BC Commercial Leading Indicator Points to Growth in 2014

The British Columbia Real Estate Association (BCREA) Commercial Leading Indicator (CLI) rose for the third consecutive quarter, increasing 0.4 points in the third quarter of 2013 to 114.1. On a year-over-year basis, the CLI is 0.8 per cent above the third quarter of 2012 after reaching an all-time high of 116.1 in the second quarter of 2007.

After flattening out through 2012, the trend in the CLI has turned upward. An upturn in the CLI trend is historically a good signal of expanding commercial real estate activity in the following two to four quarters.

"The CLI rose for a third consecutive quarter as growth in retail sales and office employment more than offset a decline in financial conditions,” said Brendon Ogmundson, BCREA Economist. “The rising trend in the CLI points to an improving BC economy and stronger commercial real estate activity in 2014."

Copyright BCREA –reprinted with permission 

Canadian Retail Sales and Consumer Price Inflation

Canadian retail sales rose 1 per cent in September, the third consecutive monthly increase. The advance in sales was largely attributable to higher sales of motor vehicles and parts. Excluding motor-vehicles, sales were flat.  Given today's retail sales data, our Canadian GDP tracking model estimates third quarter growth at 2.7 per cent.

Retail sales in BC were up for  a second straight month, rising 0.4 per cent month-over-month. Compared to September 2012, sales were up 3.1 per cent.  Year-to-date, BC retail sales are up just 1.1 per cent.

Declining gas prices pushed Canadian inflation lower in October, falling from an annual rate of 1.1 per cent in September to just 0.7 per cent in the 12 months to October. The Bank of Canada's preferred measure of core inflation, which excludes the most volatile components of the CPI, continues to trend well below the Bank's 2 per cent inflation target, rising just 1.2 per cent.

Copyright BCREA –reprinted with permission

BCREA Housing Market Update (November 2013) (+playlist)

BCREA Commercial Leading Indicator Discussion (November 2013) (+playlist)

Movember 29th Nelson Star Ad

Dominion Lending Best Rate Mortgages

Revised and expanded! Condominium Buyer's Guide Now Available Online

Condominium living is popular for many Canadians because it can be a relatively carefree housing option. This Guide has been created to help you become an informed condominium buyer and help you make the best choice. Topics include: condominium types, rules and regulations, a condition checklist, a glossary of terms, information sources, condominium selection checklist and Provincial/Territorial fact sheets.

Canadian Manufacturing Sales

Canadian manufacturing sales increased 0.6 per cent in September, the fourth increase in the past five months. The increase was primarily the result of higher sales in the motor vehicle assembly and food industries, though sales rose in 11 of 21 manufacturing sectors.

In BC, manufacturing sales rose 2.3 per cent from August and 4.5 per cent year-over-year. September's increase in sales was fairly broad based with shipments of both non-durable goods growing 3 per cent and durable goods rising 1.7 per cent.  Year-to-date, total BC manufacturing sales are 1.8 per cent higher than last year.

 Copyright BCREA – Reprinted with permission 

BC Home Sales Post Strongest October in Four Years

The British Columbia Real Estate Association (BCREA) reports that a total of 6,673 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC during October, up 26.5 per cent from October 2012. Total sales dollar volume was 34.5 per cent higher than a year ago at $3.6 billion. The average MLS® residential price in the province was $540,432, up 6.3 per cent from October 2012.

"The fall housing market is shaping up to be the most active in four years,” said Cameron Muir, BCREA Chief Economist. “Persistently low mortgage interest rates and an element of pent-up demand have driven home sales higher in the province’s large Lower Mainland and Vancouver Island markets."

"While the rebound in consumer demand has been significant, home sales are trending near the long-term average and any continued acceleration will depend on stronger economic and employment growth,” added Muir.

Year-to-date, BC residential sales dollar volume was up 8.2 per cent to $33.6 billion, compared to the same period last year. Residential unit sales were up 5.1 per cent to 63,020 units, while the average MLS® residential price was up 2.9 per cent at $533,321.

Copyright BCREA – Reprinted with permission 

CREA Housing Market Report 10th edt. 2013

Why Your Mortgage Term Matters

Choosing the mortgage term that’s right for you can be a challenging proposition for even the savviest of homebuyers, as terms typically range from six months up to 10 years.

By understanding mortgage terms and what they mean in dollars and sense, you can save the most money and choose the term that is best suited to your specific needs.

The first consideration when comparing various mortgage terms is to understand that a longer term generally means a higher corresponding interest rate. And, a shorter term generally means a lower corresponding interest rate. While this generalization may lead you to believe that a shorter term is always the preferred option, this isn’t always the case. Sometimes there are other factors – either in the financial markets or in your own life – that you’ll also have to take into consideration when selecting the length of your mortgage term.

