Mixed Signals are becoming routine.

Here we are rapidly approaching the Spring market. It is fair to say the industry is expecting brisk activity, but how the market will actually unfold remains to be seen.  Despite news coming out of the Lower Mainland of a significant slow-down in actual sales, the situation that is not being weighted is the low inventory throughout the region and apparently the Province.  Demand remains strong, and with this lower inventory, basic economics would suggest that we are going to continue to see prices increase.  However, there needs to be warnings and caution to those entering the market.

Prices on the Sunshine Coast are reaching new highs, but the question is: where can it go from here?  My biggest concern remains how sustainable our prices are, and when an eventual slow-down will occur.  This week I pulled an ad from the Squamish area which is showing a very ordinary rancher in the $700k range and a more elaborate one in the high $800’s.  These are tremendous numbers that are starting to reflect pricing in North Vancouver.  But there are major differences between the Coast market and the Sea to Sky, namely the amount of economy and industry that flows throughout that area.  North Vancouver is bustling with billions of dollars going into ship building, and the Sea to Sky is easily manages billions in tourism dollars.  Squamish is also sandwiched between Whistler and West Vancouver which have the highest real estate values in the country so there is the rub!

The Sunshine Coast, on the other hand, remains a very optional retirement area with a largely undeveloped tourism industry and zero manufacturing (Coastal Craft aside).  Therefore our local market conditions will be more subject to retirees entering the market and the general consumer confidence in the Lower Mainland.  We are also anticipating increased costs of borrowing this summer with the Canadian economy doing quite well and our lower dollar providing incentives for exports.  So while I do predict that our prices will rise this year, I see some increasing stresses coming to bear towards the end of 2017 and into 2018.  This all translates into maintaining a balanced attitude toward where our market can go, and should make decisions a little more challenging for both buyers and sellers.

Bottom line? All parties should proceed with cautious optimism with a left eye on the trends. 

Next week we will review what those trends are looking like - I made some predictions earlier this year so let’s review and revisit to see how things are shaping up. 

Have a great day and if you are in the market or know someone entering it, let me know and I’m always happy to provide a free market evaluation and report for your area of interest. 

Cheers,

Gord

Sunday Morning Musings – Feb 19, 2017

The signals coming from the Market have been getting stronger and stronger over the past few weeks.  Despite my broker insisting that statistics are demonstrating a more balanced market and lower overall activity, this really doesn’t reflect what we are “feeling” currently.

Buyers remain highly motivated, and prices remain on a steady upward trend.  Good properties are seeing multiple/competing offers immediately.  In particular, there is a push on attached properties like condos and townhouses, with a veritable run on apartments over the past 6 months.  Currently we have 49 units listed on the Sunshine Coast and have had 95 sales since August last year.  This doesn’t include those units that are currently under offer, of which I am involved in a couple. 

This is in part further evidence that the Sunshine Coast continues to be a premium retirement destination and prices are favourable compared to other areas.  However, the prices are rising steadily now and this is in large part because there simply aren’t any detached houses for under $400,000.  Sooner than later that could be under $500,000!  So not only are detached homes rising, but apartments and attached units are seeing strong gains.  It's a great time to act.

This all goes to demonstrate that 2017 is going to be a robust and dynamic year for sellers and buyers.  Will be interesting!

Consumer Confidence and Trump

While consumer confidence continues to be at high levels in BC, there have been some downward pressure.  Over the years, my Broker has been tracking how Sunshine Coast real estate cycles closely follow what the consumer confidence mood is in the Lower Mainland and British Columbia.

The two major issues that are going to affect how people are feeling - our upcoming provincial election, and Trump.

The real estate market on the Sunshine Coast was very active in 2016.  Here are some of the major highlights that have come from our office.

Detached Homes

• There were 952 detached homes sold. That’s 194 more than 2015’s total of 758; an increase of just over 25%. The increased activity was reflected in the Benchmark Price – that is, the price of an average home in an average area – which rose 26% last year, to $492,900. 
• Strong demand, short supply, and a large price differential from Vancouver continue to put upward pressure on prices.

