First off, I couldn’t agree with the poster’s comments at the end more. I so often see people drawing conclusions about the price of their home from information like this without taking time to understand the deeper working of it. I see the same sorts of conclusions being drawn from property assessments, what the neighbour’s house sold for (which of course isn’t as nice as their own) and  a price based on how much they paid for the place plus how much the average sale price has gone up plus how much it cost them to do their renos.

There’s only one thing that counts when pricing your home and that’s what people are willing to pay for it. When Realtors give you an estimate on the value of your home, we give you this price based on what has sold recently that is most similar to your home combined with  the experience and knowledge gained from spending pretty much every day thinking about the value of every property we see. And we see a lot.

If we’re really stuck for comparables, (rare) we might include average sale price changes as a factor. I for one, only do this if I really have no better option.

Why? Well, they only measure an average of what people are spending at a certain time.  Take on year ago for example, a time when hardly anyone was buying any real estate. A lot of people were scared off by the nonsense the mainstream media was spewing, those who were buying were being more modest with their purchases than usual and we had a higher number of first time buyers than usual. Those first time buyers were smart. The only deals I was doing at the time was with people like that and I was excited for them because I believed that it was the best time to be a first time buyer in quite a few years due to the low interest rates and the slight slump in the market. All in all, the although these stats do mirror the changes in actual value of real estate, they are only a general guideline. Unfortunately, I can’t think of a better way to measure the overall changes of vlaue in a given real estate market. The Vancouver Real Estate Board is trying a new way of doing these things, but I’ve yet to be convinced of its value. Pun intended.

To sum it up, what I’m trying to say is that I think most people make too much of the average sale prices. For real estate investors and real estate professionals they’re something to keep a finger on the pulse of. For most homeowners, they can be a source of making conclusions that appear more informed than they really are.  So, don’t get too detailed in your calculations.

By the way, what you should be paying at least as much attention to in my opinion is mortgage rates. Those can affect what you pay quite a bit more than market value.

Ryan Coffey

THIS time, the prize is a biggie. It’s a one week trip for two to Costa Rica with a stay in a fully furnished studio apartment with a yard, a community pool and a BBQ that’s 3 blocks from the tropical beach plus $1000 spending money.

It’s called the “1 in 10 Contest” because that’s the odds of winning. Once ten entries are received, the prize will be drawn. Those are pretty good odds if you ask me. How do you enter? Well, you need to refer me someone who is either buying or selling a property and have is turn into a successful transaction. This takes time, which is why it’s open until the end of the year.

Until the end of June, it’s only open to my existing clients. (i.e. Past sales.) But after that, it’s open to everybody and anybody who wants to enter.

Click here for more info.

Ryan Coffey

Sometimes, they’re surprised by the question and have no real answer for me, more often they give me some tips that help make things a bit easier for me and once in a while they save me from walking into a landmine or two. This post is about how I would answer such a question if a new buyer were to ask it to me.

- First off, you want to make sure you know what you can afford and what your plan is. I recently saw the phrase somewhere “A goal without a plan is just a wish.” So, regardless of what you think you can afford, you will want to make sure you have a solid financial plan in place and talking to a Mortgage Broker is a big part of that.  You don’t need to wait until you’re about to buy the home, and it’s much better to do it as soon as you start thinking that’s making the purchase is something you’re serious about doing. A Mortgage Broker will usually do more for you than a bank can for reasons I won’t go into here.  It would cause professional embarrassment for your Realtor, and waste the time, effort and money of everyone on both sides of the deal if you have an accepted offer on a place that you were sure you could afford, but it turns out you can’t get the mortgage for. You may find that it makes more financial sense to buy sooner than later, or vice-versa. Or you may find that you can afford something nicer than you originally dreamed of quite easily, or the opposite.

- Know the difference between what you need, want you really want and what you would like to have. Too many criteria can make it hard for you to find anything that suits you and asking for too much for your given price range is a sure way to find few if any potential places to live. In other words, be ready to redefine your search as you become more familiar with what’s available.

-I generally recommend that buyers look at 6 to 8 homes in person before they make a choice. This way, they have a reasonably good idea as to what is out there that is available to them. I also think, but don’t need to say so often, that if you’ve looked at 15 places and still haven’t found anything you want to make an offer on, it’s probably time to change your criteria. If you can’t change the price range, you might change something like how many square feet in the home or in the yard, how many bathrooms you need, how new and polished in needs to be and so on.

