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January 20, 2017

 

Check out this educational video, part of RE/MAX Fit to Sell campaign

 

 

The REALTOR® Code

 

In my role as a Managing Broker, it is not unusual to hear complaints from agents about other agents acting “unethically”. On occasion I have to deal with members of the public expressing concerns about one of our associates acting in a manner which was considered unethical in their eyes. These allegations tend to stem from the complainant imputing motives on the actions of the agent. They interpret what they have experienced as unethical when the results of a transaction, or negotiation do not conform with their expectations nor provide for their well-being. The insinuation is that the agent manipulated circumstances into their own interest, rather than the interest of the client or customer. What comes into play is the subjective nature of our understanding of the ethical boundaries of our business.

Ethical behavior is described in the Dictionary as follows:

 eth·ics

1. ( used with a singular or plural verb ) a system of moral principles: the ethics of a culture.

2. the rules of conduct recognized in respect to a particular class of human actions or a particular group, culture, etc.: medical ethics; Christian ethics.

3. moral principles, as of an individual: His ethics forbade betrayal of a confidence.

4. ( usually used with a singular verb ) that branch of philosophy dealing with values relating to human conduct, with respect to the rightness and wrongness of certain actions and to the goodness and badness of the motives and ends of such actions.

 

Ethics are, in a nutshell, the often unwritten, but internalized, rules of conduct that allow for the well-being of others. While many maintain that it is the religious imprint of our current or past affiliations of faith that give us a moral compass, there is a growing understanding that we all have an innate sense of fairness and communal responsibility. This inborn awareness of what is fair has even been demonstrated in studies with primates that associate in groups.

 

We all have slightly different points of reference when it comes to acting fairly. Although the “golden rule” is a universal axiom, we are also influenced in what our ethical boundaries are through our upbringing, (including where we are in birth order comparative to our siblings), our cultural background, and our religious influences. Due to these variants in one’s personal experience, it is important to set an objective guideline to overcome the elastic nature of moral and ethical boundaries. The statement that there is “honour among thieves”, suggests that even within groups that might be seen as lacking in moral fibre, a certain ethical standard is upheld. One might be tempted to respond to an accusation of unethical behavior with a question of which standard is being referred to!

CREA developed a code of ethics in 1913 for the real estate industry with the specific reason of ensuring that a standard of conduct be adhered to. They created 28 guiding principles help to determine when someone is acting unethically. This code has a higher standard than the existing legal requirements in many cases. The local real estate boards have taken these guiding principles and applied them to their professional standards doctrines. Boards also appoint professional standards committees to police the actions of agents based on the rules of conduct built around the code of ethics.

CREA describes the code this way:

CREA’s REALTOR® Code has been the measure of professionalism in organized real estate for over 40 years.

A REALTOR’s® ethical obligations are based on moral integrity, competent service to clients and customers, and dedication to the interest and welfare of the public.

The REALTOR® Code, by setting high standards of professional conduct for REALTORS®, helps to protect Canadians' rights and interests. It also creates a level of trust between REALTORS® and their clients.
 
There have been instances where a member of the public contacts me with a complaint, and it becomes evident that the designated agent they were dealing with did not instill a level of trust in their relationship with their client. As a result, as soon as something did not go as planned, the agent was seen as acting outside of the standards and values of the client. Even if nothing was done wrong in a technical sense, the client is left with a bad taste regarding their dealings with the agent.
 

When someone complains about unethical behavior to me, I will step back and picture the scenario from every angle possible. In most cases, after getting the details, it becomes clear that the agent was not acting unethically but rather, outside circumstances conspired to create that impression to someone that didn’t have the full details. As the saying goes, “There is always at least two sides to every story”. It is a rare occasion that I have found a REALTOR® acting intentionally against the well-being of others. It is for those occasions that the REALTOR® Code becomes a valuable tool in organized real estate.

Understanding the 28 articles in the CREA Code of Ethics is invaluable toward building a solid reputation as a REALTOR®. It is the ethical standard that sets us apart.

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The number of residential property sales hit a 10-year low in Greater Vancouver for June, while prices remained relatively stable.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties reached 2,362 in June, a 27.6 per cent decline compared to the 3,262 sales in June 2011 and a 17.2 per cent decline compared to the 2,853 sales in May 2012.

June sales were the lowest total for the month in the region since 2000 and 32.2 per cent below the 10-year June sales average of 3,484.

“Overall conditions have trended in favour of buyers in our marketplace in recent months,” Eugen Klein, REBGV president said. “This means buyers are facing less competition and have more selection to choose from compared to earlier in the year.”

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,617 in June. This represents a 3 per cent decline compared to June 2011 when 5,793 properties were listed for sale on the MLS® and an 18.9 per cent decline compared to the 6,927 new listings reported in May 2012.

At 18,493, the total number of residential property listings on the MLS® increased 22 per cent from this time last year and increased 3.7 per cent compared to May 2012.

