Thursday, March 28, 2013

Canadian Monthly GDP Growth

The Canadian economy grew 0.2 per cent in January, reversing a similar decrease in December. January's economic growth was lead by a 1.2 per cent rebound in manufacturing output from a 1.9 per cent decline the previous month as well as gains in mining and oil and gas extraction and wholesale and retail trade. A pick-up in housing market activity reversed a three month decline in the output of real estate agents and brokers which rose 0.4 per cent. 

Our first quarter GDP growth estimate is currently reading 1.6 per cent (at an annual rate), a significant improvement from the 0.6 per cent rate that prevailed in the second half of 2012. We anticipate that growth will continue to be modest through the first half of 2013 before accelerating in the second half of the year and into 2014.

Copyright BCREA -reprinted with permission

Wednesday, March 27, 2013

Buyers Value Storage Space, In-Law Suites, NAR Survey Finds

Purchasing a home is an important life decision, and many factors can influence the home choices buyers make.

The National Association of Realtors® 2013 Profile of Buyers’ Home Feature Preferences examines the features buyers prefer when it comes to purchasing a home, as well as the differences in preferences when it comes to factors such as region, demographics and household composition. The survey captures buyers who purchased a home between 2010 and 2012.

“Deciding where to live comes with a lot of options, but buyers quickly realize that some features are more important than others when it comes to choosing the right house for them,” said NAR President Gary Thomas, broker-owner of Evergreen Realty, in Villa Park, Calif. “Buyers need to have a clear idea of what features are important to them and know where they are willing to compromise; in this respect, Realtors® can bring buyers home. Realtors® visit hundreds of homes with buyers each year, and have a unique understanding of what buyers value in their local markets.”

Geography and demography strongly influence what buyers value in a home. The typical recently purchased home was 1,860 square feet and was built in 1996. Repeat buyers, buyers of new homes, married couples and families with children typically purchased larger homes. First-time buyers and single women tended to buy older homes. The typical buyer purchased a home with three bedrooms and two full bathrooms. Slightly over half of the homes purchased were on a single level.

Southerners tend to buy newer homes; they were more likely to want a home less than five years old and in a wooded lot with trees when compared to other regions. Not surprisingly, buyers in the South also placed a higher importance on central air conditioning.

While more than three-fourths – 78 percent – of all buyers purchased a home with a garage, garages were more popular among new-home buyers, Midwesterners, and suburbanites. Forty-one percent of homes purchased had a basement, but this feature was more popular among buyers in the Midwest and Northeast. Northeastern buyers also value hardwood floors more than people in other regions. Southerners typically bought the largest home at 2,000 square feet. Those in the Northeast followed closely behind with a typical home purchase of 1,850 square feet.

Among buyers 55 and older, 42 percent considered finding a single-level home very important, compared to just 11 percent of buyers under age 35. Single women also placed higher importance on single-level homes, while single men wanted finished basements. Both single men and married couples placed higher importance on new kitchen appliances.

Among all 33 home features in the survey, central air conditioning was the most important to the most buyers; 65 percent of buyers considered this feature very important. The next most important feature was a walk-in closet in the master bedroom; 39 percent of buyers considered this feature very important. Closely behind was having a home that was cable-, satellite TV-, and/or Internet ready, as well as an en-suite master bathroom.

When it came to actually buying a home, among buyers who considered central AC and cable-, satellite TV-, and/or Internet ready very or somewhat important, 94 percent bought a home with these features. The next most common feature was an eat-in kitchen; 89 percent of buyers who thought this was important purchased a home with an eat-in kitchen.

Buyers value some features so much that they are willing to spend more money to have them. Sixty-nine percent of buyers who did not purchase a home with central AC would be willing to pay $2,520 more for a home with this feature. Sixty-nine percent of buyers who did not purchase a home with new kitchen appliances would be willing to pay $1,840 more for a home with this feature. A walk-in closet in the master bedroom was the third most common feature on which buyers would spend more. Sixty percent of buyers who did not purchase a home with a walk-in closet would be willing to pay $1,350 more for a home with this feature.

The features on which buyers placed the highest dollar value were waterfront properties and homes that were less than five years old. Thirty-two percent of buyers would be willing to pay a median of $5,420 more for a home on the waterfront, and 40 percent of buyers would be willing to pay a median of $5,020 more for a home that was less than five years old.

The rooms that buyers were willing to pay the most for were a basement and an in-law suite. Thirty-three percent of buyers would be willing to pay a median of $3,200 more for a home with a basement, and 20 percent of buyers would be willing to pay a median of $2,920 more for a home with an in-law suite.
When it came to rooms that buyers want in a home, 55 percent of buyers thought it was very important to have a living room, although buyers in the Northeast placed more importance on a home with a dining room. Buyers aged 55 and older placed more importance on a bedroom on the main level of the house. Buyers aged 35 to 54 placed more importance on a laundry room, while those with children placed more importance on a family room.

