You have decided to buy a home. You've analyzed your budget, talked to a REALTOR® and figured out what kind of house you want. But, the most important step may have been left until last: picking the right neighbourhood.

Choosing not only the proper community, but also the right neighbourhood, can have a tremendous impact on your family's happiness and the value of your investment.

The first thing many people do when considering a move is drive around various communities gaining a sense of which areas they like. Buyers find out how close the major highways are and if the neighbours keep their yards tidy. Most will make sure they know the location of the closest mall. But what about public transit, colleges, schools, libraries, parks, recreation centres and fire or ambulance stations? Is the local police station close to your prospective neighbourhood? All of these factors can make or break a decision to buy a certain property.

Your REALTOR® can provide you with a wealth of general information on different neighbourhoods. For detailed information, it's a good idea to contact the appropriate agency directly. Here are a few suggestions to consider:

Contact the municipality

Municipalities have a wealth of information on hand. Some distribute brochures and booklets containing the locations of colleges, libraries, ambulance stations, hospitals, parks and transit stops. It's also a good idea to check the location of recreation centres, swimming pools, ice rinks and the like, along with the programs they offer.

Call the local police and fire departments

Ask them how many stations service the community and their locations. Also ask about response time to emergencies.

Contact local School Boards

The Greater Victoria, Saanich, Sooke and Gulf Islands School Districts will be able to give you information on the locations of elementary and secondary schools within their jurisdictions. It's a good idea to mark the routes your children would take and then walk them yourself.

Your REALTOR® and MLS®

Your REALTOR® will be able to offer you general advice and information on many of the above topics. Remember, your REALTOR® has access to the Multiple Listing Service® (MLS®) and can provide you with a customized list of properties available for sale in the neighbourhood of your choice that meet your needs, wants and budget.

Mortgage Rate Outlook Panel

Our panel of mortgage experts share their views on Canadian mortgage rate trends each month by answering this question: What is your outlook for Canadian mortgage rates over the next 30-45 days?
View this month's answers below.

December 2011

Previous MonthsDecember 2011November 2011October 2011September 2011August 2011July 2011June 2011May 2011April 2011March 2011February 2011January 2011December 2010November 2010October 2010September 2010August 2010July 2010June 2010May 2010April 2010March 2010February 2010January 2010December 2009

Panel Consensus

Fixed Rates: DownVariable Rates: Unchanged

Mark Kocaurek

Senior Vice President, ING Direct

Fixed Rates: DownVariable Rates: Unchanged

Dr. Ian Lee

Director at Carleton University

Fixed Rates: UnchangedVariable Rates: Unchanged

Dan Eisner

President, True North Mortgage

Fixed Rates: UnchangedVariable Rates: Up

Stella Cellucci

Mortgage Agent, Centum Mortgage Professionals

Fixed Rates: DownVariable Rates: Unchanged

Panel Consensus
Our panel's final verdict for this month's fixed, and variable mortgage rates.

FIXED RATES

Down

VARIABLE RATES

Unchanged

Summary

Can fixed mortgage rates get any lower? This month our panel members aren't ruling out a decrease to fixed rates in the short term. At the same time, they feel quite strongly that variable mortgage rates will stay at current levels well into 2012.

Fixed Rates: Down

With no quick fix on the horizon for the European debt crisis, the global economic outlook continues to be pessimistic causing downward pressure on longer term bond yields. Couple this with decreased demand for home loans during the busy holiday season, and it is likely that fixed mortgage rates will stay low or even drop further over the next 30-45 days.

Variable Rates: Unchanged

Recent GDP numbers were surprisingly strong, inflation is near the target range, and a global economic meltdown could be on our door step. The last thing Governor Mark Carney wants to do is shock consumers during the busy holiday buying season with news of an interest rate increase. As a result, our panel members agree that the Bank of Canada will hold rates steady at their next meeting.

FOR IMMEDIATE RELEASE	PDF 42 KB

December 5, 2011

Stable and Balanced Real Estate Market Predicted for 2012

Carol Crabb, 2012 President of the Victoria Real Estate Board, says that stable and balanced market conditions are expected to continue in the Victoria area housing market in the New Year. Crabb noted that real estate sales have been generally higher in recent months compared to last year and with little change anticipated in interest rates balanced market conditions should continue for the foreseeable future. "Despite global economic uncertainty, the local real estate market has shown remarkable stability. The Victoria area remains a destination of choice for many people and there is every expectation that stable market conditions will continue in the coming months," said Crabb.