-Remember that I, as your Realtor, spend my days looking at homes of all sorts. I’ve seen all sorts of things real estate both beautiful and crazy exist and happen. I’ve dealt with a lot of negotiations in my time and I’ve seen people get what they want against the odds and I’ve seen people throw away amazing, life altering opportunities because they decided to take the advice of their buddy, their uncle, or some guy they met at a bar. That’s the one that gets me, and that’s probably the one that stresses me out the most. When I hear phrases that start something like “I was talking to (someone who bought a house once) and they told me to….” I cringe because that advice is as likely to be useful as it is to be harmful. You see, every sale is unique and what that person went through won’t be quite the same as what you go through. I find that some people also think they know more than they really do, that’s just how some people are wired. At least when you’re dealing with a professional such as me, you know that if I have an opinion on something I can back it up with experience or at very least with legit info that has been passed my way. If I don’t know something, I will tell you, and will either find out the answer or tell you how you can do it.

-Above all, clear and concise communication is key. It’s just as import that you listen and understand everything I tell you as your Realtor as it is for me to listen and understand everything you tell me.

My apologies for the contrasting background. It seems to be the only way to paste this here.

Ryan Coffey

The Honourable Jim Flaherty, Minister of Finance, today announced a number of measured steps to support the long-term stability of Canada’s housing market and continue to encourage home ownership for Canadians.

“Canada’s housing market is healthy, stable and supported by our country’s solid economic fundamentals,” said Minister Flaherty. “However, a key lesson of the global financial crisis is that early policy action can help prevent negative trends from developing.”

The Government will therefore adjust the rules for government-backed insured mortgages as follows:

· Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.

· Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.

· Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.

“There’s no clear evidence of a housing bubble, but we’re taking proactive, prudent and cautious steps today to help prevent one. Our Government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it,” said Minister Flaherty. “If some lenders aren’t willing to act themselves, we will act. These measures demonstrate the Government is committed to taking action when necessary to support the long-term stability of a sector that is so vital to our economy and the financial well-being of Canadian families.”

These adjustments to the mortgage insurance guarantee framework are intended to come into force on April 19, 2010.

___________________________________
For further information, media may contact:

Annette Robertson
Press Secretary
Office of the Minister of Finance
613-996-7861

Jack Aubry
Media Relations
Department of Finance
613-996-8080

A piece of advice that I am dispensing more and more often these days is that it is generally wiser to buy real estate than it is to sell it.

The reasoning is quite simple. Real estate values increase over time, and it costs money to sell. You can rent a property at a price that is similar to what it costs to make mortgage payments based on current real estate prices so why not buy today and rent it out tomorrow? If you are patient, you can allow the rental income to increase as the years pass while your mortgage payments decrease. This way, someone else will pay most of of your mortgage at first and eventually all of your mortgage on the property you are renting out. I suppose it is worth pointing out here for the uninitiated that if you already have an existing property you are more appealing to mortgage lenders.

Remember, the golden rule is that real estate prices go up and down in the short term but up in the long term. That’s faster than inflation by the way. So, let’s say you had bought a property  ten years ago and know it to now be worth a little more than twice what it was worth at the time. (This is average right now.) Instead of selling it before buying again, you can rent it out at today’s prices and receive an income from that property which you can use towards paying for your new one. Should you decide to do this again in a few years, it will be even easier. This way, you will accumulate wealth throughout your life.

Most people sell their existing home before buying the next one. This is understandable because the proceeds from the sale gives you more buying power for the next property, but in the long term it holds you back. You see, in the process of making that move you have to pay for a variety of things like lawyers, any fixing up you have to do in order to make the property more appealing and Realtors too. Us Realtors are expensive. I’m not saying we aren’t worth what we charge, because it’s a much more crazy and stressful job than most people think and it’s harder to make a living at than most people think. This is attested to by the large numbers of people who start as Realtors every year, and then drop out in a couple of years due to stress and/or lack of income. However, for you and your interests, that money is better left in your pocket, or rather, left in your property.

My position is simply that there are good times to buy and better ones and if you don’t have to sell, don’t.  Just rent out your existing property and move into a new one. You’ll be better off in the long run.  This is all providing you can afford the payments and that you don’t get carried away and that you are realistic with how much rent you will get. Obviously, if you’re having kids and you can’t afford a big enough place for the new larger family without selling the existing one, this is an exception. Or if you are retiring and want the cash, or if you have just lost your job and can’t make the payments… these are good reasons not to follow my formula. Conversely, reasons like “I am moving overseas” don’t matter so much because I have a number of clients who are in that position and they own property here which they are renting out via a property management agency which charges 10% of the rent for the service.

