July 2022 - Latest Market Update

It’s All About Inflation

Everyone at this point has heard about the rising costs of goods and services including the rise in mortgage and interest rates.   And it’s just not a Canada thing.  We have not been threatened by inflation in many decades, and for many young adults, this is all a new world.   Governments have been obsessed with controlling inflation because it can be very destructive.  

Mortgage rates have nearly doubled since last year.  This is an alarming increase in such a short period of time.   It’s very hard to predict what the lending environment will be next year or five years from now, but this inflationary pressure may stay around longer than we hope.     

Everyone’s situation is different and there is no one answer for everyone. Here are some of my recommendations:

Mortgage lending:

• Consider the mortgage features as much as the rate.  Flexibility to stagger terms, pre-payment privileges and other such features like convertibility options become very important. 

• Consider other fixed terms rather than the popular 5-year term.

• Take advantage of b-weekly payments and other pre-payment privileges.  Little things can make a huge difference in paying down your balance. 

• Consider mainstream lenders such as a major Financial Institution.  Often, they are in a better position to help clients when needed. 

• Do not carry credit card or expensive debt.  Convert these debts into your mortgage now while home prices are high and before it becomes harder to qualify. 

Real Estate:

• If possible, delay listing your home to sell.  Sales have dropped significantly over the past few months and prices, as much as they lag; have already begun to soften.  

• If you must list your home for sale do so with a solid plan and strategy and make sure it’s followed. Consider what other homes you may be competing with in your neighborhood.

• A great visual appearance has always been important, but it’s even more so now.  And not just inside of the home.  The outside appearance your home is the first impression for a buyer when they visit. 

• Buyers should take advantage of softening conditions and jump into the market.  When the market softens, it’s common to believe it’s going to soften forever but history tells us differently. 

• Offers no longer need to be ‘condition free’ and buyers can spend more time on due diligence and satisfying their purchasing decision.  Remember, don’t wait to buy real estate, but buy and wait.  

Many households will be challenged during these Inflationary periods. 

“Control your expenses and prioritize improving your savings.  Have confidence in our Real Estate market but be cautious.”

April 2022 - Latest Market Update

It’s All About Inflation

Are the days of cheap money and deflation over? Interest rates continue to rise and are much higher than they were this time last year. Canada and many other countries are experiencing a concerning inflation trend. Housing, food, gas and much more have been rising steady and in some cases are becoming a real concern. At the last measure the inflation rate was at 5.7%; a rate not seen in 30 years.

Consumer debt has been recently reported at $2.8 trillion with 70% of this debt held as a mortgage. Increases in the interest rate not only increases the borrowing costs for many Canadians but can lead to changes in spending habits. I’ve seen reports showing that 75% and more of Canadians are spending less on such things as household items, dining out and buying less expensive groceries.

Decreased consumer spending can often curtail inflation, however; the inflation is being caused by such things we cannot control. (of course, this begs the question of why is the Bank of Canada increasing rates to try and control something they can’t?) Supply disruptions, employment behaviors and war are outside of our control and can all be very inflationary. Increases to interest rates (and taxes) will only add to these pressures.

Mortgage rates are surging higher.

I strongly recommend anyone considering a refinance to consider it now and not wait especially if you have other debts to consolidate. It may also be the time to consider converting a variable rate mortgage to a fixed rate. Mortgage rates are expected to rise significantly this year. The good news is this should reduce the impact of penalties charged by lenders to refinance or a full payout.

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Special Announcement

It is with great pride and honour to announce two new alliances with two very successful professionals.

Bill Parsons (Formally a REMAX hall of fame recipient) is one of the most successful and experienced realtors in BC. Bill Parsons and I will be working together to help clients with their real estate goals. I’ve known Parsons for almost twenty years and I’m confident that his forty-two years of experience and success will allow me to exceed clients’ expectations and continue to deliver great results.

Rebecca Harrap (Mortgage Professional with Verico) is also one of the most knowledgeable and experienced mortgage brokers in Lower Mainland. My alliance with Rebecca will allow me to continue to provide mortgage and financing solutions to clients. Whether it’s accessing private financing or battling with the big banks, we now have better and more options for borrowers.

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The latest real estate stats are out and prices continue to climb higher ……click her for latest report: Download the March 2022 stats package.

