Housing Market Experience Soft Landing.

by MBN | 06 Dec 2013

The housing market is expected to experience a soft landing, as opposed to a hard correction, the Bank of Canada announced in its monthly overnight rate announcement this week.

“The housing sector has been stronger than expected but is consistent with updated demographic data and a pulling forward of home purchases in light of favourable financing conditions,” the report stated. “The Bank continues to expect a soft landing in the housing market.”

The Bank of Canada also announced its newest overnight rate Wednesday and… surprise… they have chosen to hold it steady at one per cent, once again.

“Overall, the balance of risks remains within the zone articulated in October,” the report stated. “Weighing these considerations, the Bank judges that the substantial monetary policy stimulus currently in place remains appropriate and therefore has decided to maintain the target for the overnight rate at 1 per cent.”

The overnight rate has, of course, remained at one per cent for over three years with the Bank of Canada choosing to refrain from interfering. The announced rate bodes well for those homebuyers currently holding a variable-rate mortgage.

GDP growth, meanwhile, was stronger than initial projections.

“In Canada, underlying growth is broadly in line with the Bank’s projections in its October and July Monetary Policy Reports,” the report stated. “Real GDP growth in the third quarter, at 2.7 per cent, was stronger than the Bank was projecting, but its composition does not yet indicate a rebalancing towards exports and investment.”

BCREA ECONOMICS NOW

Bank of Canada Interest Rate Announcement – December 4, 2013

The Bank of Canada once again opted to maintain its target for the overnight rate at 1 per cent. In its accompanying statement, the Bank highlighted that inflation continues to move below the Bank’s 2 per cent target due to significant excess supply in the Canadian economy. It also noted that the risks to inflation appear to be to the downside, meaning it sees the risk of continued below target inflation as a more likely outcome than a rise in inflation. This, along with the Bank’s expectation of a “soft landing” in the Canadian housing market, suggest that monetary policy will remain highly accommodative.

The Bank of Canada is currently projecting that excess supply in the Canadian economy will be eliminated sometime in mid-2015. Keeping in mind that the Bank has spent the past several years pushing that date back, if the Canadian economy does accelerate as most expect in 2014, a gradual rise in short-term interest rates will follow. Importantly, an uptick in Canadian economic growth next year will most likely be the result of stronger external demand, particularly from a resurgent United States.  However, stronger growth in the US economy will also put upward pressure on long-term yields, lessening some of the urgency for monetary tightening. For that reason, we expect that eventual Bank of Canada tightening will occur very slowly, beginning with a 25 to 50 basis point increase in the overnight rate in 2015.

For more information, please contact: 

BCREA represents 11 member real estate boards and their approximately 18,000 REALTORS® on all provincial issues, providing an extensive communications network, standard forms, economic research and analysis, government relations, applied practice courses and continuing professional education (cpe).

Real estate boards, real estate associations and REALTORS® may reprint this content, provided that credit is given to BCREA by including the following statement: “Copyright British Columbia Real Estate Association. Reprinted with permission.” BCREA makes no guarantees as to the accuracy or completeness of this information.

News Release: December 3, 2013

FRASER VALLEY’S HOUSING MARKET COOLS IN NOVEMBER   

(Surrey, BC) – The Fraser Valley Real Estate Board’s Multiple Listing Service® (MLS®)  recorded 986 property sales in November, an increase of 9 per cent compared to the 905 sales during the same month last year, however a decrease of 21 per cent compared to October’s 1,249 sales.

Month-over-month, the Board also received 24 per cent fewer new listings – 1,774 compared to 2,336 in October – but still an improvement over the 1,723 new listings received during November of 2012.

Ron Todson, president of the Board says, “We typically see a slowdown just before the holidays and this year it started a little sooner reflecting what we’re seeing in our overall economy.

“Similar to last November, sales are hovering at about 14 per cent off normal levels, but so are new listings. They’re down about 7 per cent compared to the 10-year average, so what we’re seeing is a slower but steady market keeping home prices in check and the average number of days to sale stable.”

For a detached home in the Fraser Valley, the average number of days to sell in November was 57, compared to last year’s 59 days. For townhomes, it was 58 days and apartments 78 compared to 70 and 74 in November 2012.