The two most common rooms buyers were willing to spend more for were a laundry room and a den/study/home office/library. Sixty-three percent of buyers who did not purchase a home with a laundry room would be willing to pay $1,590 more for a home with this room. Forty-four percent of buyers who did not purchase a home with a den/study/home office/library would be willing to pay $1,920 more for a home with this room.

Although 97 percent of recent buyers were satisfied with their home purchase, there are always features buyers would like that they don’t have, said NAR Vice President of Research Paul Bishop. “Most satisfied homeowners still said they would like more or larger closets and storage space. In addition, nearly half of recent buyers would prefer a larger kitchen, and two out of five would prefer a larger home overall.”
Within three months of a home purchase, 53 percent of buyers undertook a home improvement project. The typical buyer spent $4,550 on various projects. Remodeling the kitchen was the most common home improvement project; 47 percent of buyers undertook a project in the kitchen. Bathrooms were a close second at 44 percent. Forty-one percent of buyers who made home improvements added or replaced lighting, and 37 percent added or replaced appliances soon after becoming a homeowner.

In October 2012, a sample of households that had purchased any type of residence real estate during 2010 to 2012 and still owned the property was surveyed. The survey sample was drawn from a representative panel of U.S. households monitored and maintained by an established survey research firm. A total of 2,005 qualified households responded to the survey. Households were sampled to meet age and income quotas representative of all home buyers drawn from the 2011 NAR Profile of Home Buyers and Sellers.

Copyright NAR  

USA Existing-Home Sales and Prices Continue to Rise in February

February existing-home sales and prices affirm a healthy recovery is underway in the housing sector, according to the National Association of Realtors®. Sales have been above year-ago levels for 20 consecutive months, while prices show 12 consecutive months of year-over-year price increases.
Total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 0.8 percent to a seasonally adjusted annual rate of 4.98 million in February from an upwardly revised 4.94 million in January, and are 10.2 percent above the 4.52 million-unit level seen in February 2012. February sales were at the highest level since the tax credit period of November 2009.
Lawrence Yun, NAR chief economist, said conditions for continued housing improvement are at play. "Job growth in the improving economy and pent-up demand are causing both home sales and rental leasing to rise. Though home prices are rising much faster than rents, historically low mortgage rates are still making home purchases affordable," he said. "The only headwinds are limited housing inventory, which varies greatly around the country, and credit conditions that remain too restrictive."
Total housing inventory at the end of February rose 9.6 percent to 1.94 million existing homes available for sale, which represents a 4.7-month supply 2 at the current sales pace, up from 4.3 months in January, which was the lowest supply since May 2005. Listed inventory is 19.2 percent below a year ago when there was a 6.4-month supply.
The national median existing-home price3 for all housing types was $173,600 in February, up 11.6 percent from February 2012. The last time there were 12 consecutive months of year-over-year price increases was from June 2005 to May 2006. The February gain is the strongest since November 2005 when it was 12.9 percent above a year earlier.
"A strong rise in home values is contributing to housing wealth recovery, which has risen by $1.4 trillion in the past year and looks to top that increase this year," Yun said. "The extra consumer spending arising from growth in housing wealth is expected to be $70 billion to $110 billion this year."
Distressed homes4 - foreclosures and short sales - accounted for 25 percent of February sales, up from 23 percent in January but down from 34 percent in February 2012. Fifteen percent of February sales were foreclosures, and 10 percent were short sales. Foreclosures sold for an average discount of 18 percent below market value in February, while short sales were discounted 15 percent.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 3.53 percent in February from 3.41 percent in January; it was 3.89 percent in February 2012.
NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, Calif., said interest rates remain extraordinarily low. "In the history of mortgage interest rates since 1971, the 30-year fixed rate has been below 4 percent in only 15 months, and those have all been in the past 15 months," he said. "Even with rising home prices, affordability remains historically favorable because home prices over-corrected during the downturn. This means there is still great value for buyers in the current market."
The median time on market for all homes was 74 days in February, which is 24 percent below 97 days in February 2012. Short sales were on the market for a median of 101 days, while foreclosures typically sold in 52 days and non-distressed homes took 77 days. One out of three homes sold in February was on the market for less than a month.
First-time buyers accounted for 30 percent of purchases in February, unchanged from January; they were 32 percent in February 2012.
All-cash sales were at 32 percent of transactions in February, up from 28 percent in January; they were 33 percent in February 2012. Investors, who account for most cash sales, purchased 22 percent of homes in February, up from 19 percent in January; they were 23 percent in February 2012.
"There was an upward bump in the shares of investor and all-cash closed purchases in February. These sales result from purchase offers during the holidays when shopping activity by traditional home buyers slows, but investors, who typically pay cash, remained active," Yun said. "This is a seasonal pattern, but we're now seeing a general increase in buyer traffic, which is 25 percent above a year ago."
Single-family home sales slipped 0.2 percent to a seasonally adjusted annual rate of 4.36 million in February from an upwardly revised 4.37 million in January, but are 8.7 percent above the 4.01 million-unit pace in February 2012. The median existing single-family home price was $173,800 in February, which is 11.3 percent higher than a year ago.
Existing condominium and co-op sales rose 8.8 percent to an annualized rate of 620,000 in February from 570,000 in January, and are 21.6 percent above the 510,000-unit level a year ago. The median existing condo price was $172,500 in February, up 13.9 percent from February 2012.
Regionally, existing-home sales in the Northeast fell 3.1 percent to an annual rate of 630,000 in February but are 8.6 percent above February 2012. The median price in the Northeast was $238,800, which is 7.6 percent above a year ago.
Existing-home sales in the Midwest slipped 1.7 in February to a pace of 1.14 million but are 12.9 percent above a year ago. The median price in the Midwest was $129,900, up 7.7 percent from February 2012.
In the South, existing-home sales increased 2.6 percent to an annual level of 2.01 million in February and are 14.9 percent above February 2012. The median price in the South was $150,500, up 9.3 percent from a year ago.
Existing-home sales in the West rose 2.6 percent to a pace of 1.20 million in February and are 1.7 percent above a year ago. With limited choices and multiple bidding, the median price in the West rose to $237,700, which is 22.7 percent above February 2012.

