Most of you have likely seen the front page of the Vancouver Sun the other day-I know at least some of you have called me in a panic about the current state of the Vancouver market and the broader market. A number of you have also been wondering for a few months what the market is doing.
If you would like me to go over what is happening in your particular area and with your particular type of property (ie. condo vs. house vs. land) I would be happy to do so. In a nutshell, the market is becoming much better for buyers and is still not bad for sellers. Here is some general information/my opinions on what is happening.
1) yes the market has slowed down but it has not/should not, in my opinion, crash; it is taking a lot longer to sell homes than it was several months ago...but properties are still selling and in some areas, when priced right, we are still getting multiple offers on homes. Two weeks ago, we even got multiple offers on a house that had been listed for several months-that is crazy but it happened!
2) most of you are living in your real estate investment-it is your principal residence and likely the best investment you will ever make; I can refer you to a number of books which go over in detail the substantial benefits to owning rather than renting, regardless of market conditions (unless those conditions are extreme and you are forced to sell; conditions now are far from extreme and most of you do not need to sell at this time)
3) markets go up and down...if this market goes down (so far sales have slowed but prices are still pretty solid) it will go back up
4) the market remains fine for sellers; it is now getting better for buyers-the market is now more balanced whereas previously it was much more favorable to sellers and buyers were having to rush to buy if they wanted a chance at a property.
5) if you are selling and buying in the same market, in other words making a lateral move, any price increase will not be as problematic for you. The properties you buy and sell should have decreased about the same amount if the prices do start decreasing.
6) if you are selling and buying a more expensive property in the same market (upgrading), an overall market decrease can help you. For example, while your home may have been worth $550,000 it will only be worth $495,000 if the market goes down 10% (so you would have in theory "lost" $55,000), the house that you wanted to buy for $800,000 should be down to $720,000 (so you have saved $80,000). Your gain by selling and buying up is $30,000! Plus in a slower market, while it will have taken more time (and a lot more effort and cost to your realtor!) to sell your property, you will have the luxury of time in choosing your new property.
7) if you are downsizing, or considering doing so in the near future-we should talk asap...you are in the group with the most to lose if the market prices go down. As I mentioned, to date prices have remained high; sales volume has decreased. However the law of supply and demand indicates that as we get more and more listings on the market, prices will be pushed down.
8) interest rates are still at historic lows (despite long term rates having risen slightly last week) which is great for current owners and of course great for buyers. The lower rates could allow you to get into the market in a much nicer home/move up into a nicer home than would have been possible with higher rates.
9) there are many favourable factors operating in the Vancouver market which should keep any correction reasonable and any downturn shorter than in other areas: high employment; increases in population due to ongoing immigration; Vancouver is a stunningly beautiful city which is likely still underpriced when compared to comparable cities in the world; etc
10) try not to get taken in by media reports unless they are based on fact and keep in mind the difference between decreases in sales and decreases in prices.....
Since I was born, there have been very few really bad markets in Vancouver (no I have not forgotten about the rates being over 20%-that would have been one of those bad markets BUT prices dropped substantially to compensate as well). I do not think the current market is bad AND there have been some very good looking deals around lately (for example some condos under $200k in the Commercial Drive area; 2 bedroom rentable condos under $250k in Fraser) which were not seen much over the past 5-6 years.....so fear not! All is still pretty good in the world of real estate.
If you would like to discuss your particular situation in more detail, please let me know.