Crabb added that while the number of properties available for sale has been declining in recent months from record highs over the summer, prices should remain stable with little significant change for the foreseeable future.

The 2012 Board of Directors is as follows: Carol Crabb -- President; Dennis Fimrite -- Past President; Shelley Mann -- President Elect; Mike Nugent -- Secretary-Treasurer. Other Directors are Tim Ayres, Guy Crozier, Mike Holmes, Wendy Moreton and Andrew Plank.

The 2012 Directors take office effective January 1.

Is there such a thing as a best time of year to sell a house? Certainly, seasonal factors come into play when trying to sell a home, but there are other things to consider as well, like the tug and pull of supply and demand, as well as unique local market conditions.

No matter when a home goes on the market, one should take a few things under consideration that will likely affect not just the ability to sell a property, but more importantly the ability to get your asking price. Timing, it seems, is everything.

While the economy does not follow the predictable ebb and flow of the seasonal changes in real estate and in buyer attention, the economy, it’s state and it’s prospects boil down to property values, and consumer confidence. When the economy is under fire, people are nervous about their jobs. There is generally a reluctance to spend, accumulate debt or make major purchases.

The market will tell you what a home is worth. The problem is, during an economic downturn, the market may value your home lower than you had hoped, or than from when you started.

In a country like Canada, where there are four distinct seasons, seasonal influences play a large part in creating good selling conditions.

Wintertime brings with it a series of challenges, among them the weather, holiday distractions and lack of interest from buyers.

When the snow thaws though, and greenery re-emerges from the ground, buyers tend to re-emerge as well. The spring tends to be the peak of the market, simply because the timing suits people in general. The weather is more favourable, properties generally can be better displayed, and moves and property closings can more reasonably be managed through the summer months, so for those with families relocating is less disruptive.

While the springtime may typically be a more optimal time to sell, there will typically be more competition on the market. Sometimes, if a seller is flexible on their dates, it may be advisable to wait until the spring market to list, simply because of the flood of buyers onto the market. Often, a property will sell for more, and sell much faster because of volume.

As there will be more properties on the market, the seller really needs to take time to make their property stand out, using the slow winter months to actively prepare their homes to list. For some, it can take weeks, or even months to de-clutter and re-organize their properties to best reflect the space, and the positive attributes.

Advise sellers that, even though you may list in the spring, the selling process begins now- behind the scenes. Think staging before selling.

Over the past few months, bargaining power in residential property transactions throughout the Greater Victoria area has rather clearly shifted in favour of buyers.

Looking for proof? One needs only examine real estate statistics, as published by the Victoria Real Estate Board. In July and August, while the total number of listings increased to around 5,000, sales numbered just over a tepid 500 units throughout the region. At the current rate of sales, this represents a 10-month supply of inventory in our local market — a 15-year record, I believe.

As can be expected, the increasing imbalance between supply and demand is showing up in a lower price trend across all types of residences. While average prices have fluctuated up and down dramatically, the primary cause has been the varying numbers of very high-end homes that sell from month-to-month. More indicative of price trends is the median price. For a single-family dwelling in Greater Victoria for example, the 2010 median price was $562,000. By July and August of this year it was down to $541,000, a decline of 3.7 per cent.

A few months of slower sales and rising inventories is not a definitive indicator of long-term price softening. But sellers would be foolish to ignore these early warning signs. It’s important to note that this early downward trend has emerged even as five-year fixed-mortgage rates are available for as low as 3.44 per cent.

Eventually the North American economy will pick up steam. Mortgage rates will rise. When they do, we can expect more downward pressure on buyer demand.

Despite these indicators, some organizations, including the B.C. Real Estate Association, continue to predict prices “inching up” in 2012. Don’t count on it.

I continue to believe that although we are not destined for a major drop in prices, a modest downward correction is highly likely. Investing in residential real estate today should not be done with the expectation of significant capital gains over the next three to five years.