Prices for benchmark homes also remain steady showing nominal year-over-year increases or single-digit decreases. For single family detached homes, the benchmark price increased by 1.0 per cent in one year, going from $544,700 in November 2012 to $550,300 last month.

For townhouses, the benchmark price in November was $292,400, a decrease of 2.2 per cent compared to $298,900 during the same month last year. The benchmark price of apartments in the Fraser Valley in November was $196,200, a decrease of 3.3 per cent compared to $202,800 in November 2012.

Todson notes, “Those thinking of buying or selling may notice in our monthly statistics package that average prices in November are up or down substantially compared to the benchmark price.

“Talk to your REALTOR® who will explain that the volume of sales and the calibre of homes sold can dramatically skew average prices, which doesn’t happen with the benchmark price the most reliable of all pricing measurements.” 

Since November 2012, the benchmark price in the Fraser Valley for all three residential property types combined is flat, having decreased by 0.4 per cent and over the last six months the price has decreased by 0.9 per cent.

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The Fraser Valley Real Estate Board is an association of 2,778 real estate professionals who live and work in the BC communities of North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission.  The FVREB marked its 90-year anniversary in 2011.

Full package:

http://www.fvreb.bc.ca/statistics/Package%20201311.pdf

Last modified on Thursday, 28 November 2013 04:51

Survey focuses on two generations of buyers

Front PageNov 11, 2013

By Jean Sorensen

The millennials (known also as the children of baby boomers born between 1972-1992) and the post Second World War baby boomers (born 1946-1965) are making the greatest impact on the real estate industry today.

“Both the boomers and the millennials want move-in ready homes,” says Century 21 Real Estate Canada president Don Lawby. His company, in conjunction with Rona, recently conducted a national home buyers preference survey that looked at the generations’ purchasing preferences and regional differences.

“Time is very important to people…they want to spend time doing what they want to do and not the things have to do,” says Lawby. The survey also showed that 37 per cent of millennials planned to move within two years.

“The message that it sends sellers is that if you are thinking of selling or putting your home on the market and something needs to be done, do it before you put it on the market,” Lawby says, adding it may be something as basic as painting a room. Digital images of the home showing its curb appeal are becoming more important, says Lawby.  Sellers should be aware of how the home looks when presented digitally.

Lawby says the company made the decision to conduct the survey to see “if it really was about location, location, location.”  While the old maxim still applies, it is impacted by lifestyle choices to a greater degree than in the past, he says.

There is a general shift away from long commutes and greater focus on family time and career choices by the millennials. The survey showed a short commute was important to 46 per cent of millennials and only 25 per cent of baby boomers, the demographic group that caused bedroom communities to expand around larger cities a generation ago.

Baby boomers are looking to enjoy leisure time such as pursuing travel or hobbies in their move-in ready homes as they downsize. The survey found that 28 per cent of boomers wanted funds left over when buying a house, compared to 18 per cent of millennials.

Many greying boomers (8.2 million according to Statistics Canada) no longer want to maintain a single-family house or empty nest.

Don Lawby (Photo: Jennifer Gauthier)

“Baby-boomers don’t need to work,” says Lawby. “They are going into condos because they have the ability to close the door and walk away. They are cashing out to some degree in big cities and moving to the smaller communities.”

That cash-out of traditional single-family homes is needed in cities to supply the base for entry-level condominium homes. “If you don’t have an entry point in the market, there is no first-time buyer. You are seeing in cities that they are wiping out whole blocks of single-family detached housing to build townhouses or row-houses as developers are optimizing the value of the land,” says Lawby.

The millennial generation has a realm of other concerns. Many of the children of boomers (StatsCan figures estimate 9.1 million of them) either can’t afford single-family housing or don’t want to spend time cutting the lawn and renovating as their parents did.

They are looking for ways to maximize personal time and limit time spent on traveling to work, services or recreational facilities, Lawby says. There’s also a concern that interest rates, which have remained low for a prolonged period, will rise, infringing upon their ability to renovate a home.

The millennial generation is becoming clustered around work, often in cities, and fuelling the high-rise trend experienced as densification occurs.

