Information about local real estate market conditions

What's Ahead for Real Estate in 2019?

 Thursday, January 3, 2019     Marion Goard     House and Home Real Estate Market Buying and Selling

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As we begin another year, everyone wants to know: “Where is the housing market headed in 2019?”

The Canadian real estate market experienced a cool-down in 2018 following years of rapid growth. This left many homeowners and potential buyers feeling skittish. Fortunately, economists expect the market to stabilize in 2019 and continue to appreciate at a more sustainable rate. To help guide you through this shifting landscape, below are some of the expert predictions and key factors expected to shape the housing market in 2019 and beyond.

SALES LEVELS WILL STABILIZE

A combination of rising interest rates, provincial policy changes, and a newly-implemented “stress test” requirement for mortgages pushed sales activity to a five-year low in 2018. However, economists expect the impact to taper off over time due to positive economic fundamentals: a strong economy, low unemployment, rising incomes, and rapid population growth.

“Far from a sign of trouble, we view this cooling as a healthy correction that would prevent overheating conditions from re-emerging in parts of Canada such as the Vancouver and Toronto areas. We expect a modest recovery to take shape in 2019,” noted the Royal Bank of Canada in its Canadian Housing Market Forecast. “We see little risk of a downward spiral because demand and supply conditions are balanced in the majority of local markets and expected to remain so over the forecast horizon.”1

What does it mean for you? If you’ve been scared off by reports of a market slowdown, it’s important to keep things in perspective. Policy changes were put in place to cool down an overheated market that had led to increased debt levels, decreased affordability, and historically-low inventory levels. A gradual and sustainable pace of growth is preferable for long-term economic stability.

PRICES WILL HOLD STEADY

Economists expect prices to hold steady this year, rising slightly to keep pace with inflation. While the national average price declined by 4.2 percent in 2018, the Canadian Real Estate Association predicts it will rebound slightly this year by 1.7 percent.2

The Canada Mortgage and Housing Corporation also expects prices to remain high, but stable. “By 2020, demand is expected to continue to shift towards relatively less expensive housing options such as apartment condominiums. This combined with slowing growth in economic conditions will lead to modest average price growth over the forecast horizon.”3 

The Royal Bank of Canada agrees, cautioning that “would-be buyers hoping for a meaningful [price] break will likely be disappointed—we don’t expect aggregate prices to fall on an annual basis either this year or next.”1

What does it mean for you? If you’re a buyer waiting on the sidelines for prices to drop, you may want to reconsider. The current sales slowdown has made many sellers more willing to negotiate. Don’t miss out on the most favourable market we’ve seen for buyers in years.

NEW CONSTRUCTION WILL SLOW

The Canada Mortgage and Housing Corporation predicts new home construction will trend down over the next two years from a 10-year high in 2017. “Single-detached housing starts are anticipated to decrease over the forecast horizon. Construction of this housing type will continue to be limited by residential lot availability, but also by elevated price and borrowing costs in some major CMAs that represent an important portion of national starts.”3 

However, economists expect the decline to be gradual. According to Fotios Raptis, a senior economist at TD Bank, “a steep downturn in homebuilding nationwide appears unlikely. Canada's population is on the rise, medium-term income growth should remain healthy, and most markets are generally not overbuilt.”4

What does it mean for you? Buyers will continue to have options in new construction. But the decreased rate of supply should help prop up the resale market, which is good news for sellers.

INTEREST RATE HIKES WILL TAKE A BREATHER … FOR NOW

After a series of interest rate hikes, the Bank of Canada announced in December that it will likely slow its pace of rate increases. “We no longer expect the Bank of Canada to hike its policy interest rate in January. Spring 2019 now appears to be the more likely timing, allowing for the bank to ensure that the growth narrative is back on track,” commented Brian DePratto, a senior economist with TD Bank.5 

At the same time, the impact of the mortgage stress test has slowed the pace of new mortgages being issued by traditional lenders. So even as funding costs have risen, banks have been hesitant to raise the 5-year qualifying rate. In its latest Mortgage Rate Forecast, the British Columbia Real Estate Association predicts that the 5-year mortgage rate will hold steady this year—and may even decline in the first quarter.6 

What does it mean for you? If you currently have a variable rate mortgage, the bank’s revised policy should offer some welcome relief. And if you thought rising interest rates would prevent you from buying a home this year, you may be pleasantly surprised.