“Today, our sales-to-active-listings ratio sits at 13 per cent, which puts us in the lower end of a balanced market. This ratio has been declining in our market since March when it was 19 per cent,” Klein said.

The MLSLink® Housing Price Index (HPI) composite benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 1.7% and declined 0.7% compared to last month.

Sales of detached properties on the MLS® in June 2012 reached 921, a decrease of 37.4 per cent from the 1,471 detached sales recorded in June 2011, and a 19.1 per cent decrease from the 1,139 units sold in June 2010. The benchmark price for detached properties increased 3.3 per cent from June 2011 to $961,600.

Sales of apartment properties reached 1,026 in June 2012, a 19 per cent decrease compared to the 1,266 sales in June 2011, and a decrease of 18.4 per cent compared to the 1,258 sales in June 2010. The benchmark price of an apartment property increased 0.3 per cent from June 2011 to $376,200.

Attached property sales in June 2012 totalled 415, a 21 per cent decrease compared to the 525 sales in June 2011, and a 27.8 per cent decrease from the 575 attached properties sold in June 2010. The benchmark price of an attached unit decreased 0.1 per cent between June 2011 and 2012 to $468,400.

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Did you know that RE/MAX has launched a new tech tool that is a first in the real estate market in Canada? RE/MAX of Western Canada has recently launched its new Augmented Reality feature, ‘Live View’ on the free RE/MAX mobile real estate search app. This new feature is available on iPhone and Android devices.

 How does it work? When looking through the camera view on your GPS enabled iPhone or Android phone you will be able to locate properties for sale and displays the listing information on top of the physical property that you are standing in front of. The app allows you to save the property in a list of ‘Saved Listings’ which can be connected your remax.ca account making it easy to reference while in the application or on a computer. You can also request more information on the property and have a RE/MAX agent contact you.
This app will be particularly helpful when one is looking for active condo listings in the larger buildings in the Vancouver Downtown area!
 Download the free RE/MAX application onto your device.  Visit www.remax.ca/wc/mobile.htm or the iTunes App Store or Google Play store.
 
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What is home ownership in Canada? We speak of the bundle of rights that comes with ownership, we detail different types of rights to a described piece of land, even the air above a piece of land, and the depth to which ownership rights sink into the soil and minerals below. What does it really mean to own real estate in this country? Why is it important to us as a culture and a society to be able to claim ownership on real property? What are REALTORS® really selling?

It is fascinating to ponder what ownership of property really is. What I have seen is this; the homeless on Hastings Street in Vancouver, clutching their cardboard, garbage bags, and shopping carts. Their sense of security and shelter differs greatly from the general population that surrounds them. Looking up from Hastings Street one can see the condominiums looking down. These monolithic structures contain layers of strata owners claiming ownership to what is essentially a piece of air for over half a million dollars or more. The condos hang over a mere footprint on a piece of land. It’s a far cry from what property owners a few generations back would have considered ownership of real property. Seeing this dichotomy raises the question: who has a more defined de facto ownership of property, the street person with their nomadic and unfettered existence on their stake of a piece of public property or the de jure property owners in the apartments above?

If the aforementioned strata owners don’t pay the mortgage, they could lose their right of ownership. If any property owner in Canada doesn’t pay their taxes to the crown, or the local governing body, they could lose their rights of ownership as well. The fact that the sovereignty can come and reclaim property ownership due to unpaid taxes is a throwback to the feudal system of ownership in practice. Despite the words, paper trail, and legal constructs, in many respects ownership of land is really just a fabrication of our society. One could argue that despite the protection of modern terms and conditions, the average Canadian can only rely on the security of ownership as long as regular dues are paid to the sovereignty. That in addition to the concept of Government appropriation, does lead to the question of what we really purchase when we claim title to real property. If home or property ownership in our Canadian cultural context is nothing more than a legal construct based on Medieval foundations, what are the rights that one “buys” when a name is printed onto a deed of land?

Ownership in a property can take a number of forms, such as sole ownership, joint ownership, communal property, or leasehold. These different types of ownership may complicate an owner's ability to exercise their bundle of property rights. For example, if two people own a single piece of land as joint tenants then, each may have limited recourse for the actions of the other. This is often the problem in divorce settlements. Traditional principles of property rights include: the control of the use of the subject property; the right to any benefit from the property; a right to transfer or sell the property; and a right to exclude others from the property.

 

In his book, The Common Law, Oliver Wendell Holmes describes property as having two fundamental aspects. The first is possession, or de facto property, and the second is title, or de jure property. In Manitoba a buyer will first claim possession of a subject property, and then a few weeks later, the title will finally be registered. In BC it is not uncommon to see different dates, usually just a few days apart between possession and completion of the transfer of title.

