on Youtube before venturing to Waves. The Vancouver bitcoin ATM transactions are limited by Canadian government regulations to $3,000 per day, making the machine is a bit impractical for real estate purchases.
However; Quantum and other forward thinking real estate brokers and developers can open up a bitcoin wallet account by providing the appropriate documentation and entering the virtual unofficial currency world. Online bitcoin transactions are relatively quick and the fees are fairly insignificant. Bold move Quantum!
Yesterday I received a letter from the City of Surrey essentially saying fess up or pay up if I'm hiding a rental suite. If I had a secondary suite in my house (which I do not Mr. By-law Officer), I am required to fill out the form they attached to the letter and advise the City of Surrey of its existence.
To give you a little history, Surrey Council changed the zoning in 2010 to allow secondary suites in single family homes in Surrey. There was a little time lag, but following that approval in 2011, a secondary suite fee of $495 per year was introduced. Given the failure to disclose a secondary suite will soon be subject to a $1,000 fine, you essentially pay triple if your unregistered suite is sleuthed out by a By-law Officer. The math is you pay $495 if you disclose your rental ... but you pay the fine of $1,000, plus the $495 fee (grand total of $1,495) if you do not.
The City has two "suite" detectives (i.e., By-law Officers) specifically assigned to outing secondary suites. One of the most common ways they have of learning of a secondary suite is by neighbours reporting it. Neighbours often complain anonymously given noise, pets, and the most common trigger of all --- parking.
There are more that 24,000 registered suites in Surrey right now. If you have a secondary suite and have not reported it, I recommend that you take heed of their "grace" period and report it by January 31, 2014 or pay the piper. The $1,000 is per rental suite, not per home. So, if your house has two rental suites, the non-disclosure fee could be $2,000.
Here's the "fess up" form provided by the City of Surrey.
To meet a growing need in our community, and to get an earlier jump on the cold weather, the Realtors Care Blanket Drive is being held a week earlier this year. It starts this Monday, November 18.
The drive is geared towards helping the homeless fend off the cold. As realtors, we'd like to collect gently used blankets and sleeping bags. Clothing to fend off the cold is also accepted, in particular, gently used: coats, jeans, pants, sweaters, scarves, gloves, mitts, hats. New socks and underwear are also gratefully accepted.
There are currently over 400 homeless people in Surrey. It is rewarding to know that all donations collected in a community stay in that community. My office, Homelife Benchmark Realty in White Rock, located at #1 - 1920 152nd Street, White Rock, is one of the drop off locations. If that location is not convenient, a list of drop locations can be found at http://www.rebgv.org/blanket-drive-drop-locations-0
You can also pass any donations on to me and I'll ensure they are dropped off at my Homelife office. If there is another community you prefer to assist, I'm also happy to drop the blankets and clothing off in Langley, North Delta, South Delta, Richmond or New Westminster for you.
Mike Alleyne, 604-785-7066
All eyes were on the Fraser Valley at the recent Canada Mortgage and Housing Corporation (CMHC) annual Vancouver Housing Outlook conference held last Friday. Despite the focus on Vancouver, considerable time was spent discussing the Fraser Valley's future prospects as it's one of the fastest growing regions of not only BC, but also Canada.
CMHC Market Expert on the Fraser Valley, Richard Sam, gave some interesting data. The fastest growing city in the Fraser Valley is Surrey, followed by Chilliwack, Abbotsford and then Langley. Strong economic growth and jobs are attracting people to the Fraser Valley.
Industries leading the local economy are manufacturing, construction, healthcare, retail, and transportation. Also, enhancements to the transportation infrastructure including the Abbotsford Airport are attracting people to the Fraser Valley. Buyers know they can get more for their dollar. Essentially a buyer could get two single family homes for the price of one home in Vancouver. Leading the sales are single family homes with a yard.
The demographics are interesting in the Fraser Valley in that the annual population growth is 1.9 (higher than Vancouver's at 1.7). The two fastest growing demographics are the Millennials (25-39 year olds) and the Boomers (55-74 year olds). Both of these groups generally covet home ownerhsip.
Richard Sam demonstrated that with a 10% downpayment, people are better off buying than renting. That is good news for our real estate market. Even though rents are relatively reasonable in the Fraser Valley, the low interest rates mean that mortgages payments are comparable to rent.
