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 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
Bond Yields Trading – these are currently at their lowest level in history.
The US is currently not showing a V shape recovery in current business conditions and this is right across the country.
Small businesses that are bringing back all employees account for only 50% of the total small businesses in the US.
The July 2020 buyer and seller activity for Metro Vancouver exceeded historical levels. This was published in the Real Estate Board of Greater Vancouver (REBGV) monthly market report. The report indicates that the total residential home sales increased by 22.3 % from 2,557 sales in July 2019 to 3,128 sales in 2020. The increase in July was a 28% increase over June 2020, where 2,443 homes were sold compared to the 3,128 sold in July. In total, the sales for July 2020 were 9.2 % higher than the 10 year average for sales in July.
Colette Berger, Chair at REBGV, notes that these numbers are a result of the pent up activity that both home sellers and buyers have been holding in. Couple that with limited supply overall and lower interest rates makes the market more competitive.
The July 2020 Metro Vancouver MLS saw an addition of 5,948 attached, detached and apartment properties being listed. In July 2019 only 4,613 properties were listed so July 2020 is showing a 28.9 % increase in listings compared to the same month of 2019. In June 2020 a total of 5,787 homes were listed showing a 2.8% increase from the previous month as well.
Currently, there are 12,083 properties listed for sale on the Metro Vancouver MLS system which is showing a decrease of 15.1% compared to the 14,240 properties that were on the list as of July 2019. The number is showing an increase though when compared to June 2020 which had a total of 11,424 properties listed.
Reaching Potential HomeBuyers Despite the Restrictions
We understand that everybody must take new strides to ensure that social distancing is being observed. As such companies are using a variety of technology solutions to keep home buyers and sellers safe with their interactions. We are all trying to limit in-person interactions as much as possible. As much as can be done virtually is done to ensure the safety of our nation as a whole.
Sales to Active Listings Ratios
For July 2020 we are seeing a sales to active listing ratio of 25.9% for all property types. We can further break that down by property type. Detached homes have a ratio of 25.1% while townhomes have a ratio of 31.1% and apartments have a ratio of 24.7%
The experts note that when the ratio dips to less than 12% for a sustained period is when there is downward pressure on home prices. On the flip side, home prices will rise when the ration passes 20% over a period of multiple months.
The benchmark price for residential properties on the Metro Vancouver MLS Home Price Index is currently $1,031,400. This is showing an increase over July 2019 of 4.5% and an increase over June 2020 of 0.6%.
Sales of Different Types of Properties
Detached home sales reached 1,121 in July 2020 which was an increase of 33.3% over the detached home sales that were recorded (841) for July 2019. The benchmark price for detached homes is $1,477,800. This price is showing an increase of 5% from prices in July 2019 and 0.9% from prices in June 2020.
Apartment home sales prices reached 1,400 in July 2020 showing an increase of 12.6% when compared to the sales(1,243) of July 2019. The benchmark price for apartments is currently at $682,500 indicating an increase of 4.2% from July 2019 and an increase of 0.3% when compared to June 2020.
Home sales for Attached homes were at 607 for July 2020 indicating an increase of 28.3% over the 473 sales for July 2019. The benchmark price is $797,700 indicating an increase of 3.7% over prices at July 2019 and a 0.9% increase over prices at June 2020.
A lot has changed since the start of this pandemic. People have lost jobs, or are now working fewer hours. While many economies are reopening, there looms the need for further lockdowns. It is obvious that this pandemic is not going anywhere soon, and we now have to adapt our life as we know it to meet these needs.
While everybody’s situation is different, housing needs are changing for one reason or another. Some persons are finding their family counts reduced as they lose loved ones to the virus while others are seeing an increase as cohabitating becomes are a more affordable and feasible option. Whether you need to go up in the house or go down in the house we can help you.
How Can SilverBeam Homes Provide You with a Housing Solution?
Sell your old/current home to us and let us help you to construct a new home based on your specific needs. Here, at SilverBeam Homes, we are home builders, but in this crisis, we want to meet you more than halfway. We want to help you with everything from selling your current home. That way you can focus more on the things that need your attention, and we will get the work done for you.
What You Need to Know Before Buying or Selling a Home
Buying/Selling a home was always a huge undertaking. Imagine now doing both in a pandemic! Now more than ever, you have to make sure that you make a very wise choice. Are you currently at that place (between a rock and a hard place) considering the sale of your home and moving your family into a different home?
If your needs have changed, then you have a good enough reason to sell and repurchase or have us build you a new home. The advantage of building a new home is that you now will have the opportunity to have just what you and your family needs.
