Are We There Yet? The Long Road To Recovery

Unfortunately, no, we aren’t even close.

BC, and quite possibly the rest of Canada, are presumably about to experience what economists are calling a double-dip recession, meaning that housing prices are going to drop once again, and this time in a very aggressive way. Despite being thought to have stabilized, the Canadian housing market is in fact quite vulnerable at the moment, and though prices have been “bottoming out” it appears the barrel goes even deeper than most expected. How much could values potentially drop? Vancouver Sun reports that they could drop as much as another 7.8% lower than the already frighteningly low prices we see today.

Now, this isn’t to say that every house in BC will depreciate this much, however we can already see the market slowing down quite a bit, which is a pretty good indicator of this theory coming true. For example, home sales in Vancouver are a whopping 30% down from this time last year, and August’s sales were 21.4% down from July…unsettling would be an understatement at this point.

Experts are divided on whether or not the housing market will actually take the 7.8% dive, but one thing is for certain – the seller’s market isn’t looking hot. If you were thinking about listing in the near future, it might not be a bad idea to sit on your property for a little longer and try to do some value-added home improvement projects to pass the time. We aren’t there yet…but hopefully we will be soon.

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image courtesy of breahn

Boomerang Benefits

The boomerang generation – a title freely used to describe most people who were born in the late 80′s and early 90′s, who are now in their 20′s, have gone to college or university, then moved straight back home. One of the main causes of this ‘boomerang generation’ phenomenon are the lack of available jobs in combination with the lack of affordable housing to these young people, who generally go broke from paying for school to get a degree that didn’t even earn them a job after-all…it’s a vicious cycle to say the least.

How do we break this cycle that’s causing such a distinct divide in the availability of social opportunities for our children? By sticking out our hands and helping our kids off the ground. It’s not really their fault they can’t afford a house or a car or their education…our generation sort of made it that way. We’re the ones with all the jobs and houses, so it’s no wonder there isn’t any room to share with our kids, unless we initiate their launch into the spectrum of social and financial responsibility.

Most of these boomerang victims are working enough to afford to pay rent, so instead of letting them continue to walk down the never-ending path of dissipating rent money, why not fork out for a down-payment for their first home? It sounds crazy, and it sounds like a lot of money, we get that, but when you look objectively at what it is – an investment – then there’s no need to panic. Position your family into a more financially stable and achievable situation by securely investing your money (especially with the market barely starting to recover from being bottomed-out), while pushing your kid into the real world by putting their name on the deed to a house and initiating the responsibility of mortgage payments to benefit their credit rating and social standing. After all, if you left it up to them to come up with a down-payment, let’s face it, they’re just going to hang around and wait for their inheritance, and nobody likes the sound of that.

A way to take this step even further would be to make the same investment if your “kid” is going to school abroad. Regardless of where they’re going, this same secure investment can be made to benefit both of your finances. They’ll be guaranteed a stable place to live throughout the course of their schooling while you make a secure investment.  The reason this is a secure window of time for the property’s value to raise to achieve profit on the re-sale once they return home from school with a pristine degree in their hands, is that their schooling can take anywhere from 4 to 10 years (or more) to complete, depending on the degree. Considering the current market prices, don’t think too much about it and just make the investment! The market’s about as close to bottoming out as it’s going to get, so the time’s never been better to take advantage of the next few years of growth and cash in, and to give your kid a fighting chance at entering ‘the real world’.

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article courtesy of enviromint

image courtesy of jollyjump

Home Improvement Breakdown

Every once in a while we run into some houses that have been personalized, adjusted, tailored, or whatever else you’d like to call it, just a little bit too much to the owner’s liking. In fact, most of these “little changes” become a pretty “big deal” when you’re trying to sell your property. This is why we’re here today to inform those of you who weren’t already aware that, when making adjustments to your home, you seriously need to draw the line at some point. This is a perfect example of what happens when you don’t draw the line:

We get it if you want to paint the bathroom, put in a new oven, maybe even put a swimming pool in the back yard, and that’s all totally fine. However, when you start painting the Bat signal (yes, the photo is real) on the bottom of your new swimming pool to entertain your kid, you should really stop and ask yourself two things:

1) What on Earth am I spending this money for?

2) Who’s ever going to buy this?

