Have you ever driven up to a restaurant and your first impression was
disappointing? Perhaps the windows looked dark and gloomy, the façade
was worn and unattractive or for some other reason it just didn't look like a
tempting place to eat.
It could still be a fantastic restaurant – a real gem. But, your first impression
has soured your anticipation. If you still walk through the front door, it will
likely be with the expectation of being disappointed.
This scenario often plays out in the real estate market as well.
A buyer drives up to a home for sale and quickly forms an impression based
on what he sees "from the curb". That's why you'll hear real estate experts
talk about the importance of "curb appeal". It's one of the most important
selling points of a property.
If you plan to put your home on the market, you obviously want your home
to look as attractive as possible from the street. Fortunately, there are many
simple things you can do to improve curb appeal.
For example, you can trim shrubs and hedges, plant flowers, clean the
walkway and driveway, paint the front door and garage door, and clean the
exteriors of the windows. All these projects are relatively easy and
inexpensive. Yet, each can make a dramatic improvement to how your
home looks at first glance.
Don't be like the great restaurant that’s hidden behind an unkept façade.
Make sure your curb appeal reflects the overall value of your property.
Looking for more advice on selling your home quickly and for the best price? Call today.

When is it time to talk to a REALTOR®?

Many people only see a doctor when they're sick or have some other health concern. On the other hand, some people visit a doctor regularly for checkups, to ask questions and get advice, and to maintain good health.

Which do you think is the better approach? Obviously, the second one! The same thing is true when it comes to real estate. Even if you have no current plans to buy or sell a home, there are many reasons to talk to a REALTOR® regularly in order to maintain your good "real estate" health.

For example, you can:

• Get an assessment of the current market value of your home, so you
can make an informed decision about whether to stay or move.
• Ask about the state of the local real estate market (which may be
vastly different than what you hear on the national news.)
• Find out what homes are currently selling for in the area.
• Learn what's currently available on the market, especially in
neighbourhoods you would like to live in and that are within your
budget.
• Ask for a contractor recommendation.

In fact, it's a good idea to have a chat with your REALTOR® once or twice a
year, even if it's just to say hello.
You want to build a relationship with a good REALTOR® who understands(and cares about) you and your needs. That way, when it does come timefor you to make a move, you're dealing with a REALTOR® you already know and trust.

Don't have a good REALTOR®? Call today!

How Long Does it Take to Find a New Home?

If you're planning to look for a new home sometime in the future, you
may be wondering how long the process will take. How much time
should you set aside for viewings? How many of the listed homes
should you see?
Of course, the process varies from person to person. According to
the Department of Housing & Urban Development, home buyers view
an average of 15 properties before finally choosing to make an offer
on one of them. That number may be a good benchmark for you.
On a Saturday afternoon, you can comfortably look at three or four
potential properties. You can see more if you want to make a full day
of it.
One factor that impacts the home shopping process is how clearly
you know what you're looking for.
For example, if you're certain you want a three bedroom backsplit,
backing onto a wooded area or ravine, in an upscale neighbourhood,
then the process is going to be fairly simple. You're just going to view
properties that closely meet that criteria.
But if you're the kind of person who simply says, "I'll know it when I
see it", then you'll need to look at several homes on the market. That
means carving out plenty of room in your schedule for viewings.
A good REALTOR can help you understand what's available on the
market and which homes are worth seeing. He or she can also help
you determine how long the process will likely take, and show you
ways to make the process go more quickly and smoothly.

Small Steps Towards Financial Freedom

Good news!

You can baby step your way to mortgage freedom and save thousands of dollars in interest in the process.

According to Scotiabank’s Mortgage Landscape Study, almost two-thirds of mortgage holders agree they could pay off their mortgage faster without impacting their lifestyle. How much does it take — only an extra $20 a month.

While many homeowners think in terms of lump-sum payments, which are a great option, there are other ways to save money and pay down that debt. Seventy-nine per cent of mortgage holders have taken at least one of these steps:

1. Refinancing for a lower interest rate

2. Renegotiating for a lower interest rate

3. Switching to bi-weekly payments

4. Increasing amount of regular payments

5. Lump-sum payments

Increasing your payment by just $20 a month will have a positive impact because the extra money is applied directly against the mortgage principal. This decreases the amount of interest you will pay over the life of the loan. For example, the average borrower would save almost $2,800 in interest over 25 years and reduce the amortization by 10 months.

Imagine if you added $40 or $60 a month.