Mike Alleyne 604-785-7066HomeLife Benchmark Realty White Rock
The signs of mid-autumn are all around us. Last weekend, I enjoyed hoisting free pumpkins into passersby cars at the White Rock Homelife Real Estate office. On Halloween night I came home to my 20 year old son dressed up in a costume covered in Jagermeister bottles -- don't ask (I long for the times when I could push him out the door in my favourite hockey jersey). My wife was had all kinds of grey fabric hanging off of black pants and a shirt -- I didn't get it, but it was 50 shades of grey. With the exception of our pets, our family really enjoys autumn, and it’s crown jewel , All Hallow’s Eve -- but to get back to the purpose of the blog, ---- just like Halloween, the real estate market can be a tiny bit scary in the fall.
Real estate markets behave differently in the autumn so the secret is to wrap your head around the market and understand it. This year, mortgage rates are still good, and there are still opportunities to buy or sell homes. Get the stats of the recent market for your area. The Fraser Valley Real Estate Board has not released the October stats yet, but September 2013 showed a 32% increase in sales over September 2012. But, this has not caused any increase in prices because inventory levels have held pace with demand.
Often in fall there are frustrated sellers who have missed the busier summer market. Their reaction is to either re-price their homes or take their properties off the market entirely before the holiday season brings the inevitable market lull. Houses, townhouses, condos and apartments all behave differently. Surrey, Langley, Delta and White Rock homes sales all behave differently from each other. There can also be hot and cool mini housing markets. Talk to your agent about what is happening in your area.
Before dropping out of the real estate market, I recommend both buyers and sellers take the opportunity that the fall market provides. For buyers, late autumn (after the kids are settled in school) is actually a great time to buy a home. Prices have settled back to what is more reflected of the true market value. Beautiful summer gardens do not distract buyers from maintenance issues. Now is the time to really make good and rational housing decisions. Are the gutters draining properly, is the furnace working, does the house smell fresh and free of dampness?
For sellers, remember the importance of the senses and embrace the season. For sight – add fall colours -- pumpkins, gords, mums, fall wreaths or cornstalks at the front door can add decorative homey appeal. For smell, how about apple pie or apple cider, you can whip something up in the kitchen or buy a candle with the appropriate scent. For feel (touch), my suggestion is to ensure the air and surfaces are warm and cozy, the house must be warm and inviting.
If you need an extra bedroom, want to move to a quieter part of town, or just want to upgrade for any reason, the current real estate market provides the perfect opportunity for some.
The FVREB shows that September 2012 homes sales were down 26% over the same month in 2011. People hear this news and panic --- “Ring, ring, realtor take my home off the market”. The For Sale sign is now off the lawn, so they dig out their warm winter woolies and anticipate weathering the real estate market storm. Not so fast …. there may be an opportunity lurking here.
As with all stats, you have to dig a little. The benchmark price for a single family home in the Fraser Valley was $533,400 in September 2011, increasing to $549,500 this September. Yes, that’s right, an increase. Homes in this range continue to sell. The reason is these homes are in the affordable range for many buyers in the market, particularly while interest rates remain low.
What has been hit the hardest are the more expensive single family homes … so dream a little. Is now that time? Opportunities like this do not come by very often. Prices of more expensive homes have dropped significantly in some areas. Also, I'll tell you a little secret, real estate is seasonal and winter is a good time to pick up a bargain. Also, to sweeten the pot a little more, winter is a great time to buy because homes show all their flaws. Is that a water leak ... is it drafty in here? You won't get distracted by the magnificent hydrangea and sun streaming in the windows and will focus on more important aspects of the home.
The old adage about the stock market is buy on bad news, sell on good. For real estate this parlays to trade up in a down market and trade down in an up market.
You can seek advice from your realtor and financial professionals on this, but work through the numbers. There is definitely opportunity in this market, but your financial circumstances have to be right for it.
Very interesting article in CBC New/World written by Neil Macdonald.
Although there are some similarities to the US experience, there are some fundamental differences as well.
Certainly Canadian debt level is a concern (I did blog about this earlier in the month), as it should be... the Toronto/Vancouver housing markets are soft and are undergoing a correction that is expected as a result of the Harper governments policies over the last several years to control the Toronto/Vancouver condo market specifically (as quoted by the Right Honourable Finance Minister), as well as decreased demand from Asian buyers.
The other similarities to the US crash as suggested by Neil Macdonald may be more "doom and gloom" than reality. Bad news sells more than good news.
"The US Government through Fannie Mae and Freddie Mac encouraged malinvestment and speculation. It was the Government guaranteeing home loans through these agencies such as Fannie Mae and Freddie Mac that eliminated risk as the lender would have the ability to make loans while the Government guaranteed its potential losses. As such there was no incentive to lend money conservatively (125% mortgages) as doing so would restrict the number of transactions while not minimizing potential losses since these losses were absent due to the Government guarantees. To make matters worse, Republicans and Democrats alike voted several times to increase the FHA loan limit during the housing bubble. This allowed people to take on greater debt and perfectly illustrates that government subsidies do not lower the price but make the underlying assets more costly. By raising the FHA(Federal Housing Administration) loan limits the Bureaucrats in Washington voted to extend the housing bubble, raise prices, and delay the inevitable correction.
