Affordability is Key

Despite how many reports are claiming that new construction is the key to developing a healthy recovery method for the real estate market, it would appear these reports aren’t looking in all directions very effectively. If they were, there would probably be a leniency towards re-visiting that mentality and developing a more comprehensive approach, rather than a shrouded one.

Fluctuations in the property market are of no surprise to many at this point, however these particular market activities seem to be telling a story not many want to hear – the market’s recovery is moving in the wrong direction. As it stands, new buyers are in a tough position when it comes to entering the market due to the revisited amortization constraints wherein down-payment amounts increased, while amortization lengths were decreased, meaning more money up front, and higher payments; a compromising situation indeed. So, what happens now? Property investors have incidentally taken the market by storm to scoop up properties at a healthily reduced rate to be owned as secondary properties, and rented out to the general population – presumably those same potential new buyers who can’t afford to get a piece of the market activity.

Reports are suggesting that one of the only ways this young buying population will enter the market is if their baby-boomer parents (the same demographic investing in the renter’s market) provide down-payments in order to make the endeavour more affordable. The means to do so come from their parents’ act of downsizing, thus freeing up funds that can be allotted to their offspring’s hopeful property purchases.

Our neighbours to the South have also released some purchasing statistics which indicate the trend that pains new buyers is one felt on both sides of the border, as the sales of previously owned homes hit the highest they’ve been in 3-1/2 years. Now, if you take a look at these impeding market factors it’s hard to lean on the argument that new developments are the way to go, as they are even less affordable than previously owned homes and provide no positive alternative to what’s paining the market: the low number of new buyers.

Instead of putting up new developments that hardly anyone can afford to the extent that would stimulate a positive increase in market activity, we should be focusing on resolving the impeding factors that are vice-gripping the market’s potentially young population. If amortization laws are revisited, or if market activity ceases to favour some and down-play others, and instead reaches a content equilibrium for the purchasing population, we could expect a healthy and fulfilling market recovery rather than the lop-sided one we’re experiencing now.


image courtesy of katerha

Kelowna Luxury Market Best In Canada

Original Article via Castanet

Kelowna found itself in elite company Tuesday, when in the space of one hour, top realtors from nine of the world’s most luxurious neighbourhoods gathered to share their market insights.

The top-grossing realtors from Coldwell Banker offices in Paris, Miami Beach, Beverly Hills, Aspen and others connected via teleconference for a luxury market roundtable; each giving five-minute summaries of their markets’ price ranges, demographics, selling features and forecasts.

Kelowna’s own Jane Hoffman, of Coldwell Banker Jane Hoffman Group represented Canada in a luxury market roundtable Tuesday.

“This is a unique opportunity to gain insight about the luxury market and affluent client expectations from a special group which represents not only many of the top Coldwell Banker Preview specialists in the world, but indeed what I believe to be the finest agents within the real estate industry,” said Budge Huskey, Coldwell Banker President and CEO.

Representing Canada was Kelowna’s own Jane Hoffman, of Coldwell Banker Jane Hoffman Group.

The Hoffman Group is the top producing team for Coldwell Banker Canada and has been active in over 85% of all sales in her market over $3m and 100% of sales over $5m.

“Kelowna is largely an undiscovered gem in the luxury market in Canada,” said Hoffman.

She cites the weather, moderate size, recreation opportunities and agri-tourism industry as some of the main reasons affluent home-buyers come to Kelowna.

Most of Kelowna’s luxury properties are either lake view homes, waterfront homes or vineyard estate properties, according to Hoffman, with elite homes being in the $3m to $5m range.


image courtesy of mastermaq

Will Housing Become A Luxury?

Everybody right now is complaining that there’s too many houses on the market; which is true. There is certainly a bit of a general market flood occurring in most areas of the country. However we might be too quick to complain because the future or real estate might take a different turn than expected once the market recovers.

At the current rate of market activity, new developments are being executed at a sufficiently sustainable rate. There’s a good availability of workers, costs are relatively low, the listing prices of new properties, due to the nature of the market, are also low, and the rate of new developments is manageable due to low market activity. However we may be getting ahead of ourselves to be pushing for a quick market recovery.