The BC Government is now set to amend the Property Law Act to allow a ‘Cooling off’ period allowing buyers to backout of a purchase contract. Only a few details are known at this time but more on this will be available in the coming weeks. The new law may have unintended consequences that may affect all parties to a real estate transaction; however, it looks like more of an impact to sellers than buyers.

This new law may not do anything to increase inventory levels or stop the increase in housing prices, but there will be more to report on this as we move into the Spring market.

Fixed mortgage rates are much higher than they were just a year ago. Fixed rates have basically doubled from the lows of 2020. Currently 5-year fixed rates can be offered as low as 3.59% and as high as 3.89% depending on lender and product. Variable rate mortgages can be offered as low as 2%.

January 2022 - Latest Market Update

2022 Will Be The Year of UP

BC tax Assessments are out in the mail and are available online.   I think most homeowners will be quite surprised by the increase in their tax assessed values. Some homes have increased up to 35% over last year and most are seeing nothing less than double digit increases.  

Metro Vancouver’s housing market remained very active again for the last month of 2021.  We are nearing record low levels of housing supply, and this is pushing prices way up.  It’s not just pent-up demand and low inventory causing prices to rise, but the cost of construction materials and labour have also risen substantially.     

Inflation is expected to remain elevated for the first half of 2022 and the recent spike in COVID cases and severe weather will likely cause inflation to continue its upward trend.

The Real Estate Board of Greater Vancouver reports that residential home sales in the region totalled 2,688 in December 2021, a 13% decrease from the same month last year and decreased 22% from November 2021.  

Last month’s sales were 33% above the 10-year December’s sales average.

The number of homes available for sale last month decreased 19% compared to the same period last year and dropped almost 51% from November 2021. 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver increased 17% from same period last year and is currently $1,230,200.

The benchmark price for a detached home increased 22% from same period last year and is $1,910,200, up 2% from November 2021.   

The benchmark price for apartments increased 13% from same period last year and is $761,800 up modestly from November 2021.    

The benchmark price for attached homes increased 22% from same period last year and is $1,004,900, up modestly from November 2021.    

Fixed mortgage rates are much higher than they were just a year ago. Fixed rates are up at least 50% from last year.It is expected that fixed mortgage rates will rise this year; how much; hard to say, but I believe we may see most terms in the 3% range.  The biggest move may be with Variable rate mortgages. The Prime rate is not expected to remain at its historical low level and should increase by at least 30% this year.

Currently 5-year fixed rates can be offered as low as 2.59% and as high as 2.89% depending on lender and product.  Variable rate mortgages can be offered as low as 1.35%. 

November 2021 - Latest Market Update

Housing supply continues its downward trend

Metro Vancouver’s housing market in October remained very active amongst the continued decline in the number of homes available to purchase.  This lack of supply and strong demand continues to push prices higher.      

The Real Estate Board of Greater Vancouver reports that residential home sales in the region totalled 3,494 in October 2021, a 5.2% decrease from the same month last year but increased 11% from September 2021.   

Last month’s sales were 22% above the 10-year October sales average.

The number of homes available for sale last month decreased 35% compared to the same period last year and dropped almost 13% from September 2021.  

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver increased 15% from same period last year and is currently $1,200,000, up modestly from September 2021.   

The benchmark price for a detached home increased 21% from same period last year and is $1,850,500, up modestly from September 2021.   

The benchmark price for apartments increased 10% from same period last year and is $746,400, up modestly from September 2021.    

The benchmark price for attached homes increased 19% from same period last year and is $975,000, up modestly from September 2021.    

Fixed mortgage rates are on the move up.  This was unexpected a few months ago but the recent surge in inflation has caused great concern in the cost of living.  Best 5-year fixed rates can be offered as low as 2.34% and as high as 2.59% depending on lender and product.  

Variable rate mortgages can be offered as low as 1.35%.  This offers the absolute best rate and payment, but there is now increased risk of the prime rate rising within the next six months.     

We currently have many lenders with money to lend out.  Financing highlights as follows:

• Large 1st mortgages -$1M+ 

• 2nd mortgages up to $3.5M 

• Fast closings 

• Pre-construction using current market value 

• Rural properties including acreages 

• 3 year Reverse Mortgage 

• Unique property types considered: leasehold, commercial, partial interest, bare land… 

NOTE: The low mortgage rate environment, low housing supply and the steady demand for homes should push prices higher this Winter season.

