Greater Victoria Real Estate Blog

Victoria Real Estate Market update

2009-01-29T08:42:00.000-08:00

Date : January 29, 2009

To: Our clients and friends in real estate,

Just a quick update on the market and checking in with you how you and your family are doing.

In this first letter of the year we wanted to touch on a number of timely subjects affecting many people and their real estate plans for the next number of years.

· Market updates resources now online...

· Your 2008 Property Tax Assessment notices.

· We will touch on a number of questions we hear from various people at different stages in their live in trying to figure out what is the right thing to do regarding their real estate plans.

· In addition we wanted to introduce you to our new VIP service and invite you to become a member in this preferred services club.

For current market conditions and statistics we would encourage you to visit our website and check out our newsletter their which is updated with current real estate news almost daily. In addition you will find market statistics of various Lower Island communities in greater detail, with current averages, median prices and number of sales over the past month. Our web site is at www.pfanntastic.com . if you do not have access to the internet, and would like to receive a printed copy, please call us and we will gladly make a copy available.

TAX ASSESSMENT NOTICES; This month you will or have already received your annual property assessment notice, which this year has an extraordinary approach to estimate the assessment, by using the lower of 2 years in determining this year’s assessed property value. As you know your annual property taxes are based on a multiplier factor used with your assessment value, so the higher the assessed value the higher your property taxes (notwithstanding that the municipalities can and will adjust the multiplier every year if needed). With this unprecedented move the assessor is all but eliminate the flood of appeals that they would otherwise have incurred, however if you feel that your property assessment is still to high, you do have the right to file a formal appeal (the online system as identified in your notice is very simple and works very well).

In order to submit your appeal you do need to have some estimate of value as of the assessment date, so talk to us if you need any assistance with establishing this value as at July 08 and July 07.

We mentioned to review the market statistics on our website well as you will see the market statistics show some dramatic shifts and changes, as the sample gets smaller however it is clear that with the current market conditions and lack of confidence that there will be some amazing opportunities that will show up over time. Let us give you some examples.

For those considering upgrading to a larger and or more expensive home. To give you an example, and assuming that prices slide at the same rate across the market (which is not true) but let’s say that the market prices dropped 10%, from $ 660,000 to 595,000 but your next home priced at $ 800,000 dropped the same 10% the spread between the 2 actually reduced by $ 15,000 in your favor.

As mentioned we actually think that the higher priced/ larger properties are dropping at a slightly higher rate than the prices of properties closer to the median of the local markets, which would further benefit you. On top of this, you will see over the next little while that a few builder/developers are getting squeezed by their banks and will be very motivated to sell sooner rather than later.......

Conversely, if you were planning to downsize over the next few years (2 – 5 years), it may be a good time to consider your options as well. As most of the experts are anticipating a prolonged slide in market activity and values, if your property is valued moderately to substantially higher than you local market area medians, your property value is likely to reduce more and faster than those at or below the median values in your area. Which could cause the net proceeds difference between the sale of your current property and the lower purchase price of your future property to be smaller than you would have hoped for.

For example, say you sell today at $ 600,000 and buy today at $ 400,000 (ignoring fees and expenses) you would net $ 200,000, however say you sold in 2 years with a net value reduction of 10% per year for both your sale and purchase in 2 years your current property would sell at $ 486,000 and the property you would buy would be at $ 324,000. Again ignoring all the expenses and fees, you would net a whopping $ 38,000 less, but it gets worse, if you then consider if you had invested the net proceeds from your sale now at say 5% return per year, the difference would turn out to be a total of just over $ 60,000 in net advantage to you just by timing your move correctly.

So if a move during the next 5 years seems inevitable for you, making the big move now in either case may be better than over the next 2 to 5 years, that much seems to be clear.

TO SELL OR NOT TO SELL THAT IS THE QUESTION…….? As we keep discussing with most people, if you do not need to sell now or in the future, that would be the way to go, keep the current property and use it for future “investment purposes”. That investment may be your downsized home, or the new dream home, use the current property for revenue purposes and have your mortgage paid for by tenants. However we understand, that is not always possible or an appropriate solution for you. (ask us for our free report on this issue).

