The market is changing

 A very drastic title, just to grab your attention. I noticed lately that a lot of media outlets love to grab people’s attention by using a good title. Often, it’s not accurate and misleading but the sound bite is already out there and that’s what influences the masses. Not many people bother to read the whole article but base their opinions on these cleverly manipulated opinions. I suspect, that’s how critical thinking was abolished.

I would like to share some facts about the market and will try to avoid sharing my opinions, but before I do that, I wanted to give a round of applause to all the people that showed up to the Public Meeting at the community center last week. In case you missed the meeting, a lot of people showed up and we had a lot of great speakers. One thing I took away from this meeting was that people still care about this community. I have gotten used to seeing people’s eyes glazing over when you mention anything about politics. To my pleasant surprise I saw a nice mix of young people and experienced folks; and it warms my heart that a lot of people don’t only think about money. Job creation is nice, but change must be carefully planned with feedback from the citizens. It should never come down from the top. I’m curious to see what will happen with this proposal of rezoning but I really hope the democratic system still works here. Sorry I deviate from my main topic, but it’s important to note that communities consist of people, not empty summer houses.

It’s hard not to notice the news talking about the high level of inflation these days. In order to curb the inflation banks will be unveiling more interest rate hikes and effectively shrinking their monetary policy. A valid question is, how will it impact real estate in Canada?

What we are seeing today is a highly distorted curve of demand vs supply in the market. I think the higher interest rates will force prices down, but because the demand is still very high, I don’t think prices will decline significantly and probably only in some areas.

In addition to interest rate increases the government has proposed a freeze on foreign buyers. The government thinks that banning foreign ownership for 2 years will make an impact on affordability. I highly doubt that since foreign buyers consist of only about 3% across the country. No details have been revealed yet but as soon as I will know, I wish share. 

Another controversial measure proposed by the government to cool down the market is the introduction of a “cooling off period”. Similar tool exists in a pre-build market where a buyer who buys a condo that hasn’t been built yet can rescind their offer within few days after signing the contract. Unfortunately, this proposed measure would be favoring the buyers and possibly punishing the sellers. No details have been revealed by the government yet, but I will keep you posted.

One more proposal made by the government is to create a multiple offer registry, where all offers that the seller received would be registered. I think this is a great idea to gain more transparency and trust in the system. Similar system already exists in Toronto and seems to work well. Currently there’s no details about this yet but I hope it will be rolled out soon.

 Couple interesting statistics that also have an impact on real estate prices:

- more than 100,000 people moved to BC in 2021 (most since 1961)

- In BC between the years 2010-2015 we had an average of 40,000-50,000 active listings consistently every year. Since 2016 something happened and the number of available homes for sale has been considerably falling. In 2022 we are on track for about only 15,000 active listings for the year. A healthy balanced market is roughly 40,000 active listings.
We have been under a very low supply of inventory for many years and if you would like to get some hints of the core issue you could google questions like: “When was Justin Trudeau elected? What is Justin Trudeau’s immigration policy?” to get some interesting answers.

In summary, the sky is NOT falling. Prices in our area are still affordable for people coming from the city. Things will probably slow down, and we may not see as many multiple offers. Properties will take longer to sell, and prices will level off. Only time will tell.

Are you thinking of selling your home? Call me for a free home evaluation.

Roman Krzaczek REALTOR ®

Home number: 250-285-2141

Quadrarealty.ca

March in Real Estate

Spring is in the air and the nature is waking up from its wintery rest and hibernation (including myself!). Last few weeks have been quite busy for me therefore there was no time to contribute with an article in the last Discovery newsletter. In this edition however, I would like to share March statistics with you.

Campbell River

Inventory in the Vancouver Island Real Estate Board (VIREB) area is slowly inching up but is still far from ideal.

In Campbell River, the benchmark price of a single-family home hit $722,400 in March, up by 28 per cent from the previous year.
Benchmark Price for an apartment: $363,300.
Benchmark Price for a Townhouse: $537,300.

Quadra Island
Quadra Island in March had 2 new listings, 2 sold (pending), 2 cancelled, and 1 expired listing.If you would like more details including “sold prices” go to my website and sign up and log in for free to members only area that will provide that information www.quadrarealty.ca
Cortes Island
March on Cortes Island had 1 new listing listed at $775,000 and 3 pending.If you would like more details including “sold prices” go to my website and sign up and log in for free to members only area that will provide that information www.quadrarealty.ca

Calgary
For the second month in a row, sales activity not only reached a monthly high but also hit new record highs for any given month. Gains occurred across every property type as they all hit new record highs.
“While supply levels have improved from levels seen over the past four months, inventory levels are still well below what we traditionally see in March, thanks to stronger than expected sales activity,” said CREB® Chief Economist Ann-Marie Lurie. “With just over one month of supply in the market, the persistently tight market conditions continue to place significant upward pressure on prices.”

The benchmark price of detached homes in the city of Calgary hit $620,500; semi-detached: $478,400; row home: $335,400; apartments: $265,900.

Vancouver
“Market remained elevated in March."

“March of 2021 was the highest selling month in our history. This year’s activity, while still elevated, is happening at a calmer pace than we experienced 12 months ago,” Daniel John, REBGV Chair said. “Home buyers are keeping a close eye on rising interest rates, hoping to make a move before their locked-in rates expire.”

The benchmark price for a detached home is $2,118,600. This represents a 23.4 per cent increase from March 2021.
The benchmark price of an apartment home is $835,500. This represents a 16.8 per cent increase from March 2021. The benchmark price of an attached home is $1,138,300. This represents a 28.1 per cent increase from March 2021.

Toronto
There were almost 11,000 Greater Toronto Area (GTA) home sales reported in March 2022, capping off the third-best March and second-best first quarter on record. Tight market conditions continued to support a double-digit annual pace of price growth, with an average selling price of $1.3 million. The average selling price dipped slightly month-over-month, bucking the regular seasonal trend

However, we did experience more balance in the first quarter of 2022 compared to last year. If this trend continues, it is possible that the pace of price growth could moderate as we move through the year,” said TRREB Chief Market Analyst Jason Mercer. 

The average price for a detached home in area (416) is $1,920,018.
The average price of a semi-detached home (416) is $1,545,447.
The average price of a townhouse (416) is $1,117,469.
The average price of a condo (416) is $831,351 as reported by the Toronto Regional Real Estate Board (TREBB).
Today we are facing the most serious housing crisis ever, in this country. Yet, we continue to keep faith that our government will come and save us, even though the government has created these problems in the first place. Have you seen the latest government proposals to “help” with the housing market? I may address those in my next article. As for now…. I’m once again excited about this new gardening season.
One thing I have learned last year, the hard way, is planting seeds too early.  The wait is hard, but in another week or so we should be good to go, my fellow gardeners. Thank you to all the gardeners for sharing valuable information with the community. I have lots to learn.

Are you thinking of selling your home? Call me for a free home evaluation.

Roman Krzaczek REALTOR ®
Home number: 250-285-2141
Quadrarealty.ca