In every culture ownership and possession are built upon custom and regulation, both legal and social. Many tribal cultures balance individual ownership with the laws of the specific collective be it tribal, family, associate, or national. For example the 1839 Cherokee Constitution frames the issue in these terms: “The lands of the Cherokee Nation shall remain common property; but the improvements made thereon, and in the possession of the citizens respectively who made, or may rightfully be in possession of them, (shall be respected)”.

Different societies have different theories of property for differing types of ownership. It does appear universal that property ownership is not a relationship between people and things, but a relationship between people with regard to things. What someone purchases in Canada when they “buy a home” is not the physical property, but rather a bundle of rights. It is the legal permission from society and the crown, to have the prescribed usage of a defined “place” for whatever the set term is.

Despite the abstract notion of modern ownership and the ubiquitous tax bills and operating expenses, we are driven by the hunger to have something that we can truly call our own. This desire to own real property is not a universal need, as the nomadic tribes in the arctic or the desert demonstrate.  However, the need for safety and shelter is a primal and instinctive motivator.

In his 1943 paper entitled, A Theory of Human Motivation, Abraham Maslow introduced the conceptual model for the importance of certain basic needs that a person is instinctively driven to obtain. In the mid-fifties, he expanded on his theory in his book, Motivation and Personality. It has become a well received and respected theory that has had a substantial impact on many other theories of human developmental psychology. Abraham Maslow’s theories focus on describing what the drivers are in our motivation in various stages of our development.

It’s interesting that Maslow studied well adjusted and exemplary people to arrive at his concept of a Hierarchy of Needs, rather than people that were psychologically damaged. In some respects this fact helps to cement the universal nature of the motivational strata that he envisioned.

Maslow’s Hierachy of Needs is usually depicted as a pyramid, with a human’s most basic needs on the bottom platform, and as the pyramid narrows the needs become more esoteric. He placed self realization needs at the top of the pyramid, while physiological needs were foundational. Some have criticized his placing self realization as a “top tier need” as being ethnocentric, or possessing some cultural bias; but no one argues that needs such as food, shelter, and safety are basic motivations in life.

So according to Maslow’s Hierarchy of Needs, the need for shelter is a foundational driver. It is a fundamental motivation in life along with food and safety. These are the ingredients that fuel the hunger for real estate. One could postulate that this primal need accounts for the wars over borders, and the arguments over hedges and fence posts. Countless neighbours have done each other harm over a few inches of lawn, alongside with countries arguing over rocky islands that are inhabited primarily by gulls and clams. History is full of unfortunate battles over real estate. It’s no wonder that dealing with competing offers in a real estate transaction can be so volatile.

The indigenous peoples that had the embarrassment of riches in their unfettered use of large tracts of land seemed to take its availability for granted. The nomads and the gypsies also had an abundance mentality that saw the countryside not as a series of parcels of separate ownership rights, but rather as a shared resource. For these social groups the need for safety and shelter did not tie itself to a quantified lot or acreage, but was shared in a larger global sense. Maslow in studying the elite Europeans and Americans in his theory did not delve into how the pyramid of needs may motivate responses based on cultural elements.

The need for safety and shelter, while it can claim its roots inside the development of the legal constructs of real estate is not the only motivational driver in building a real estate industry. Canadian culture and social convention have added to the primary need for shelter with the notion of self-esteem associated with property ownership. As most Canadians find their primary needs of food, safety and shelter satisfied, they climb Maslow’s Hierarchy of Needs to the upper tier motivational level of self-esteem. As we place our sense of self-worth into the equation, the desire for ownership of property increases. There is no greater flag of conspicuous consumption than the deed to a piece of property in a desirable location.

Considering all of this makes one appreciate that this business is a complex one, built from a primal need to claim a nest,(and then possibly a castle for our self-esteem needs), but it is all for something that can be called “home”. Our cultural and societal motivators drive the real estate industry. This industry will remain strong for years to come because its foundations are primal motivators. The REALTOR ® that appreciates and responds to this will always find a livelihood and a deep satisfaction in knowing that they are fulfilling a deep rooted hunger.

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Vancouver continues to be one of the most interesting case studies in North America for Real Estate activity. Predictions abound about the vulnerability of the Vancouver market. Many call the hot market, "a bubble", but from where I stand, I don't see Russia...only the horizon.
 
The unique Vancouver combination of being the primary Pacific port in Canada, locked into a narrow crease of land between mountains and waterways, and being the most temperate climate in the country make it a compelling location for migrants. In deed many point to the "investor class" migrants who see Vancouver as a destination of choice in Canada as being a primary factor in rising house prices. This is just one factor among many for the climbing sticker price on Vancouver properties.
 
A year ago Vancouver was the host city to the Winter Olympics. This cast a concentrated focus on this mountain city by the sea. Not surprisingly since then, prices have continued to climb. Some neighbourhoods have seen double digit growth in already comparatively high prices. The Vancouver westside neighbourhood has some of the most expensive "dirt" in the country. Builders and investors look to purchase lots in some of the more mature neighbourhoods in the hope of tearing down the older home and building a newer luxury class dwelling. The problem continues to be that demand outpaces supply.
 