While many self-proclaimed conservatives blame the Democrats for the social programs and anti-free market policies it was President Bush in 2002 who stated that a high down payments are a big barrier to first time owners. During “A Home Of Your Own” conference on May 17, 2002 President Bush urged Congress to use taxpayers money to interfere in the market place by lowering down payments for those that cannot afford to buy a home. During that speech President Bush also explained how the guarantees of home loans by the Government Sponsored Enterprises would streamline the underwriting process and basically neglect the risk variable. President Bush made it clear that his and Congress’ vision is to make homeownership a right and not a privilege."
The "delusion" Mr. Shiller and Drummond suggest Canadians are suffering from mirror the US crash.....that "it will make them rich" is not a valid argument. As pointed out is the article, the subprime mortgages to unqualified buyers was a significant reason for the crash....which we don't have and hopefully never will. Not to mention allowing these agencies to bundle and sell packages to Wall Street when they all knew it was going to fail and in fact bet on the investment to fail.
The underlying Canadian economic indicators are nothing like the US....and the delusion Canadians have is to simply own a home and build some equity.
At the end of the day, it was the irresponsible public agencies, investment bankers and banks that created the conditions and allowed the US bubble to grow and ultimately burst in their lap. They were greasing the slide while blowing up the balloons. Canada has nothing similar that would cause a US like crash. To say "The same sort of thing might well happen in Canada" is speculation at best and is just as easy to say the same sort of thing might well NOT happen in Canada.
So after the thunder clouds clear from the overall tone of the article, they predict a 10 - 15% correction in Canada....ya likely...but maybe not. Aside from Toronto/Vancouver, just about every other market in Canada is performing as it should....quite reasonably thank you very much.
That’s my 2 cents. :)
Condo owners and buyers should be aware of a significant change that will affect strata properties beginning December 14, 2013.
Depreciation Reports will be required with some exceptions. For example, stratas with less than 5 units are automatically exempt, but they may choose to have reports prepared anyway. Other exemptions require a 3/4 vote from it's members. This is great idea and will provide added confidence to purchasers that are considering buying a strata property.
The reports will not only inform buyers, but also current Strata owners of maintenance issues that may have been avoided by Strata Boards until "next year". It should significantly change the way Strata Corporations are managed and issues prioritized. The intent of the reports are to help Stratas better plan for future repair and maintenance costs. They also provide valuable information to purchasers considering your strata unit. Purchasers would get a copy of the latest depreciation report as part of the Form B.
I strongly recommend that potential buyers and strata owners read the full report provided by BC Office of Housing and Construction Standards.
A depreciation report must contain:
- a physical component inventory and evaluation of those components, such as
– the building structure
– the building exterior including the roof, decks, doors and windows
– building systems such as electrical, plumbing, heating, fire, protection and security
– parking facilities and roadways
– balconies and patios;
- a summary of the anticipated maintenance, repair and replacement costs for common expenses projected over 30 years;
- a financial forecasting section that contains at least three cash flow funding models for the Contingency Reserve Fund;
- the date of the report, the qualifications of the author(s), their relationship (if any) to the strata corporation and details on any errors and omissions insurance; and
- information on the common and limited common property (if any), that individual owners are required to repair and maintain.
If you have any questions please don't hesitate to call me directly.
Mike Alleyne, Real Estate AgentHomeLife Benchmark604-785-7066
The Fraser Valley is defying the expected statistical blues by producing a strong July 2012. Sales of MLS listings for the Fraser Valley Read Estate Board (FVREB) for July were 1,391, that's 5% higher than July 2011 (sales of 1,322).
There were 10,813 listings on the FVREB at the end of July 2012 (which includes 2,928 new listings added in July). For sellers this means that the number of listings are higher than average but the market is considered "stable". The reason it is stable is that sales are slow but steady. The steady sales are mostly from townhomes sales which have greater affordability than detached homes. In July 2012 there were 25% more townhome sales than July 2011 (condo sales were also up, but by 7%). Ther average selling price of a single family home throughout the Fraser Valley was $551,400 which was higher than 2011 by 3.4%.
The FVREB emphasizes location is paramount in determining sales prices. Prices are up by 8% in some areas and down by 5% in others. The two main factors are location and property type.
If you'd like a free comparative market analysis, call me, at 604-785-7066