Friday, August 28, 2009

High hopes for B.C. housing market upswing in 2010

High hopes for B.C. housing market upswing in 2010

Shared via AddThis

The B.C. Real Estate Association is forecasting a better sales season this fall than last, hoping to see the last of the housing recession.

In its latest third-quarter housing forecast, the association predicts that Multiple Listing Service residential sales will go up 15 per cent this year over last year.

In 2008, there were 68,923 units sold in the province, a sales drop of 33 per cent, according to the report. By the end of 2009, the provincial real-estate board, which represents the interests of 12 regional real-estate boards and more than 17,500 B.C. realtors, hopes to see 79,400 units sold, up 15 per cent from 2008's lows.

In 2010 they are aiming for 84,200 units sold, an increase of six per cent over this year.

The 10-year-average for sales is 82,800 units.

The BCREA also anticipates that more homes can be sold in 2010. It is forecasting a sales increase of six per cent across the province for 2010.

"After twelve months of significant volatility in B.C.'s housing markets, greater stability is expected through 2010," BCREA chief economist Cameron Muir said.

It expects growth in 2010 in Greater Vancouver with a predicted four-per-cent increase, in the Fraser Valley with a five-per-cent increase, and in Victoria with an anticipated nine-per-cent increase.

Double-digit sales increases over 2009 are forecast for the Sunshine Coast (15 per cent), the Northern Lights (12 per cent), Okanagan Mainline ( 12 per cent), and Kootenay (11 per cent) real-estate boards.

All of the boards had sales declines in 2008, and in some regions sales were down as much as 39 per cent. All but three regions had better sales rates in 2009 over 2008. In 2010, all boards are expected to be in positive territory. With an assumption of better sales comes an anticipated increase in sales volumes.

In 2009, $35.8 billion of real estate changed hands. In 2010, the real-estate industry hopes to see $38.5 billion in sales.

The association also made predictions on a rebound in housing starts.

This year has so far been a "dismal" one for housing starts, the association said, with a forecast total decline of 57 per cent by the end of this year compared to 2008, which was also a low year (starts in 2008 were down 12 per cent).

That comes to a total of just 14,800 units built in 2009, the lowest level of activity since 2000.

In 2010, the association predicts, starts in the province will regain some ground, with an estimated 18,500 units forecast to be built. Muir cautioned, though, that recovery would be spotty.

"Market conditions vary depending on the region of the province," he said, adding that while Vancouver and Victoria have shown improvement, "interior markets are demonstrating a more gradual trend toward balance between supply and demand."

The association noted that the uptick in housing sales over the traditionally strong spring/summer season is the "brightest light" in an otherwise dark B.C. economy.

It points out that overall, "economic output is expected to contract 2.2 per cent this year, with employment down 2.8 per cent and unemployment rising to an annual rate of 7.7 per cent."

Saturday, August 15, 2009



The constant bombardment of the real estate marketplace with offers of "huge price reductions" off previous sale prices can be misleading.

Let's examine foreclosures:
Foreclosure in British Columbia is a process designed to sell distressed properties for fair market value. It begins when the home owner is unable to make the required monthly payments. The lender is required to wait until the loan is 3 months in arrears, then they apply to the court for permission to foreclose. The court will usually grant the borrower a 3 month redemption period to sell the property to satisfy the loan. If this is not successful the court grants the lender "conduct of sale." The property is listed with a REALTOR® on MLS®. Offers on the property can be accepted by the lender without consulting the borrower but must be "subject to court approval." During this time, (typically one to two weeks) between acceptance by the lender and approval by the court, the offer is on the public record. This is to encourage higher offers to be submitted. The court will consider all unconditional written offers received up to and including the court date.
The buyer is unlikely to get a bargain here because even if the lender has accepted a low offer, the court process will usually result in a higher offer being made at the court hearing.

Now the "Buyer Beware" part:
The offer when accepted by the lender and the court will be amended with a "Schedule A". This among other things will contain an "as is, where is " clause.
It will state that the property will be accepted by the buyer in whatever condition its in on the transfer date. The house you saw in good condition could be trashed. You have no recourse. Buyer beware indeed!

Let's look at developers 'blow out ' sales:
Don't get caught up in the hype. There are more than enough condos to go around. These condos are, for the most part, units that did not sell in the good times. They may be the left over least desirable units in the building. They might also be units that the "flippers" were unable to re-sell. Developers are not stupid. They will hang on to the best units until the glut of poorer units is sold off to you.

Beware the ads that say, Price WAS $$$ Price NOW $$$, a savings of $$$.

Do your homework! Make sure that "price was" is an actual sale price, not just an overinflated asking price which was too high in the hottest market. Your research might show that no one ever paid that much. "Price now," check today's market. Be sure that this is a bargain price and cannot be easily duplicated or bettered in the open market. Buyer Beware!

I have a client who says, "real estate deals are like trains. There will be another one tomorrow."

I say, there is no substitute for doing your "due diligence" before you buy!
Get your own expert help. The "expert" at the blow out sale is working for the developer, not you.

Central Okanagan Stats

Number of sales July 09/July 08

Type:..................SalesJuly 09...... Sales July 08....Incr/Decr.

Average Sale Prices July 09/July 08

Type:..................Av.July 09........Av. July 08......Inc/Decr.
Single Family:.........483,183............502,887.........-3.92%
Apt. condo:............260,002............315,707.........-17.64%
Twnhse Condo:..........368,838............395,108.........-6.65%

(Stats courtesy of OMREB)

The market appears to have bottomed in March/April 09 and be gaining strength since then. The number of walk-in buyers to Premier offices is increasing daily. Listing inventory is adequate, but has declined by 23% from July 08. Interest rates remain low.

A good time to buy, just do your homework.

Bert Chapman
Office: 6-3185 Via Centrale,
Kelowna, B.C, V1V 2A7
Phone: (250) 765-0570
TollFree: 1-866-765-0579
Fax: (250) 765-0577