I’M HERE TO GUIDE YOU

While national real estate numbers and predictions can provide a “big picture” outlook for the year, real estate is local. And as a local market expert, I can guide you through the ins and outs of our market and the local issues that are likely to drive home sales and values in your particular neighbourhood.

If you have specific questions or would like more information about where real estate is headed in our market, let me know! I’m here to help you navigate this changing real estate landscape.


START PREPARING TODAY


If you plan to BUY this year:

  1. Get pre-approved for a mortgage. If you plan to finance part of your home purchase, getting pre-approved for a mortgage will give you a jump-start on the paperwork and provide you with more confindence in a competitive market. The added bonus: you will find out how much you can afford to borrow and budget accordingly.
  2. Create your wish list. How many bedrooms and bathrooms do you need? How far are you willing to commute to work? What’s most important to you in a home? I can set up a customized search that meets your criteria to help you find the perfect home for you.
  3. Come to our office. The buying process can be tricky. I’d love to guide you through it. I can help you find a home that fits your needs and budget, all at no cost to you. Give me a call to schedule an appointment today!

If you plan to SELL this year:

  1. Call for a FREE Comparative Market Analysis. A CMA not only gives you the current market value of your home, it will also show how your home compares to others in the area. This will help us determine which repairs and upgrades may be required to get top dollar for your property, and it will help us price your home correctly once you’re ready to list.
  2. Prep your home for the market. Most buyers want a home they can move into right away, without having to make extensive repairs and upgrades. I can help you determine which ones are worth the time and expense to deliver maximum results.
  3. Start decluttering. Help your buyers see themselves in your home by packing up personal items and things you don’t use regularly and storing them in an attic or storage locker. This will make your home appear larger, make it easier to stage ... and get you one step closer to moving when the time comes!

Sources:

  1. RBC Canadian Housing Market Forecast –
    http://www.rbc.com/economics/economic-reports/pdf/canadian-housing/housingforecastAugust2018.pdf
  2. CREA Resale Housing Market Forecast Update –
    https://www.crea.ca/news/crea-updates-resale-housing-market-forecast-4/
  3. Canada Mortgage and Housing Corporation Housing Market Outlook –
    https://www.cmhc-schl.gc.ca/en/data-and-research/publications-and-reports/housing-market-outlook-highlights
  4. TD Economics –
    https://economics.td.com/ca-housing-starts
  5. TD Economics –
    https://economics.td.com/ca-boc-interest-rate-announcement
  6. BCREA Mortgage –                                                                                                  http://www.bcrea.bc.ca/docs/economics-forecasts-and-presentations/mortgagerateforecast.pdfRate Forecast

Five Tips for a Perfect Open House

 Tuesday, September 11, 2018     Marion Goard     House and Home Real Estate Market Buying and Selling Just Listed

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Your home’s exterior needs to make a good first impression. Tidy up landscaping and paint any features that look worn. If it’s in your budget to buy some new items for an even bigger wow factor, consider new garage doors, house numbers, and new light fixtures. Remember to remove all cars from the driveway on the day of the open house.

Keep it clean. Hiring professional cleaners is money well spent, especially if cleaning isn’t your strong suit or you simply don’t have the time. This could include house cleaners, window washers and carpet cleaning services.

Declutter. Make all rooms in the home look as spacious as possible by removing some furniture and knickknacks (pack them away so they’re ready for your new home). A clean, uncluttered space gives buyers a better idea of the home’s features.

Stage the home. Paint in neutral colours and, if possible, replace cabinets and faucets with new hardware. Add in a few small touches such as crisp new towels in the bathrooms, and vases of fresh flowers throughout. No matter the weather on open house day, open up all blinds and curtains to let as much light in as possible. Also remember to hide toothbrushes and toiletries by stowing them under the sink. Remove anything personal. Items such as family photos, certificates and awards should be packed away. This allows home buyers to visualize their own family in the home.

Keep pets at bay. If you’ve got a dog, it may be as easy as taking them out with you on the day of the open house. Other pets such as cats should be confined to less trafficked areas. Remember to put food bowls away until you return home.

With these tips in mind, you’ll be providing a more marketable home that’s ready to show any and all potential buyers.

Contact me anytime to find out how I can help you on your real estate journey! Email me at mariongoard@kw.com or call 905-335-8808.


Finding an agent that fits

 Monday, August 27, 2018     Marion Goard     House and Home Real Estate Market Buying and Selling

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Buying and selling a home is a huge undertaking. You’ll want to work with a real estate agent that meets your goals and expectations and has your best interest in mind without any pressure tactics. There are many things to consider when hiring an agent.


