Calling Nanaimo expensive isn’t accurate. Yes, there are cheaper places nearby, like Campbell River, places up north like Sointula and where I grew up, Port Alberni. Places are expensive or cheap for a reason. (Summarized by supply and demand.) Sure, the local government’s policies affect both sides of the equation but their policies are deeply influenced by what the market is doing in terms of supply and demand. Ultimately real estate is never worth more or less than what people are willing and able to pay for it.
National average sale price according the Canadian Real Estate Association: Just shy of $350,000.
So, nationally, our prices are bang on national average. On the Island, (not including Victoria) we’re about average if a little higher than that. If we do include Victoria it skews things quite a bit because their average sale price is basically our price plus 50%. (They’re currently at $574,750 as their average.) Then there’s Vancouver which last I checked was double our average sale price. They changed how they measure things last year though so now it’s like comparing apples to Volvos. I suspect they did it to make their prices seem less expensive. Regardless, when I look at listings there and compare them to the most similar thing here it’s about double.
So, how are people able to pay for their homes here? Well, like I implied earlier, people aren’t moving here for the money so much as they are for the lifestyle. Retirees are a big part of the market on the island because of our mild winters and pretty location. They bring their money with them. So are younger people from well to do families in other parts of the world and/or people who have made money in other parts of the world. Lots of people these days have jobs that allow them to telecommute via internet as well. These groups of people in addition to local professionals like Doctors and successful business owners etc. are the ones who own the big pretty homes. A few people in the right position at the university do pretty well too. You don’t have to work in my industry to see this pattern though. Just go for a drive around town and ask yourself which local employers are paying for all these nice places.
The mid range (usually homes between 275k and 375k) are mostly young professionals, people who are renting out a suite for the mortgage helper, and regular people who have worked hard and saved for a long time. Lots of these homes out there and lots of people in this demographic.
Of course, you could get a deeper look from going through the most recent census data and comparing it to the latest real estate association data but I trust my own life/work experience more than what I can learn from that as it is much more detailed, up to date and well… real.
Looking at stats won’t tell you the following for example: You can buy a modest but comfortable condo or townhome in Nanaimo for a total of about $1,100-1,200/mo right now. That’s including taxes, strata fee and mortgage. Such places are abundant as they are the bread and butter of the condo market here. Usually two beds but sometimes three. There are cheaper places too, but in my eyes this is what your average first time buyer is comfortable living in when considering a condo.
It’s the end of the year again. This means it’s time for me to make a list of posts I think are most worth reading and sum up the year as I see it for things real estate in Nanaimo.
Incidentally, this also marks the third birthday of this blog. My cpanel says I’m getting 3000 individual visitors a month these days and they’re coming about twice a month on average. She has grown so much in those three years. I’m just so proud of her. (Sniff.)
On to the review of local real estate happenings this year. The end of last year was quite busy and then things slowed down in the beginning of this year. As of February or so, things started picking up as per normal and but at some point in the summer things slowed down again (also normal) but what wasn’t normal was that they didn’t really pick up again in the fall as much as they usually do. Strangely, in December we’ve been seeing a bit more action in the market which is strange because it’s usually the quiest time of year. Personally, I’m getting more inquiries lately and quite a few people are talking about buying in the new year so hopefully the plans will become a reality.
Nanaimo started a shift this year. Or perhaps I should say that the shift is now apparent. Since at least the 90′s the north end of Nanaimo has seen the most growth and the most… well… “new”. A few years ago we started to see the revitalization of downtown start to gain momentum (which is still building) and more and more new developments popping up in the southern areas of Nanaimo. My hope is that the momentum will continue and we will have more of a centralized downtown area. From what I can gather from the people I’ve spoken to at city hall, it would seem that this is the plan. This town is definitely maturing into a small city.
And now my list of posts which I think are the best of the blog for 2010:
You probably already know that you can use Google Maps street view to get a good look around at a particular spot. You probably also knew that you can look at photos of the view from certain spots by clicking on the photo icons. (Under “more” in google maps and visible by default in Google Earth). But did you know you can fly a plane over Nanaimo in Google Earth’s flight simulator?