These are two fail-safe tips to hopefully prevent you from making the same mistakes these Bat-crazy homeowners have made. At the end of the day, your home improvement projects need to be reasonable and tasteful to appeal to the general public, while also hopefully improving the re-sale value of your property instead of degrading it. If you desperately need to customize your house to the theme of your favourite comic book hero, or whatever else, then decorate it or hang a picture up instead of mutilating your home. This isn’t like getting a tattoo where you’re the only person who will ever have it and that’s that. It’s a property. You’re eventually going to sell it, and when you do, you need to make sure you haven’t destroyed it to the point where nobody’s going to buy it…otherwise you might was well put your money in a blender and feed it to your cat. **No cats were harmed during the writing of this blog post

Maybe it’s all the Batman frenzy that’s been happening lately that’s led these homes to be Bat-themed…but this has to stop. Do what’s best for your property, give your head a shake, and remind yourself you’re a grown up (as much as that may suck to admit). If all fails, just think of those sweet $$’s you’re missing out on by impeding the resale value of your property all for some novelty “improvements”. We promise you’ll thank us later…now please start painting over your Iron Man mural.

 

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Article courtesy of Enviromint

images coutresy of Zillow and UberReview

Here We Go Again

As it turns out, the housing market is reportedly stabilizing as we, among many others, have been talking about for the past couple months. The interesting portion about this is where the stability is being derived from. From what we can see, there’s a large number of investors putting their money into luxury real estate…but that’s about it. A news clip from CNBC stated that 24% of Americans making over $450,000/year are in the market for real estate (more specifically luxury real estate) which is a substancial 7% increase since last year. The market has of course bottomed and started to show signs of stability, but the only people who seem to be able to afford taking advantage of this situation are the people who were never really affected by it in the first place.

Low interest rates, low prices, and promise of market improvement is any investor’s dream, but what about the rest of the population that doesn’t even come close to making that sort of coin? Heck, Canada’s housing prices still haven’t even bottomed, and are expected to drop another 10% over the next two to three years. So, while wealthy investors, foreign and domestic, take advantage of this situation, there seems to be no weight being thrown around by the “average” social classes, which is kind of a scary thought. Why? Because when a market cheapens up, if there’s only a small population of people who can afford to have a piece of the pie, it makes for a really unbalanced property market. Yes, it contributes to market recovery, but if luxury properties are the only ones being circulated to seemingly increase their value, while making no contribution to evening out the rest of the market, it may lead to another collapse down the road.

New mortgage rates in the US are dropping to try and increase purchasing rates and entice new buyers, which is great, but in Canada they’re going up…and they’re cutting mortgages shorter to boot, pushing new buyers even further away from their purchasing goals. Homes and properties are being purchased, but the way this is weighted doesn’t spell good news looking down the road. If the rich get richer, while the rest of us scrape our change together to make the same level of purchases, the market won’t stabilize. Keep in mind that renting rates are going up in conjunction with available properties instead of the ideal situation of new buyers rising in conjunction with increasingly available properties. Collectively, this doesn’t exactly scream “recovering market” as much as it does “impending monopoly”.

 

photo courtesy of f_shields

Real Estate Agent Bails on Market

Just when you’ve seen everything in real estate, an agent steps in and gives you something to think about. Ken Roy, a Vancouver real estate agent is encouraging others to get out of the Vancouver market before the slow sales period starts to snowball. Not only is that unusual for someone in his position who is trying to well… sell, but he has put his money where his mouth is and sold his Vancouver home. Very rarely will you hear an agent comment on a dismal state of sales, let alone encourage people to cash out, because it’s simply not good for business.

Although it may not be the most practical choice based on other factors (re: employment, family, friends, cost), are Mr. Roy’s claims an overreaction to a trend or is his advice warrant some serious thought? Do you admire his unwavering character for telling the truth or has he caused his career some undue harm?

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Photo courtesy of Vincepal

Vacation Homes: The Resurgence

It’s no mystery by now that the property market has been…questionable…since the middle of the past decade, and is only just starting to finally sort itself out. By no means has the market recovered, however it seems apparently stable, and is starting to show slight improvements over the past few months. We may not be on the home stretch yet, but for those of you reaping the benefits of this new-found stability, we’ve got some good news for you.

Vacation homes, the pinnacle of leisurely purchases and all things great, are currently presenting themselves as very appealing purchasing targets. Since the market isn’t so slasher movie frightening anymore, investments can finally be securely placed in the hands of vacation homes, which, as a market, have sat relatively dormant since the mid-2000′s. Why’s this? Cause and effect dear friends. “The vacation market is going to follow the overall market with more volatility because properties that would appeal to vacation home buyers are not only being affected by what is going on in the market overall, but the process of buying a vacation home is purely discretionary,” according to Paul Bishop, Vice-President of NAR. ”If there is a lack of confidence in the economy by consumers, it is easier to wait on a vacation home purchase than on a primary residence purchase.”