If you are a buyer, there’s much product to choose from, and little urgency to close an early deal. If you are the seller, be sure to price at the market level — or the only one visiting your home while it’s listed may be your realtor to suggest a price reduction, and perhaps your curious neighbours. Aside from realistic pricing, proper staging of your home and an aggressive marketing plan become more important than ever.

The saving grace for sellers is that more than 500 buyers are looking to purchase a home every month. And they are buying. Despite the dismal summer statistics, of the sales that occurred during that period, I know of two in the past month which sold within a week, and within a whisker of their near $800,000 asking prices. The sellers’ secret? Very realistic pricing and an excellent marketing program, well-executed.

Owning residential real estate in our very appealing corner of Canada cannot help but be a good investment in the long term. The current challenge for sellers is in the shorter term. For those needing to sell their home, ignoring these rather clear market signals will likely lead to lack of success and great frustration.

Remember the facts. No more than about one-tenth of all those listing their home will succeed in selling within any one month. Some 90 per cent will remain without an offer, many not selling even after many months on the market. Price accordingly.

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 now available at Tanner’s Books, and in other bookstores.

Protect your investment. Title insurance offers peace of mind and protection whether you own a home or if you are a first time buyer. One of the most important milestones in your life will be buying your first home. It is an exciting time, and there will be a lot of information that you will be required to understand to ensure everything goes smoothly, and that your investment is protected. Eliminate some of the stress and uncertainty by speaking to your lawyer and ensuring you are protected with title insurance from the beginning. Click here to find out about the Top Benefits of Title Insurance.

Why do I need Title Insurance?

• Real Estate Title Fraud - What you need to know
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August 8, 2011

REALTORS® Participate in Home Energy Ratings Program

Victoria area REALTORS® will play a key role in a Time of Sale Home Energy Labelling Pilot Project that will provide sellers in the Capital Regional District (CRD) with a free (regular cost $150) EnerGuide for Houses rating that will be placed on the Victoria Real Estate Board’s (VREB) Multiple Listing Service® (MLS®) System database. The first 100 homes to register in the pilot will receive a home energy assessment which takes into account a home’s windows, doors, insulation, heating equipment and air leakage.

VREB President, Dennis Fimrite, notes that the program represents Phase II of a similar pilot project conducted in 2010 which offered a BC Hydro rebate of the assessment cost but which only applied to sellers on Salt Spring Island and in the Municipality of Oak Bay. "We are pleased to be part of this much wider program that will benefit more sellers and buyers," said Fimrite. "Today’s consumers are interested in the energy consumption of their purchases. The energy assessment will make sellers and buyers eligible for substantial government rebates for home energy efficiency upgrades; it will also provide sellers with an additional marketing tool by providing potential buyers with important information on the energy efficiency potential of a home," added Fimrite.

Real Estate Sales and Prices Soften in July

August 2, 2011
 

A total of 523 homes and other properties sold in July through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®), down from 618 sales in June but very close to the 527 sales in July of last year. Overall prices, meantime, declined somewhat across all major property types.

Victoria Real Estate Board President, Dennis Fimrite, noted that despite the drop in the number of sales last month compared to June, market activity is now very close to what we saw at this time last year. "In the coming months, we anticipate that market activity will remain relatively stable and similar to what we saw during the summer and early fall months of last year."

Fimrite added that the number of properties available for sale continued to increase at the end of last month with inventory levels currently 14 per cent higher than a year ago. "The available choice for buyers increased further last month with 5,094 properties available for sale at the end of July, up slightly from the 5,050 properties available for sale at the end of June." Fimrite added that the increasing inventory means sellers need to be realistic in pricing their homes in order to attract qualified buyers. "A REALTOR’S® expertise can be invaluable in today’s market to help sellers price their homes to best advantage," added Fimrite.

The average price for single-family homes sold in Greater Victoria last month was $581,117, down from $629,292 in June. The median price also declined to $535,000 while the six-month average declined to $615,439. There were 13 single family home sales of over $1 million in July including two on the Gulf Islands. The overall average price for condominiums last month was $315,371, down from $320,172 in June. The average for the last six months declined to $327,762. The median price for condominiums in July also declined to $289,000. The average price of all townhomes sold last month declined to $412,178 from $444,768 in June. The median price also declined to $385,000 while the six month average declined to $443,341.