Multiple offers and bidding wars continue to push prices skyward. As long as affordability remains in reach, Vancouver will continue to demand the highest property values in Canada. Scarcity of supply that meets an overabundance of demand is always the recipe for accelerated prices. That fact doesn't appear to change anytime soon in Vancouver. Not surprising...given that this is best place on earth!
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New federal rules have come into play as a result of government concern over rising consumer debt levels. Three new changes to Canada's mortgage rules are an attempt by Finance Minister, Jim Flaherty to create some “moderating” impact on the Canadian housing market.

These new federal rules will reduce the maximum amortization period to 30 years from 35 years for government-backed insured mortgages with loan-to-value ratios of more than 80 per cent.

Secondly, Ottawa will lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes.

Thirdly, Ottawa will withdraw government insurance backing on lines of credit secured by homes.

Though longer amortization periods reduce monthly payments, they greatly increase the amount of interest paid over the life of the mortgage and make it harder to build up equity.

The average Canadian resale home sold for $344,551 in December. Assuming a five-year mortgage at 4 per cent interest, and the minimum 5 per cent down payment of $17,227, a 35-year mortgage would have monthly payments of $1,441. Shorten the amortization period to 30 years, and the monthly payment increases to $1,555.

Mr. Flaherty said his concern is not Canada's mortgage default rate - which is less than 1 per cent. Rather his concern is those who are borrowing as much as possible.

"We're seeing people borrow to the max, and borrowing to the max at low interest rates," he said. "Most Canadians are not doing that."

He said the changes will not take effect immediately because of a requirement to give the industry 60 days notice before making policy changes of this nature.

He said past experience suggests there is no need to fear a rush on 35-year mortgages before the new rules take effect.

In addition to cutting mortgage terms, Ottawa is taking action to reduce the rapid rise in home equity lines of credit, or HELOCs. The government will do this by clamping down on the insurance that Canada Mortgage and Housing Corp. offers to the lines of credit.

Home-equity lines of credit and loans have surged in Canada, rising at almost twice the pace of mortgages over the past decade to account now for 12 per cent of overall household debt.

The third measure that will reduce how much Canadians can draw on their home equity. Last February the Finance Department announced that it would lower the maximum amount Canadians could withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. It is now reducing that maximum to 85 per cent from 90 per cent.

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RE/MAX is the number one Real Estate Franchise on the planet...that is an undisputed fact. However, the reason for the Franchise's greatness lies at the grassroots, in the quality of the REALTORS(r) its associate Brokerages have been able to attract. After watching these amazing professionals work their magic for several years, these are the traits that I have seen surface among the cream of the crop...
 
1. Create a positive attitude. Research shows that most failure in business stems from an attitude problem. A positive attitude looks for solutions to problems, and is not de-motivated by them.
2. Stay Motivated. The RE/MAX organization has seen this as a key element to building it's sales force around the world. The tools that are available to offer encouragement and motivation to our agents is unmatched. That is why year after year, the top agents in Canada are usually RE/MAX agents.
3. Have Integrity. Always tell the truth and maintain your ethical standards. Face up to mistakes right away and take immediate steps to correct them.
4. Be consistent. Know your strengths and weknesses and focus on tasks that you do well; delegate those tasks that you don't do well. Stay on track.
5. Expect Success. The top challenges in life are to manage your expectiations and to mange the unexpected...this will determine your results.
6.. Manage Relationships. Get to know people by taking a genuine interest in them. Allow your spontaneity to show others how to be positive and upbeat. The top agents are truly nice people!
7. Use Team Skills. A healthy team attitude begins with a solid commitment to help other team members win. You may see the agent, but you don't see the hundreds of support players behind him.
8. Have Vision. People are driven by visions of improvement...lead others to better solutions by offering a clearer vision. Have a clear vision and you will rise to the top. Focus turns light into a laser.
9. Follow up. Listen carefully to what people are asking. Repeat their needs back to them and explain how you will solve them.
10. Practice Self-Improvement. Always keep your temper in check, speak calmly and stay focused on learning. RE/MAX has a slogan that says, "The more you learn, the more you earn."
 
These are just  brief lessons  from the amazing agents at RE/MAX Select Properties. They are a guide book by example of how to be the best!
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CMHC Housing Outlook Session: Forecast for Vancouver Housing Market

 

August 18, 2010

Presenter: Robin Adamache Senior Market Analyst for Vancouver Region

August 18,2010, Vancouver - Senior Market Analyst, Robin Adamache began her session by talking about the overall economy in BC.  Real GDP up 2.7% in BC although what happens in the USA affects us directly in GDP, so predictions must be done with an eye on how conditions are in the States.