Interestingly, the poll also showed that 21% of mortgage holders have not taken any steps to pay down their mortgage for the following reasons:

1. Don’t have available funds

2. Have other payment priorities

3. Don’t know what steps to take

The poll also revealed that 51% of mortgagors have spoken to their mortgage professional about how they can become mortgage-free faster.

It’s easy to forget about your mortgage when you’re making automatic payments. It’s a good idea to keep up-to-date on mortgage options and interest rates .You could potentially save a ton of money by understanding those options.

The freedom that being completely debt-free brings is a dream for many Canadians. If you’re unsure of what your next step should be, just give me a call. Together we can review your mortgage, look at your financial picture and devise a mortgage-reduction plan that works for you.

2012 Ends on a Steady Note for Greater Victoria Real Estate Market

January 2, 2013

VICTORIA BC - Victoria’s real estate market ended 2012 with relatively flat pricing when compared to 2011, along with similar sales numbers for the third consecutive year.

Total MLS® sales in December 2012 were 283, a 17% decrease over December 2011 when 339 units sold. A different picture is told, however, when comparing full years, where there is only a 5% decline from 2011 to 2012.

Similarly, pricing has held steady year-over-year. The annual average price of a single-family home in Greater Victoria was $603,298 in 2012 compared to $613,839 in 2011. Shelley Mann, President of the Victoria Real Estate Board, notes that while the annual average in 2010 was $629,925, it was $580,748 in 2009.

"In December there were less active listings on the MLS® system than in recent months," Mann says. "With less competition, homeowners have a better opportunity to sell. But the property must show well, and they cannot expect to sell for the all-time high prices of 2010 and 2011." Current active listings are 3,896.

"We continue to see buyers waiting to make their move. Two factors seem to have triggered this, the first being the tightening of lending regulations which has affected the purchasing power of many consumers," Mann says.

"The second factor is that some buyers are continuing to wait for the market to fall," Mann says. "What we heard at the local 2012 CMHC Housing Outlook Conference is that the market has bottomed out and slow growth is in store for 2013."

There were 65 condominium sales in December 2012, compared to 98 in November 2012 and 89 in December 2011, and the year-over-year average price has decreased by 3%. Townhome pricing remains flat.

Total Waterfront Single Family Dwellings sold: 10, also 10 in December 2011
Total Non-waterfront Single Family Dwellings sold: 146, down 27 sales from December 2011
Single Family Dwellings sold over $1 million: 10 (3 over $2 million)

Stats Quick Reference

Total Single Family All Areas includes Shawnigan Lake/Malahat, Gulf Islands and Up Island

Summary Report and Graphs

Monthly Sales Summary
Average Selling Price Graphs
Active Listings, New Listings and Sales Graphs

When Interpreting Our Statistics

To ensure sales are not over-reported, we report net sales: that is, the number of sales less the number of collapsed sales, if any. Average Price is the total dollar volume of sales for the month divided by the number of sales in the month. Six Month Average is the total dollar volume of sales for the last six months divided the total number of sales in the last six months. Median Price is the mid-point price between the least expensive sale and the most expensive sale in the month.

The use of average price information can be useful in establishing trends when applied over a period of time, i.e. six months or longer. The Victoria Real Estate Board cautions that an average price does not indicate the actual value of any particular property. Those requiring specific information on property values should contact a REALTOR®.

Why we won’t crash like the USA

Front PageNov 21, 2012

Any builder will tell you a house is only as good as its foundation. The same rule applies to a national housing market.

On July 9 a new set of mortgage rules will go into effect aimed at firming up the financial foundations of the Canadian housing market.

Among the changes is the rolling back of the maximum government insurable amortization period to 25 years from thirty years. That means banks can no longer entice cash-poor wannabe homebuyers with lower regular payments by stretching them out over thirty years. The regular payments may be bigger but in the end the total amount of interest paid by the borrower is less.

In addition, the maximum allowable amount that can be borrowed against the appraised equity in a home will be lowered to eighty per cent from 85 per cent. The change is expected to decrease the risk of higher borrowing rates and falling house prices making the total amount owing greater than the value of the property.

Canada Finance Minister Jim Flaherty admits the move could close the door on nearly five per cent of new home buyers. That may be an understatement considering forty per cent of new mortgages last year were for amortization periods between 25 and thirty years according to the Canadian Association of Accredited Mortgage Professionals.