Canadian Consumer Price Inflation

Canadian consumer price inflation picked up marginally in February, registering 1.2 per cent year-over following a 0.5 per cent increase in January. The Bank of Canada's core inflation index, which excludes the eight most volatile components of the CPI like energy and food, rose 1.4 per cent year-over-year in February, a moderate acceleration from January's 1 per cent increase.  Inflation in BC registered only 0.9 per cent year-over-year in February. 

Subdued by sluggish growth in the Canadian economy over the past six months, inflation continues to trend well under the Bank of Canada's two per cent target.  As economic growth improves in the latter half of 2013 and into 2014, inflation should gradually move back toward 2 per cent. Until then, we expect that the Bank of Canada will remain on hold and that longer term interest rates that impact mortgage pricing will hold near historic lows.  

Copyright BCREA - reprinted with permission

Thursday, March 21, 2013

Canadian Retail Sales

Canadian retail sales rose 1 per cent in January, with gains reported in 7 out of 11 retail subsectors. Adjusting for inflation, retail sales were roughly flat. With today's retail sales release, we have a full month of data for our quarterly Canadian GDP tracking estimate. While there isn't much we can tell from just one month, there are signs that real GDP growth has picked up from the sub-1 per cent level that prevailed in the second half of last year. That said, growth is still likely to come in at modest 1 to 1.5 per cent in the first quarter.

Retail sales in BC rose 1 per cent over December but were unchanged year-over-year. We anticipate that, in spite of a stronger labour market, BC retail sales will continue to grow well below trend at between 3 and 4 per cent in 2013. This would mark the third consecutive year of weak sales growth.

Copyright BCREA -reprinted with permission

Canadian Manufacturing Sales

Canadian manufacturing sales began the year on a down note, declining 0.2 per cent in January, the fourth decline in the last five months.  However, weakness was not broad  based with just 7 of 21 manufacturing sectors posting declining sales.   Adjusting for inflation, Canadian manufacturing sales were 0.4 per cent lower.

Sales in the BC manufacturing sector rose  2.1 per cent in January, and were 1.4  per cent higher year-over-year.
BC manufacturing growth continues to be lead by a strong rebound in the forestry sector as evidenced by a 19 per cent year-over-year increase in wood products. We anticipate the rebound in wood product shipments to be an ongoing story through 2013 as the US housing sector gains strength. Today's US housing starts data showed that homebuilders down south broke ground on 917,000 homes at a seasonally adjusted annual rate while building permits advanced to their strongest level since June 2008. 

copyright BCREA -reprinted with permission

Housing Market Update (March 2013)