September 2021 - Latest Market Update

Housing supply is the biggest factor impacting the market

Metro Vancouver’s housing market in August remained active amongst a continued decline in the number of homes available to purchase.  This is creating a huge challenge for buyers and the trend of increasing prices continues to rise.

The Real Estate Board of Greater Vancouver reports that residential home sales in the region totalled 3,152 in August 2021, a 3.4% increase from the same month last year but decreased 5% from July 2021.

Last month’s sales were 20% above the 10-year August sales average.

The number of homes available for sale last month decreased 30% compared to the same period last year and dropped almost 9% from July 2021. 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver increased 13 percent from same period last year and is currently $1,176,600, up modestly from July 2021.   

The benchmark price for a detached home increased 20% from same period last year and is $1,807,100, up modestly from July 2021.   

The benchmark price for apartments increased 8% from same period last year and is $735,100, down slightly from July 2021.    

The benchmark price for attached homes increased 17% from same period last year and is $952,600, up slightly from July 2021.    

Mortgage rates remain stable and are expected to remain as these low levels until late in 2022.  Best 5-year fixed rates can be offered as low as 2.15%.  

Variable rate mortgages can be offered as low as 1.45%.  

We currently have many lenders with money to lend out.  Financing highlights as follows:

• Large 1st mortgages -$1M+

• 2nd mortgages up to $3.5M

• Fast closings

• Pre-construction using current market value

• Rural properties including acreages

• 3 year Reverse Mortgage

• Unique property types considered: leasehold, commercial, partial interest, bare land…

NOTE: The low mortgage rate environment, low inventory levels of properties for sale and the steady demand for homes should push prices higher this upcoming Fall season. 

August 2021 - Latest Market Update

Metro Vancouver homes sales down slightly as prices remain elevated

Metro Vancouver’s housing market saw more moderate sales, listings and pricing trends last month compared to the heightened activity experienced earlier this year. 

The Real Estate Board of Greater Vancouver reports that residential home sales in the region totalled 3,326 in July 2021, a 6.3% increase from the same month last year but decreased almost 12% from last month.  

Last month’s sales were 13% above the 10-year July sales average.

The number of homes available for sale last month decreased 26 per cent compared to the same period last year and dropped 25 per cent from June 2021. 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver increased 14 percent from same period last year and is currently $1,175,500.

The benchmark price for a detached home increased 21 per cent from same period last year and is $1,801,000.

The benchmark price for apartments increased 8 per cent from same period last year and is $737,000.    

The benchmark price for attached homes increased 17 per cent from same period last year and is $950,000. 

Mortgage rates remain stable and are expected to remain as these low levels until late in 2022.  Best 5-year fixed rates can be offered as low as 2.15%.    

Variable rate mortgages can be offered as low as 1.45%.  

We currently have many lenders with money to lend out.  Financing highlights as follows:

• Large 1st mortgages -$1M+

• 2nd mortgages up to $3.5M

• Fast closings

• Pre-construction using current market value

• Rural properties including acreages

• 3 year Reverse Mortgage

• Unique property types considered: leasehold, commercial, partial interest, bare land…

NOTE: The low mortgage rate environment, low inventory levels of properties for sale and the steady demand for homes should push prices higher this upcoming Fall season. 

April 2021 - Latest Market Update

The local Real Estate market is on a blistering pace and new changes coming to the Mortgage Stress test

“The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 5,708 in March 2021, a 126.1 per cent increase from the 2,524 sales recorded in March 2020, and a 53.2 per cent increase from the 3,727 homes sold in February 2021.” 

It’s not just a Vancouver thing.  Victoria, Whistler, Toronto, Calgary and more are all recording record increases in sales and home prices. 

“In March, residents bought and listed homes across our region at levels not seen before,” Taylor Biggar, REBGV Chair said. “This surge in activity is increasing upward pressure on prices. We’re beginning to see double-digit price gains for single-family homes and townhomes over the last 12 months.” 

These stats have gotten the attention of our Governments and economists.  The bank of Canada has recently issued a warning and has stated their concerns that Canadians may be taking on too much debt to buy Canadian real estate.  They are concerned about whether these price increases are sustainable.  However; these warnings are from Governments that have inflated debt to levels not ever seen before.  It’s hard to take it their concerns too serious, especially when the cost of construction of new homes is reaching record highs.  