Yeah, there’s a lot of controls there. I can’t be bothered with learning them all either but it’s still fun. And when gets boring there’s still lots of views of the city to look at and explore.
This one is related to myth #1, but it is sufficiently different in my eyes to warrant its own post. Besides, this is the number one question I get when people want to start a general conversation about real estate.
Essentially, as I’ve often heard from veterans in the real estate world, “There is no such thing as a good or a bad market.” When I first heard this, I was fairly new to the field and I half dismissed it as salesman talk. After more experience and much more reflection I have come to agree with the statement. I do find it a little too succinct though. My way of wording it is “Whether the market is going up or down or sideways, it’s always good for somebody and bad for somebody else. It really depends on what cards you’re holding.” This is after all why we have the terms “Buyer’s market” or “Seller’s market”.
Market conditions are really only either good or bad for people who make their living building or selling homes. Slow (down) markets mean less business after all busy (up) markets mean more business. Yes, it really is that simple. For everyone else, from homeowners to investors it really depends on their financial situation and what their plans for the next few years are as there are strategies for all markets that will maximize their long term revenue/equity.
The thing about buying, is that there are no bad times to buy in terms of what the market is doing. There are only good times and better times to buy so long as you do it correctly. As always the most important factor is whether you can afford those payments. The rest is detail.
A subject clause, or “subjects” as us Realtors often refer to them, is a term within an agreement that has not yet been fulfilled at the time of signing.
For example, in almost any offer for a residential property you will see a clause that says the offer is “Subject to the buyer obtaining approval for a first mortgage at terms that are satisfactory to the buyer by (date).” (FYI This isn’t the exact clause I usually use, as it is an example.) Once the contract is signed with this subject clause in it, the buyer has the agreed upon amount of time to obtain approval for a mortgage. If they try to and can not, the agreement can be pulled apart if the Buyer has truly tried but not been able to get the mortgage.
There are an infinite variety of potentially useful subject clauses for an equal number of properties and situations. The vast majority of deals though start with a standard five subject clauses or six if it is a strata property.
I sometimes visit a local forum called www.nanaimoinformation.com . Lots of local chit chat on there from the inane, to the spooky, to the humourous. Once in a while when I login I see someone asking about what neighbourhood they should or shouldn’t live in. This is a perfectly reasonable question for people from out of town to ask and well meaning people will give a lot of different answers. I have certainly thought about this deeply, and although each person will have different standards and tastes, I have over time come up with a stock answer that I think is a good starting point for all.
So here is the answer I gave:
You’ll see this sort of conversation in many spots throughout the forum. There is the odd street here and there that I wouldn’t want to raise my kids on since there are so many other choices available but the only area I strongly steer homeowners away from is the Haliburton/Nicol area. “Bad” and “good” are relative terms and everyone has a different idea of what qualifies for what. In my eyes the area mentioned above is comparable to living off of Commercial Drive in Vancouver in terms of how safe one feels there. Actually, it’s probably better than that since there are so much fewer people. If that’s the worst part of town, it’s saying a lot if you ask me.
I guarantee that someone will use the term “Scarewood” to describe Harewood either somewhere on this forum or in a conversation with you. It is my understanding that there was some truth to this 15 or 20 years ago but times are a changin’. I was actually living in Harewood myself for three years during that era and the worst thing I remember to me or those directly around me is that a friend on mine had his stereo stolen. Of course, worse things did, can and do happen there but also in other parts of town. Even in the fancy neighbourhoods. Harewood is actually the most likely location for my next home due to affordability and future prospects.
As an aside, if I was only interested in future prospects for investment in a rent out and hold onto situation, I would be likely to consider both of these areas first but then also consider the rest of Nanaimo. Good deals can be found in any neighbourhood. The combination of what we need and can afford are bigger factors in the eventual purchase than what our ideal home is, unless the buyer is rich and not many are.
That’s about it for the big picture. Infinite details can always be mentioned though.
Nanaimo is going through a stage of municipal puberty (yes, I’m using this term humourously) at the moment in that it is changing from small town to little city, but it is still essentially a small town. I can’t spend more than three or four hours walking around downtown without seeing at least one person I know.