Copyright BCREA - rebroadcast with permission

Wednesday, March 20, 2013

Home Sales Continue at Modest Pace: Pent-up Demand Growing

The British Columbia Real Estate Association (BCREA) reports that a total of 4,501 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC during February, down 23.6 per cent compared to February 2012. Total sales dollar volume was down 29.9 per cent to $2.39 million. The average MLS® residential price in the province was $514,134, up 3.1 per cent from January, but down 8.1 per cent from a year ago.
"BC home sales continued at a modest pace in February,” said Cameron Muir, BCREA Chief Economist. “Despite improved affordability, many potential buyers and sellers remain in a holding pattern. With pent up demand now becoming latent in the market, it’s not a matter of if, but when home sales rise above their current pace."
“An unusual spike in the average MLS® residential price in February 2012 is largely responsible for the year-over-year percentage change,” added Muir. “Most BC markets have experienced relatively stable price levels during the first two months of the year.”
Year-to-date, BC residential sales dollar volume declined 24.6 per cent to $4.1 billion, compared to the same period last year. Residential unit sales dipped 19.6 per cent to 7,911 units, while the average MLS® residential price was down 6.2 per cent at $523,117.
Copyright BCREA - reprinted with permission
Mortgage Rate Outlook 
Although there have been a number of ups and downs in the Canadian mortgage market over the past 12 months, there was very little movement in posted mortgage rates. In fact, volatility in mortgage rates, as measured by a rolling 52-week standard deviation of posted five-year rates, is at a multi-decade low. With growth and inflation remaining relatively subdued and the Bank of Canada on the sidelines for all of 2013, the unprecedented low volatility in Canadian mortgage rates is likely to continue for much of the year.  
While posted mortgage rates remain relatively constant, some chartered banks have recently re-ignited a small furor by again offering below 3 per cent five-year fixed rates to help spur spring-time demand following a nationwide slowdown in home sales activity. We expect that, disapproval from Ottawa notwithstanding, lenders will continue to offer steeply discounted rates to their most credit worthy borrowers while leaving their official posted rates constant. We are forecasting that the five-year fixed rate will remain at 5.24 per cent, and the one-year rate at 3 per cent for most of 2013 before gradually rising toward the end of the year as the outlook for economic growth improves.
The primary risk to our outlook is that growth in the global and Canadian economy will outperform current expectations. Faster growth could cause bond yields to quickly rise off of their current near historic lows, thereby forcing banks to re-price their mortgage offerings.
Economic Outlook
The second half of 2012 saw the Canadian economy post its weakest rate of growth since the 2009 recession, expanding at an average annual rate of just 0.6 per cent. Moreover, there is reason to believe that growth will continue to underwhelm in 2013. Excluding recessionary periods, consumer credit is currently expanding at its slowest pace in decades as households look to de-leverage following several years of low-interest debt accumulation. Slower credit growth will likely constrain consumer spending and the economy will require a greater contribution from exports and business investment.  
However, a pivot to investment driven growth appears unlikely given that anticipated investment for 2013 is set to rise just 1.7 per cent, the smallest increase since 2009. Add-in a still struggling global economy and you have a Canadian economy that will likely struggle through much of 2013, posting growth of just 1.5 per cent.
However, there are reasons to be optimistic about the second half of this year and beyond. Following nearly seven long years, the US economy is set to finally post sustained economic growth, led by a resurgent housing market and a reprieve from a seeming endless string of economically injurious congressional battles. A strong US economy will help lift Canadian economic growth in 2014, though headwinds from potentially higher interest rates and slower residential construction may limit growth to around 2.6 per cent.
Interest Rate Outlook
With an expanding output gap and inflation trending well below its 2 per cent target, it is natural to ask if the next move by the Bank of Canada is a rate cut rather than the rate hike that almost all economists have penciled into their forecasts. Economists tend to evaluate the ‘rightness’ of monetary policy using estimated policy rules. That is, a formula for setting interest rates in a way that is consistent with the goals of the central bank. In the Bank of Canada’s case, that means stabilizing inflation around a target rate of 2 per cent. Using an interest rate rule that closely matches past Bank of Canada rate-setting behaviour, along with the most recent Bank of Canada forecast, we can see that the interest rate path that gets inflation back to 2 per cent is still consistent with the next rate move being up.
Besides that, the Bank is also unlikely to lower interest rates since doing so would run counter to a year of loudly exhorting households to cut back on debt. Instead, the Bank will likely continue to use forward guidance about the need, or lack thereof, for future rate hikes in order to influence long-term rates and the Canadian dollar lower. The combined effect of which should provide continued stimulus to the Canadian economy.
Copyright BCREA – reprinted with permission



3725 Cemetery Rd

3725 Cemetery Rd
Wide open spaces. With great sun and approximately 2 useable acres in Krestova, this 1994 mobile home has 2 bedrooms and two full baths. The master bedroom has a walk in closet and ensuite bath. The addition creates a nice entry/office space and adds to the functionality of the floor plan. Water is from a well on the property that is shared with the neighbouring home. There is an established garden area but lots of room to expand on this gently sloped property.
MLS # K218683


Monday, March 11, 2013

Housing Market Forecast

·         Housing starts are forecast to total 28,800 units in 2013, up from 27,465 units in 2012. In 2014, housing starts are forecast to total 30,100 units.

