The Tides of The Market Continue to Change
A few months back, as mentioned on this blog, we started to see first time buyers come out of the woodwork and start to take advantage of the lower prices and ridiculously low interest rates. At the time I thought it was too early to be certain, but in my head I thought it was fairly likely that it would be the beginning of a larger trend. Well, it was. First time buyers are coming out in rather large numbers and giving the market a boost. They’re smart to as well. The affordability of homes lately is amazing, and your first buy is generally when that makes the biggest difference as a homeowner. Gotta have that equity, and watch it grow as markets recover.
The question remains as to whether it will spread to the larger part of the population. Ususally by now we’ve seen the peak of the spring market but it seems to me that it’s not over just yet. The spring market started late and is still going full throttle. I often quip that as soon as swine flu hit the mainstream media and people stopped hearing endless economic doom and gloom, people had something else to worry about thus making the economic situation a bit better. That’s a half joke based entirely on speculation of course, but I am quite certain that as more good news stories hit the papers the prophecies those stories create will self fulfill.
The investors I know haven’t jumped in the pool just yet, but if I were buying for investment, I’d be seriously considering doing it now while the sellers still feel they’re at a disadvantage and are willing to accept lower offers. This plus the low interest rates make for smart planning. The same price point on the way back up the market stats is unlikely to yield the same deals.
Below is the article that sparked this post. I found it in the local newspaper, the Nanaimo Daily News. By the way, this is the sort of info that nearly every Realtor in my company knew 2 or 3 weeks ago. It was less certain at the time as the stats weren’t there in official form, but the pattern was indeed visible and talked about. If you trust your Realtor, you should listen to them for advice rather than reading newspapers, the Realtor’s knowledge more current, more in depth and less convoluted. If you don’t trust your Realtor, you could always try me of course. By reading my blog you’re part way there already anyways. 😛
Sales brisk although prices lower than 2008
Spring sales prove to be strong on Island
The local real estate market is gaining strength, says the Vancouver Island Real Estate Board, with the latest sales numbers north of the Malahat looking similar to what they were a year ago.
Last month, 447 properties changed hands compared to 448 in May 2008. Those numbers are propped up by the Cowichan Valley and Parksville-Qualicum areas, which both saw a 33% hike in sales compared to May 2008. Campbell River also saw a 7% increase, while Nanaimo saw a 12% drop in sales compared to the previous year.
Realtors say activity is picking up and some homes are even receiving multiple offers. But prices still lag behind what they were a year ago.
Across the VIREB region, sale prices were down 10% compared to the previous year, selling at an average of $323,573. Nanaimo saw a 6% drop, with the average home price at $341,462.
VIREB president Ray Francis doesn’t think home prices will start rising again anytime soon, but with low mortgage rates luring new, younger buyers, most realtors don’t expect them to drop either.
“The market’s busy, there’s no two ways about it. The inventory that was sitting on the market is now being sold off,” said Francis.
First-time buyers are also increasingly entering the market thanks to low interest rates, he added.
Nanaimo realtor and VIREB director Jim Stewart said because Nanaimo remains a destination for retirees and other people, it will fare well in the market this summer.
“We still have that inward migration of wanting to be here,” he said. “The buyers are out there.”
Stewart chalked up the large spike in sales in Cowichan Valley and Parksville-Qualicum to just being a “good month” for those areas. He points out that a single month of statistics is only a snapshot of what’s going on in the market. Last month, VIREB saw a 26% drop in sales compared to the previous year.
The local realtor said he’s seen more sellers renovating their homes, a tactic he thinks will appeal to today’s young buyers.
A Re/Max report released Tuesday said the majority of the 50 Canadian markets surveyed “reported a marked trend toward 30-something buyers snapping up affordably priced product, ranging from waterfront cottages to resort condominiums, compared to just 40% in 2008.”
And Generation X is also more likely to buy a home that is move-in ready, said Stewart.
“That group, for the most part, isn’t the fix-up guys. They want it all done and they want everything.”
Rod Fedosoff was able to sell his high-end home along Cosgrove Crescent — a Nanaimo road littered with “sold” real estate signs — within just one month. He gave himself three months to sell the property and wasn’t surprised when he made a deal sooner.
“I wasn’t worried because this is a desirable street,” he said.