There are many very good tenants still screaming for appropriate housing at affordable rates. We have also recently spend some time investigating how to optimize revenue from rental accommodation and would be delighted to share this information with you if needed.

We can not predict what the future has in store for you, however, we do know that those that embrace information, knowledge and opportunity tend to be able to better weather the storms of change when they show up, real estate holdings have always been a save heaven for most not just as a home but as a secure and long-term investment……

Now this off course has nothing to do with anything until and unless you are interested or need to be moving at all. If that is the case the chicken and egg issue of real estate becomes relevant again, as most people need to sell their property in order to be able to move forward with their purchase.....We have a little report about timing your move correctly, which we will gladly forward to you if needed.

FOR FIRST TIME BUYERS, this current market situation is like opening a cookie jar, and finding new favorite cookies every day.

With increasing supply and lowering prices and combined with amazingly low interest rates it becomes almost to good to be true. properties that were not even on the radar scale a year ago, are now being by passed, as even better options become affordable. Be sure to stay in touch with us as well as your Mortgage Broker, as financing situations are changing and your local mortgage expert, can save you money time and frustration as long as they know what your plans are.

The question we currently hear often from first time buyers is “when is it the right time to buy?” the answer is often dependent on your own situation, but simply stated, when your current cost of housing exceeds the cost of your mortgage for your future home, I would say it’s time to take a hard look at your options. Even if the prices may still drop a bit, with the monthly payment savings, the equity your are building as well as the ability to start adding value to the property, I would likely suggest again that sooner is likely better than later, provided we shop smart, find the right property, at the right location and at the right price and terms.

INVESTING IN REAL ESTATE, is it time to start investing in real estate…….?

Yes, no and maybe, is the short answer, again it really depends on what your objectives are over the next 3 to 5 years. But like any other investment, if the investment fits your specific investment criteria, why would you not buy it….?

Today is likely not the time to buy and try to do a short term flip with a property for obvious reasons. However there are certainly properties around that by doing the right things to them (buy, fix, sell) that could give a decent return, although even that would be a higher than average risk at this time.

The best situations at this time are likely in properties that are under used, in some way or another, and that could benefit from a creative investment approach to its improvements with an eye of generating cashflow that would far exceed the normal forms of cashflow available.

We have discussed this opportunity area with a good number of people over the past few months and years, and it is very clear that there is an ever increasing demand for specialty housing with added services for which in the past various levels of government was responsible, however this segment is more and more becoming an amazing business opportunity for those with a bit of vision.

Even if you want to be in the traditional revenue type real estate, there are already a number of opportunities around where the potential cashflow would easily pay for the property, which again would likely make sense to consider for long term holding certainly more secure than the stock-market………., need we say more.

Options, Choices, more options, more choices, what to do, it is a real good time to consider your options and talk to us.

Peter Meets Lady Luck (hopefully)

2007-11-08T20:59:00.001-08:00

Not really news but just to let you all know that Peter Will Be in Las Vegas for the week of November 11 till November 17, 2007.

Not for Pfunn but for work, (and I am sure you believe it) but it is true, we will be going to the worlds largest real estate convention (NAR) and attending the conference and a large number of special sessions.

It will also be a great opportunity to meet and network with thousands of North American Realtors
Discussing anything and everything interesting real estate.

2 meeting I am looking forward to are presented by Bill Cosby and Della Reese, both of great Television acclaim but also great givers and will be sharing insights in to how and why to do things for the greater good.

Housing Start update from Cmhc for the Island

2007-11-08T11:05:00.000-08:00

Just released the Vancouver Island Housing start information from CMHC,

Indicating a slight slow down in starts, not unusual for this time of the year, and predicted in earlier releases, check out the full coverage.

Talk To Peter, if you have questions or comments about this information. peter@talktopeter.com

http://www.cmhc-schl.gc.ca/odpub/press/2007/2007_11_08_0815_EBI.pdf

CMHC Housing Outlook for Victoria for 2008

2007-11-05T21:17:00.000-08:00

Be the first to study the CMHC Victoria Housing Outlook for Victoria for 2008.

