Sharply Higher Mortgage Rates Will Slow Housing Activity in BC Through 2023

BCREA 2022 Second Quarter Housing Forecast

MLS® residential sales in the province are forecast to decline 22% from a record high 2021 to 97,240 units this year. In 2023, MLS® residential sales are forecast to fall an additional 12.4% to 85,150 units.

“After a strong first quarter, BC markets are now adjusting to a much different interest rate environment,” said BCREA Chief Economist Brendon Ogmundson. “With mortgage rates surpassing 4 per cent for the first time in over a decade, the housing market over the next two years may have very little resemblance to the housing market of the past year.”

On the supply side, we have begun to see active listings move from record lows and re-sale inventories trend back toward balance. However, because inventories reached such low levels over the past year, the journey back to balance may take up to a year or more in some areas.

 

THOMPSON-OKANAGAN

Housing market activity in the Thompson-Okanagan region has moderated from the elevated highs of spring 2021 and home sales are currently trending somewhat above longrun average levels. We expect further moderation in the remainder of 2022 and into 2023. A major theme observed during the pandemic has been the relocation of buyers into less densely populated areas of the province. That trend is evident in how demand has evolved over the past year in the Interior. We are forecasting that MLS® home sales will decline 19% to 11,500 in 2022 and by another 14.8% to 8,800 in 2023. This brings sales back to more historically normal levels for the region.

While sales are moderating, demand remains strong in the region due to migration. According to Statistics Canada, from 2016 to 2021 Kelowna was the fastest-growing Census Metropolitan Area (CMA) in Canada, growing by 14% over the period. The broader Thompson Okanagan region is currently growing at about 1.6% per year, hitting 620,000 in 2021 and adding roughly 10,000 new residents annually. As a result of this demand, inventory of homes for sale in the Interior continues to sit near all-time lows in both the Okanagan and Kamloops. Despite these stark figures, there are some signs of easing. Although the sales-to active listings ratio in Kamloops and the Okanagan is also at the lowest level since early 2021, it is still very firmly in seller’s territory. Consequently, even with sales moderating back ton long-run trends, market conditions in the region are historically tight.

As a result, MLS® average prices are forecast to be up for 2022 and to a lesser extent in 2023. With strong economic growth and high inflation, the central bank is raising rates quickly, which is dampening demand. Nevertheless, prices continue to rise in the Thompson Okanagan. Given current trends, we are forecasting the MLS® average price will rise 21% in the Interior, before slowing to a growth rate of 1.6% apiece in 2023.

Source: BCREA

Relocating to a Different Town or City

Moving around the corner or even across town is relatively simple because
you are likely familiar with the various neighbourhoods and you can access
them anytime. If there’s a listed home you want to view, you can simply go
see it.


Relocating to a different town or city, however, is much more challenging. It
may not be possible for you to make multiple visits to see homes for sale.
You may also be unfamiliar with the various neighbourhoods.

So what do you do if you want to move out-of-town or need to relocate due
to work?

Your first step is to get the information you need. You’ll want up-to-date data
on the neighbourhoods so you can pinpoint the ones that are the best fit for
your needs and lifestyle. You’ll also want to get a sense of the types of homes
for sale in those neighbourhoods — style, size, features, listing price, etc.

Your next step is to schedule a day to view homes. This visit must be
carefully planned so you only see those properties that are likely to be of
interest. You don’t want to travel all that way only to end up seeing
properties you wouldn’t likely buy. What a waste of time!

So, if you’re relocating, you’ll need help. Give me a call. I can help make the
relocation go smoothly for you.

9 Steps to Finding your Next Dream Home

If you’re thinking ahead to your next dream home, the road you need to take
to get there may seem confusing. Do you search for listings online? Drop by
Open Houses on the weekends? Call the number on For Sale signs?


Let’s break it all down! Here are the specific steps you need to take to
ensure you find a home that fits your wants, needs and budget.

1. Find out how much your current property will likely sell for on today’s
market.

2. Arrange for financing, so you know what you can afford.

3. Select neighbourhoods you’d love to live in. (That may involve some fun exploring!)

4. Decide on the type of home you want to buy. (For example:
detached, three-bedroom, etc.)

5. Prioritize the property features you want most, so you can be flexible
if a feature is missing from a home listed on the market that is
otherwise ideal.

6. View properties on the market that closely fit your criteria, particularly
new listings that may not yet be posted online. (Tip: Arrange to be
immediately notified of new listings that are a good fit for you.)