Here in Southern BC, we have heard these concerns and warning many times in the past few decades.  The bottom line is that land, lumber and materials are all limited.  We live in one of the best places in the world and certainly the best place in Canada.  Basic economics of supply and demand would suggest you buy real estate sooner than later.   

Mortgage rates have risen from their record lows over the past few months.  They continue to be very attractive though.  A five year fixed can still be offered under 2% and variable rates near 1%.   Be cautious when it comes to mortgage rates.  As our economy rolls out of this pandemic, the mortgage rate may continue to rise further.  More importantly; The Office of the Superintendent of Financial Institutions is making a change to the stress test rate.  It means the rate used will be higher than the rate used currently making it harder to qualify for a prime rate mortgage.  This is to be effective as of June1, 2021.   Act now to refinance.   Send me an email if you have any questions or want to get a refinance started. 

February 2021 - Latest Market Update

The real estate market is looking a lot like 2016

The local Real Estate market had ended 2020 on a blistering pace and this momentum has not changed as the 2021 season gets underway.      

“The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,389 in January 2021, a 52.1 per cent increase from the 1,571 sales recorded in January 2020, and a 22.8 per cent decrease from the 3,093 homes sold in December 2020.”

Many segments of the market are doing well but in particular the detached home sales have boomed. Last month’s sales increased almost 70% over the same period last year.  Prices are rising fast and many homes are selling with multiple offers.  BC’s home sales were up 20% in 2020 and the BC Real Estate Association has forecasted sales to increase almost 16% this year over last year.  

 “A strong economic recovery and record-low mortgage rates will continue to drive strong demand this year.”  Brendon Ogmundson, BCREA Chief Economist.

Mortgage rates have remained at their historical lows and a 5 year fixed can be offered as low as 1.69% and variable rates as low as 1.45%.   These conditions are great if you are considering refinancing your mortgage or if you are selling a home.  How long will these conditions last is the big question.   Often during these times we assume that rising home values and falling/low interest rates will be the norm but as history has shown us; things can change quickly. It’s very important not to be complacent during these times.  Some economists have even expressed their concerns that interest rates will rise quicker than earlier predicted due to a stronger recovery from the pandemic.   Although the Bank of Canada said it wasn’t planning to increase rates this year, it doesn’t mean they won’t.  Take advantage of these low rates now and lock into a fixed rate before it’s too late. 

Did you know:  You can get a 20 year fixed rate mortgage in Denmark for 0%

Say good bye to 2020

This year is concluding with mortgage rates at record lows and our local real estate market accelerating to new highs.   This trend is expected to continue well into 2021 and I’m committed to keeping you regularly updated throughout the year. It should be an exciting year and I look forward to helping you all save money and reach your real estate goals.  Whether it’s selling, buying or financing; I’ll be there to help and give you my 100%.

 “Sometimes, a flame can be utterly extinguished.  Sometimes, a flame can shrink and waver, but sometimes a flame refuses to go out.  It flares up from the faintest ember to illuminate the darkness, to burn in spite of overwhelming odds.”  Karen Hesse

I wish all of you a very special Holiday season and the very best for the upcoming New Year. 

November 2020 - Latest Market Update

Second Busiest October on Record

Metro Vancouver home sales last month was the second busiest October on record.  Activity since the Spring has remained at record levels.  

“Home has been a focus for residents during the pandemic. With more days and evenings spent at home this year, people are re-thinking their housing situation," Colette Gerber, REBGV Chair said. 

Although the number of listings is up 37% from last October they are 13% lower from last month.   The inventory of homes for sale remains constrained and this combined with the increase in sales has pushed prices upwards.  Since last year the benchmark price of detached homes are up 8.5% and apartment and townhomes benchmark prices up 4.4% and 5.4% respectively.  In Toronto similar results have occurred and prices of detached homes have soared as homeowners are moving away from small apartment space.   

It’s not just the pandemic and constrained inventory levels causing the surge in real estate.  The record low interest rates are also having a huge impact.  It wasn’t that long ago that a 5 year fixed rate was near 4% compared now with the rate as low as 1.80%.  It’s even lower in some circumstances.  The economic growth in our Country is projected to remain challenged and as a result the Bank of Canada recently announced that they expect to keep rates this low until 2023.  

Need funds but the bank said no.  Private first and second mortgages are easily available.   You can access up to 85% of your home’s equity.