The big drivers in how individuals in more rural or remote areas are situating themselves are driven by climate change and geography, says Lawby. Individuals in these communities also want to be near social activities or centres. “They want access to curling or skating indoors (in areas where winters are longer).”

The survey highlighted some regional differences in buyer preferences. In Atlantic Canada “they are looking for a good home in a good area many of the communities are smaller, so they are looking for good access to services and amenities,” Lawby says.

In Ontario, homes with character features are the hot ticket. “There is some prestige in finding a character home in a nice area with trees and it feels like the kind of place that you would like to raise a family,” says Lawby.

Quebec buyers place a high value on their social life and want to be involved in activities. “They want money left over after buying a home…and they want to be close to where they are working. They like the city, but don’t live in high-rises but in older properties.”

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In the Prairies, says Lawby, there is a focus on wanting to be close to centres that can provide social or recreational activities. That is indicative of the harsh and long winters and home buyers want to be able to escape into a social atmosphere, rather than be isolated.

Alberta buyers, though, want to be situated in an area that generates a sense of community and that is family oriented. They are more interested in single-family homes than condos. They are entertainers and want a property that allows them to entertain inside and outside.

In B.C., Lawby says it’s about lifestyle. Buyers want to be close to recreational facilities, services and entertainment.

News Release: November 4, 2013

FRASER VALLEY HOME SALES IN OCTOBER CONSISTENT WITH 10-YEAR AVERAGE   

(Surrey, BC) – An increase in sales and a decrease in new listings last month resulted in Fraser Valley’s real estate market returning to typical activity levels for October – on par with that month’s 10-year average.

The Fraser Valley Real Estate Board posted 1,249 sales on its Multiple Listing Service (MLS®) in October, an increase of 19 per cent compared to the 1,053 sales processed during October 2012.  At the same time, the Board received 2,336 new listings, a decrease of 7 per cent compared to the 2,522 new listings received during the same time period last year. 

Ron Todson, President of the Fraser Valley Real Estate Board, says, “We’ve had a great summer and good early fall, but it’s important to remind everyone of the context. The last four months of 2012 were amongst the slowest for our real estate market in the last 15 years.

“What we’re witnessing is a return to a balanced residential market indicated by prices remaining unchanged or down slightly compared to a year ago, stable inventory levels and the average length of time to sell a home is about two months.” 

In October, the benchmark price of single family detached homes in the Fraser Valley was $551,400 a 0.8 per cent increase compared to $546,900 during the same month last year. For townhouses, the benchmark price was $295,500, a decrease of 0.5 per cent compared to $297,100 in October 2012 and the benchmark price of apartments was $199,500, 2.2 per cent less than in October 2012 when it was $203,900.

In October, the Board’s listing inventory was 9,047, a decrease of 10 per cent compared to the 10,051 active properties that were available in October of 2012.

Todson adds, “We characterize our overall market as balanced because of the ratio of sales compared to the number of active listings, however that ratio changes for every community and property type in the Fraser Valley.  We have quite a range; some markets with less than 10 per cent of inventory selling and others where more than 25 per cent of the housing stock will sell in one month. If you want to know what’s happening with your local market and how it would affect the selling price of your home, talk to your REALTOR®.

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Flaherty to discuss further changes with developers

 MBN | 29 Oct 2013

Finance Minister Jim Flaherty will meet with developers to determine whether future interference in the housing industry may be needed.

“Some of the economists this morning suggested that I have some conversations with some people in the building industry – some more conversations – because of what we’re seeing in certain parts of the country: a re-acceleration of housing prices,” Flaherty told the media following a meeting with private economists.

It’s no secret that many believer Flaherty has been too active in trying to control the housing industry in Canada. Perhaps more consultation with those involved in the industry will reign in the minister’s aggressiveness. However, for the time being, he will hold off on interfering.

“I do speak to people regularly in the business and I’m going to do more of it now, because I want to ensure that this isn’t just a temporary bubble,” Flaherty said. “One theory is that we’re pulling forward housing sales by the reality that eventually interest rates will go up and so that some people who perhaps should be waiting a bit are going ahead and buying, but this is speculation and we’re going to have to look into it more.”

As for right now, however, Flaherty has no plans to interfere,

“But I have no intention of interfering in the market at the time being.”