MLS® sales last month included 283 single family homes, 147 condominiums, 47 townhomes and 19 manufactured homes.

Summary Report and Graphs

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

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The Harmonized Sales Tax (HST) came into effect on July 1, 2010. The provincial and federal governments combined the 7% provincial sales tax (PST) and the 5% federal Goods and Services Tax (GST) into the 12% HST. Some of the transition rules can be quite confusing, so talk to your REALTOR® about the specifics of your situation. In the meantime, we hope the following will help you understand the basics of what is, and what is not, subject to the new tax and how it affects your home purchase.

First and foremost, it is important to note that the HST applies to new homes. It does not apply to resale homes.

New Housing Rebate

You may be eligible for a provincial New Housing Rebate if you buy, as your primary residence:

• a new home together with land;
• a new home together with leased land;
• a new mobile home or float home;
• a new home purchased through shares in a housing cooperative; or
• a home constructed or substantially renovated (more than 90%) by the owner-builder.

Buyers of new homes are eligible for a rebate of 71.43% of the provincial portion (7% of the HST’s 12%) of the HST paid on the new home up to a maximum rebate of $26,250. Homes priced at more than $525,000 are eligible for a flat rebate of $26,250. This rebate is limited to primary residences. Recreational property not used as a primary residence does not qualify.

If you buy a presale property and the agreement is dated on or before November 18, 2009 and you take owner­ship or possession after July 1, 2010, you will not pay the HST and will not be eligible for a New Housing Rebate. You will pay the GST. If the agreement is dated after November 18, 2009 and you take ownership or possession after July 1, 2010, you will pay the HST and may be eligible for the New Housing Rebate.

Buying either a new or a resale home

The 12% HST is now charged on a range of goods and services including:

• home renovations;
• energy efficient appliances, insulation, windows and doors;
• heating and electricity bills, telephone, cable;
• closing costs such as appraisals and inspections;
• moving costs; and
• REALTOR® fees or commissions – note that the HST will apply to REALTOR® services performed on or after July 1, 2010. If 90% or more of the services were per­formed before July 1, 2010, the HST will not apply.
  

The HST is not the PTT

The Property Transfer Tax (PTT) is a separate provincial tax on all property transfers. The rate is 1% on the first $200,000 and 2% on the remainder of the fair market value of the property (usually the selling price) and is charged on the fair market value (usually the selling price) of the property before the GST/HST is applied. Eligible first-time home buyers may qualify for a PTT exemption. Information about the PTT can be found here.

Buying or selling a home can be a little confusing. This glossary of some of the most common real estate terms that you are likely to encounter will help you better understand the language of real estate.

Adjustment Date

The day from which all calculations of interest, tax adjustments, utility bill adjustments (if applicable) are made to the credit of the either the buyer or seller. This is usually (but not always) the same as the possession date.

Amortization

The number of years it takes to repay the entire amount of the mortgage.

Appraised Value

An estimate of a property’s market value used by lenders in determining the amount of the mortgage.

Assessed Value

The value of a property, set by BC Assessment, and used by the local municipality for the pruposes of calculating property tax.

Buy-down

When the seller reduces the interest rate on a mortgage by paying the difference between the reduced rate and the market rate directly to the lender or to the buyer.

Closing

Completion of the real estate transaction when the parties involved agree that all legal and financial obligations have been met and the deed to the property is transferred from the seller to the buyer.

Closing Costs

Expenses in addition to the purchase price for buying and selling a property.

Conveyance

The term used to describe the process of transferring the seller’s title to the buyer and indicates all the necessary steps to complete the transfer. This process is usually undertaken by a conveyancing lawyer (or notary) acting for the buyer.

Counter Offer

An offer made by the seller back to the buyer altering one or several terms and/or conditions of the offer as originally written.

Debt Service Ratio

The percentage of a borrower’s income that can be used for housing costs. Gross Debt Service (GDS) Ratio is the amount that a lender will permit a borrower to use from his/her gross income in order to quality for a loan for housing costs, including mortgage payment and taxes (and strata fees when applicable). Total Debt Service (TDS) Ratio is the maximum percentage of a borrower’s income that a lender will consider for all debt repayment (other loans and credit cards, etc.) including a mortgage.