With mortgage rates starting to rise, for instance, a longer term may be worth considering now. And if paying your mortgage each month places you close to the financial edge of your comfort zone, you may want to opt for a longer mortgage term, such as five or 10 years, so that you can ensure that you’ll be able to afford your mortgage payments should interest rates increase further.

By the end of a five- or 10-year mortgage term, most buyers are in a better financial situation, have a lower outstanding principal balance and, should interest rates have risen throughout the course of your term, you’ll be able to afford higher mortgage payments.

If you’re shopping for a mortgage for an investment property, you’ll likely want to consider choosing a longer mortgage term – depending, of course, on your overall plan. This will allow you to know that the mortgage payments on the property will be steady for a long time and enable you to more accurately project your future income from the property.

On the other hand, if you know you will not be staying in the same home for the next five or 10 years, opting for a shorter term can save you significant fees when it comes to early payout penalties.

Choosing the right mortgage term is a unique decision for each individual. By understanding your personal financial situation and your tolerance for risk, your mortgage broker or lender can help select the mortgage term that will work best for your situation.

Dominion Lending Centres Best Rates

Is Refinancing Right For You?

There are numerous reasons why homeowners choose to refinance their mortgages – everything from debt consolidation to freeing up money for their child’s education to using their home equity to buy another property. But the most popular reason for refinancing at this time of year is for holiday gift buying and entertainment.

Planning ahead really can save you money down the road. And with the high-cost holiday gift-buying and entertaining season quickly approaching, this may be the perfect time to refinance your mortgage and free up some money instead of relying on high-interest unsecured credit such as credit cards and lines of credit.

You may find that taking equity out of your home will help bring joy back into your holiday season – and start the New Year off on a debt-free note, as you may also be able to use some of the equity in your home to pay off high-interest debt such as your credit card and/or line of credit balances. This will enable you to put more money in your bank account each month.

And since interest rates continue to hover near historic lows, switching to a lower rate may save you a lot of money – possibly thousands of dollars per year.

There are penalties for paying your mortgage loan out prior to renewal, but these could be offset by the lower rates and extra money you could acquire through a refinance. I can sit down with you and work through all of the equations to ensure this is the right move for you.

With access to more money, you’ll be better able to manage both your holiday spending and existing debt.

Paying your mortgage down faster

By refinancing, you may extend the time it will take to pay off your mortgage, but there are many ways to pay down your mortgage sooner to save you thousands of dollars in interest payments. Most mortgage products, for instance, include prepayment privileges that enable you to pay up to 20% of the principal (the true value of your mortgage minus the interest payments) per calendar year. This will also help reduce your amortization period (the length of your mortgage), which, in turn, saves you money.

You can also increase the frequency of your mortgage payments by opting for accelerated bi-weekly payments. Not to be confused with semi-monthly mortgage payments (24 payments per year), accelerated bi-weekly mortgage payments (26 payments per year) will not only pay your mortgage off quicker, but it’s guaranteed to save you a significant amount of money over the term of your mortgage.

By refinancing now – before the holiday season is in full swing – and planning ahead, you can put yourself and your family in a better financial position.

Off Season Home Shopping

If you’ve been thinking about buying a new home but don’t think that the cooler months make for an ideal time, you may actually benefit from changing your perspective. Though spring and summer are typically the most active real estate buying and selling seasons, house hunting in winter has its own benefits. Knowing what they are and how to use them to your advantage can put you on the path to homeownership sooner rather than later.

One of the best reasons to buy a house in winter is that there is usually less competition out there. Because many people believe that buying a home in cooler months is a bad idea, they stay home waiting for spring to come instead of house hunting. After all, moving at this time can be inconvenient and messy if you have to deal with inclement weather. Additionally, families will be less likely to move in the months of September through June if their children are in school.

It’s the perfect time to start looking for a home during months when there are fewer house hunters. With fewer buyers in the market, homes move more slowly and sellers are more willing to negotiate on their asking price. They often need to move from the property in the near future, and you can use that to your advantage to get a favourable deal on a house that may otherwise be out of your price range during the peak selling seasons.

Touring a home during the winter allows you to see things that you may not have been exposed to if you had come in the summer months. For instance, drafts may be a sign that windows need replacing or that there are air leaks that may need to be sealed. If the house feels warm without the thermostat being set too high, it may be an indication that the home has good insulation.