Can we call ourselves professionals?

Oct 21, 2013

                        By Lloyd R. Manning

In recent years, from many quarters, concerns have been expressed about the continuing decline in professionalism. This includes medical doctors, lawyers, accountants, other professions and certainly Realtors, assuming that we who transact in real estate as agents for sellers and buyers could be considered as a profession in the first place.

That we can legitimately call ourselves “a profession” is questionable, because many of the basic canons of a profession seem to be lacking. One only has to follow the blogs and opinion pieces in magazines such as REM to prove the point. The public is very cynical about this. Some place Realtors in the same category as used car salesmen and politicians. In our industry there is less focus by Realtors on the needs of clients and more on making that sale or getting that listing. It is suggested that many have forsaken their professional roots and regard their agency solely as a business, and professionalism is a lesser priority. This creates the need to inform the public more by deed than word that Realtors are indeed professionals. We must demonstrate by high standards of ethical behaviour, service and conduct that we live up to the tenets of professionalism and the Codes of Ethics we so often hear preached.

Professionalism is best described as a relationship between a person who has a high level of expertise and discipline in a chosen field and who is a member of an organized group of like-minded individuals with the same expertise and discipline in the same field, and the relationship they have with their clientele. The building blocks of professionalism are being well educated in the chosen discipline, integrity, honour, leadership, independence, pride, collegiality and service, all balanced with commercialism.

This includes the relationship between a Realtor and a client and the unwritten contract between the Realtor and society. An essential attribute is the ability to provide sound advice, competent service and to quote the medical profession, “Do no harm.” Real professionalism involves a pride in one’s work, a commitment to quality, a dedication to the interests of the client and a sincere desire to help. Professional success is about attitudes and about character. These are demonstrated by energy, drive, initiative, commitment, involvement, enthusiasm and the ability to provide sound advice.

Professionalism does not mean wearing a suit, carrying a briefcase, driving a high-priced automobile or always having your cell phone at the ready, just in case. Nor is it having a collection of meaningless (to the public) designations and diplomas, which many associations and commercial diploma mills are far too anxious to hand out. It is not one, but a combination of qualities; not a skill but a blending and integration of a variety of skills and attributes.

All of this is wonderful news; isn’t it? Or is like the multitude of seminars and lectures on ethics, just grinding out the same old and worn-out palaver to deaf ears? Know-nothing lecturers and writers of articles such as this keep telling us everything that is wrong with the way we conduct our business, so should we not listen to them?

There is also a common thread that runs through most professional organizations. This is an ingrained negative reaction to compulsory ethics courses where it creates increased monitoring and accountability. Case in point! For over 35 years I held the AACI designation. During all those years I never had a single incident reported to the Canadian Appraisal Institute or had to legally defend an ethics or malpractice violation. Not one! Yet, having more than 125 continuing education credits where only 60 were required for recertification, to be able to continue practicing as an appraiser, I had to take an ethics course taught by someone with less than half of my experience. How ridiculous!

In real estate sales there are many very competent, very conscientious and very honest Realtors who could justifiably call themselves “professional”. They demonstrate all the mandatory characteristics just referred to. However, this is not the majority. In so many areas in our industry commercialism and old-fashioned greed has taken over. To earn a good living is a common goal and a necessity, yet many of our colleagues are given over to avarice. Fundamental ethical behaviour, which often is in competition with increased revenue and profit, is losing.

Realtors win prizes and in-house recognition, not for doing a good job, not for advancing the acceptance of the industry, not for assisting the less knowledgeable or for high-quality professionalism, but for making the most sales, getting the most listings or earning the most commissions.

Ours is a fractured commercial system comprised of largely poorly trained, ill-fitted candidates who were initially attracted by romantic notions of what selling real estate is all about and anticipation of high earnings, but for whom the starvation rate is high and the retention rate low. Although the pre-licensing courses have reduced the revolving door concept to a degree, the high failure rate persists. No other industry or profession would tolerate such seduction of the innocent and this waste of human resources as does the real estate brokerage industry.

There is a philosophy, not spoken about but certainly practiced. If at the beginning of a fiscal quarter you hire 10 new sales agents and if at the end of the quarter two remain, your brokerage has done well.

