Approaching A Balanced Market Again?

The purchase and sale of coal, orange juice, Royal Bank shares or residential property involves folks (producers or current owners of the commodity) who desire to dispose of some or that entire commodity and other folk who want to acquire some, interacting with each other.  They decide upon a price acceptable to both parties and then trade the money for the commodity.

That price rises or falls depending on the intensity or weakness of the demand of the buyer and the motivation of the seller to dispose of the commodity, with the emphasis on the supply (abundance) of that commodity or other forms of that commodity. An example of “other forms” could be garden furniture made of wood or cast iron. In Real Estate we know these “other forms” as detached homes, condo apartments, townhomes, mobile homes etc, etc. These transactions all take place in specific “markets”.

A “balanced” market is simply one where neither the buyer nor the seller has the upper hand by being able to force prices upwards or downwards with ease. In the real estate market, the past year or so has seen the buyers doing just that by their inaction or only offering a lesser consideration than the seller had requested. If a sale is to occur, a portion of the sellers would have to agree to lower their expectations. This is sometimes described as a willing seller adjusting to the lower level offer of the willing buyer.  The market can be said to be balanced when the expectation of the seller and that of the buyer are close together and the “tension” in the market is low.

Reversing cycles are inevitable truisms of all markets with few exceptions. One notable one did occur when photography turned predominantly digital and the demand for silver, an important part of the negative print process, dropped significantly.  Only when human beings learn to live without shelter, especially in the higher latitude countries, need we start to worry about overall demand for homes plummeting. The apparent oversupply of condos has, to some extent, fueled concerns regarding retention of value. This has exacerbated the delusion of continually falling prices. Just as delusional as continually rising prices that existed some years ago!

‘SnapStats’ (what price ranges are selling and which are not) is being very well received. I’m now forwarding the past 12 month trend for not only N and W/Van but ALL available metro neighbourhoods, as many w requested. If any locations are not of interest, please ignore those areas.

So, 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 N/S R/Estate analysis and jump-off point for FULL market information.

Join those wishing to get the e-mail version of the “update” and SnapStats  – send a request to alanskinner@shaw.ca; phone (604) 988-7368 or visit www.OnTopOfTheMarket.ca and you’ll be added.

May 2013 Numbers

Now to the ‘Year to Date’ figures for 2013. We now have the first 1/3rd  figures 2013 vs. 2012. A little more of the statistical information that will help “define” our current year.  North Van detached homes sold, down 9% from last year, attached (t/hses) down 10% and apartments down by 26% from 2012. Detached average prices virtually unchanged and inventory now up by 43%. Average prices down 2% (t/hses) and down 2% for (apts). Inventory (t/hses) 8% higher than Apr 30th 2012 and (apt) down from the same date by 6%. The numbers here now reflect the activity in 4 months and these figures are starting to become more meaningful to indicate a trend.

In West Van, detached number of sales for 2013 has dropped by 29% from 2012.  Average price of what has sold is virtually unchanged and inventory up 23% over Apr 30th 2012. On the condo side – attached (t/hses) sold 2013 are down 37% from 2012 at 20 vs. 32 units (a 9% drop in average price). Active listings are up year over year from Apr 30th 2012 by 28% (56 vs. 42).  Apartments reflect 49 sold in 2013 vs. 64 by Apr 30th 2012; with average price up 5% from Apr 30th 2012 and active listings up14% from Apr 30th 2012. The sample size remains too small for meaningful analysis.

 

Now to the ‘Year to Date’ figures for 2013. We now have the first 1/3rd  figures 2013 vs. 2012. A little more of the statistical information that will help “define” our current year.  North Van detached homes sold, down 9% from last year, attached (t/hses) down 10% and apartments down by 26% from 2012. Detached average prices virtually unchanged and inventory now up by 43%. Average prices down 2% (t/hses) and down 2% for (apts). Inventory (t/hses) 8% higher than Apr 30th 2012 and (apt) down from the same date by 6%. The numbers here now reflect the activity in 4 months and these figures are starting to become more meaningful to indicate a trend.

Overall North Shore demand is up a little over the last quarter of 2012 with overall inventory climbing since Jan 1st 2013 (exception – N/V apts at 6% lower). With this few actual sales to compare we remain prone to anomalies e.g. possibly fewer “luxury units” selling in these lower demand times.  I continue using average YTD prices which will become more meaningful as we get more months’ stats to compare.

Podcast

North Shore Real Estate Radio

On an ongoing basis I pledge both my continued personalized service and a commitment to my reduced  business ecological “footprint”. A significant part is the radio (podcast) library which I’m continually 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 and 1-800-665-1455.