 Lower mainland is looking forward to 29 Billion in major projects in the next year…including the New Surrey Hospital and the Evergreen Line. Job growth is at 2% vs. a decline last yr of half a percent. Good solid full time jobs are being created, Ms Adamache quipped that these were not “McJobs”.  

Migration growth continues at the same pace as last year’s 58 thousand new migrants into Vancouver area. There will be approx 18 thousand new households in need of housing each year over the next few years if not longer.

The CMHC expects that there will be a gradual increase in interest rates next year. Robin made a point of reminding everyone that interest rates have been at a historic low for a sustained period of time. Any increases will be gradual, but they are expected.

Canada remains about 20 times lower than the US in mortgage defaults. In short, Vancouver has a stable economic environment. There are lots of people moving here and buying here. The question was asked, “Who is buying?”  6% of existing Vancouverites plan to buy.  One third of buyers  will be first time home buyers, while sixty percent  are move-up buyers, and 25% are downsizing.

Despite all of this seeming good news, the reason it is not a crazy hot market is partly due to the changes in lending policies, and the rise in interest rates. The market is in the “balanced” range of 40 to 60% of the sales to listings ratio. Prices will rise next year at about the rate of inflation. There is an ample supply of listings in the West Side. Peak prices were reached earlier this year, but have dropped slightly since. The activity in house sales has shifted to the higher price ranges. 57% of the activity on the MLS has been in the 1.25 to 2.25 million dollar range. Downtown condo prices have dropped by around 3%. Coal harbour average condo price per sq ft is 852; False Creek = 805; West End = 605.

Price growth in 2010 will close out in the average range of 9 -11% due to the price growth and activity earlier in the year. Speculative activity is not an issue and is down according to statistics. Research shows that the speculators left the market in 2006 and have not been a factor since. While average mortgage carrying costs remain higher than average rents, the vacancy rate is at 1.7% in Vancouver.

 

 

Summary

 

Economic conditions in the Vancouver CMA will be favourable for the housing market this year and next

Major projects worth approximately 28 Billion are proposed for the Lower Mainland area

As the economy gets traction, some of these proposed projects and some of the 4 Billion worth of project currently on hold will move forward

Vancouver’s job market is also expected to pick up as the economy improves over the next eighteen months

Population growth will add to housing demand, an estimated 40,000 people are expected to move to the Vancouver region each year, adding about 18,000new households in need of housing

It will be important to keep an eye on higher mortgage rates which may dampen homeownership demand, especially for those who are more sensitive to the impact of higher rates.

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While none of us can truly predict the future, except that octopus in Germany that predicted the World Cup winners consistantly, there are certain indicators that we can look to in making forecasts for the real estate market.
 
Vancouver is in the unique position in Canada of having a limited supply of land available for development, while at the same time having an ever growing demand from international, and interprovincial immigration.
 
Post-Olympics Vancouver has seen an embarassment of riches in the tourism industry. June and July are showing that the high end hotels in Greater Vancouver are at phenominal occupancy rates. These types of high end hotels provide the city with high end tourists, many of which are willing and able to own secondary homes internationally. The exposure to all that the Vancouver life-style has to offer is a great advertising vehicle to this market. This same prospective buying group is also being enticed into the city via the new convention centre, which is bringing in industry groups from around the world for professional gatherings.
 
Household growth in Vancouver is predicted to be 32 thousand per year while housing starts lag behind at an estimated 14 - 16 thousand per year. This scarcity of demand will continue to drive the Vancouver market. There has been a market adjustment recently, but this only slows down the upward price pressure and doesn't remove it. Vancouver is not in a bubble. The price growth will still be a healthy 8 to 9 % year to year increase.
 
The cost of construction in Vancouver is higher than in other Canadian markets. This is due partly to the demands of the terrain in the Greater Vancouver area. Issues related to earthquake proofing the buildings, soil density, bedrock, and elevation all play a part in making construction in Vancouver a costly venture. Added to the mix is the hard cost of land in Vancouver. Between the physical limitations, there are also economic restrictions and political restrictions that limit the supply of usable land for development.
 
The city of Surrey is poised to become the largest city in the Greater Vancouver area within the decade. Richmond, and the Tri-Cities are also growing quickly as mass transportation in and out of Vancouver improves.
 
The biggest challenge, and one of the most important moving forward, is the supply of affordable rental units in Greater Vancouver. The influence of foreign investors is very important in the development of a sustainable rental property supply. It is estimated that 32% of Vancouver residents are renters, and that number will increase as the need to replace the Baby Boomer workers builds over the next decade.
 
What all of this means to the real estate market is that the Vancouver area has all of the fundamentals to continue to grow over the foreseeable future. Certainly there will be bumps in the trajectory, but the lack of supply, coupled with the growing demand will continue to push prices and development.
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The power of consumer confidence is often addressed in economic forecasts by the various charter banks and government agencies. For many the impact is not appreciated or realized...but make no mistake it is a powerful mass dynamic.
 