The industry has only itself to blame; not the government, not the public, but us. There is a crying need for all Realtors to uphold the values of a profession and make a strong commitment to do so.

Professionalism must start with the Realtors themselves, insisting that all practitioners uphold the tenets of true professionalism and eliminate from our ranks those who do not. Until this occurs, acceptance by society will never be attained. The greatest challenge will be the elimination of unprofessional conduct from all unethical and incompetent Realtors. This is to consider the interests of our clients and the public as the No. 1 priority. This is not to sacrifice our own needs to attain this end but to demonstrate care and concern for our client’s welfare in all of our actions, not by giving only lip service or obtaining continuing education credits for having taken an ethics course, but a genuine commitment.

In Part 2 of this article, I’ll discuss the question, “Can ethics be taught?”

Lloyd Manning, AACI, FRI, CCRA, PApp is a semi-retired commercial real estate and business appraiser and broker who now spends his time writing for professional journals and trade magazines. He resides in Lloydminster, Alta. Email lloydmann@shaw.ca

News Release: October 2, 2013

SEPTEMBER HOUSING MARKET SHOWS MARKED  IMPROVEMENT OVER LAST YEAR’S HISTORICAL LOWS   

(Surrey, BC) – The Fraser Valley real estate market continues to edge closer to typical activity levels as September saw the largest year-over-year increase in property sales this year to date.   

The Fraser Valley Real Estate Board processed 1,131 sales on its Multiple Listing Service® (MLS®) in September, an increase of 32 per cent compared to the 857 sales processed during the same month last year and 10 per cent fewer than processed in August.

Ron Todson, President of the Board, explains, “It is good news however, it’s important to put the increase into context. Our home sales in September went from the worst in 10 years to just below our 10-year average.

“It can take a year or more for the market to recover from regulatory changes such as last year’s tightening of mortgage rules introduced by the federal government. Although we are seeing evidence of first-time home buyers returning to the market, we have to keep in mind that it is more challenging now for them to get financing, so although we’re witnessing a recovery to a balanced market it is gradual.”

Todson adds, “An improvement in our sales in the Fraser Valley has not translated to an increase in home prices because inventory levels have either kept pace or depending on the property type and community are elevated. 

“Your REALTOR® can provide specifics for your area, for example there is 12 months of condo inventory right now in White Rock/South Surrey, 5 months of inventory for single family homes in North Delta and only 3 and a half months of townhouse inventory in Langley. Real estate is local so to understand your market, talk to an expert.”

In September, the benchmark price of single family detached homes in the Fraser Valley was $552,900, a 0.6 per cent increase compared to $549,500 during the same month last year. For townhouses, the benchmark price was $296,200, a decrease of 1.4 per cent compared to $300,500 in September 2012 and the benchmark price of apartments was $203,100, 1.9 per cent less than in September 2012 when it was $207,000.

The Board received 2,375 new listings in September, a decrease of 7 per cent compared to the 2,544 new listings received during the same month last year – leaving the volume of active properties at 9,875 a decrease of 5 per cent compared to September 2012 and the lowest it’s been since March of this year.

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The Fraser Valley Real Estate Board is an association of 2,784 real estate professionals who live and work in the BC communities of North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission.  The FVREB marked its 90-year anniversary in 2011.

Full package:

http://www.fvreb.bc.ca/statistics/Package%20201309.pdf

Can you sleep your way to success?

Oct 2, 2013

By Ari Lahdekorpi

An Internet series called TED talks is a fascinating diversion these days. The series consist of experts in various fields sharing leading edge ideas and discoveries. The other evening I was scrolling through the latest of the TED talks and came across Russell Foster speaking on the subject of sleep. Foster is a circadian neuroscientist who studies the sleep cycles of the human brain.

While listening to Foster’s lecture, it occurred to me that having a successful real estate career can be greatly aided by paying attention to one’s sleep habits and improving on them. This may seem contrary to the image of a hard-working agent who never rests, but research suggests that spending quality sleep time is actually time well spent.

Sleep is the single most important physiological activity of the human brain. A person living to the age of 90 will have spent 32 years asleep. Interestingly enough, the brain does not shut down during sleep, quite the contrary. There are some areas of the brain that are more active during sleep. Some genes are only turned on during memory consolidation periods of sleep.

