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