Selling costs you a good chunk of change, and holding on to a property and renting it out rather than selling it will increase your net worth in the long run.

My position is not shared by all, and it is certainly not something that every Realtor will promote as listing properties that need to sell is the best kind of business we get and the mainstream media will probably never tell you this because they are usually peddling drama and fear rather than informing people on how to get ahead.

If you are of the more analytically minded, read the following posts for a deeper understanding of where I am coming from:

Good Debt: Yes, There IS Such a Thing!

When Should I Buy My First Home?

When to Buy and Sell Part 1

Ryan Coffey

I think though, that the video would have been cooler if Michael J. Fox was carrying a hoverboard and wearing those cool sneakers from 2015. Am I alone here?

Ryan Coffey

I’ve seen similar articles about Vancouver Island or Nanaimo from newspapers in other Canadian cities and travel magazines but this one sticks out in my mind partly because of how far the author has come and chosen here from the endless array of places to write about, but also because of how many people must have read about it.

This article of course speaks of tourism, but the large number of U.K. Expats in the area (like my dad) and U.K. food stores are testament to how many have been and continue to live out here. Nanaimo’s nicest pub? British. Nanaimo’s finest gourmet food store? Ironic as it sounds, is owned by a Scot. The local army infantry unit is the “Canadian Scottish Regiment” where you will typically see a bottle of HP sauce at meal time despite virtually everyone having the local accent.

Such an article makes a small but potentially noticeable impact on the local real estate market, but many of them make a large one. I’m watching quite closely to see what happens during and after the Olympics because I think this is just the beginning.

I hope Doctor Who comes and makes a visit in an upcoming episode. That would be so cool!

Here is the link to the article, which I only just found thanks to stumbleupon:

Daily Mail Article

Ryan Coffey

However, I recently got something in my inbox from an Immigration Lawyer that I thought would be of interest to international readers of this blog so I asked for permission to post it here.  And yes, permission granted.

The .pdf document below is from David Aujla, and Immigration Lawyer who operates out of Victoria. Check out his site at www.bcimmigration.com

It paints one portion of the picture of how easy/hard it is to gain entrance into Canada from abroad. I can tell you from experience though, that it takes a certain amount of determination and time to accomplish this worthwhile task. When my (now) wife and I moved back from Japan it took quite a few months to get the documents together and then about 6 or so for the application for me to sponsor her to be processed. Many don’t use a Lawyer due to the cost, but like real estate, it’s high stakes stuff that is very complex and could easily send your life down the wrong track should you miss one of the many important details of the process.

looking_ahead_to_2010

Ryan Coffey

New house construction is starting to recover after rough economic times saw financing and purchasing dry up.

Photograph by: Files , Times Colonist

Nanaimo was the brightest spot for new home starts on Vancouver Island in the past year, the Canada Mortgage and Housing said Monday.

While the “Hub City” had 13 per cent fewer starts last year than in 2008, other Island communities saw annual declines of up to 53 per cent year-over-year.

Recovery from a struggling economy looks promising as the last three months of 2009 had more new housing starts than the last five quarters.

“The modest rebound in new construction activity observed during the fourth quarter of 2009 is a sign that builders are starting to respond to the recent surge in resale demand,” said Travis Archibald, CMHC senior market analyst.

On Vancouver Island the total number of homes getting under construction last year was 2,345, down 39 per cent from 3,823 in 2008.

Last year’s numbers are not a surprise. The worldwide economic crisis and crash in the local multi-family housing boom led to lower monthly start-up numbers in 2009.

However, national house construction rose more than expected in December as Canada’s real estate market continued to show signs of recovery.

Housing starts in Nanaimo slipped just 13 per cent for 2009, compared with far larger drops elsewhere on the Island. A total of 789 homes were started in Nanaimo in 2009, down from 921 in 2008.

At year’s end, Greater Victoria had the highest number of total starts, at 1,034, down 45.7 per cent from 2008’s total of 1,905.

In December, 129 homes were stated in Victoria, down from 159 in November, but a huge increase from just 38 in December 2008.

Duncan’s total starts for last year came in at 168, down 38.9 per cent from 2008. The Courtenay area saw starts slide by 52.6 per cent to 245 in 2009, from 517 the previous year, CMHC said.