Deed

A legal document that conveys (transfers) ownership of a property to a buyer.

Easement

A legal right to use or cross (right-of-way) another person’s land for limited purposes. A common example is a utility company’s right to run wires or lay pipe across a property.

Equity

The difference between the price for which a property can be sold and the mortgage(s) on the property; equity is the owner’s stake in the property.

Foreclosure

A legal process by which the lender takes possession and ownership of a property when the borrower does not meet the mortgage obligations.

Lien

Any legal claim against a property filed to ensure payment of debt.

Mortgage

A contract between a borrower and a lender. The borrower pledges the property as security to guarantee repayment of the mortgage debt.

Mortgage Insurance

Government-backed or private-backed insurance protecting the lender against the borrower’s default on high-ratio (and other types) of mortgages.

Mortgage - Blended

Equal or regular mortgage payments consisting of both a principal and an interest component.

Mortgage - Conventional

A first mortgage issued for up to 75 per cent of the property’s appraised value or purchase price, whichever is lower.

Mortgage - High Ratio

A mortgage that exceeds 75 per cent of the loan-to-value ratio; must be insured by either the Canada Mortgage and Housing Corporation (CMHC) or by a private insurer to protect the lender against default by the borrower who has less equity invested in the property.

Mortgage - Open

A mortgage that can be prepaid or renegotiated at any time and in any amount, without penalty.

Mortgage - Variable Rate

A mortgage for which payments are fixed but whose interest rate changes in relationship to fluctuating market interest rates. If mortgage rates go up, a larger portion off the payment goes to interest; if rates go down, a larger portion of the payment is applied to the principal.

Mortgage - Vendor Take-Back

When sellers use their equity in a property to provide some of all of the mortgage financing in order to sell the property.

Principal

The mortgage amount initially borrowed or the portion still owing on the mortgage. Interest is calculated on the principal amount.

Property Disclosure Statement

This form enables sellers to disclose known material latent defects and other defects. The form also serves as a checklist for buyers enabling them to address concerns about the property’s condition on the spot. The BC Real Estate Association developed the form. Submission of the form is required before any listing is placed on the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) system.

Property Taxes

Location and the value of the property as determined by BC Assessment affect this levy. Local government determines the rate of taxation. Property taxes are payable on an annual basis.

Property Transfer Tax

Payment to the provincial government for transferring the property from the seller to the buyer. Certain exemptions are available for first-time buyers.

REALTORS®

Real estate professionals licensed by the Real Estate Council of BC who are members of the Victoria Real Estate Board and the British Columbia and Canadian Real Estate Associations. Only these professionals can call themselves REALTORS®.

Rights-of-Way

These are indicated on title and the Land Title Office; often for use of utilities or city or municipality in order to make repairs to pipes, etc. No permanent structure may be build on a right-of-way.

Statements of Adjustments

Closing statements in a real estate transaction which set out the sources of funds which make up the purchase price, adjustments to and from the purchase price, the final amount required from the purchase and the amount due to the seller. Lawyers will prepare a statement for the seller and the buyer.

State of Title Certificate

A copy of the title which lists charges against a property, e.g. liens, mortgages, rights-of-way, etc.

Strata Common Property or Common Elements

The portions of a strata development owned in common (shared) by the unit owners, e.g. pool exercise room, lobby, etc. A strata fee is charged to every unit owner for the use of the common property.

“Subject-to” Clause

A statement of a condition to be fulfilled before the contract will become firm and binding; must include a specific deadline for removal.

Title

The legal evidence of ownership in a property.

Title Search

A detailed examination of the ownership documents to ensure there are no liens or other encumbrances on the property and no questions regarding the seller’s ownership claim.

Utility Taxes

Examples may include water, sewer and garbage (may include recycling levies).

Working with a REALTOR® Brochure

A brochure given to prospective buyers and sellers that explains the different kinds of agency relationship that may be entered into with a REALTOR®.

Zoning Regulations

Strict guidelines set and enforced by municipal governments regulating how a property may or may not be used.