• Sales of vacant land went through the roof last year: 353 compared to 149 the year before. That’s an increase of over 135% and evidence that buyers are looking more toward vacant land as the shortage of detached listings persists. The Benchmark price for land is not available, but we feel there was an increase in the order of 15%. 

• Sales of apartments and townhomes increased 34%, from 172 in 2015 to 231. The Benchmark price is also not available, but our guess is prices increased 15 - 20%. It’s interesting to note that, while sales of detached homes fell in the latter part of 2016, sales of attached housing did not. This shows the influence of retirees and indicates this sector will remain strong this year.

The best information suggests that 2017 may be another booming year for real estate demand on the Sunshine Coast.  If you or someone you know would like to chat about how you might benefit, don't hesitate to reach out over email (gord_clayton@remax.net), or call me directly at 604-884-4313.  

Cheers!

Gord

On occasion I've provided individual people with a regular weekly update of what I thought was going on with real estate on the Sunshine Coast.  I called it my “Sunday morning musing”, and it was made up of the things I see going on in the world and in our communities that are influencing our local real estate scene. Over time, I’ve found that clients often wanted to keep hearing the musings even after they’ve bought or sold – so much so, in fact, that I've decided to make it a weekly ritual that I share with my community.  This is my first issue of what I hope is a long running blog post better known as my Sunday Morning Musings.

This week:

Lately we've heard about the market "slowing down" and this is definitely true in Vancouver where they are calling 2016 “annus horribilis”, or “horrible year”.  Poor Vancouver sellers didn't see their prices skyrocket and (shocking) had room to come down!  I guess that means the average house has come down from $1.5 to a mere $1.3 million. 

Okay… I'm not feeling their pain. 

On the Coast the situation is starkly different.  We continue to have motivated buyers who are finding it increasingly difficult to find suitable properties.  Where we had a glut of product to sell coming into 2015, this inventory is gone as we say goodbye to 2016.  In fact, after hitting a record high of listings in 2014, nearly every week has seen more sales of houses than new listings.  This has continued even though we now have a 20 year low of inventory, and despite the market "balancing" now and again. 

People say that it is seasonal, or that the slowdown is due to tougher financing, new taxes, etc.  However, my website continues to receive about 200 people per day suggesting demand may not be slowing down.  

My thought is this: until the trend breaks for a sustained period, demand remains stronger than supply. If this trend continues into the spring of 2017, we are going to see a stiff increase in pricing on the coast.  If we thought 2016 lined up to be a year of price increases, 2017 has a stronger fundamental case to justify price increases beyond the frenzy that we saw in 2016.  The point is, if you are in the market to buy, now is the time before it rises too far.  If you are in the market to sell, get your property ready to enjoy a maximum return.

Thanks for reading this first issue of Sunday musings.  If you have any thoughts or questions, I’d love to connect.  Shoot me an email or give me a phone call between sips of eggnog. 

All my best this Holiday Season!

Gord

Is the call of the great outdoors getting louder? A cabin on the Sunshine Coast can be a great place to escape to. Before you start shopping, here are a few things to consider:

1. Can you afford it?
You may have found a great cabin at a great price. Don't forget, however, to calculate annual property taxes and maintenance costs. Insurance for second homes can run higher than for primary residences. Financing may be more expensive for a second home as well. Get quotes, do your research and do the math to see if you can heed the cabin's call without creating so much financial stress that you won't be able to relax when you're there.

2. How often will you use it?
Look at your number of days off each year, then think about how many you want to spend at your cabin. Would you miss the beach? Regret not traveling abroad? Be sure you'll enjoy the area, and not just the cabin itself, through most of the year.