Finally, Parksville-Qualicam ended the year with 100 starts, a drop from 205 in 2008.

CMHC said the number of seasonally adjusted housing starts across the country were up 5.9 per cent from November, to 174,500 units. Most economists had expected an increase of between 160,000 and 165,000 units in December, following an upwardly revised 164,800 starts the previous month.

“The improvement in housing starts was broad based in December,” said CMHC chief economist Bob Dugan. “Solid increases occurred in both single and multiple starts to end the year.”

The Bank of Canada may shed further light on whether that strength has pushed Canada into a housing bubble when one of the governor’s advisers talks about the real estate sector in a speech Monday afternoon in Edmonton.

The speech will be closely watched for clues of growing concern among Bank of Canada policy-makers on the red-hot recovery in Canadian real estate. It is to be delivered by David Wolf, an adviser to Bank of Canada governor Mark Carney.

According to CMHC data, urban starts were up 6.6 per cent to 157,100 units in December, CMHC said in its report. Multiple-unit starts totalled 77,700 during the month, up from 72,800 units in November, while single-unit starts totalled 79,400, up 6.4 per cent from the previous month.

Urban construction was up 17.8 per cent in Quebec, 15 per cent in Atlantic Canada, 8.7 per cent in British Columbia and 2.9 per cent in Ontario, the report said. In the Prairies, urban starts declined 3.8 per cent.

Rural starts were unchanged at 17,400 units.

“Overall, the uptick in Canadian residential starts underscores the improving response of builders to the dramatic rebound in overall Canadian housing market activity,” said Ian Pollick, economics strategist at TD Securities.

“It is increasingly looking like the ‘fever’ in the existing home sales market is starting to catch in the new residential housing market. Further, the pullback seen in permits strikes us to be an unwind from unsustainably strong gains due to one-off factors.”

Meanwhile, Statistics Canada said Monday that Greater Victoria’s building permits climbed to $68.6 million in November, up by 48 per cent from $46.4 million October, and higher than November 2008’s total of $49.3.

The Victoria construction industry received a boost Monday with the announced of $42.5-million in renovations to six UVic buildings.

The value of national building permits fell in November by 4.6 per cent from the previous month to $5.9 billion. Still, that was 23.1 per cent higher than November 2008 and 62.8 per cent higher than February 2009, “when the lowest value during the economic downturn was recorded,” the federal agency said.

“However, November’s value remained below values recorded in 2007 and early 2008.”

The decline was due to a drop in the non-residential sector, which offset increases in the residential sector, the agency said.

In a separate release, the Construction Sector Council said the industry the housing recovery is helping the industry emerge from the recession “relatively unscathed,” as a result of government stimulus spending and pre-recession record levels of investment.

The not-for-profit group said construction employment has been rising since August after falling from October 2008 to July 2009.

“This will likely continue because of new infrastructure projects, renovation and maintenance work, and strengthening housing starts,” it said.

Canwest News Service

A little over ten years ago I moved out to Nova Scotia, on the east coast of Canada, to finish my degree. When I moved out there, I knew it was colder there than the west coast, I knew there would be more snow, and I knew I would need to dress differently. I didn’t, however, have even the slightest clue what I was getting into. I still whine about it and it’s been a number of years now since I left.  Six months of snow, bone chillling winds that are often so strong that you actually walk with a pronounced lean into the wind at nighttime temperatures that are frequently -20 Celcius (that’s -4 Fahrenheit) and sometimes -30 (-22) or lower and often snow piled as high as your head. Driving is a different world to say the least, and only possible when the snow plows are doing their thing and you’ve managed to get it out of your driveway or in some cases figure out which bump in the snowy driveway is actually your car.

Can you tell I don’t miss it?

There’s a lot of nice places in the rest of Canada, and the people are really nice too. In many ways I really like Canada overall as a place to live, but it’s just too cold for me much of the year which is why I came back to the west coast. (That and it’s pretty here.) The mild winters here that are rainy rather than frozen are a blessing if you ask me. Well… I admit that I did see some frost on my car about three or four weeks ago, but it was only about -1 out so it melted pretty quick. There was also a bit of snow that melted in about a day around that time as well.

Here is a list of average January high and low temperatures by city across Canada. Nanaimo is just across the water from Vancouver so I’m using the Vancouver numbers to represent us as I doubt they’ll vary much. These stats are from the Weather Network. My guess is that these are daytime temperatures as I know the nighttime temperatures to be generally colder in the places I am familiar with.