Click on the “Podcast” Icon in the top right of this article to listen now.

North Vancouver Real Estate

Podcasts

First Time Buyer’s Guide

What are the benefits of home ownership?

Pride of Ownership
Pride of ownership is the number one reason why Canadians desire their own home. There is no landlord looking over your shoulder. You are able to make improvements knowing that any appreciation that results, will be to your benefit. Home ownership gives you and your family a sense of stability and security. It’s making an investment in your future.

Appreciation
In Canada, especially over the past years, homes have appreciated considerably and in doing so have added substantially to owners net worth. Unlike stocks and bonds, you get to live in your investment. Also, in Canada your principal residence is exempt from capital gains taxes.

Mortgage Reduction Builds Equity
Each month, part of your monthly payment is applied to the principal balance of your loan, which builds your equity. You can borrow against a home’s equity for a variety of reasons such as home improvement, sending your children to university or college, or starting a new business. Why pay-off the debt on your landlord’s property when you can own your own?

Homeowners accumulate wealth for the future while enjoying the benefits of a shelter that they have, can use, improve and sell. Over the medium or long term, a home is a safe haven for investment.

Are You Ready to Buy a Home?
First – do you have the financial resources? You should have a minimum of five % (preferably 10%) of the purchase price of a home for the down payment;  ideally even more. Are there other priorities in your life e.g. starting a new business, which require your savings? If not, buying a home should be on your radar.

Second – do you expect to stay in your new home for some time? Moving can be expensive and you will want to build some equity before having to relocate. Your job and home life should be stable.

What Can You Afford?
If you haven’t already gone through the mortgage pre-qualification process, you will need to meet with a lender or mortgage broker. They will establish how much of a mortgage you will qualify for. Mortgage rates vary considerably and it is paramount that you shop around for the best rate, terms and options.

Your financial advisor’s mortgage calculator will help you determine what monthly payment and debt you can manage. Note: if you are buying a condo, the amount of your monthly maintenance fee has a direct impact on how much you can afford to spend on servicing your mortgage.

First time home buyers may want to take advantage of the federal government’s Home Buyers’ Plan. Under this plan, you may use up to $20,000 of your RRSP towards the purchase of a home. The money is tax-free as long as you pay it back in the next 15 years. Ask your RE/MAX Sales Associate/mortgage advisor for details.

Good Questions When Assessing Home Features
Do you need several bedrooms, more than one bathroom, a home office, a two-car garage?
Do you want air conditioning, storage or hobby space, a fireplace, a swimming pool? Do you have family members with special needs?
Do you plan to have children? Downtown or suburbs? Close to recreation or work.
Do you need a substantial backyard? Pets?   Is there adequate storage space?
Will any remodeling be required to make the home move-in ready for you?
What service providers (cable, Internet, telephone, Satelite) are available in the area, and is the house wired for these? How good is the cell phone reception?
How much are the yearly property taxes?
How much will utilities cost each month? Does the house have a gas or electric furnace, water heater, and appliances? How old are the major appliances, and which are included?
Have there been any major repairs to the house, and if so, when were they completed? For example, how old is the roof? Has water ever damaged the basement or foundation?
Any previous problems with insects, such as termites and spiders, or rodents?
Older homes need to be carefully examined – Windows may need caulking or new sashes, bathroom tiles may need grouting, home may need rewiring (planning on a hot tub or sauna?), a new hot water heater, or a new furnace.
How far will you be commuting and what is the traffic like? Factor in your cost of fuel.
Where will your children attend school and how will they commute?
Are there recreational facilities and parks close by? Are you close to family and friends?
Is safety or high crime an issue?
Is the property close to an obstacle or negative influence? (eg.an apartment building, shopping centre, school, radio tower, power lines, LRT or railroad track, highway, airport or commercial project).
Access to schools, work, recreation, shopping centres, public transportation, cultural attractions, libraries, churches and hospitals
Adjacent undeveloped land – what is proposed for this or other green space?
Heavy traffic can be a noise nuisance and hazard for children
Distance from the unit to amenities, parking, walkways, cycle paths, roads, public transit
Does the neighborhood reflect positively on the value of the condo and your lifestyle choice?
Does this neighborhood, for any reason, have a poor reputation?
Is the future economic climate for the area good? Are businesses moving in?  Significant municipal/government investment?
Are people moving in or out of the neighborhood? What is their average ages, income level, family size?
Are there plans for this neighborhood that you may be unaware of (i.e. a future highway, a commercial development or a new housing development) that may provide resale competition?

A good tip!  Visit at various times (day/weekends) to check traffic, noise levels and activity.