Amazing service and knowledge! We have never been happier with any other realtor. She was always there with answers, no matter what the situation was. Paige made us feel very happy with our purchase and we can't wait to work with her again!
- Ryan and Christina McKenzie
Time to Buy Real Estate?
What you should consider:
- Current Rent - $1500.00 per month
- Owning - $1700.00 per month (Based on a $300,000.00 mortgage at 4.75%, amortized over 25 years with a 3 year term) with a potential equity savings - $560.00 per month or $6800.00 per year.
Your potential equity savings for owning VS renting is approximately $360.00 per month or $4300.00 per year.
Prices in the Kelowna real estate market are such that you have the opportunity to buy a good home in the $300,000.00 to $350,000.000 range.
Check out the recent article taken from the Vancouver Sun below:
Renowned investor Warren Buffet says “I’ve been waiting for this day for 10 years.” What Buffet is referring to is the recent US market downturn. Why on earth would one of the greatest investors of our time see a shining beacon of light in the current state of the economy? Simply put – because everything is on sale. When confidence the world market dwindles, short term price reductions occur on quality products. Single family homes in B.C. are no exception.
The question is: How long will this opportunity last?
According to the British Columbia Real Estate Association (BCREA), residential unit sales volume was down 51 % compared to October 2007. “Housing demand was negatively affected by the global financial crisis and a sharp downturn in the equity market,” said Cameron Muir, BCREA Chief Economist in November 2008. He adds, however, “Home sales are unlikely to fall much further… the fundamentals [of the economy] support a higher level of home sales than experienced last month.” Furthermore, although single-family starts in BC are correcting in response to market demand, Robert Kavcic, Analyst for BMO Capital Markets observes, “Single-family starts have actually been declining in BC over several years and that the numbers are much closer to the actual need.”
In Fact, 96% of single detached homes built were absorbed within the month of completion, and only 20 % of all new housing starts will be single detached homes.
What does this all mean?
It’s a clear sign that single family home inventory has fallen below normal levels in BC and prices will eventually be on their way back up.
Many experts also point out that the economic situation in Canada is nowhere near as serious as the US. “Canadians should realize that Canada’s economy and housing market are in better shape,” says Calvin Lindberg, President of the Canadian Real Estate Association (CREA) “ the US market is much different than Canada, most notable because the Canadian market does not have the same oversupply of homes.” The Lover Mainland single family home market is definitely well off compared to most. And while consumers are worried about the world economic turmoil, a new study conducted by RBC Royal Bank reports the overall intentions of Canadians to purchase a home the next 2 years has remained steady. “Despite recent economic events,” reports Catherine Adams, Vice President, Home Equity Division for RBC Royal Bank, “We’ve noted that Canadians still believe a home is a good investment.”
In fact, those with firm intentions to invest in a new home, but hesitant to make the move because of the economic outlook, can take solace in a statement from Mark Carney, Governor of the Bank of Canada: “The Bank expects growth to be sluggish through the first quarter of next year, then to pick up over the rest of 2009 and to accelerate to above-potential growth in 2010.”
For the vast majority of people, the premise of a falling market affecting the biggest purchase of their lives is unsettling at best. But buyers should bear in mind that purchasing sooner rather than later can offer major financial and lifestyle advantages.
For example, by purchasing the right home that meets all your needs now –a home with strong underlying value, in a good location close to amenities, and in a neighbourhood built by a professional developer with strong architectural controls and standards – you’ll begin building long-term value right away. Furthermore, by taking advantage of the current low mortgage rates you may significantly reduce your total cost of ownership even more than you would on a future purchase price at higher interest rates once the economy begins to trend up.
Finally, recall the simple law of supply and demand. To quote Warren Buffet once more: “When others are fearful, be greedy. When they are greedy, be fearful”. To translate that into the Lower Mainland situation, there is a dwindling number of extremely high quality single-family homes available now. Smart builders have already adjusted prices to reflect the reality of the new market, so this is the time smart investors will make their move. Prices will soon be up, and selection down. Those sitting on their hands now may experience a chronic case of non-buyer’s remorse later. In closing, take a moment to think about the words of Calvin Lindberg: “the downturn in consumer confidence will pass, and when it does, housing demand will rebound, especially when they realize the window of opportunity to buy at low rates will begin to narrow once economic growth shows signs of rebounding next year.”
Words well worth heeding.
© Vancouver Sun, Saturday, November 29, 2008
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