3. Will disaster strike?
Forest fires are tough beasts to tame, and mountain cabins are often directly in their path. Although no one can predict when a fire will spark, you can find out if your desired area is prone to droughts or other conditions favorable for an out of control conflagration. Look into insurance coverage for different disasters, and add it to the monthly cabin costs.

4. Could you rent out your cabin?
In some instances, you can rent out a vacation home for up to 14 days a year without paying taxes on the income. The money could help offset the cabin's maintenance or mortgage payment. Make sure you research the tax benefits (if any) of your own unique situation.

To view the original post click here http://blog.remax.com/4-things-to-ponder-before-buying-a-cabin-1837193458.htm

Here is our weekly real estate report for the Sunshine Coast, created by our brokerage Re/Max Oceanview in Sechelt, BC.  As you can tell by the numbers below, the Sunshine Coast Market is hot.  Be sure and give us a call if you're interested in buying or selling your property on the Sunshine Coast.

The most notable thing about this week’s Sunshine Coast real estate report is the continuing decline in supply, pushing the buy/sell ratio to bordering on a seller’s market. This is a big change from just two years ago when buyers weren’t around. Now, buyers are not only around but they are busy taking advantage of the opportunity making this coming Spring the best time to sell in the past 10 years.

I have to admit that I love the Coast and have come to learn that while we may all not agree on the way the Sunshine Coast has developed, it offers more amenities and opportunities than it ever has before.  In the past, the Sunshine Coast was an outdoor recreational mecca based on the pristine wilderness and natural abundance in wildlife and in particular fishing.  As these resources have become scarcer and scarcer, the Sunshine Coast has evolved from an area with a narrow base of interests to one which encompasses a broad range of lifestyles and pursuits.  The communities on the coast are proud and active and recently have been accomplishing some great things.  Change comes with pros and cons and that is always a concern. 

Change.  The Sunshine Coast is very young, and as a small young set of communities, we see the change occurring all around us.  It is satisfying to some and unsettling to others.  One thing that is a guarantee is that change will continue at a rapid pace.  I hang a picture of my father and his brother from 1936 when the two were standing all alone on Cowrie St.  and when I say alone, I mean the only house on the street was Rockwood Lodge.  So we know that change and growth are happening at all times and hopefully, through the positive efforts of our many community groups and associations, we will continue to have a healthy and happy place to call home.

Real Estate.  Sorry, for getting off track, but if this blog is going to work it will be because people are paying attention and interested in a reasonable dialogue about the local real estate market and the forces that are affecting it. 

I have had quite a number of buyers take to sitting on the fence over the last several weeks and they seem content to do so while the markets try to make sense of things.  In only a few weeks the market has gone from softening to falling about 10% from asking prices only three months ago.  To make it more difficult for sellers, each week that the buyers remain on the sideline, inventory has been growing, which of course drives prices further down as the sellers compete for the few buyers that are motivated to make a purchase.

I contend that for buyers, we know prices have fallen, and that sellers are concerned.  Ask any real estate agent or an appraiser and the idea of putting a “sell tomorrow” value on a property would risk hearing a surprising number.  The market is neither exclusively driven by buyers or sellers, but rather that point where the two come together.  When one considers the stock market meltdown of 30 – 40% in a few months, real estate prices backing off 10-20% still make for a great investment.  So I believe that we have seen some of the worst, in terms of conditions and once the buyers start to make decisions again, the market will firm up pretty quickly.

Believe it or not, uncertainty continues to mean good opportunities for both buyers and sellers.  It will be interesting when we see a return to a more active buyers market – because it is theirs to take advantage of.  Until then, the value of properties will be driven by the financial needs of the sellers, which may get tougher with the economic news continuing to be “challenged”.

What are your thoughts?  How soon is the market going to turn around and start a slow rise again?  How has your day to day lives been effected by the economic turmoil?  Are you changing plans to buy or sell? 

I am looking forward to hearing from a few interested participants.  Hopefully, this will be a helpful exercise and a point of interest for first time homebuyers through to the savvy investors.