·         Resale transactions in 2013 are expected to reach 73,000 units, up from 67,637 sales in 2012. In 2014, resale transactions will increase further to 79,500 sales, remaining below the ten-year average.

·         Provincial resale markets are expected to move from buyers’ to balanced conditions in 2013. Compared to an average MLS® price of $514,836 in 2012, existing home prices are forecast to essentially hold steady in 2013 at $511,200, before rising to $524,000 in 2014.

Economic Outlook

Economic fundamentals are forecast to improve with job growth concentrated in full-time employment and the provincial population continuing to expand. Increased non-residential investment and consumer spending are expected to be accompanied by a slightly stronger global outlook in 2013, resulting in a modest pick-up in economic growth this year and next.

Through the third quarter of 2012, net international migration has been higher than year earlier levels and this trend is forecast to continue adding to the province’s population, particularly in the larger urban centres. The interprovincial outflow recorded in 2012 is forecast to turn around in 2013 as job opportunities draw more people to the west, which is expected to continue over the forecast horizon, further supporting the housing market in 2014. 

While the housing market in British Columbia is forecast to benefit from an improving economic outlook over the forecast horizon, risks to the outlook are reflected in a range of forecasts. Following a level of 27,465 total housing starts in 2012, the forecast for total housing starts ranges from 27,200 units to 30,400 units in 2013. In 2014, the forecast ranges from 27,200 to 33,800 units.

Housing Market Outlook

Reflecting better economic prospects in British Columbia going forward, the outlook for the province’s housing market in 2013 is for an increase in existing home sales and new home construction when compared to last year. However, both sales and new construction are forecast to remain below their ten-year averages. Home prices are expected to remain essentially stable in 2013. Expected stronger economic and employment growth in 2014 will lead to higher levels of resale activity and new home construction, as well as modest home price growth next year. Both single detached as well as multiple-family construction levels are expected to increase in 2013 and 2014.  

Single-detached housing starts are forecast to rise to 9,100 units in 2013 and to 9,500 in 2014, compared to 8,333 units in 20123. However, single detached housing starts will remain below the ten-year average of roughly 11,700 units. In the province’s larger housing markets of Vancouver and Victoria, densification, the high cost of land, and mobility are some of the factors contributing to the shift away from single-detached construction towards more multiple-family construction. Together these two markets accounted for three-quarters of the province’s total housing starts in 2012, and 88 per cent of multiple family housing starts.  

Multiple-family housing starts are forecast to reach 19,700 units in 2013 and increase further to 21,000 units in 2014, compared to 19,132 units in 2012. Housing starts of apartment condominiums, row and semi-detached homes are forecast to rebound in early 2013 following a slowdown in the fourth quarter of 2012. This upward trend is expected to continue into 2014. Building permits have been issued for several large scale projects in the Vancouver CMA and, with site preparations currently underway, these projects are expected to start construction in early 2013.

Resale transactions in 2013 are expected to reach 73,000 units, up from 67,637 sales in 2012. In 2014, resale transactions will increase further to 79,500 sales. Despite these gains, the level of sales over the forecast horizon will remain below the ten-year average of roughly 86,500 units. While employment and population growth would suggest a higher level of resale activity than projected, a number of factors are dampening sales. These factors include a reduced inventory of homes for sale as some sellers choose to let their listings expire rather than accept lower prices and buyers taking a wait-and-see attitude as existing home prices moderate in the Vancouver and Victoria housing markets. 

Compared to an average MLS® price of $514,836 in 2012, existing home prices are forecast to essentially hold steady in 2013 at $511,200, before rising to $524,000 in 2014. On a quarterly basis, resale home prices are forecast to grow at a rate consistent with overall consumer price inflation.  

Copyright Canadian Mortgage and Housing Corporation

Canadian Housing Starts and Employment

Housing Starts

Following a woefully low 158,000 units in January, Canadian housing starts registered 180,719 units
at a seasonally adjusted annual rate (SAAR) in February. However, new home construction is trending lower. On a year-over-year basis, housing starts were down 10.5 per cent.

New home construction in BC urban centres rose 2.1 per cent month-over-month in February to a seasonally adjusted annual rate of 22,000 units.  However, on a year-over-year basis, total starts were 29 per cent lower than February 2012. Single-detached starts were 29 per cent higher over last year, while multiples fell 40 per cent compared to February 2012.

Looking at census metropolitan areas (CMA) in BC, Vancouver CMA starts fell 41 per cent year-over-year in February. Single-detached starts were 43 per cent higher than last year, while multiples were almost 50 per cent lower.  New home construction in the Abbotsford CMA was up 86 per cent compared to February  2012 due to a burst of activity in multiples starts. Similarly, housing starts in the Kelowna CMA shot up 89 per cent over last year. In the Victoria CMA, total starts dipped 1 per cent.