There you have it folks, straight from the horse’s mouth. Right now is prime time to finally bite the bullet and grab that little ski cottage or lakeside retreat you’ve always had your eye on, so don’t sleep on it an execute! Agents, this means you too. Consider this a tip from us to you: take this information and use it to your greatest advantage, and move some of those awesome vacation properties you’ve been sitting on that nobody seemed interested in before. Make it explicit that the vacation home market is going to mirror that of the primary purchase market, putting your clients in the perfect position to get a great listing at a premium price, with no sweat off either of your brows. The time is now, so act on it!

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Celebrity House Flipper Settles Down

Diane Keaton, actress and house flipper extraordinaire, has finally chosen a home to settle down in. Breaking her normal habit of buying homes that need major rejuvenation and adding her own flavour of decor and and renovation, she has bought a home that’s all ready to move into. Although this change seems to be just temporary, because her plans are to find her next flip project to sink her teeth into. Until then, she has found 7,800 square feet on a quarter-acre of land to call home.

Past Keaton projects include:

A Spanish-style home in Beach
A Bel-Air estate ‘in the style of George Washington Smith’
A Spanish style manse in Beverly Hills, which was eventually sold to Madonna.
The Samuel-Navarro house sold to Christina Ricci
A Spanish-Colonial style in Beverly Hills, sold to director/producer Ryan Murphy

Photo courtesy of sbclick

 

NAR Owns The Block

NAR now officially owns every building on the block on which they operate off Michigan Avenue in Chicago, Illinois, after purchasing the last remaining non-NAR building – a two-story building previously occupied by the Wrigley Company. Though, we’re not sure which is more surprising: their ownership of an entire commercial block, or the price at which they scored this last puzzle piece. Rumors and speculation are throwing the price tag of $4 Million around in regards to the original price of NAR’s newly acquired purchase. Startlingly, the building was purchased for a mere $1.45 Million, and there was no commission on the sale, though both brokerages were apparently separately compensated.

This $1.45 Million CASH purchase, if the speculated listing price was in fast $4 Million, was definitely a steal of a deal. Even if they were to sell this newly acquired building in one year, they would still make a killer profit. The purchase was done primarily as a preventative measure for other development on the block that could potentially be detrimental to the block’s equity, but they apparently have no near-future plans for this building. Speculation points to the possibility of a tear-down, and then a further expansion of their headquarters. What are your thoughts on this incredible deal NAR just got, and what you think their plans for this building are? Join the conversation with us on Twitter.

photo courtesy of Chicago Agent Magazine

Wages Are Up, Prices Are Down

The National Association of Realtors have released results of a survey revealing interesting details. The survey’s results concluded that in 2011 there was a 2.3% increase in average salary amongst Realtors; the first increase seen in nine years. Yes, that’s right. 9 years. Now, this seems rather strange since real estate has been doing nothing but plummeting and ebbing it’s way through the past decade, with no sights for improvement on the horizon. However, this increase in salary could be a great indicator that maybe real estate as a national industry is finally starting to recuperate, and that not all hope is lost for those pursuing the career path of a real estate agent. In fact, the poll also revealed that more than 9 out of 10 Realtors surveyed said they planned on remaining in their profession for at least two more years.

In combination with reports of real estate being on the recovery in the United States, as well as theCanadian market’s “soaring” in prices and sales (with the exception of Vancouver, who for over 5 months have seen a steady decline in sales and price), are we about to see the market recover? Let us know your thoughts on Twitter.

 

via. enviromint

photo courtesy of Colin_K

Facebook’s Impact on Real Estate

Palo Alto, California, is seeing some very substantial activity in their real estate market as a result of Facebook’s impending IPO (Initial Public Offering). Huge price influxes have started occurring since the beginning of the year, up to 10%, as a result of Facebook’s operating headquarters being located in Palo Alto.

Part of this influx is a result of investors seeing the opportunity for the area to boom, creating a very high demand for properties in the area, resulting in these significant increases in price. Real estate agents are even recommending to their clients to wait to list their home until Facebook goes public, as this is predicted to largely increase home values in the area. And, really, who wouldn’t when the medium price for a single family home in the area is estimated at nearly $2 Million.

One impending factor is that Palo Alto’s inventory is reported to have declined by 57%, a very scary number, resulting in predictions that should the IPO not go as well as planned, the Palo Alto market may in fact crash, which is the last thing anybody wants out of this. Did anybody else think that Facebook would ever have a legitimate impact on the real estate world? Join the conversation with us on Twitter.

 

photo courtesy of birgerking