It's the fourth time the Federal government has tightened the mortgage rules since the U.S. real estate meltdown five years ago, when highly leveraged purchases met crumbling house prices. Even now the amount owing on one in four U.S. homes is higher than the appraised property value.

New rules protect lenders or home buyers?

Ottawa is also serving notice to lending institutions to ensure borrowers meet basic requirements and have appropriate insurance if they don't repay their loans.

It's all a bit of the old closing the barn door after the horse is gone - with a twist. The latest clampdown is from the same Conservative government that opened the door in the first place by caving to the finance industry and loosening lending requirements in the early 2000s. One of those loosening measures that survived is the five per cent minimum down payment. Technically you can still buy a house on your credit card.

While the initiative may seem like protection for prospective homeowners it's more about making sure the big banks get their money back. Keep in mind mortgage insurance through the government owned Canada Mortgage and Housing Corporation insures the lender. Home buyers with less than a 20 per cent down payment must pay the premium.

When the new rules were announced in late June the government was quick to trot out the average 152 per cent debt-to-income ratio. Debt-to-income measures thetotal amount of household debt against the annual average Canadian household after-tax income. In the 1990s the debt to income ratio was 90 per cent.

Shocking as it may seem, the debt-to-income ratio says little about the financial state of an individual household and does not distinguish between low interest, equity building, mortgage debt and high interest consumer debt. A young household with a $60,000 income and a $200,000 mortgage, for example, would have a debt to income ratio of 330 per cent. A household with a $60,000 income and credit card debt of $30,000, on the other hand, would have a seemingly more manageable debt to income ratio of 50.

To address the ballooning debt to income ratio Ottawa is also tightening the rules surrounding debt serviceability — the ability of households to manage their debt on a monthly basis. The banks measure debt serviceability in two ways:

1. The Gross Debt Service Ratio (GDSR): Monthly housing costs (normally mortgage principle and interest payments), property taxes, secondary financing, heating and fifty per cent of condo fees, if applicable. Ottawa would like to cap the GDSR at 39 per cent of a household's monthly income.
2. Total Debt Service Ratio (TDSR): Housing costs (same as GDSR) plus payments on lines of credit, credit cards and other debt. Ottawa is calling for a maximum TDSR of 44 per cent.

Thanks to lax lending rules the portion of household income devoted to debt each month has also skyrocketed, putting thousands of Canadian households on a financial treadmill while widening the profit stream for the banks.

But even the way the government measures debt serviceability is skewed toward the lender. Both methods calculate before-tax income because the lender, who has the property as collateral, is often in line for payment ahead of the Canada Revenue Agency if the borrower defaults. Wise borrowers who want to stay on the CRA's good side may want to calculate their own debt serviceability by factoring after-tax income instead.

Also, with home ownership becoming more and more elusive, prudent Canadian households are opting to make sacrifices to pay down debt more aggressively. Tighter debt serviceability requirements take away that option, making it tougher for young families to break ground on their own financial foundations.

MAY 2012 REAL ESTATE MARKET IS PICKING UP IN GREATER VICTORIA

June 1, 2012
 

VICTORIA, BC-Consumers are showing confidence in the Greater Victoria real estate market, evidenced by a spike of 71 residential sales in May 2012 over the previous month. "During the last two or three months, we’ve seen many potential buyers out looking," says Carol Crabb, President of the Victoria Real Estate Board. "During May, they made their decisions. This shows there is good selection on the market, as well as good value."

The average price for single family homes sold in Greater Victoria last month was $622,387, a jump over April’s average of $609,376. Excluding previous months’ sales of over $4 million, the median has returned to $534,250.

"Last month we told you that homebuyers were researching their purchases by working with home inspectors, mortgage professionals and REALTORS®," Crabb says. "Now they are moving forward, which is often reflected in a spring market, even though it’s not feeling very spring-like."

Total MLS® sales for May 2012 were 659, with 636 of those residential, compared to 572 and 544 respectively for the same period in 2011, and 586 and 565 last month. We ended May 2012 with 5,015 active listings.

Total waterfront Single Family Dwellings sold: 15, down 3 sales over May 2011
Total non-waterfront Single Family Dwellings sold: 373, up 38 sales over May 2011
Single Family Dwellings sold over $1 million: 24 (3 over $2 million)

STATS QUICK REFERENCE

Summary Report and Graphs

Monthly Sales Summary
Average Selling Price Graphs
Active Listings, New Listings and Sales Graphs

When Interpreting Our Statistics

To ensure sales are not over-reported, we report net sales: that is, the number of sales less the number of collapsed sales, if any. Average Price is the total dollar volume of sales for the month divided by the number of sales in the month. Six Month Average is the total dollar volume of sales for the last six months divided the total number of sales in the last six months. Median Price is the mid-point price between the least expensive sale and the most expensive sale in the month.