If you decide to brave the cold and hunt for a home during winter, there are a few things you should keep in mind. First, don’t feel like you’re going to inconvenience someone by viewing their home during the holidays, evenings or weekends. Sellers want to sell just as much as buyers want to buy. Also, don’t be overcome by holiday decorations, which can make a house look cramped or have the opposite effect of making the house more emotionally appealing than it otherwise would be.

Just like any holiday shopping sale, knowledgeable shoppers know where to find great opportunities. The same holds true for real estate. There are still homes for sale in winter and bargains to be found, so don’t let the seasons rule your search for a home.

Canadian Employment and Housing Starts

Employment

Canadian employment expanded by 13,200 jobs in October, and the total number of employed rose 1.3 per cent compared to October of last year. The unemployment rate remained unchanged at 6.9 per cent.

In BC, employment again fell, with firms shedding over 5,000 jobs for a second consecutive month. In spite of job losses, the provincial unemployment rate actually declined 0.2 points to 6.5 per cent due to a sharp drop in those looking for work. Year-to-date, employment  in BC has declined 0.1 per cent.

Housing Starts

Canadian housing starts increased 1.2 per cent in September to 198,282 units at a seasonally adjusted annual rate (SAAR).  The trend in Canadian new home construction rose as well, to 195,338 units SAAR over the past six months, a rate that is slightly higher than demographic demand suggests is needed.  On a year-over-year basis, housing starts were down 5.4 per cent.

New home construction in BC urban centres declined in October, falling 19.2 per cent to 23,918 units SAAR . On a year-over-year basis, total starts were 9 per cent lower than October 2012. Single-detached starts were up 15 per cent over last year, while multiple starts fell 18 per cent. Year-to-date, total BC housing starts are down 5 per cent.

Looking at census metropolitan areas (CMA) in BC, total starts in the Vancouver CMA fell 13 per cent year-over-year at 1,533 units.  Single family starts increased 32 per cent while multiples fell 22 per cent. In the Victoria CMA, total starts continued to be somewhat volatile, falling 28 per cent year-over-year  on the heels of a 40 per cent increase in September. New home construction in the Kelowna CMA jumped 87 per cent year-over-year in October due to a sizable increase in multi unit starts.  In the Abbotsford-MIssion CMA, starts were down 29 per cent year-over-year.

Copyright BCREA – reprinted with permission 

Canadian Building Permits

Canadian building permits rose 1.7 per cent in September to $6.5 billion, following a 20 per cent decline in August.  The modest increase in building permits was led by the residential sector, primarily in Alberta and Quebec. 

Construction intentions in BC declined 6 per cent in September from August and were nearly 19 per cent lower year-over-year. The value of residential permits were 14.1 per cent lower in September and 6 per cent lower year-over-year.  The total number of residential units permitted in September fell 29 per cent from August due to a sharp decline in permits for multiple units. The value of non-residential permits rose 10.3 per in September. 

Building permit activity across BC's four major census metropolitan areas (CMA) was mostly lower in September. In the Abbotsford-Mission CMA, permits rose 15.2 per cent on a monthly basis but were 61.7 per cent lower year-over-year. Construction intentions in the Victoria CMA declined for the second consecutive month, falling 2.5 per cent from August and 31.4 per cent year-over-year. In the Kelowna CMA, permits fell 52.8 per cent after posting a 70 per cent increase in August.  Finally, in the Vancouver CMA  building permits declined 11.3 per cent month-over-month and 29.2 per cent year-over-year.

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US Q3 Real GDP Growth

The preliminary estimate of Q3 US GDP came in at 2.8 per cent, resoundingly beating the consensus expectation of 1.9 per cent.  However, a full 0.8 per cent of that growth was due to a build-up of inventories and this report may be noisier than usual due to the government shutdown. It is worth noting that today's release is a preliminary estimate and will be revised in subsequent months.

Stronger than expected economic growth in the United States, coupled with a decent jobs report tomorrow, could put some upward pressure on long-term bond yields, which have fallen significantly since the Fed opted to delay its quantitative easing program. Even so, we anticipate that long-term rates and therefore mortgage rates, will remain stable through the end of the year.

Copyright BCREA -reprinted with permission

909 Vernon Street

$20,000 Price Reduction

Now $289,900 

Situated on a gorgeous tree lined street in Nelson, BC, this classic Victorian home is located in a popular residential area that is adjacent to the downtown core.  From this ideal location you are just a short walk to the theatres, shopping, restaurants and nightlife that the Queen City is known for.  This home has an open floor plan and features wood floors and updated bathrooms.  There is off street parking, a covered porch and loads of character.  The basement is unfinished but has potential to be more than it is. Quick possession is available.  This 3 bedroom home is a must see for those who would like to take advantage of an opportunity to be part of the culture and community that is Nelson.     

MLS# 2392195