In their book, SWITCH, the Heath Brothers talk about the impact of "peer perspective" rather than "peer pressure". It seems that people will respond to any given dynamic based on what others around them are doing. In research it has been observed that an individual in a room with smoke coming through the vents will respond differently than one sitting with others in a room with smoke coming through the vents. The individual will immediately leave to look for assistance, while those sitting together will wait and see what the others do. That same response is often seen in an audience watching a film, or play. People will laugh or applaud based in part on what they see their peers doing.
 
Recently I succumbed to the power of peer perspective when a young paperboy came to my door. I didn't have any intention of signing up for paper delivery until he casually mentioned that "all of your neighbours are chosing the pre-payment plan via cheque". Before I realized what I was doing, I had my cheque book out.
 
Consumer confidence has the same power as peer perspective but on a larger scale. Mass media has used their influence in steering consumers. This was displayed recently in Canada when, despite the fact that we were not directly part of the American mortgage meltdown, the housing market dropped  for a number of months. It was only after restoring the confidence of the consumer that the market came back in any signicant way.
 
The Bank of Canada recently signalled an upward move in the prime lending rate...and the Bank of Montreal responded by lowering their 5 yr mortgage rate. Both acting in different directions in an attempt to address the consumer in Canada. Like it or not, we work as a group...and part of our actions and responses are due to peer perspective. People see, people do...
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I have come to the conclusion that people just like the words, Twitter, and Tweet. Even those who have no idea about the social media revolution taking place know about Twitter. The name recognition aside, this cute little bird is actually leading the pack in the power of third party endorsements as the new way to navigate through choices and options.
 
Let's face it, if you want to hire a plumber you can look through the yellow pages and pick out the one that has the best ad, or you can google to find the best website. The third option is to ask your social media network group about their experiences in finding a good plumber. Which has the most power? For most people the endorsment from a third party will carry the greatest weight in making a choice like finding a good plumber, or finding a great real estate agent in a given neighbourhood.
 
Some pundants are annoucing the death of the search engine and the corporate website in their enthusiasm to embrace the power of social media like facebook and twitter. While it is a bit like those who predicted  the death of radio when TV came in, there is no disputing that the internet landscape has forever changed with the growing interactivity available via social media tools.
 
Within the real estate industry the changes are coming fast and furious. Today it is necessary for an agent to be well versed enough in social media to have a facebook page and a youtube account to keep in contact with their clients and contacts. Many are engaged in blogging, sharing photos, and posting tweets in an effort to remain visible and available for their clients,  Our website allows links to the agents individual websites, as well as links to twitter, linkedin, and facebook.
 
Passive use of the internet is becoming passionate use of the internet. This trend will help the cream rise to the top as people search out advise, experience, and opinions from their third party network friends.
 
 
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I recently watched an interesting visualization of the median house price index for Greater Vancouver over the last 40 years. The animation places the viewer in the seat of a roller coaster as it climbs and drops relative to the housing market. Apart from being very entertaining to watch, it also clearly demonstrates how quickly the environment can change in the Greater Vancouver housing market.
 
Following market trends is only accurate in the past tense. One cannot truly understand the direction the market will take until the change is in motion. Presently in Vancouver there seems to be a shift occurring. Reviewing the MLS statistics, and the RE/MAX numbers it appears that the listing inventory is rising faster than the housing demand. Listings are up, but sales seem to be slowing down. This is happening despite the fact that the charter banks have warned that they will be raising their interest rates by summer.
 
The fear that house prices have risen beyond what the market will bear may be slowing down the buying frenzy of the last few years. The price of a condo in Vancouver is reaching the unaffordability level for the average citizen. The price of properties in this wonderful city have reached a level more than ten times the average wage of a Vancouverite. Those who caught the roller coaster at the bottom of the climb have done very well over the last 7 years in this market.
 
Once the HST effect has flowed through the local economy, the question of affordability will come into a clearer focus. Vancouver has always been higher priced than its neigbouring provinces because of it's desirability as a location. The recent olympics have proven to be a magnet for some international tech companies as well as those well-heeled enough to own properties internationally.
 
The desire to own property on Canada's west coast might be slamming against the reality that those without a seat on the roller coaster could be in for a long wait to buy a ticket.
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Spring is the traditional busy season for real estate in Greater Vancouver, as in most of the Western World. This year is no exception. The signs are out in full force across the region. From Richmond to Coquitlam and through the West Side, the signs are popping up like the leaves are filling the trees.
There has been much speculation regarding what this "post-olympic" market will look like. For the most part it is turning into a typical Vancouver Spring Market. There are a few clouds in the horizon that need to be watched carefully...
 
The change in bank lending policies came into effect on April 19th. This may have an impact on Investors and first time home buyers, requiring them to have more "in-hand" cash before seeking financing. Although this may create some slowing of the market, it is not enough of a deterrent to impact heavily on demand.
 