The use of average price information can be useful in establishing trends when applied over a period of time, i.e. six months or longer. The Victoria Real Estate Board cautions that an average price does not indicate the actual value of any particular property. Those requiring specific information on property values should contact a REALTOR.

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A $10,000 temporary, one-time refundable income tax credit for first-time home buyers who purchase a newly constructed home, effective today, February 21, 2012 through to March 31, 2013.

Details are available here: http://www.bcbudget.gov.bc.ca/2012/homebuyers/2012_First_Time_Home_Buyers_Fact_Sheet.pdf

HST Threshold being raised to $850,000 effective April 1, 2012

Government announces the transition rules for the HST early

The Honourable Kevin Falcon, Minister of Finance, held a press conference today in Victoria to announce transition rules for the harmonized sales tax and the affect it will have on the home building industry. Effective April 1, 2012, the threshold for new housing rebates will be increased from $525,000 to $850,000. Furthermore, this rebate will not be available for secondary homes (outside the Metro Vancouver and Capital Regional District).

The Victoria Real Estate Board was present for a pre-briefing with Minister Kevin Falcon, along with other key stakeholders from BC’s housing sector in the province.

Be reminded that if your clients are considering amending existing agreements as a result of this announcement, they should seek legal advice before doing so.

BCREA is working with legal and tax experts to prepare draft contract language that REALTORS® can include in their listing agreements and Contracts of Purchase and Sale, as well as a series frequently asked questions. This material is expected to be available the week of February 20, and will be posted on the BCREA website as a resource for both REALTORS® and their clients.

Members can find the government’s announcement here: http://www.newsroom.gov.bc.ca/2012/02/transition-measures-support-new-home-buyers-builders.html

Some of the key elements include:

- The B.C. new housing rebate threshold will be increased to $850,000, effective April 1, 2012 with a maximum rebate of $42,500.

- A provincial grant of up to $ 42,500 will be available for purchasers of new secondary vacation or recreational homes outside the Greater Vancouver and Capital regional districts priced up to $850,000, effective April 1, 2012.

- For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the seven per cent provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of two per cent on the full house price.

- The temporary housing transition measures will be in place for two years, until March 31, 2015. The tax only applies to homes where construction begins before the transition date and ownership and possession occur after.

The BC Ministry of Finance has updated their PST in BC website: http://www.pstinbc.ca/buying_goods/buying_a_home

The Canadian Ministry of Finance has also released its transitional rules, with examples related to the sale of real property. The rules note:

- In the case of a sale of real property, tax generally becomes payable on the earlier of the day on which ownership is transferred to the recipient and the day on which possession of the property is transferred to the recipient under the agreement of purchase and sale. However, where the property supplied is a residential condominium unit in a condominium complex which has not, at the time possession is transferred, been registered as a condominium, tax is not payable until ownership of the unit is transferred or, if earlier, 60 days following the date of registration.

There are several examples listed in the rules, which can be found here: http://www.fin.gc.ca/n12/data/12-017_1-eng.asp

The Board will post further information as soon as it becomes available.

Property Assessment Appeals Drop 25 Per Cent for 2012

A Decade to Remember for Greater Victoria Real Estate

If, after a decade of living in his home, an owner sells today, hoping to bank some cash, he’ll have to move to a lower-cost area, downsize his home, or both.

Many of us can attribute our increasing net worth largely to this unrealized, historical increase in the value of our home. But, will this trend continue for the next decade? Not very likely.

In Canada today, it is estimated that some 43 per cent of total household income is needed by an average family solely to finance their mortgage, property taxes, and utilities. In British Columbia this figure exceeds 70 per cent. In Vancouver, it’s a horrendous 92 per cent. For Greater Victoria, a specific number is not available, but since our home prices are second only to Vancouver’s, we know that our costs are much higher than the Canadian average. Such costs are clearly not sustainable.

A retired corporate executive, enjoying post-retirement as a financial consultant, Peter Dolezal is the author of three books. His most recent, the Smart Canadian Wealth-Builder, is available at Tanner’s Books.