To go beyond this though, I would need to know more about the individual asking the question. Someone who has lived in countries other than Canada will be less concerned about what they find here than someone who has lived in Vancouver, and someone who has lived in Vancouver will be less concerned than someone who has lived most anywhere on Vancouver Island. It’s all relative.
Choosing the right mortgage is as important a decision as choosing the right home. Getting the best deal on a mortgage loan can minimize your monthly payments and maximize the value of the investment you have made in your home. There are many different types of mortgage loans available to home buyers today, and it is important to understand the differences, advantages and disadvantages of each type of mortgage loan.
There are several elements of a loan that should be analyzed. While one of these elements may suggest one type of loan, another may call for a different type. You must weigh each ingredient separately and collectively. You will find that your answers to the questions below will ultimately determine the type of mortgage that best fits your needs.
How much risk are you willing to accept?
If you are the type of buyer that needs to know exactly what you will be paying each month for the term of the mortgage, a fixed rate mortgage will fulfill this need. The fixed rate loan, however, will also net a higher interest rate. If you are willing to take some risk of fluctuations in the interest rate, you may be able to receive a lower interest rate.
How much can you afford?
Most lenders set lending ratios that ensure mortgage payments never exceeds more than a third of a person’s income. However, this may still be too much of a stretch for you, especially if your have other expenses, potential future income changes or simply a lifestyle to uphold. Once you find a home you love, start crunching numbers. Can you really afford the mortgage payments, and are you willing to cut your expenses and save every month? Make sure you select a mortgage plan with a monthly payment that is within your means.
How much cash do you have available for upfront costs?
If you have the resources, you may want to make a larger down payment to lower your monthly payment. By keeping a higher monthly payment however, you might be able to shorten the term of the loan to a 15-year loan in order to pay it off quicker.
Keep in mind that you’ll have closing costs and fees to pay in addition to your down payment. If you don’t have much cash saved for your upfront costs, don’t despair. You may need to accept a higher monthly payment or even lower your monthly obligation by choosing an adjustable rate mortgage.
In addition to choosing a type of loan, you must also consider which lender to use. Once again, several factors will influence your decision.
Annual Percentage Rate
This is most likely the best way to make an “apples-to-apples” comparison of lenders. The Annual Percentage Rate reflects the cost of credit on a yearly rate and includes any points and fees in addition to the interest rate.
Interest Rate
Find out the rate the lender will commit and how long the lender will guarantee it. Get any commitments in writing. As with any transaction, if it isn’t in writing it doesn’t exist.
Points and Fees
These factors will vary greatly. Look out for hidden fees. Make sure the lenders disclose all fees; ask what they charge and what is included and what is not.
Loan Approval
Both approval and funding time should be considered. You don’t want to lose a prospective home because your lender takes weeks to fund your loan. A lender should be able to fund the loan within ten days.
Those of you who are familiar with me will know that I go out of my way to do business (and life) in as ecologically friendly way as I can. About two years ago, I started what is now called “The Nanaimo Green Group” which is essentially a group of local businesses that are working to encourage sustainability in our economy. Part of that involves helping the public understand what the real difference is between product A and service B. There is, after all, a public thirst for knowledge on these matters, but access to good information from experts is hard to separate from those who brand themselves as “green’ but haven’t committed to the cause.
This is why we are holding the following event.
Look to the bottom for the .pdf which gives additional info and if you have additional questions you can contact me via my main website or the email at the bottom of the .pdf
Tips On Making Your Home More Energy Efficient
@ DYS Architecture
#420-256 Wallace
Sunday, November 14th
1-3pm
ADMISSION IS FREE
Presenters:
Ian Gartshore,President of Shore Energy Solutions and Founder of Energy Solutions for Vancouver Island
Michael Hill, a Senior Architect and Associate Partner of DYS Architecture
Calling Nanaimo expensive isn’t accurate. Yes, there are cheaper places nearby, like Campbell River, places up north like Sointula and where I grew up, Port Alberni. Places are expensive or cheap for a reason. (Summarized by supply and demand.) Sure, the local government’s policies affect both sides of the equation but their policies are deeply influenced by what the market is doing in terms of supply and demand. Ultimately real estate is never worth more or less than what people are willing and able to pay for it.