After a slight decline in January, hiring in the Canadian economy picked up in February adding 51,000 new jobs. The National unemployment rate remains at 7 per cent.

After sputtering to start the year, employment growth in BC jumped in February. Employment in BC expanded by 19,800 jobs in February, including 13,500 full-time jobs. The BC unemployment rate remained constant at 6.3 per cent.

Copyright BCREA - Reprinted with permission

Wednesday, March 6, 2013

4129 Lower Krestova Rd


 Here it is, just what you have been waiting for, the ultimate opportunity to enjoy the Kootenay lifestyle. Just 15 minutes to Nelson and Castlegar with nature at your doorstep, this beautiful 10 acre, Crescent Valley property comes with 300’ feet of water frontage that is easily accessed via a quick stroll down a well defined path. The home is a 3 bedroom 2 bath comfortable rancher with wood stove and a beautiful covered deck off the back. There is a detached 20 x 30 workshop that is wired plus chicken coop and small barn both with fenced enclosures. Good sun exposure boosts the mature fruit trees and productive garden area. This rural property has it all. 


Help A Seller Out: 5 Tips Buyers Would Give Sellers if they Could

By Tara-Nicholle Nelson,'s Real Estate Realist

It is a rare occurrence these days to have a home’s buyer and seller sit down around the kitchen table to make a deal. In some areas, they do still sit around the attorney’s boardroom table to close the deal, but by that time, the deal is done and the ship has already sailed on any avoidable mistakes.

So in the vast majority of home sales, buyer and seller never connect in person, never talk, and never exchange insights or information except in the most formal, written formats - despite being effective business colleagues in one of the single most important transactions of their lives. And here’s the rub: buyers sit on a wealth of knowledge that sellers crave to know, most of which could be filed under how to attract buyers and make them want to buy a home (or at least, not turn them off). So, since buyers and sellers can’t get together, allow me to reveal a handful of helpful insider insights that the buyers I’ve worked with and connected with over the years would reveal to sellers, if they could.

1. You should see what your home looks like online. No, really.
If you did your due diligence before listing your home for sale, met with agents and reviewed their marketing plan they use for their listings, chances are good that you chose an agent who takes online marketing very seriously and said as much during your listing interview. But somehow, there are still hundreds of listings in every major city that receive a failing grade on their online presence, once the home has actually been listed.

Every day, online listings are activated on Trulia and all across the real estate web with:

  • only one or two pictures
  • no pictures at all
  • multiple photos that represent the home very poorly or show it in its worst light, in terms of the shots selected and included in the listing (e.g., photos focusing on the dumpster in front of the house, or the messy breakfast dishes on the table), or
  • listing descriptions that bemuse us buyers, but would befuddle and even anger the homeowner, like the homes whose descriptions start off with the attention grabbing: “This place is a mess!”

Sometimes, there’s just a glitch along the production chain that it takes to get a property marketed; other times, there’s an actual error in judgment that took place. But it’s free for you, seller, to hop online and just do a quick audit of the way your home is represented in the same listings, virtual tours, and property websites that buyers will see. And it’s often the only way these glitches will get caught, brought to the agent’s attention and rectified. So you should.

2. If your home is seriously overpriced, I’ll wait for the price to come down before I even come see it. You might be thinking the best plan of action is to list your home high, planning on the fact that prospective buyers will want to bargain the price down. And, in fact, this might be true for your area - your agent can brief you on what the standard negotiation practices in your neck of the woods are, and you two can then work together to factor them into your pricing strategy.

That said, even in an area where homes generally go for below-asking, buyers are willing to do some basic negotiation. They are not, generally, interested in correcting a seller’s belief system about their home and its value that are clearly not based in the realm of reality. That seems daunting and like too much work to do - as well, there are so many properties to see, and buyers have to invest so much time, energy and emotion in making an offer, they don’t like to do that in cases where the seller’s list price is so bizarrely above-market that the chances of coming to a meeting of the minds about price are slim.

If your home is dramatically overpriced, compared to the others in the area or compared to it’s market price range, most serious home buyers in the market for a home like yours will either (a) never come see it, because it doesn’t show up in the price range they are searching online, or (b) not come see it unless and until you drop the price, because it simply isn’t worth their time and energy until you correct your pricing into the realm of the realistic.

3. There are a whole lot of fish in the sea - I only have to find one. Agents and mortgage brokers talk to buyers a whole lot about compromising, and what they can expect on the market as a whole, and such. But my reality is this: home buyers are not in the business of market analysis. They are in the business of finding a home. Only. One. Home.

