KELOWNA REAL ESTATE MARKET – WHAT IS IN STORE FOR 2016
It is nоt аlwауѕ соmfоrtаblе to ѕtісk уоur nесk out аnd tаlk about the Kеlоwnа Rеаl Eѕtаtе market in thе сurrеnt есоnоmіс climate.
Thе lеvеl оf economic uncertainty реrvаdеѕ ѕосіеtу.
Whеthеr іt іѕ a Fеdеrаl Gоvеrnmеnt runnіng deficit budgеtѕ, a lоw Cаnаdіаn dоllаr, аn аll but destroyed economy in Alberta оr a hоuѕіng bubblе іn Vаnсоuvеr thе аbіlіtу to lооk fоrwаrd to whеrе thе potential орроrtunіtіеѕ lіе іѕ іmроrtаnt.
Clearly ѕоmе of the macro lеvеl есоnоmіс indicators аrе not gооd. A quісk glаnсе аt whаt іѕ hарреnіng аt that 20,000′ lеvеl іѕ еnоugh to mаkе аnу REALTOR® ѕhу away frоm making аn predictions or writing about the Kelowna Rеаl Eѕtаtе Market.
But, as wе know, every grey cloud hаѕ a ѕіlvеr lіnіng аnd I wanted tо share wіth you mу thoughts оn those silver linings and whаt I feel mау hарреn іn 2016.
MY THOUGHTS ON A KELOWNA REAL ESTATE MARKET
At thе end оf thе dау, pressure іn nеіghbоurіng Alberta аnd a ѕtrеѕѕеd and overpriced mаrkеt іn Vаnсоuvеr can рау dіvіdеndѕ tо BC аnd іn раrtісulаr tо Kelowna.
- In 2016 Cаnаdа as a whоlе was rаnkеd as оnе of thе bеѕt соuntrіеѕ іn the wоrld tо live
- Kеlоwnа is оnе оf thе fastest grоwіng сіtіеѕ in Cаnаdа
- Albеrtа in mіgrаtіоn tо Kelowna could роtеntіаllу ассеlеrаtе аѕ реорlе gеt сlоѕеr tо rеtіrеmеnt уеаrѕ and run away frоm a dаmаgеd есоnоmу
- Low Cаnаdіаn dollar іѕ a bоnuѕ for Kelowna and could turn аrоund thе rеѕоrt market thіѕ year аѕ fоrеіgn buуеrѕ lооk tо capitalise on a lоw еxсhаngе rate
- Hіgh prices іn Vаnсоuvеr are аlrеаdу drіvіng fаmіlіеѕ оut оf thе lower mаіnlаnd tо соmmunіtіеѕ like Mеrrіtt, Kеlоwnа and Pеntісtоn
- The sun аlwауѕ ѕhіnеѕ іn Kеlоwnа іn the ѕummеr
- The wіnе always tаѕtеѕ аmаzіng
- Thе wаtеr іѕ always clear аnd wаrm fоr a ѕwіm
If уоu need any mоrе reasons, thеn уоu hаvе not vіѕіtеd… call mе tо bооk a time for a соnѕultаtіоn оn how Kelowna could bе the rіght tоwn at thе rіght tіmе fоr уоur nеxt mоvе.
Buying in Kelowna Real Estate or your first house is indeed a major fulfillment in life. However, this is a decision that you should make with great caution and a lot of responsibility. You do not buy a house just because you like it. Instead, you should buy one when you know that you are 100% ready for it.
We will discuss 3 signs that will show your readiness. This way, you can make sure that it is the perfect decision made in perfect timing.
3 signs that will show your readiness to purchase in Kelowna real estate
Sign #1: You have a stable job with good pay – first of all, it is important that you have regular and stable source of income. You need a job with a nice income to pay for your mortgage. It is best if you’ve been in the company for at least 3 years to show stability. You do not want to lose a job while in the middle of your 5-year mortgage.
Sign #2: You have savings in the bank – having a savings in the bank shows financial stability. This can serve as your security blanket in case something unexpected happen with your real estate deal.
Sign #3: You are out of debt – it is also important that you are done paying for your debts or at least you are in perfect control of it. It would be very difficult to buy a house or apply for a mortgage when you can’t even find the resources to pay for your monthly dues and debts.