Ask for references. The agent should readily give you a list of past clients. Ask them if they encountered any issues while working with the agent, how well the agent performed and, on a more personal level, ask them if they worked together amicably.


Check their credentials and find out how long they’ve been in business. What brokerage are they with? How long has it been in business? Has the agent received any awards or honours? Check their website to see if they have recognition in their field, such as being a top performer or received a high ranking of performance in Canada.

Attend open houses and chat with the agent on duty. These situations are more relaxed so it’s a good opportunity for conversation. Collect their business card and take notes if you wish. You’ll also see how the agent shows the home, their mannerisms, and if the marketing material is professional. If the agent doesn’t engage with you and spends time on their phone or computer, that could be a red flag.

Does the agent know your area well? If they have several years of experience selling in your area they’ll know the neighbourhood’s details and how your area is trending price wise. Even better is if they live in the same town or city where you live. Ask how they’ll market your listing: will it be posted online and in the newspapers? Will they post heavily on social media?

Chemistry is key. Buying and selling a home can be stressful, so it’s important to get along. Any tension will not bode well when you’ll be spending so much time together.

Keeping these factors in mind will help you find the agent that best suits your situation.

Contact me anytime to find out how I can help you on your real estate journey! Email me at mariongoard@kw.com or call 905-335-8808.


Why Selling Privately Could be a Mistake

 Monday, July 23, 2018     Marion Goard     House and Home Real Estate Market

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Many people are tempted to sell a home on their own because they like the idea of saving that four to six per cent commission they’d otherwise pay a real estate agent. However, selling privately is a lot harder than you think and there are many downsides to offering your home as ‘for sale by owner’ (FSBO). 

No mediation

Consider all the aspects that go into selling a home yourself and know exactly what you’re getting into. Selling a home is hard work and will take up a lot of your time. You’ll need to book appointments and show the property to buyers, hold open houses, negotiate the offers, market the home and deal with all other administration required for the sale. It can be a full-time job, except it’s not! 

Benefits of hiring a Realtor

Real estate agents are the professionals who know exactly what your home needs to be the most appealing to potential buyers. They have the knowledge and experience to handle all aspects of the sale. They can guide you in choosing the best, most appropriate price at which to list your home. Agents have market knowledge and aren’t emotionally attached to the property. Going the FSBO route can lead to overpricing which could mean your house will sit on the market for too long. Negotiating the sale can be an awkward and difficult thing to do. A good Realtor can negotiate more favourable terms, price and conditions for you than you’ll likely be able to do on your own.

Hiring a real estate agent also means you’ll benefit from the services they offer including, staging, professional photography and video, social media and exposure to a wide network of other Realtors through multiple listings services. 

Think twice about skipping a real estate agent when you sell your home. They’re there to help!

Contact me anytime to find out how I can help you on your real estate journey! Email me at mariongoard@kw.com or call 905-335-8808.


The new mortgage rules in Canada - What you need to know

 Monday, May 14, 2018     Marion Goard     Financial Health Real Estate Market Buying and Selling

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At the beginning of this year, new tighter mortgage rules were put out by The Office of the Superintendent of Financial Institutions (OSFI). This has made it more difficult for some homebuyers to get mortgages this year. 

The new rules have stricter qualifying criteria as the requirement for a mortgage stress test is now extended to all homebuyers. Even borrowers with a down payment of twenty per cent or more now face a stress test, as has been the case since January 2017 for applicants with smaller down payments who require mortgage insurance. This is aimed at limiting the amount of debt that Canadians and financial institutions take on.

So what is the stress test? It means that financial institutions would use either the five-year benchmark rate published by the Bank of Canada or the customer's mortgage interest rate plus 2 per cent - whichever is higher. This is to ensure that borrowers’ housing expenses compared to their income remain below a certain threshold even if rates rise. Financial institutions look at the size of the loan compared to the price of the house as well as credit scores.

For some first-time homebuyers these stricter mortgage lending rules mean you might need to rent for longer before you can buy a home. Or you might need to consider getting a co-signer to qualify under these stricter rules. This may cause others to have to settle for a less expensive home than they would have qualified for in the past, and some people may choose to wait and save up for a larger down payment.

Are you a first-time homebuyer? Get in touch to discuss how I can help you on your journey to home ownership! Call me at (905)330-5201 or by email at mariongoard@kw.com