September 2020

All posts from September 2020

The luxury Home Market in Vancouver is Recovering

by Bevony on September 30, 2020 No comments

According to the latest Royal LePage report, the real estate market in Vancouver is slowly recovering for luxury homes. This particular market has been in a slump over the last couple years. So not only is this good news but it is also interesting that the market is recovering during a pandemic. 

The report notes that the recovery is being seen both in price increases and with an increase in demand. Released last Wednesday, the report indicates that properties over $5 million are seeing price increases. The report indicates that in mid-March, around the time of the COVID_19 pandemic onset, the prices of luxury homes rose by 3.9 percent, bringing home selling medians above 4 million dollars. 

With equity being recovered we can easily understand why we are seeing these price gains. There has been a sustained correction brought on by low sales and price softening and this is causing equity to recover. With all of that, consumers are now regaining their confidence as more people are settling into the “new normal”. 

Market Anticipations

We anticipate that as long as the interest rates remain low and the economic conditions continue to be stable, the demand for luxury properties will continue to recover for the remainder of the year. 

Buyers who had previously taken advantage of price softening and had the opportunity to get luxury homes below $4 million should be rejoicing right now. Others probably are mad they didn’t take the opportunity. These opportunities will be getting exceedingly harder to find. This is because the gap between asking and selling prices is currently narrowing for homes that are priced over $5million. But there are quite a number of options for buying to those who are motivated to buy. 

What This Means for Offshore Buyers

Meanwhile, Metro Vancouver is still on top for luxury properties for offshore buyers. Many marketers note that COVID-19 is causing this stimulation of demand for “safe havens, this is good news as well since these numbers were down as far back as two years before the pandemic. Prosperous buyers are also looking for discounts thanks to the pandemic. 

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BevonyThe luxury Home Market in Vancouver is Recovering

Hello Fall – Great Time for Property Maintenance

by Bevony on September 23, 2020 No comments

Spring cleaning may excite some as you consider that you will have a wide array of colorful spring flowers ahead. But ahead of prepping for spring, you may want to think about some of the chores that you complete before winter. While they may not enhance the beauty of your property, these chores are important. This is because they prepare your property to deal with the snow, rain, and wind that comes along with the winter season. So what are the chores you should be doing this fall? Here are some of the tasks that should be on your fall chore checklist for 2020.

Change Your Filters

Your ventilation systems will need a look. Examine your filters to see if they are clogged. The cleaner your filters, the more effective they will be at ensuring you get the best quality air while in your house. 

Rake The Leaves

If you have trees, if your neighbor has trees, you have to rake. This is the one fall chore that most people can’t get away from. If you were in the practice of pushing your leaves over into the gutter, you should stop. When you do that, the rain comes and the wet leaves, clog the drains and then our streets get flooded. 

What you should do, is rake the leaves and then you have two options to deal with them. Either set them out with your organic household waste. Or you can use them for composting, so you can have this ready for next year’s garden and those lovely spring flowers. 

Check Gutters and Drain Pipes

Your gutters and drain pipes need attention now. You want to ensure they are not blocked up with any organic matter. This may lead to water backing up and later leaking into your home. 

Check Pipes

We don’t often have winters with a consistent cold snap of temperatures dipping below -5 degrees Celsius over five weeks or more. But if we do, would you be prepared for such weather? It happened in the winter of 2016. Many homeowners were not prepared and so pipes close to exterior walls burst. When they turned the heat down they came home to a not so nice, soggy mess. 

Fall is the best time to ensure that your pipes are in tip-top condition and also insulated. If you will be gone for an extended period you will fare better if you can turn the water off. You can also have a trustworthy friend or family member to check every other day or so. This can be handy when it comes to trying to claim insurance. The companies like when you can report and respond promptly. 

You also want to empty any water in hoses and disconnect those, Check on your outside taps and ensure you close them, cutting off the water supply entirely. 

When you follow the above tips you can winterize your home so that in the dark winter months you can be warm and cozy with no unpleasant surprises. This also ensures that your property value is maintained. And the best part is that it really only takes a little attention to detail every fall. Start this fall, by inspecting, updating and replacing the things that you need to keep your home in tip-top shape. 

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BevonyHello Fall – Great Time for Property Maintenance

Houses For Sale During a Pandemic

by Bevony on September 16, 2020 No comments

We see people bidding up house prices even though we are in a pandemic and what may turn out to be one of the deepest recessions in history. This is not only true for British Columbia, but we can also see a lot of the real estate market across Canada which is red-hot especially in the market for single-family homes. While this defies all rational logic, it is where we are. People are looking for the security of owning a home even with people losing their jobs and getting pay cuts. 

Herd Following

Herd Following is a theory stumbled upon in 1906 when Francis Galton observed a competition. The competition was for persons to guess the weight of an ox. When all the guesses were averaged, the total average gues was 1,197lbs. The actual weight of the ox was 1,198lbs. Since then, there have been a lot of studies on the theory of collective intelligence which have shown similar results. 