7. When you find a home you want, make an offer designed to get the
property — without overpaying.

8. Negotiate until you secure the deal. This may involve counter-offers.

9. If the negotiation is skillfully done and all goes well, the home is
yours.

As you can see, there isn’t a lot of mystery in finding your next dream home.
You just need to take the steps and get the professional help you need
along the way.

Looking for a real estate agent that can get you to the finish line?
Call today!

Getting an Early Start on Selling your Home

You’ve probably heard the expression, “The early-bird gets the worm.” It
refers, of course, to those who get in early and reap the rewards. For
example, if you arrive early to a retail store for a big blowout sale, you’re
likely to get the deals before the inventory runs out. The stragglers who
come later miss out.

Well, this same wisdom can be applied to selling your home. Starting the
process early — even if that means simply doing some initial planning —
gives you the edge in several ways.

First of all, you get extra time for preparation. That means you can get your
home cleaned, uncluttered and staged without feeling rushed. You also get
more time to find out how much your property will likely sell for on today’s
market. That’s important information, especially if you’re also looking to
finance a new home.

Secondly, there’s less stress. You’ll have more time to make the right
decisions. The last thing you want is to be scrambling around, last minute,
trying to get your home ready for sale.

Finally, with your initial preparations done, you’ll be able to put your home
on the market at a moment’s notice. That’s a huge advantage that’s likely to
lead to selling your property more quickly and for the best price. In fact, by
getting an early start on the process, you might even find that right now is
the best time to list — and you’ll be able to do so, with confidence.

Want help getting an early start on selling your home? Call me.

Budgeting for Moving Day Expenses

On moving day, you’ll have a big task. You’ll need to get your possessions
from your old property to your new one — ideally without delays or damage!
Surprisingly, many people underestimate the time and costs involved in doing
that. Careful planning and budgeting are crucial to ensuring moving day goes
smoothly.


You basically have three options:

1. Hire a moving company to handle everything.
2. Hire a truck and crew, while doing some of the work yourself. (For
example, you can pack and help with loading.)
3. Do it all yourself by renting a moving van and getting friends and family
to help.

If you’re going with option one, get quotations as early in the buying/selling
process as possible. Services, costs and quality vary widely among fullservice moving companies.

If you’re going to do some or all of the move yourself, the best place to start is
by making a list of what you’ll need. In addition to renting a moving van, or
hiring a truck and crew, there are many supplies you may require. For
example, you’ll need boxes, protective fill and/or wrapping (i.e. bubble wrap),
markers for labeling boxes, packing tape, and more.

You may decide to rely on friends to help load the truck on moving day. That’s
fine. Just be sure you have enough people to do the job within a reasonable
timeframe, and confirm everyone’s attendance at least a couple of days
before.

Should you Buy a Resale or a New-Build?

If you’re thinking about buying a new home, you may be considering
purchasing in a new development.


How does that compare to purchasing a resale property?

Buying a newly-built home has some advantages. Depending on the
development, you may have leeway in the style of the home and the lot you
choose. Also, when the home is built, you’ll be moving into a place where
everything is brand new!

On the downside, however, you may be forced to make a decision based
purely on marketing brochures and floor plans. Unless there’s a model home
just like the one you want, you’ll be buying sight unseen. Also, there may be
unpredictable construction delays — an unpleasant experience if you’ve
already sold your current property.

Of course, buying a resale home may also have a downside. For example,
the house might need work, such as a new roof. What you see is pretty much
what you get. And, that’s true for the floor plan too. You can’t ask for the living
room to be five feet wider, unless you decide to renovate.

On the other hand, a big advantage of a resale home is moving into a
neighbourhood that is already there for you to see and explore. Unlike in a
new development, you can get a very clear idea of what it’s going to be like to
live there.

Plus, you get to see the house too!

Regardless of which way you go, I can help you make the best decision and
find the home that’s perfect for you. Call today.

Finding a Great Home in a Hurry

Do you have only a few weeks to search for your next dream home? Don’t
panic. There are things you can do to find the perfect (or, at least, almost
perfect) property — without getting too stressed out!

Consider these tips:

• Pre-arrange your mortgage. You want to be able to make a good
offer on a home right away, without worrying about financing. So, talk
to your mortgage advisor or lender about getting a mortgage preapproval. Sellers will take your offer more seriously if you have
financing in hand.

• Decide what you want. What type of home are you looking for? What
type of neighbourhood do you want to live in? The narrower your
focus, the less time you’ll waste looking at properties that don’t fit your
needs.