In short, Steady, Robust, bus likely to slow a little in Volume but prices will continue to increase but at a lower pace.

Check out the entire report, at the link below, and decide what your best action is for the next year.

http://www.cmhc-schl.gc.ca/odpub/esub/64367/64367_2007_B02.pdf

Logic to me says, if you are going to buy, buy sooner than later.
If you are going to sell, determine what you are going to buy first, Up size, sideways move or downsize.

To be honest if you don't need to sell, then don't sell, just build your real estate portfolio, as the report clearly indicates that rental accommodation will continue to be at a premium.

But this is just my read on the situation, and I would love to hear yours.

peter@talktopeter.com

Victoria Real Estate Octorber Sales Continue Strong Showing

2007-11-03T08:05:00.000-07:00

Sales of homes and other properties in the Greater Victoria area soared 20 percent
in October compared to the same month a year ago.
There were 708 sales through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) in October, up from the 590 sales in the same month a year ago. There were 632 sales in September of this year.
Meantime, prices for single family homes moderated somewhat while prices for condominiums and townhomes showed little change.

Victoria Real Estate Board 20+ year Realtor, Peter Pfann, says the strong sales and stable prices show continued consumer confidence in the market. “

Sales last month were the highest for October since 2003 and so far this year sales are running nearly 13 per cent higher than the first 10 months of 2006.”

Peter Pfann added that it’s normal for overall prices to fluctuate on a month-to-month basis depending on the properties that sell in a given month. “While the average price of single family homes moderated slightly last month, the overall average price so far this year is over seven percent higher than at the end of last year.”

The average price of single family homes sold in October was $556,222; the six month average was $570,454, The median price was considerably lower at $495,000.

The average price of all condominiums sold in October was $343,334; the average for the last six months was $321,993. The median was again lower at $291,000.

The average price of all townhomes sold last month was $407,031; the six month average was $404,163. The median price was $369,950.

MLS® sales last month included 375 single family homes, 196 condominiums, 79
townhomes and 22 manufactured homes.

There were 3,311 properties listed for sale on the MLS® system at the end of last
month, down slightly from the 3,426 properties in the same month a year ago.
If you are interested in Area Specific information on sales, listings and values, we have these available upon request.

If you are wondering how your property compares or fit with the current market conditions, please talk to Peter Pfann, www.talktopeter.com
or peter@talktopeter.com or (250) 213-9490

upcoming seminar

2007-11-03T07:49:00.000-07:00

November 20, 2007
We will offer our Cash-Flow your dreams Workshop.

Based on Robert Kyiosaki's Book "Rich Dad Poor Dad, we will explore ideas, tips and life altering mind set to make little changes in our approach to using money to work for us, instead of working for money.

email peter to register : peter@talktopeter.com

Realtor population

2007-11-02T09:23:00.000-07:00

When I moved to Victoria in 1991,
Real Estate was very busy, and at the time with over 1,300 agents active in the local industry.

After the last Market decline in 1995, we dropped from an all time high of 1642 Realtors to a low of about 880 Realtors by 1999.

Since then we have seen some significant changes in the industry, most importantly the change to the Real Estate Act to allow Realtors to be active in multiple careers.

Even with the change to allow part time Realtors, the number of Realtors now active in our area is approximately 1,150 and growing by about 10 to 15 new agents per month.

The ratio between general population growth and the Realtor population growth is indicating that Real Estate as a Career option is a very secure and smart business decision

What is the point here, Real Estate as a career is one of the last industries where your pay raises are very much in your own hand, and should be considered if you are looking for a 1st, 2nd or retirement career.

Talk To Peter Pfann to find out how, peter@talktopeter.com

GST reduction

2007-11-01T19:03:00.000-07:00

Ok GST and Real Estate is big news, and the Federal government, just indicating that we are to see a further reduction to the GST, will have a big impact on construction cost, and off course to all those planning to buy a NEW (gst added or included) home, that could save thousands of dollars, this would be Pfanntastic news

source CREA, contact me if you want a link to the actual press release from crea.