The coming HST is of concern to many. It will impact on the amount of commission that a Seller will pay. Prior to the HST Sellers only had to pay the GST, as there was no provincial component in commissions earned. Now the sales tax becomes a blended entity with the service tax, it will create a 7 % increase in the amount due to the Brokerage on closing.The increase in listings thus far does not suggest that some are looking to beat the tax by selling prior to July. If the listings numbers continue to outpace seasonal norms into the late spring and early summer, then it could be argued that consumers are realizing the savings that will occur with a sale prior to July.
 
The rise of the Canadian dollar may help to slow down out-of-country speculative buyers, but it has been argued that these types of buyers are a small minority of the buying market.
Some concerns have been expressed regarding the potential increases in interest rates projected for the summer. The Bank of Canada may be looking to increase the rates, but with the relatively low inflation numbers being posted, the Bank may reconsider the increase. An increase in rates may do more harm than good for the Canadian economy, which seems to be moving along very well at this point.
 
The RE/MAX signs out in the yards across Greater Vancouver are a sign of the times. Inventory is outpacing Buying at this point...but demand doesn't seem to have wained at all.
 
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Home listings rise to start the spring season

A steady influx of new listings has helped create a balanced ‘typical spring’ housing market in the Greater Vancouver region.

The Real Estate Board of Greater Vancouver (REBGV) reports that new listings for detached, attached and apartment properties in Greater Vancouver totalled 7,004 in March 2010. This represents a 60 per cent increase compared to March 2009 when 4,385 new units were listed, and a 52.1 per cent increase compared to February 2010 when 4,606 properties were listed on the Multiple Listing Service® (MLS®).

At 13,538, the total number of property listings on the Multiple Listing Service (MLS®) increased 19 per cent in March compared to last month, but remains 7.6 per cent below this time last year.

“The total number of homes listed for sale on our MLS® is at its highest level in 10 months, which translates into more options and variety for those looking to buy during the traditionally busy spring period,” Jake Moldowan, REBGV president said.

Residential property sales in Greater Vancouver reached 3,137 in March 2010, a 38.5 per cent increase compared to March 2009, a 4.7 per cent increase over March 2008, and a 12.4 per cent decrease compared to March 2007. The current figure also represents a 26.8 per cent increase compared to the 2,473 sales recorded in February 2010.

“With a sales-to-listing ratio of 23 per cent, we see a healthy balance between buyer demand and seller supply in the marketplace,” Moldowan said.

Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 20.3 per cent to $584,435 from $485,845 in March 2009. This price is 2.8 per cent above the previous high point in the market in May 2008 when the residential benchmark price sat at $568,411.

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Albert Einstein died in 1955, having seen his concepts create a new world of understanding during his life. His passing was at a time when the cold war between the Soviets and the Americans was at a point of escalating. Much of the worry of that year, and the decades that followed were with the growing number of nuclear weapons that both super powers were amassing. The creation of the weapon that could effectively wipe out much of life on our planet was due in part to the theories that Einstein had developed.
 
Albert Einstein was not only a radical thinker, but he also was an amazingly creative communicator. Although his ideas are beyond the understanding of most of us, he was able to demonstrate his ideas using common speak. His description of the speed of light was done by referencing a moving train, while his explanation of gravity and time was done by the mental picture of an elevator.
 
The context of communication is so very critical. When looking at something as simple as market trend data in Vancouver, the numbers can be skewed to reflect the researcher's bias, or to amplify opposing opinions. Our age is quickly moving forward in the means that we communicate ideas and opinions. Today Twitter is evolving weekly to address the quick fix communication needs of social media. To some the world view has transformed into a series of games...spurred on by a generation that has grown up with video games and virtual reality. Looking for a home in Kerrisdale becomes an extention of gaming and social media in method and mindset.
 
The language of the landscape is changing, and as Einstein once said, "We can't solve problems by using the same thinking we used when we created them".  The notion of communicating value and service is becoming increasingly difficult in a culture and marketplace where information can be accessed quickly and effectively. The answer to meeting the communication demands in the real estate marketplace is not to continue to use the same thinking of even two years ago. REALTORS(r) must find new ways to communicate service and value to the new consumer.
 
The context of the information is important, and although information is freely and readily available, it must be interpreted properly and effectively in order to best serve the constituents. As Albert observed, "Sometimes one pays the most for the things one gets for nothing."
 
The hidden costs are often greater than the sticker price. This is why having effective communication is so critical. Understanding the information is more important than having access to the information,
 
Nothing reflects the need to communicate properly in the right context than Albert Einstein's last words. Before he passed away, he felt the need to share some final thoughts. The only person in the room was the attending nurse. She heard the final words of the greatest thinker in history. Unfortunately, he spoke them in German, a language the nurse did not understand.
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For some inexplicable reason, the Competition Bureau has been on a witch hunt against the Canadian Real Estate Association for some time now. It may be that someone thought that this highly effective and progressive industry was an easy target. Certainly with the right spin, and with the media on side, it is easy to create an unsympathetic picture based on old charicatures of REALTORS(r).
 