Why You May Need to Sell your Home
Your current location has become unsuitable. If your job situation has changed and you now need to travel further for work, it may make sense to move. With many people having lost their jobs in the pandemic, we are now having to really become more flexible and that may mean taking a job that is further away. If you are the sole breadwinner, moving closer to cut commute time could help you better manage your finances.
Your household as shrunk or grown. Your current house may become too expensive to maintain in the event of a loss. Or maybe your extended family will now need to come live with you or vice versa. Either way, if your space needs have changed, then you will benefit from purchasing a new home.
Leave sad memories behind. If you lost a family member during the pandemic, even if your space needs haven’t changed, you may want to leave the bad memories behind. If you are financially able to make the move, then selling your current home and moving into a new one may not be a bad idea.
Real Estate and “Subject To” Clauses
“Subject To” clauses in contract negotiation are your safety hatch. They allow you a means of escaping a contract in the event that anything goes wrong. You can find a list of clauses from The Real Estate Council of British Columbia’s website. The most common clauses you may come across are;
Subject to Financing
This type of clause limits your ability to negotiate. The buyer cannot remove this clause at the offer/counteroffer phase. It means the buyer needs a mortgage, so they are making the offer with the hope that they will receive the necessary financing to be able to purchase your home.
Subject to Inspection
This clause can be easily negotiated since an inspection takes on average three days to arrange. If you want to get your house sold faster you can ensure that the inspection is completed a lot quicker so the buyer knows exactly what they are getting into. You can even have the inspection done and report ready if a buyer requests it.
Subject to Sale
This clause gives your buyers a particular amount of time in which they need to sell their current home. Chances are your buyer can’t afford to be paying for two different homes. So you want to include some time in the clause for them to get their home sold, so they can purchase yours. This is usually a period of 4 to 6 weeks.
If you opt to complete your sale and repurchase with SilverBeam homes we can help provide a hassle-free process flow. With us, you don’t have to worry about listing with a realtor. We will offer a cash payment for your house and ensure a speedy closing process. If the funds from your home cannot cover the cost of your new home we can help you by putting you in touch with finance professionals to get the additional funds.
Contacts us today to recreate your reality and have a home that allows for the execution of our new normal.
2018 was quite a disastrous year when looking at the performance of the housing market. In 2019, it looked a lot better with sales going up by approximately 22%. With sales hover above 10-year averages, the home price index is higher. It has increased by 3.5% from last year’s numbers and the trend is for it to continue increasing.
Homeowners are no longer listing their homes up for sale and this is the phenomenon that is driving this resurgence. With not many new listings, there is a decline in inventory. In December of 2019, the sales to new listing ration went up to 67%. This is the highest this has been since October of 2009. A ration of 40% to 60% is considered balanced and anything above 60% will put pressure on prices, causing them to rise. When looking at the statistics on a deeper level we see that listings haven’t been this low since February of 2010.
Why Are Canadian Homeowners not Listing Homes for Sale?
You will find that most places in the country are seeing an all-time high in prices. Canadian housing is on an almost 30-year bull market. So most homeowners are thinking that with prices continually rising there is no need to sell right away. In the meantime, any amount of correction in the market is met by global central banks’ ample liquidity. Banks aren’t increasing interest rates this time around. They are actually doing the opposite.
Leveraged buyers are finding incentives for taking more risks. Hoarding assets are now more attractive to homeowners even more so than putting money into bonds, savings accounts or GIC’s. The current market is not triggering or incentivizing Canadians to cash out and so new listings dot go onto the market unless it is extremely necessary.
What Does This Mean for First Time Home Buyers?
While there are not a lot of listings going up on the market, first time home buyers can find affordable housing solutions. Here at SilverBeam Homes, we are custom home builders that can help you make your dream of owning a home a reality. Give us a call, or send us a message. Let us set up a consultation and show you how you can own a home in a housing market that seems it is not going to be kind to you.
We are looking at New York City luxury condos that are going unsold underneath a real estate market decline. In Manhatten we see almost 50% of luxury condos built and which remain unsold up to 5 years after their build date.
The future for Vancouver is looking similar as well. In the past decade, prices have risen three times faster than those in New York. With such high prices, we find that middle-class young people are finding their dreams of owning a home are getting slimmer and slimmer.
New York Vs Vancouver
Yes, the markets in New York and Vancouver are different. But both these cities are often ranked as some of the most sought after destinations in the world. So they do have a lot of similarities, enough to make the comparison useful. East and West Coast cities are also seeing a similar downward trend.