Once the market’s demand and activity stabilizes, new developments will predictably increase, but it’s not looking like enough craftsmen will be available to sustain this potentially increasing demand. And if there’s anything we can say for sure, it’s that once the market recovers, there will certainly be an increase of new development proposals. Now the issue is finding people to build them.

Within the next 10 years, Canada will see an estimated shortage of 800,000 skilled workers due to the lacking emphasis on the social importance and demands for tradesmen. This situation could play out negatively or positively depending on which side of the fence you’re on.

If you were hoping on building a house in ten years, you’d better start saving your pennies (still getting used to that one) nickels, because the price tag is going to look a whole lot different than the one you were expecting. However, for property owners, this may not be such a bad thing.

Due to the labour shortage, house prices will predictably rise due to the squeezed rate of supply and demand, single-handedly increasing market value. Now, this also goes hand in hand with a smaller index of available properties due to the foreseeable housing shortage. That being said, the increases in value may be bittersweet to those looking to eventually sell and settle down in ‘the perfect place’, because that ‘perfect place’ will look like a ham to a herd of wolves when the time comes around.

Real estate comes at a price – that prices varies in many degrees including long-term investment. At this point there’s a large availability of affordable properties on the market, so get ‘em while they’re hot, because ten years from now things might be taking a strange turn.

image courtesy of Dave Stokes

We’re Experiencing Some Turbulence

Though the United States are reporting their Q4 as having the strongest quarterly growth in over seven years, it seems that we aren’t so lucky.

Canadian home sales are in fact taking a slight dive, as we predicted in our blog post, Here We Go Again.Despite our neighbours to the south prospering, our real estate market is not comparable to theirs for a number of reasons, however one would think that with both markets making a slight recovery that they should be following the same streamline.

However, The Vancouver Sun reports that this January we saw a near-23% decline in housing starts, leading is to believe that buyers aren’t in the mood for it yet this year; and sellers are clearly white-knuckle gripping the deeds to their beloved yet not-so-valuable homes. (Buyers and sellers failing to see the ‘give and take’ in the market. We aren’t going to go off on that tangent…because we already did here: Stop Forcing It!)

So now that we’re left with slipping market enthusiasm, not to mention our now lacking new developments, what can be done to inject some life back into real estate?

A NAR survey result posted by Chicago Agent Magazine revealed that agents in 2012 were statistically less experienced (measured in their number of years in the real estate industry) than those in 2011. What does this tell us? Well, if we look at the public’s lacking market participation, shorthanded developments, and the United States’ doing well while we aren’t, one could easily draw the conclusion that the entire real estate experience has become stagnant and stale.

Rather than blaming the public’s lacking participation with the market/industry, maybe it’s time the market participated with them instead by offering services and experiences that entertain and excite your clients about the wonderment and limitless possibilities to be discovered in real estate investment. The typical opinion of real estate agents is declining, so it’s time to take control, tighten up your business, man the hatches, and execute an expedition to the frontiers of scared sellers and new buyers. Agents need to step it up!

The only way we can expect the market to recover is by encouraging participation within; so why not be the draw instead of complaining that there isn’t one?

Sizzling Marketing

An article released by the National Post is bringing a particular amount of attention to the world of real estate marketing.

A Calgary, AB, based real estate agent recently released a billboard advertisement that’s been drawing a lot of attention; whether that attention’s a good or bad thing we’re still unsure. The billboard featured a photo of the young female agent Diana Arvatescu with the caption ‘Let Me Take You Home, It’s Gorgeous Inside’ as the message of the ad.

What started out as a clever innuendo campaign has now developed into a critique of the appropriateness of this style of advertising, and it’s place in real estate, as critics believe it to be too sexually implying and could put the agent in danger as a result.

Though critics may be overly assumptive in predicting that harm would come to the young Diana, the larger issue now is where the boundaries are to be drawn regarding appropriate advertising in a relatively conservative industry such as real estate.

What are your thoughts on this campaign? Is Diana going too far, or simply adding some spice to a bland industry?

Stop Forcing It!