However, sleep is complicated. Researchers have theories on what sleep is, but they don’t really know why we sleep.

The need for sleep is not restricted to humans. Other mammals and birds share with humans the two broad types of sleep: rapid eye movement (REM) and non-rapid eye movement (non-REM). However, the sleep process seems to have a greater impact on human brain activity in the areas of memory consolidation and the creative areas of the brain. An adult reaches the REM stage of sleep every 90 minutes, but the function of REM is uncertain. What is certain is that without proper REM sleep, the ability to learn and retain information is clearly impaired, according to scientific research into the subject.

Our society is sleep deprived. We live in an aura of artificial light that affects natural sleep cycles. As a result we keep strange hours. We suffer from jet lag, shift work, late-night computer addictions and various other factors that limit the time resting. Margaret Thatcher famously said, “Sleep is for wimps”. According to Foster and other neuroscientists, Thatcher couldn’t be more wrong.

So, what happens when we don’t get our eight hours of proper sleep? Lack of sleep has a real nasty downside. For starters, things like mood change, stress, anger, impulsive actions, chemical dependence, lack of concentration, poor memory and lack of creativity will result from sleep deprivation. Heart problems, obesity and even mental health problems such as bipolar disorder, depression and schizophrenia have been linked to lack of sleep. For a Realtor, any one of these side-effects of the lack of sleep can really impair the ability to fulfill the job description.

On the other side of the coin, getting proper sleep will give you many of the attributes for a successful career. Sleep increases concentration, attention, decision making, creativity, social skills, maintaining a healthy weight and overall cardiovascular health. A study conducted in 2007 by researchers Turner, Drummond and Brown showed that working memory was clearly reduced by 38 per cent when one was sleep deprived. Another University of California psychiatry study of more than one million adults found that people who live the longest reported a regular sleep habit of seven to eight hours. Having good regular sleeping habits pays big dividends in health and effectiveness.

Some cultures have the accepted practice of taking an afternoon nap after lunch. Despite stereotypes and social bias, this is not a sign of laziness. Studies have demonstrated that taking a short “power nap” actually helps in overall wellness. The “siesta” has been associated with a 37-per-cent reduction in heart disease.

The idea of the “power nap” is not new. Salvador Dali, the famous surrealist painter, would often sleep in a chair while holding a spoon. When he went into the sleep phase, his hand would loosen and the spoon would fall. The noise would awaken him, and he felt refreshed and ready to work again.

Recent studies have proven that short naps during the day can be as good for some types of memory tasks as a solid night of sleep. NASA has conducted numerous studies and research into the effects of sleep patterns as part of its interest in the effects of space travel. The research has confirmed the importance of naps for memory, alertness, response time and other cognitive skills.

This is a far better outcome than a sleep deprived individual having his brain shut down into the phenomenon known as micro-sleep. Many industrial accidents and traffic tragedies have been caused by micro-sleep. We have all experienced the uncontrollable experience of micro-sleep during a boring lecture, an overly long sermon or an early-morning sales meeting. It’s that feeling when your eyes begin to close and your head slowly begins to drop despite your best efforts to engage your attention.

So, how do we create the atmosphere conducive to healthy sleep? Foster suggests reducing exposure to light a good half an hour before sleep. Have a dark room with a slightly cool temperature and don’t drink coffee after 3 pm.

Perhaps brokerages should provide a quiet dark room for those who need a power nap in the mid-afternoon and remove the stigma of short rest periods during office hours. It might provide as much benefit as an in-house gym, or café-style office area. That being said, having a power nap during a quiet open house is not recommended practice!

The conclusion in all of this is; if you want to be your absolute best in the real estate business and achieve greater success through capitalizing on your full potential, remember that quality sleep is a scientifically proven, valuable and important tool in achieving your goals. The plus side of developing and maintaining good sleep habits far out-weigh the negative results of sleep deprivation, regardless of what our current social mores may be.

Writer and journalist Tim Butcher once wrote, “Sleep is God. Go worship.”

Rest well!

Ari Lahdekorpi is managing broker at Re/Max Select Properties in Vancouver.