While the luxury condos and flashy highrises in New York are staying unpurchased. We over here are seeing the same. In Vancouver, our more expensive homes are going unpurchased too. Since the peak in 2017, prices have plunged more than a quarter. Single-family high-end residences in Vancouver are also seeing a plunge in prices as sellers try to get their houses off the market.
In the past two years across West, Vancouver prices have dropped more than 25%. This municipality is known for being one of the highest per capita income in the country. Vancouver and many of its suburbs are experiencing a similar dip were in 2019, values went down more than 11%.
What it All Means
While the luxury house market in Vancouver is not as badly hit as the one in New York it is undergoing a considerable amount of struggle. We see this very evident in the Oakridge neighborhood of Vancouver alone. Hundreds of units with price tags in the millions do not have buyers. With prices over $2400 per square foot, local wage earners cannot afford to own a home. Prices like these are very common as the city becomes more and more known as one of the most unaffordable cities in Canada. The truth is that the gap between the median wages and housing costs in Vancouver is even larger than those in New York City.
Global Real Estate Consultants at Knight Frank estimates that there will be a price fall of approximately 10% in house prices in Vancouver. So sellers stand to lose more. Even with a decrease some buyers will still see certain homes out of their reach.
What Are Your Options?
Are you a potential homeowner with dreams that are looking out of your reach right now? Why not give us a try? Let us help you make your dream a reality. We can get you a custom-built home tailored to your housing needs and your housing budget. We may not be able to get you into the fanciest neighborhood in town but we have the expertise necessary to make your dream come through.
The exterior of your home should speak well of it, if you are considering painting the exterior of your home, you want to read some of these pointers before you do. You want to start by thinking about the number of colors you will have in your home. You don’t want to have more than four colors out there. These colors include any paint used on the main parts of the house as well as on the trim which includes garage doors, door frames, and window frames. Then other places you can consider colors are on your shutters or other decorative details and your front door.
When you think about painting the outside of your home, you want your home to look nice, you may even want it to look unique. But what you don’t want is for it to stand out in a daunting manner. If you don’t get it right, your house may turn into an eyesore in your neighborhood and fixing it could be costly and time-consuming. Here are a couple of things to consider when you want to paint the exterior of your home.
Reason for Repainting
Are you simply tired of the exterior of your home? Or are you considering selling your home and want to make the palate a bit more neutral so the house can appeal to a larger population? It is important to consider the reason for painting your home’s exterior before you start looking for paint colors.
If you will be moving we can help you find your next home and can even help you to create your dream home from the ground up.
Who Will Do the Painting?
So you’re planning on painting the exterior of your home. Will you be hiring a professional, or do you plan to do the painting yourself? Some colors may provide a better finish if they applied in a particular way, in a certain amount of coats, etc. If you don’t have all the information necessary and start to paint your home yourself, you could end up being frustrated with a paint job that doesn’t meet your expectations.
The Architectural Style of Your Home
Some colors will go better with particular architectural styles. How did you come up with your colors of choice? Are you just painting your house green because green is your favorite color? Are there colors already there that you won’t be removing, for example on your patio or deck?
Materials that Will Be Painted
You will need to consider the
types of materials that will be painted. You also want to consider the condition
of the surfaces that will be painted. There may be necessary prep work such as
sanding and stripping that needs to be done.
You will find that some materials will require a specific type of paint or prep product. So you may need a different type of paint for metal than you would need to use for wood. Your paint retailer can provide you with guidance on choosing paints that will work well with the materials used on your home.
Weather at Time of Job
What time of year are you considering painting? What is the weather forecast like for the week you are considering having your home’s exterior painted? The paint quality and finish can be affected by direct sunlight, rain or humidity.
Colors and Paint Quality
You want to choose a
high-quality paint as these will provide more durability and colorfastness. You
will also find some paints that offer additional benefits such as mildew
As far as colors go, white,
black and grey are popular options for painting the exterior of your home.
Trending currently is pale neutral grey colors that coordinated with stone
landscaping complete with black and white trim detail.
If you have remarkable
landscaping and want your landscaping or foliage to be more visible you can
choose to go for dark grey colors. These darker greys will allow your foliage
and landscaping to be the forefront of your exterior home detail.
If you have a lot of natural elements in your yard you can opt for earthy colors.
Lighting when Choosing Paint Colors
When you find a color you are happy with, you should test it out before you order the full amount of paint needed for your project. Viewing your selections in natural outdoor lighting is the best option. Further testing a portion on your walls will give you a better idea of how well the paint will perform and look as well. You a pint sample to paint a small section at the side of your home and if possible do this in different areas where you may have different lighting scenarios to contend with.