Where is the Victoria Market Going

2007-11-01T07:14:00.000-07:00

With every media outlet indicating different directions about the future of the market, we wanted to see how you feel about the future of the local market and how changes elsewhere impact upon us.

Our read of the future market is simple, as long as there is more demand than supply prices will continue to go up and as such, we predict a slow down in the price increases over the coming years.

Everybody that leaves their house and drives the streets of the Greater Victoria Area, will have noticed all the building going on, the concern we have that most of the current constructions seem to be focused on one type of building. Most of the condo's build are the mid to high price luxury buildings. With prices starting in the mid to high $ 300,000 for Condo's and as far as town-homes the starting prices is in the mid to high $ 400,000.

that takes most if not all first time buyers out of the new construction marketplace and off course with the influx of this large number of similar type properties entering the market more or less all at the same time, and many more in the works, we feel that we have seen the end of the fast spiking price increases, at least in the condo market.

The Single family home market is a little different, as they are not building single family homes as fast as they are being sold, yet, so we think that there is still a fair bit of price increases on the horizon. But again with the starting prices, well into the $ 500,000's the new home construction market has not seen a first time buyer for years by now.

The commercial section of the local real estate market is much more complex, and I will write a separate post for it later this week.

So what do we conclude from all this;

New construction condo market is and or will soon enter a period of time with more supply than demand and prices will soften. Re-sale homes are a much better value at this time, and are often in better locations anyways (except for the really special ones, read expensive ones).

New construction Single family homes are getting easier to find and buy over the next year or two, but prices will hold and increase at single digit increases.
Again the resale homes are a much better buy in most cases, dependent on where you want to be and what type of home you are considering.

Example, one just can not buy a 3,000 sqft 1990's home with an in-law suite in Oak Bay, and if you can it is so rare that the whole world will jump all over it. where that type of home is the norm in the western communities.

but this is just our small take on the future of our market, we are cautiously optimistic.

October 2007 Housing Stats from CMHC

2007-10-31T12:04:00.001-07:00

the link below will open a pdf with the latest CMHC Victoria Housing Starts, and construction information.

This is very interesting information to predict and anticipate where the market supply and absorption is and is likely to go in the foreseeable future.

We welcome and encourage your feedback.

Here is the link :

CMHC HOUSING STATS Victoria October 2007

2007-10-31T08:03:00.001-07:00

Strong Real Estate Market
Continues in September
The strong real estate market throughout Greater Victoria showed no signs of slowing
down last month with continuing strong sales and robust prices. There were 632
sales through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) in
September, up seven per cent from the 593 sales in the same month a year ago.
There were 846 sales in August of this year.
The average price of single family homes sold in September reached a new record
high of $584,193 although the median price was considerably lower at $520,000.
Victoria Real Estate Board President, Bev McIvor, noted that a number of highpriced
sales affected the overall average price, “There were 17 single family home
sales of over $1 million and this had a significant impact on the overall average.
Nearly a quarter of all single family homes sold for less than $425,000.”
The six-month average for single family homes was $572,007. McIvor added that
overall sales so far this year are running 12 per cent ahead of the first nine months
of last year.
The average price for all condominiums sold in September was $341,014; the
average for the last six months was $318,198. The median was again lower at
$288,500. The average price for townhomes last month was $402,313; the average
for the last six months was $402,246. The median was $375,000.
MLS® sales last month included 335 single family homes, 150 condominiums, 77
townhomes and 21 manufactured homes.
There were 3,381 properties listed for sale on the MLS® system at the end of last
month, down slightly from the 3,449 properties in the same month a year ago.

Real Estate Tip 1

2007-10-30T15:51:00.001-07:00

If Owning a Money Machine, (Real Estate) that others pay for is not enough, here are a few more key reasons.

Value Appreciation
Tax Benefits
Leverage
Easy to Do
Secure Investment
You Control It
Many Options to Add Value
Help Others