 It is unfortunate that they are attacking one of the truest free market sectors in the Canadian economy. The Real Estate Industry is one of the most competitive industries in North America. Each Brokerage competes aggressively with it's rivals because remuneration is based on performance. Even within an office, the agents compete against each other for Listings and Buyers. Despite this,  the Competition Bureau is smearing CREA and it's almost 100,000 members. The media has been allowed to create untrue pictures of what the issues are surrounding the Competition Bureau's concerns.
 
Meanwhile, the Bureau does not acknowledge the important changes that CREA has made to address those concerns. Changes that the Bureau itself had recommended.
 
 
 
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The Canadian Real estate Association (CREA)  posted recent statistics showing the change between January and February of this year. A total of 42,799 homes were traded last month, down 1.5% from January, as a gains in Toronto were offset by a decline in units sold in Vancouver.
 
The Winter Olympics were cited as a possible factor in lower sales in the province last month. Unit sales were down 13.3 %. Compared to Ontario's growth of 3.3% during the same period.
 
Continuing low interest rates could further prompt home resales this spring ahead of new mortgage rules set to take effect in April. The introduction of the harmonized sales tax will also add to the buying mood of the consumer this spring, as buyers seek to purchase before the tax change takes effect.
 
The average Canadian house price in February rose by 18.2 % from last year.
 
Currently the most affordable Canadian city for housing is Thunder Bay, Ontario with a February average house price of $142,280, up 23.6 % from a year ago.
 
The most unaffordable Canadian city for housing continues to be Vancouver, BC with a February average house price of $658,984. That is also an increase in price from a year ago of 22.4%
 
Most experts agree that the Canadian housing market will be moving to a more balanced market in the fall, while the spring will continue to heat up to answer demand.
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The indications all point to a very active market for this fall in Vancouver. Following the excitement and energy of a successful hosting of the 2010 Olympic games, Vancouver is poised to experience a gold medal spring in terms of the real estate market in the lower mainland.
 
Several factors point to continued growth in development, sales activity, and price. Firstly, the market fundamental of supply and demand has never been stronger on the demand side. Vancouver is desirable as a world class city with it's amazing urban amenities. The city is in a natural setting that is second to none in the world. It is nestled between mountains and sea. The incredible landscape also provides for a mild temperature, something unusual for a Canadian city. The forests are lush, with moss and ferns under the canopy of giant spruce and cedar trees. Vancouver is a mountain metropolis surrounded by a rainforest. Following the exposure the area received during the games, inquiries from around the globe have increased, signalling continued demand for Vancouver real estate.
 
The price of land will continue to climb as long as there is more demand than available supply. Despite the fact that Vancouver is already categorized as "severely unaffordable" in comparision studies between average wage and average house price, the allure of living in this amazing city continues to drive the market.
 
In order to continue to keep up with the demand, developers seek out new locations for high density housing. Projects are fanning further and further away from the core of Greater Vancouver, ahead of mass transit infrastructure projects. This activity on the development side brings employment and opportunity, which continues to feed the demand for housing.
 
Sales activity remains strong as baby boomers seek to use the sale of their homes to leverage their retirement plans. Many long time Vancouverites are benefiting from the surge in prices and demand for property in Great Vancouver. This demand has created many new millionaires, who can now consider selling and retiring by downsizing and cashing in on their new found equity.
 
 
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January 20, 2017


First-time buyers interest-free down payment program


The new BC Home Owner Mortgage and Equity (HOME) Partnership program helps eligible BC residents purchase a home.

The program offers first-time home buyers who have saved a down payment:

  • A down payment loan of up to 5% of a home’s purchase price to a maximum of $37,500, on a home with a maximum price of $750,000.
  • This loan matches the buyer’s down payment and is interest-free and payment-free for five years.
  • After five years, buyers can either repay their loan or enter into monthly payments at interest rates that are current five years from the date of the loan.
  • Loans through the program are due after 25 years – the same length as most mortgages.

To qualify for the program, home buyers with a registered interest on title must reside in the home and be a:

  • Canadian citizen or permanent resident for at least five years;
  • resident of BC for at least one year immediately preceding the date of application; and
 
  Click here for larger version of infographic
 
  • first-time buyer who has not owned an interest in a residence anywhere in the world at any time.

The home buyer must:

  • use the property as their principal residence for the first five years;
  • obtain a high-ratio insured first mortgage on the property for at least 80% of the purchase price; and
  • have a combined, gross household income of all individuals on title not exceeding $150,000.

Buyers can begin gathering the documents they’ll need to submit an online application. Buyers will need:

  • Proof of status in Canada and residency in British Columbia.
  • Secondary identification (must include your photo).
  • Proof of income and tax filings.
  • Insured first mortgage pre-approval.

 

• Information and application details
• Questions and answers 

  

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