Buying real estate like a house is indeed a goal of many. However, this calls for the right timing. Make sure that you fit all the signs before you go ahead and buy one. That way, things will be a lot easier and smooth sailing for you.
Ottawa, ON, February 16, 2016 – According to statistics released today by The Canadian Real Estate Association (CREA), national home sales rebounded in January 2016 compared to the previous month.
- National home sales edged up by 0.5% from December to January
- Actual (not seasonally adjusted) activity was up 8% compared to January 2015.
- The number of newly listed homes retreated by 4.9% from December to January.
- The Canadian housing market has tightened but remains balanced overall.
- The MLS® Home Price Index (HPI) rose 7.7% year-over-year in January.
- The national average sale price rose 17% on a year-over-year basis in January; however, excluding British Columbia and Ontario, it edged down 0.3%.
The number of homes trading hands via MLS® Systems of Canadian real estate Boards and Associations edged up by 0.5 percent in January 2016 compared to December of last year. The monthly increase lifted national sales activity to the highest level since late 2009.
The number of local housing markets was almost equally split between those where sales were up from the month before, and those where sales were down. Monthly sales increases in the Greater Toronto Area (GTA) and Lower Mainland of British Columbia fuelled the national sales increase and offset monthly sales declines in Calgary, Edmonton and the Okanagan Region.
“Single family home buyers in the GTA and Lower Mainland of British Columbia had been expected to bring forward their purchase decisions before tightened mortgage regulations take effect in February 2016,” said CREA President Pauline Aunger. “If listings in these and nearby markets were not in such short supply, January sales activity would likely have reached even greater heights. Meanwhile, other major urban housing markets have an ample supply of listings, particularly where some home buyers have become increasingly cautious amid an uncertain job market outlook. All real estate is local, and REALTORS® remain your best source for information about sales and listings where you live or might like to in the future.”
“January 2016 picked up where 2015 left off, with single family homes in the GTA and Greater Vancouver in short supply amid strong demand standing in contrast to sidelined home buyers and ample supply in a number of Alberta housing markets,” said Gregory Klump, CREA’s Chief Economist. “Tighter mortgage regulations that take effect in February may shrink the pool of prospective home buyers who qualify for mortgage financing and cause national sales activity to ease in the months ahead.”
Actual (not seasonally adjusted) sales activity rose eight percent on a year-over-year basis in January 2016 and stood 2.6 percent above the 10-year average for the month of January. Activity was up compared to January 2015 among roughly two-thirds of all local markets. B.C.’s Lower Mainland and the GTA again contributed most to the national increase.
The number of newly listed homes fell by 4.9 percent in January compared to December which more than reversed monthly gains that were posted in the final two months of 2015. Canada’s largest urban housing markets contributed to the monthly decline in new listings, including the Lower Mainland of British Columbia, Calgary, Edmonton, the GTA, Hamilton-Burlington, Ottawa and Montreal.
The national sales-to-new listings ratio rose to 59.2 percent in January due to the drop in the new supply of listings, January’s reading was the ratio’s highest since November 2009. A sales-to-new listings ratio between 40 and 60 percent is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively.
The ratio was within this range in about 45 percent of all local housing markets in January. A little over one-third of all local housing markets recorded a ratio above 60 percent; as in recent months, virtually all these housing markets are located in British Columbia and Ontario.
The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.
There were 5.3 months of inventory on a national basis at the end of January 2016, down from 5.4 months at the end of last year and the lowest level in nearly six years. The national figure is being pulled lower by increasingly tighter housing markets in B.C. and Ontario. This is particularly true in the Lower Mainland of British Columbia, the GTA and Hamilton-Burlington, where months of inventory are currently sitting at or below two months.
The Aggregate Composite MLS® HPI rose by 7.73 percent on a year-over-year basis in January – the largest gain in more than five years. Year-over-year price growth accelerated for two-storey single family homes and apartment units.
Two-storey single family homes continue to post the biggest year-over-year price gains (+9.97 percent), followed by one-storey single family homes (+6.86 percent), townhouse/row units (+6.46 percent) and apartment units (+5.16 percent).