• Be open to possibilities. There are probably terrific homes on the
market — right now — that are close to what you’re looking for. So be
prepared to consider properties that are less-than-perfect. Remember,
what a home lacks today may be remedied with a renovation later on.

• Be flexible with your schedule. When you see a home you like,
schedule a viewing immediately, even if it’s at an inconvenient
day/time, such as a weekday after work. Finding a great home, quickly,
is worth some inconvenience.

• Get alerted to new listings. As they say, the early-bird gets the worm.
So arrange to be alerted to new listings the moment they come on the
market. That way, you can see these properties right away.

Want more tips on finding a home, quickly? Give me a call.

Protecting Your Home Gadgets from Hacking

Imagine your coffee maker switching on by itself, staying on for hours,
overheating and becoming a fire hazard. That’s not science fiction. As more
and more appliances incorporate WIFI, the opportunities for hackers to play
havoc with your home gadgets increase.

How do you prevent that from happening? Here are some safety tips:

• If your gadget uses a password to access the settings, change that
password frequently. Ideally, change it once every 3 months.

• Some gadgets, such as alarm systems, come with their own
connection to the internet. Learn how to turn that connection off if it
becomes necessary to do so.

• Don’t leave an internet-connected appliance or other gadget on
constantly unless it’s necessary. For example, you don’t need your
home speaker system connected to your digital music providers all the
time.

• Baby monitors with video are a common target for hackers. Use a
password unique to that device and change it often. Never leave the
monitor on when not in use.

• Never share passwords with anyone unless it is absolutely necessary.
Most home WIFI systems have a “guest” feature with a separate
password and limited access. Use it.

In this age of internet connectivity — from coffee makers to stereos and even
washing machines — it’s smart to play it safe. Know what’s connected and
protect yourself.

How Much Should You Budget for your Next Home?

If it’s been a while since you last moved, you might be wondering how much you’ll need to spend on your next home. That’s an important question to answer, even if you’re just at the “thinking about it” stage and haven’t decided
whether or not you’ll look for a new property. After all, knowing your budget might influence your decision.

How should you determine your budget?

The first step is to calculate the maximum you can spend. This involves adding the money you’ll get from the sale of your current property after repaying your outstanding mortgage, to any other funds you have available to invest plus the maximum amount of mortgage you qualify to receive.

Of course, just because you may qualify for a large mortgage doesn’t mean you want those bigger payments. So, the second step is to think about your needs. What features are a must in your next home? For example, you might want four bedrooms and anything less would be a deal-breaker.

Make a “must-have list”. That list can by used to find a baseline of properties on the market — and then find their average asking price. This will give you an idea of what it would cost to find a home that meets your must-have list. The third step is to go beyond needs and consider the features you want. These might not be deal-breakers, but you’d sure love to have them in your next home. They could be a large deck, a location in a desirable neighbourhood, a big country kitchen, etc. Ask yourself how much you would be willing to pay for those desirable features. $20,000? $50,000?

Once you’ve gone through these steps, you’ll have the information you need to match your needs and wants to what’s available on the market — and you’ll know how much you might expect to pay for your next home.

One Hour Ideas for Boosting Curb Appeal

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You’ve heard of the term “curb appeal”. It refers to the initial impression buyers get when they first see your property from the street. If the impression is a good one, it sets the right tone for the rest of the home viewing. How do you boost curb appeal? Here are some proven ideas that you can get done in an hour or so:

 

• Wash both the inside and outside of the front windows. You’ll be amazed at the difference that can make.

• Sweep the walkway leading up to the front entrance. Add a new welcome mat. Also, wash down the front door.

• If possible, remove cars from the driveway. Let buyers imagine their own cars parked there!

• Mow the lawn. Lightly trim the hedges. Weed flower beds.

• Remove anything from inside window sills that may look unsightly from the outside. Try putting a couple of flowering plants there instead.

• Place any trash bins out-of-sight. For example, put them in the garage or neatly at the side of the house.

• If the entrance door hardware is old and worn, change it. New hardware can make a bigger difference than you might think.

• Make sure the outdoor lights are working, especially if you’re showing your home in the evening.

• Add some flowering plants to flower beds, or buy a couple of portable potted plants and place them strategically.

• Clean your mailbox. If it’s rusted, replace it.

• If you have a power washer, give the walkway and driveway a quick blast. Just be sure it will be dry before the buyers arrive.

These one-hour improvements may seem minor, but anything that helps buyers form a more positive first impression.