A Pop of Color For Your Front Door
Your front door is probably
one of the most exciting things to paint. You can go completely wild here as
repainting will be easier to get done if you don’t entirely like your first
choice of color. When choosing a paint color for your front door you want to
pay attention to what is going on your street. You can opt for the classic red
door or you can add a twist by choosing a berry tone, coral or even orange
tones also do great. If you are not into those shades you can consider shades
of blue especially if your house color is white or pale grey.
Are you wondering where house and condo prices in Vancouver are heading? If you are looking to find a new home, then you will be happy to know that these prices are mostly going down. If you are looking to sell your home then this may not be the best news for you. the truth is that house prices have doubled in the last 10 years which equates to price increases of an average of 7% per year while our incomes have only increased on average around 1.5%.
House prices dropped in the summer of 2016 after the foreign buyer tax was introduced but the prices later recovered. The drop back then was a shallow drop and when you think of you, you really wonder just how volatile the market is. The truth is that prices in the Metro Vancouver area have already dropped by 12% which works out to approximately $192,000. While this drop may seem very significant just by looking at the numbers the truth of the matter is that this drop still leaves house prices out of reach for a lot of residents of Vancouver. Residents of the Westside and West Vancouver have been the hardest hit but there have been significant declines in East Vancouver and Richmond as well.
What About Condo Prices?
Within the same timeframe of 10 years, there has been a decline in the prices of Condos as well. This downturn had continued on the downward trend until last summer. While there was a decline in Condo prices it was not as notable as the decline in prices of houses.
What does this Mean for the Market?
With a market like this, buyers have a better chance of getting more house for their money. Sellers, on the other hand, will have to lower their prices to remain competitive and to increase their chances of closing a sale. First-time buyers who have been saving up for buying a home will be happy about the current market statistics but those who don’t have a sizeable amount saved up could still be second guessing buying a home at these prices.
At the end of the day, it all comes down to how much money you make and how much you have saved to help get your home. There are many people who remain in a good position no matter which way the market goes and there are those can just hope and pray that the market continues to show a decline in the price of homes.
When you consider putting your home up for sale you want to also make some other considerations even before you start thinking about what you are going to price it at. There are a lot of steps involved in putting a home up for sale and each is very important to the success of the venture.
The different steps include;
Finding a Buyer
Navigating the Closing Process
Turning over to the new owners
These steps don’t necessarily have to be in the above order as sometimes you may move out prior to doing anything else on the list. There may be times as well where you get to number 5 and may have to go back to number 5 or even number 3. Yes it is a very complex process and there will be hiccups along the way but if you know what the most common mistakes are then you can avoid some of those hiccups.
Mistakes to Avoid!
Underestimating Selling Costs
There are expenses associated with selling your house that you will have to pay upfront. You can expect to pay 5 to 6% in agent fees but your expenses will be much more than that. Estimate expenses to be around 10% of your selling costs and keep this money handy for any costs that may need to be covered.
If you will be moving into a new home prior to selling your home you will need to add those expenses into your selling cost expense category as well.
Setting a Price that is Unrealistic
You will hear the term “fair market value”. This ensures that sellers are listing at prices that buyers can afford. You don’t want to out-price your self of the buyers market.
Considering Only the Highest Offer
The highest offer, of course, is always going to be the most exciting one but not always is the best option. There can be problems with high bidders down the line just like with any other bidder. Consider contingencies that are included in higher offers such as mandatory home inspections etc whereas someone with a lower offer may not have those contingencies. Some contingencies can really increase the amount of time your house spends on the market and can increase your selling expenses notably.
Making Costly Renovations or Ignoring Major Repairs
Buyers will be turned off if you are selling a home with a long list of items and areas to be repaired. On the other hand, you can turn away buyers if you have made too many costly renovations that caused a major increase in the price of your home. When it comes to these two, it really is all about balance.
Not De-cluttering and Staging Your Home
The way your home looks when a buyer walks through it has a huge impact on the buyer’s decision making process. The buyer walks through your home and pictures their lives there. If you have too much going on, too much clutter, too much furniture, too many toys it can be hard for them to make the connection of their lifestyle and your home. This will deter them from wanting to make an offer. Make sure you clean up the house, put some of your stuff in storage and make sure you go the extra mile on open house days.
These five mistakes can make a big difference in the entire process of selling yoru home. When not done right you can find these stumbling blocks can cause your home to stay on the market longer and can even increase your house selling expenses and thereby will decrease your profits on the home sale. Take heed and ensure you don’t make these mistakes when selling your home.
If you haven’t found your new home yet but are considering moving up in home, give us a call here at SilverBeam Homes so we can help you find the home that is customized to meet the needs of your growing family.