One of the main issues with the market right now (besides it’s obviously ‘flattened’ state) is that people can’t seem to come to terms with the fact that their property isn’t worth as much as they think it should be. Startling, but true. This mentality unfortunately appears to be budding because, for some reason or another, sellers seem to think that by selling for less than what their property was worth when the market peaked (or less than their own made-up magical number), that they’re going to be out on the street once they sell, unable to afford a suitable home…Newsflash: The whole market’s doing bad, not just your property.

When the market takes a dive the only way to build it back up is for the inventory to keep moving…otherwise we just end up with a bunch of broke angry people who’ll die of old age in the properties they never sold. It’s a very rugged reality, and we’re compassionate for you, but by sitting there and trying to force a high market price for your property, you: a) aren’t going to sell your place, because (surprise!) the comparable market value of similar properties will obviously be set lower, leaving no buyer in their right mind with a reason to spend another $30k-$50k on your property, and b) contributing to what’s turning into a serious housing traffic jam.

Whether you like it or not, as a seller, you can make a choice. You can choose to sell your place, deal with the loss, get a new one, wait for the market to recover and cash in then; OR, you can stick it out, stay grumpy, and hope that you’re still around when your property value finally ‘comes back’.

So, this goes out to all sellers who are giving buyers headaches with this issue: Please keep in mind that it’s not just your listing price that’s low. It’s everybody’s. Just by taking a bit of a dive from your ‘magical number’ doesn’t mean you’re going to be homeless. It means you’re going through the market recovery motions. You’ll still be able to find a new place at a reasonable price, so don’t sweat it and bite the bullet already! After all, they call it a competitive market for a reason.

Starting 2013 The Right Way

The end of the world never came, so here we are back to the grind at the start of what we’d like to hope will be another great year.

One of the biggest issues with the new year is getting back into work mode. Everybody suffers from this (you’re lying if you deny it) including ourselves, so we’ve decided to pass along a few tools that will help ease the blow and keep your productivity optimized. We’ve gathered a compilation of some of our favourite extensions for our favourite browser: Google Chrome.

Not a Chrome user? You should be. Here’s a few Chrome extensions and apps to take some of the pain out of your first days back at work.

Short Link Getter: Does it drive you insane when a colleague passes a link along that’s about as long as the first chapter of Lord of the Rings? Fear no more. The Short Link Getter is the perfect tool to add to your browser to have a short URL for whatever page you’re on with the click of a button. No more are the days of copying, pasting into a shortener, re-copying your tiny URL, and sending it off. Just click, copy, and paste.

Google Mail Checker and YouSendIt For Webmail: Like us, many use GMail to keep our e-mail in order; personal or professional. With these two plugins, GMail just got even better. Receive instant inbox updates right to your toolbar with the Google Mail Checker, preventing having to incessantly check your inbox to see if you’ve got mail. Now, you just know. Have trouble sending large files through GMail? Just download the YouSendIt for Webmail extension and watch your fears melt away. Easily attach large files right to your GMail to share them with colleagues and friends alike with the click of a button. No more need 3rd party sites/programs or “WHY WON’T THIS SEND? BE SMALLER!” moments, just a simplified process.

Highlight to Search: One of the smaller aggravations encountered around many offices is the highlight, copy, paste, and search process, which can be tedious when doing ample research. This extension allows for a quick and easy process. Just highlight the keyword, click, and Google it. It’s that easy.

TooManyTabs and Page Snooze: A predominant issue when conducting research is the eventual maelstrom of ‘tabs’ that consumes the top of your browser. Ever wished for a way to save some of these for later, or to organize them is an efficient way? These two extensions allow you to do just that. Organize and categorize your tabs with TooManyTabs, or simply put them to sleep for up to two weeks with Page Snooze. Happy tabbing!

Speed Dial: If you’re a frequent flyer to a set of specific sites, this is your dream. Speed Dial allows users to customize their ‘new tab’ to have a set grid of sites ready to go at the click of a mouse rather than a) remembering them all, and b) typing them in one after the other. Getting to your sources is now a total breeze.

Adblock for Youtube™: Last but not least, we present you the most handy gadget of the bunch. Not because it improves productivity, but because it’s the internet’s Advil when it comes to the ever-annoying ads that YouTube displays before, during, and after their videos. Now you can get back to how it used to be and skip all that garbage with the Adblock for Youtube™ extension.