Yes, ultimately, every buyer has to make some compromises. No home is perfect, and every person who buys a home eventually gets that. But even in a heating market like the one we’re in right now, there are lots of homes coming onto the market every single day. Any given buyer only has to find one that works for them. To buy your house - any house - that buyer really does need to feel inspired by it enough to feel like it could work for their family, their needs and their life as their home.

If you take shortcuts when it comes to primping and prepping your home for the market, it becomes super obvious to buyers when they scrutinize it, even if it’s really priced well. On the other hand, the homes that were well cared for, prepared and priced shine above the others, at every price point.

4. If I nitpick your house, that probably means I like it. Every buyer’s broker has a horrific moment, at some point in their career, where they realize their buyer has been trash talking a home - its nasty wallpaper, vomitrocious carpet, silly stylistic choices, etc. and so forth - and the home’s seller has managed to overhear this diatribe. The pool boy who was at the property turns out to be the seller’s son, the sellers turn out to have been next door or in the basement through the entire showing, or the teddy bear-cum-Nanny Cam has advanced audio capabilities.

Here’s why this horrifies buyer’s agents: the buyer that goes to all that trouble to dissect precisely what they would do differently if a given house belonged to them is a buyer who is thinking about making an offer on that very house.

The more questions, critiques, nitpicks, “What I would do’s” and such a buyer rattles off about a home, the more likely they are to make an offer on it. Of course, the occasional curmudgeonly amateur designer likes to just rip other’s decor choices apart for the fun of it, but many otherwise lovely individuals do this when they get serious about a home as part of the exercise of visualizing the property as theirs, and envisioning themselves, their families and their stuff in it. This is how buyers take a place that might not be perfectly move-in ready for them, and figure out how they might be able to make it work.

So if you happen to overhear a nitpicky buyer dissecting your home and verbally tearing down walls or ripping up carpet, don’t despair. They might simply be mentally “trying on” your home as their home.

5. When it comes to staging, the bar is high. Really high. HGTV. Houzz. Architectural Digest. All these outlets which constantly publish beautifully designed and decorated homes have influenced what the average American expects their home to look like - and yours, for that matter. Additionally, all the do-it-yourself publications and shows along with the advent of home improvement stores which double as DIY design emporiums have given everyday people of modest means the power to live in beautiful and functional homes, without breaking the bank.

Beyond all this, professional home staging has taken off in recent years, as data has repeatedly shown that staged homes sell faster, for more, and more certainly than homes that are not staged, nor well-prepared by their owners. So not only is your home competing with the homes buyers are seeing on TV and in the magazines, it is also competing with professionally staged homes for sale right in your own neighborhood - homes that the very buyers who will come to see your home will also have seen, possibly right before or after they view yours!

So, if you want to and can afford to have your home staged, do. If you can’t, you should still take the preparation of your home very seriously, and include your agent or a stager you hire for an hour of advice in the process, taking their input on things like:

  • what furniture to get rid of
  • which improvements will get you the most bang for your buck with local buyers
  • and what paint, flooring and other finish materials will appeal to the broadest buyer segment in your area.
These pros often also have contacts with local handypeople, painters, landscapers and other vendors who can get your home ready for market in a time and cost-efficient manner.

Bank of Canada Interest Rate Decision

The Bank of Canada announced this morning that it is holding its target for the overnight rate at 1 per cent.  The Bank sees economic growth in Canada picking-up through 2013, as growth in exports and business investment offset a slowdown in household spending and residential construction.  On inflation, the Bank noted that low core and total CPI inflation have been more subdued than the Bank projected, owing to significant excess capacity in the economy. Given low inflation and what the Bank terms a "constructive evolution of imbalances" in the household sector (meaning a lower pace of debt accumulation), the Bank has walked back its previous rate tightening bias stating that, "current levels of monetary stimulus will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required."

Weak economic growth through the second half of last year will likely bleed into the first half of 2013, which means a continuation of subdued inflation of just over 1 per cent. In fact, the outlook for growth and inflation is weak enough that, if the Bank had not spent the last year voicing concern over the perilous state of household finances, a 25 basis point cut in the Bank’s overnight target would be increasingly likely.  Instead, the Bank will put a future rate hike on hold for the foreseeable future, with rates gradually increasing in 2014.

Copyright BCREA - reprinted with permission

Tuesday, March 5, 2013

Demystifying the Changes to Mortgage Rules

Just met with Francine Gomes, a mortgage specialist with BMO and she passed along the following article which she wrote about the new mortgage rules.

Demystifying the Changes to Mortgage Rules

After speaking with clients, it’s apparent that there are many misunderstandings that persist concerning the mortgage policy changes that have taken effect this year. A BMO Bank of Montreal poll conducted earlier this year by Pollara reflects this, with nearly half (49%) of Canadians indicating they are unfamiliar with the new measures being put in place.