Year-over-year price growth continued to range widely among housing markets tracked by the index. Greater Vancouver (+20.56 percent) and the Fraser Valley (+16.94 percent) posted the largest gains, followed by Greater Toronto (+10.69 percent).
Home prices in Victoria posted a year-over-year gain of just over seven percent while Vancouver Island home prices rose by five-and-a-half percent.
By contrast, home prices retreated by about three percent on a year-over-year basis in Calgary, by about two percent in Saskatoon, and by less than one percent in Regina. While home prices have begun to decline in Calgary and Saskatoon only fairly recently, they have been trending lower in Regina since early 2014.
Prices crept higher on a year-over-year basis in Ottawa (+1.10 percent), rose modestly in Greater Montreal (+1.48 percent) and strengthened further in Greater Moncton (+6.57 percent).
The MLS® Home Price Index (MLS® HPI) provides a better gauge of price trends than is possible using averages because it is not affected by changes in the mix of sales activity the way that average price is.
The actual (not seasonally adjusted) national average price for homes sold in January 2016 was $470,297, up 17.0 percent on a year-over-year basis.
The national average price continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which are among Canada’s most active and expensive housing markets. If these two housing markets are excluded from calculations, the average is a more modest $338,392 and the year-over-year gain is reduced to eight percent.
Even then, the gain reflects a tug of war between strong average price gains in housing markets around the GTA and the Lower Mainland of British Columbia versus flat or declining average prices elsewhere in Canada. If British Columbia and Ontario are excluded from calculations, the average price slips even lower to $286,911, representing small a decline of 0.3 percent year-over-year.
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PLEASE NOTE: The information contained in this news release combines both major market and national sales information from MLS® Systems from the previous month.
CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types.
MLS® Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale.
The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 109,000 REALTORS® working through some 90 real estate Boards and Associations.
Further information can be found at http://crea.ca/statistics.
For more information, please contact:
Pierre Leduc, Media Relations
The Canadian Real Estate Association
Tel.: 613-237-7111 or 613-884-1460
What is shadow flipping? This is a term that has been used to describe the legitimate practice of assigning a contract.
According to the Real Estate Council of British Columbia Professional Standards Manual:
“Licensees, from time to time, will be involved in situations where buyers wish to assign their rights in a Contract of Purchase and Sale to other parties…The general rule, in the absence of wording in the contract to the contrary, is that buyers may assign their rights under the contract as long as they do not prejudice the rights of the sellers.”
Certain wording is recommended within the contract if the buyer wishes to maintain the opportunity to assign the contract, or if the seller does not wish the contract to be assignable they can put in a clause that the buyer agrees not to assign.
The Realtor must undertake various steps of due diligence if the contract is to be assigned, such as ensuring that a proper assignment is drafted, the parties are clear and verified with proper identification, that the seller is given notice in writing etc..
A clause that can assist the Seller is to make the Assignment subject to the Sellers approval giving the Seller’s REALTOR® the opportunity to conduct due diligence on the suggested assignment.
This practice has hit the news recently after a Globe and Mail article Feb 6th highlighted the increasing volume of assignments in the heated Vancouver real estate market. According to the article “As part of an ongoing investigation into the phenomenon, The Globe and Mail examined scores of transactions and hundreds of records, and spoke with more than a dozen real estate agents and observers to understand the role of assignments in the Vancouver market.
The findings shed light on an opaque and speculative realm of the housing market, in which properties are traded one or more times before a deal closes – legal but controversial flipping that creates opportunities for agents to make multiple commissions and investors to profit tax-free from houses that are not yet technically in their possession.”
At a press conference on Tuesday the Premier Christy Clark promised action. “We’re giving them the chance to fix it. if they don’t, we’re going to fix it for them,” she told reporters Tuesday in Victoria. In response the Real Estate Council of BC has said it’s appointing an independent advisory group to investigate the allegations.
It is an interesting story that we are sure to follow. The opportunity to assign a contract can be useful and legitimate, but an industry that is allowed to self regulate needs to maintain high ethical standards in order to keep the trust of its clients. So how do you find a realtor that will represent your best interests in this high tech day and age. Why not try that age old technique of word of mouth.