Now, get out there, download Google Chrome, and start your year off the right way: as easy as possible.

Have some personal favourites that we missed? Be sure to share them in the comments below.


image courtesy of Lisa Brewster

Market Slump Contributes to Recovery

You’d think that the market being down in the dumps would be something to worry about, but according to new theories put forth by several economists this could be somewhat of a God-send for real estate recovery.

Like we were saying in our post ‘Collaborative Recovery’, in order for the real estate market to recover, we need to see participation from all areas of society rather than the elite. Well, prices being as low as they currently are could in fact be what we’re looking for to jump-start the climb out of the market’s shriveled state. Couples, young families, or whomever else, have now been granted the opportunity of a low-cost housing index (for the most part) which is exactly the type of stimulus the market needs to recover. The low prices could very well be the icing on the cake for a lot of potential young buyers, who may otherwise not have been able to afford a home. Now that mortgage rates are so low and housing prices having practically never been lower (at least for quite some time), we may finally start to see the collaborative initiative required for a wholesome market recovery.

Through this, theories are also being put forth suggesting that the Canadian market won’t take a second dive like our neighbours to the South as statistics put forth suggesting a second crash were in fact misconstrued and did not account all factors, especially when compared to the US market. For example, the debt-to-income ratio, when compared to the US, didn’t take into account the amount of extra benefits Canadians receive through their debt such as healthcare and other subsidized services that the US doesn’t provide, therefore weighting economic predictions in a direction that may not be entirely comparable after all.

The only way to tell if any of these theories come true, is of course time. However, the prospects being put forth don’t seem shy of being on the right track…we hope.

image courtesy of USACE-Sacramento District

Collaborative Recovery

A short while ago we talked about how the real estate’s market recovery will more likely than not depend on full societal collaboration and participation within the market, in a post called ‘To Stabilize We Must Equalize’. If only those who are in good shape participate, then top-end properties circulate freely while mid-level properties stay put and depreciate.

Looking into the future, this concept is seemingly being applied to various markets already, which is a huge step in the right direction. Participation is going to be the key to market re-stabilization.  In the US, it’sshowing that dual-income households are helping largely in this aspect. Therein lies the example that multiple participants working towards a common goal within their own households are improving the market in its entirety. An annual study by NAR showed that about 65% of all buyers are married couples, as opposed to 58% the year before. This increase in efforts is exactly what we need to see.

According to a recent Scotiabank poll, an impressive 77% of Canadians view home purchasing as an investment as opposed to an expense. With this mentality, Canada will hopefully follow-suit with our neighbours to the South in investigating the proper investment methods that will not only benefit the buyers and sellers, but the market itself. Recovery is close, now it’s just a matter of harnessing interests and investment strategies to collaboratively force a market recovery.


image courtesy of Ken Jarvis Photography

To Stabilize We Must Equalize

Speculations around market recovery are many. The desolate state in which the property market resides is remaining stagnant, with fragments of measurable recovery being made. Therein lies the question of how to inject some life into the current market; enough to drive a full recovery.

A recent Vancouver Sun article highlighted a very interesting and probable theory put forth by Vancouver’s Mayor Gregor Robertson. The concept he proposes is that more low to middle-income housing must be implemented in order to develop an efficient housing market recovery. Reason being is similar to a concept we covered in a previous blog post – Here We Go Again – that covered the principle of a market recovery being impossible wherein the lower-income citizens couldn’t participate in the market themselves. If only the wealthy are purchasing and rotating properties, then the market only fluctuates above a particular income bracket, as opposed to that of a fluid recovery that encompasses the efforts of all classes within a particular society.

The concept of introducing affordable housing for the lower and middle-class is quite ideal. In order to stabilize the property market, we must first even the playing field. If implemented successfully, this methodology could quickly yield beneficial results, as a rounded market recovery rather than a weighted one would increase and stabilize real estate across the board instead of augmenting the values of high-value properties for relatively elite citizens to exchange amongst themselves like poker chips.

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image courtesy of Antanith