When Cycles Are Acceptable And When Not

When Cycles Are Acceptable And When Not

The biggest problem with cycles is when they get in the way of what we want to achieve now. Yes, they can be very inconvenient. The simple truth embodied in this month’s headline is that up-cycles are great when we own property or are in the market to dispose of same and down-cycles are great when we don’t own property and are of a mind to acquire some. Reverse the sentiment (not great/rotten) when the “up” or “down” do not coincide with our present desire/position. Yes, we are into a higher supply/ lower demand phase which many believe we will see more of before we see the brakes being applied and the cycle starting to go the other way.

It never ceases to surprise one that the inevitability of cycles is accepted by the majority when these are in the ascendant phase but once we reach the descendant phase, the “it’s all over” and “it’ll never improve” talk outweighs the rational. This is seen in its most extreme form with the highly emotive and tantalizingly newsworthy terms which contain the word “bubble”. Those most affected by a down-cycle are those unable to sell their properties and need to and, yes, another subgroup, called real estate agents. Not as much sympathy is extended to this latter group. This specific supply/demand imbalance manifests itself in a (significant?) shrinkage in the number of properties that sell. When, say, only 1 in 10 homes is selling (read sales for the period divided by number of homes for sale i.e. inventory) then 90% of those wanting to sell are disappointed. Consider too the shrinkage in the “number of sales” pie. If that drops to, say, one half of the sales of a former period (month, or heaven forbid, year) this could likely be somewhat detrimental to the income of the, largely commissioned, real estate sales force. Yes, the unhappy will, understandably, “beweep” their situation and seek to ascertain, what or whom, is to blame. Sadly, but not surprisingly, there is another group adding fuel to the argument (and showing their – often unconcealed – delight) and that is the group who are not home owners but wannabe acquisitors, impending or at some future time. Their mantra is ‘drop, drop, drop you prices’. Fear not, gentle reader, this is not the ‘dark side’ but merely a normal part of the supply/demand and acquire/dispose aspects of home ownership.

Yes, prices will inflate and yes, prices will deflate and there is very little that we (individually) can do about it. We can choose not to buy or we can choose not to sell. We can choose to rent or we can choose to relocate.

Again, visit my website to see and “hear” the new developments.  I continue my commitment to keep you… www.OnTopOfTheMarket.ca – the “go to” site for North Shore Real Estate analysis and jumping-off point for FULL market listing information.

To join those wishing to get the e-mail version of this “update” – send a request now to alanskinner@shaw.ca and you’ll be assured receipt; phone me at (604) 988-7368 or visit www.OnTopOfTheMarket.ca

May 2012 Numbers

 

When Cycles Are Acceptable And When Not

Now our North Shore results.  North Van detached homes sold are down ‘year to date’ by 5% from this time last year, attached (t/hses) sold – down 19% and apartments up 1% from 2011. Detached – average price is 8% higher than 2011 and inventory Apr 30th, 2012 down 2% from 2011. Average prices up 6% (t/hses) and up 5% (apts). Inventory (t/hses) up 17% from Apr 30th, 2011 and (apt) up 12% from 2011. N/Van overall inventory at Apr 30th, 2012 is up 7% over 2011 and all categories in N/Van, down 6% in total sales ’12 vs. ’11.

In West Van, detached number of sales to date 2012 is down by 37% from last year. Average price up by 13% and inventory Apr 30th, 2012 up 23% from last year. On the condo side – sales of attached (t/hses) are up, at 32 vs. 23 units; average price is now 23% higher. Active listings from Apr 30th, 2011 (45 vs. 31).  Apartments sold are down from 2011 (83 vs. 64), with average price 8% lower than’ 11 (remember the small sample size) and active listings up 16% from Apr 30th, 2011(115 vs. 99).  Overall 23% higher inventory with softer demand evident – particularly detached properties. Some 32% fewer units sold YTD vs. 2011.

Podcasts

North Shore Real Estate Radio

This year I pledge to continue my personalized service and further reduce my business ecological “footprint”. A new initiative is the radio (podcast) library which I am creating.

All North Vancouver Real Estate “Updates”, reports and information articles, checklists etc. will be archived on my website and available for download or desktop listening 24/7. You can access the information you seek when the spirit moves and not when someone pushes yet another flyer into your mailbox. I am most excited about these developments. Input as to the topics for “programming” you feel would be of interest is strongly sought. Please e-mail This email address is being protected from spam bots, you need JavaScript enabled to view it or call me 604 988-7368

Click on the “Launch Podcast Player” Icon in the top right of this website to listen now

North Vancouver Real Estate

Podcasts

Example Of Current North Shore Costs

Example Of Current North Shore Costs

An Estimation Of Closing Costs On The North Shore.

  • Approximate Legal Fees and Disbursements $900/1,200*
  • Survey Certificate (if one is not available) $550
  • Appraisal (if required by the lender) $300
  • Inspection fee (not mandatory, but strongly recommended) $450 – dependant on square footage
  • Property Transfer Tax 1% of the first $200,000 plus 2% of the balance of the purchase price

E.g: A $850,000 home would attract PTT at this level
1% of the first $200,000 – $2,000
2% of $650,000 – 13,000      Total    $15,000

Other Fees/Costs

  • If your down payment is less than 25% of the purchase price of the home, the lender will require mortgage insurance from CMHC (Canada Mortgage and Housing Corporation)/or other Mortgage insurers. The insurance premium, which is usually added to the mortgage, ranges from 0.5% of the mortgage amount to 3.10% depending on the size of down payment.
  • Property Tax Adjustment – In addition to the above costs, you may be required to have cash on hand to repay the vendors for taxes they have paid in advance (depending on possession date and how the vendors paid their taxes). A good rule of thumb is to have enough money on hand to pay six months of taxes. e.g. $750,000 home – approx $2,400.
  • Insurance – You will have to arrange home insurance a few days before possession. The annual rate for a basic policy is approximately (detached)  $800/1,200.

*These figures are an estimate only. They are subject to change and it is recommended that you consult your lawyer/notary for confirmation of your total costs.

I have not tallied the above as you should determine which will apply to your purchase.