Information from the Canadian Bankers Association indicates that around 15% of mortgages have been deferred, this is a total of 743,000 mortgages. As the days go by, we see that “the reopening” is not going as well as we would’ve wanted it to go. We see infections getting higher and more businesses are going back to closed doors and working from home. Look at Apple, they have closed seven of their area stores in Houston and 14 of their stores in Florida since the reopening. Of course, they have enough cash to afford to close their stores, but other businesses are not as fortunate with a lot of white-collar jobs been axed. 

What are the Banks Doing? 

We see central banks flooding the system with liquidity so much so that free-market price discovery is almost entirely out of the window. And so now we see cash finding its home in hard assets. 

What Does This Mean for Society on a Whole?

We are getting to that tipping point and this is certain to have long-lasting effects on our society. There are several possible outcomes that we must be ready for. 

What We’re Watching

  1. Bond Yields Trading – these are currently at their lowest level in history. 
  2. The US is currently not showing a V shape recovery in current business conditions and this is right across the country. 
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  1. Small businesses that are bringing back all employees account for only 50% of the total small businesses in the US. 
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BevonyHouses For Sale During a Pandemic

Scaling Down Homes is Trending

by Bevony on September 10, 2020 No comments
Mighty building

There has been an increase in the interest of small homes and RV model homes in the past couple of months. A factory in Oakland California is offering homeowners the option for a 3D print. They can print a 350 square foot studio in under 24 hours.  The company is called Mighty Buildings, and they have a focus on the accessory dwelling unit market. 

With a lot of uncertainty due to the pandemic more people are looking into this avenue, not just an accessory dwelling but as their main dwelling. They came up with the technology as a way to address the shortage of housing in California. They boast that they are offering a 21st-century technology to solve a crisis. 

The material being used in these structures is a quick, curing, freeform architecture that can support its weight safely. The structure you end up with an energy-efficient structure that is extremely strong. 

Sustainability

One of the key driving factors behind this printing technology is sustainability. With this technology, 3 to 5lbs of waste per square foot will not end up in a landfill.  With 3D printing, the only thing that is printed is the things that are needed. 

Cost Reductions

By cutting waste, this new technology also cuts the overall cost of the building. The average building costs with this technology are reduced by approximately 45%. The cost of labor is one of the things that affect the cost of a house the most. 3D robotics can do the more complicated and dangerous aspects of building, but human workers are still needed to complete the task, so this initiative is not taking jobs away. 

With COVID-19 motivating more people to seek financial freedom, many are downsizing their lives as a means of downsizing their expenses. In Vancouver, 3D models can be had from Mint Tiny Homes. They note that they have seen an increase in interest over the past couple of months with persons looking to downsize as they are concerned about the possibilities of job loss.  People don’t want to have large bills, and they don’t want to have large liabilities, so they are trying to get in a better financial position while they can before things get worse. We also see where people are looking more towards homes outside of the city and away from the crowds. With more people engaging in flexible working arrangements they need for living or near, the city is no longer necessary. 

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BevonyScaling Down Homes is Trending

Lower Demand Expected for the Housing Market

by Bevony on September 4, 2020 No comments

The Canada Mortgage and Housing Corp. (CMHC) has indicated that they are bracing for the COVID-19 pandemic to further impact the Canadian housing market. The short term uncertainty is significant as housing demand falls with household incomes becoming weaker and weaker. 

The sales and price records were broken in July 2020, but this was after the shut-downs in spring. So we can say the market played a little catch-up if we may say so. CHMC is noting however that the economic shock of the pandemic has not been fully reflected in the latest data on the housing market. They note that the process of the pandemic could still have a huge effect on new buildings as well as the prices and sales of existing buildings. 

We expect it to take months for these impacts to materialize, but we can see some factors already coming to play. CMHC has noted a seeing the difference in provisions for insurance claims. This is showing up in the financial results proving that the impact is far-reaching. 

CMHC’s net income for the three months prior to June 30, 2020, was $566 million. This is up from $379 million during the same period from the previous year. The arrears rate for which is 0.34%. 

While they saw this income, they also saw an increase in claims expenses, jumping to a 711% increase up by $256 million. This was due to an increase in COVID-19 related claims including mortgage deferrals. 

As part of a government program, CMHC this year purchased $5.8 billion insured mortgage pools. They also administered the small business Canada Emergency Commercial Rent assistance program. 

In the next report from CMHC, we will see what impact the stricter underwriting criteria had overall. As of July, requirements for insured mortgages have become tighter and requirements for down payments have also become tighter.  The corporation has even suspended dividends in an effort to save money in the event further action is needed by the government. 

Stick around to read more as the information unfolds. 

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BevonyLower Demand Expected for the Housing Market