I’ve had clients incorrectly believe that:

·         they now need to have a 20 per cent down payment to purchase a home

·          they are no longer able to refinance their current home

·         if they were in a mortgage with an amortization over 30 years their mortgage would need to be renegotiated to 25 years

All of these beliefs are false. There have, however, been a few changes in 2012 to mortgage lending policy that are currently in effect. They are:

·         the maximum amount that can be borrowed when refinancing a mortgage was reduced to 80 % from the previous 85 % value of a home

·         The maximum amortization from insured mortgages drops to 25 years from 30 years — giving borrowers less time to repay the debt in full.

·         The ban of mortgage insurance on properties over $1 million.

·         New Home Equity Revolving Loans are approved to a maximum of 65% of the value of the home.

So if you currently have a mortgage with an amortization longer than 30 years, you can rest soundly as the bank is not going to have you increase payments to renegotiate it to 25 years. You should be aware, though, that if you apply to refinance at a later date, your new application will be subject to these new mortgage rules. However, if your mortgage is coming up for renewal and you are not looking to increase your mortgage amount; you will also not be affected by this change in amortization period.

If you are purchasing a home as your primary residence, you can do so with as little as a 5% down payment, but you would be limited to a 25 year amortization. The minimum down payment to avoid mortgage insurance premiums is 20%, and in this scenario you can still choose a 30 year amortization.

However, the benefits of a shorter mortgage means you pay less in interest, saving thousands of dollars in interest costs over the life of your mortgage – meaning you can have a mortgage burning party sooner and allowing you to get a head start on other financial goals such as saving for retirement.

A shorter amortization period also allows homeowners to begin building home equity sooner. This equity can then be used to finance other important life events, such as post-secondary education for your children, a family vacation property or renovation and expansion of your current home.

For all you’re home financing questions and for advice about your particular scenario please do not hesitate to contact me, Francine Gomes, BMO Mobile Mortgage Specialist, locally serving the West Kootenays, at 1-877-680-9225. As a mobile mortgage specialist I’m able to meet you when and where it’s convenient for you. Mortgage expertise at your doorstep 24/7.

Francine Gomes
Mortgage Specialist
BMO Bank of Montreal
West Kootenays
Office: 250-365-8919

Fax: 250-365-8921

Cell: 250-513-0042 or 1-877-680-9225


Canadian Q4 Real GDP Growth

The Canadian economy weakened significantly in in the second half of 2012, posting growth of just 0.6 in both the third and fourth quarter respectively. For all of 2012, the Canadian economy expanded 1.8 per cent.

Although consumers ramped up spending in the second half of 2012, households continue to undergo significant de-leveraging following several years of low-interest debt accumulation. Excluding recessionary periods, household credit is currently growing at its slowest pace in nearly 30 years, which will likely translate into slower spending. Besides a likely slowdown in consumer spending, a much needed pivot from consumption to business investment driven growth looks doubtful. Anticipated investment for 2013 is set to rise just 1.7 per cent, the smallest increase since 2009.  Add-in a still struggling global economy and you have a Canadian economy that will likely struggle with below 2 per cent growth for much of 2013 before picking up in 2014.

Copyright BCREA - reprinted with permission

BC Commercial Leading Indicator Edges Lower in Fourth Quarter

The British Columbia Real Estate Association (BCREA) Commercial Leading Indicator (CLI) edged lower by 1.3 points in the fourth quarter of 2012, to an index level of 111.3. On a year-over-year basis, the CLI was up 0.8 per cent during the fourth quarter of 2012.

The decline in the CLI translates to a slight rolling over in the underlying index trend, signaling a potential slowing of activity for the first half of 2013.

"A modest slowing of commercial real estate activity is in general accord with 2013 being somewhat of a transition year for the economy,” said Brendon Ogmundson, BCREA Economist. “We anticipate that slower growth through the first half of 2013 will give way to a more robust economy in 2014 and therefore an increase in commercial market activity."

Copyright BCREA - reprinted with permission

5320 Riding Club Rd

A four Season paradise with recreation opportunities all around you, this stylish 2 bedroom, 2 bath home is sure to please the adventurer in you.  Just 15 minutes from Nelson, enjoy an array of outdoor activities no matter what the season then quench your thirst with a drink of water from your own artesian well.  The outdoor features include: 1.9 flat, wooded acres, great sunlight, lots of privacy, raised gardens and a covered deck.  Inside features an 1100 sq ft open floor plan that creates an easy and relaxed space.  Close to rails to trails and a short walk to public river access, this property is what life in the Kootenays is all about. If you are looking for an affordable, well maintained getaway that is close to town then call your Realtor® today to book your viewing appointment.

Call Robert to arrange a viewing  250-354-8500
MLS# K218563