What is going on in the market right now?

Recent interest rate hikes aimed to target inflation have caused a media frenzy. Headlines and news stations are causing panic over the Bank of Canada’s latest 1.0% increase today. The media thrives and profits off of fear, and what is scarier than predicting a market crash? Right now it’s important to take a step back and evaluate what is actually happening.

It’s no secret that the housing market is changing. New figures released by the Canadian Real Estate Association (CREA) revealed that the country’s home price index fell 0.6% between March and April, its first decline for over two years, as home resales also dropped by 12.6%.

The actual national average home price has now declined for two months in a row after peaking in February, according to CREA. It might seem like the housing market crash that has been predicted for years is imminent…but prices are still about 7% higher than last year. *Based on April 2021 and April 2022. 

Meanwhile, the home price index is 23.8% up compared with the same time last year, although that represents a smaller yearly increase than the 29% it recorded in February.

It seems like everyone has an opinion about what is going to happen next, but here’s the truth, no one can predict the future!

For me, this data suggests we are moving towards equilibrium rather than a crash. We are still seeing values continue to grow, jus not as rapidly as they have been over the past two years.

Conditions are constantly changing and we won’t know where we are heading until we get there. But smart investors know that every market can provide great opportunities.

Right now, it’s easy to speculate and be wary of jumping into the market. I have a lot of my clients who are waiting to see what happens and think the market is going to collapse but here are a few more points to consider. 

We’ve been wrong before

At the start of the pandemic, many economists predicted that there would be a housing market crash. While the market did slow for about 3 months, it quickly recovered and hit record highs. This just goes to show we don’t always know what will actually happen until it does.

History doesn’t always repeat itself

The 2008 recession really spooked a lot of people, and for good reason; many people lost their homes. The sudden increase in interest rates helped trigger a seemingly overnight crash in the housing market back then. However, there were lots of other factors including shady practices on Wall Street, poor government policy, and lax lending from banks. It is important to understand that many of the factors that caused that crash have since been corrected and are not likely to be repeated.

Real Estate boards led by top industry professionals are now involved in helping create effective and fair policies, that protect public interests. These boards help guide the government into creating and implementing real estate-related laws and regulations that aim to solve issues without causing catastrophic damages.

Keep in mind, that in 4 of the past 6 economic recessions, housing prices remained consistent, or increased. 

Interest rates are still low

Even with the recent hikes, we are still at a great number, the prime rate is still very low. In fact, most mortgage brokers I’ve talked to are still recommending their clients stay on variable rates. Yes, they will continue to increase in the near future, but they could also go back down again in the long term.

The next increases are scheduled to take place on September 6, October 25, and December 6. After these it’s all speculative as to what could take place. Keep focused on your long term plans. It might be a good idea to start with a small payment increase now, to prepare for these increases. Speak to a professional mortgage broker and ask how an increased rate will impact your payments and affordability.

The Sea to Sky Market

Unlike other areas, the Sea to Sky region attracts buyers who are looking to purchase here for the lifestyle. Squamish, Pemberton, and Whistler are all highly sought-after and internationally renowned destinations, it is unlikely that prices will ever completely tank here. There is a large pool of buyers who have been waiting to jump into the market and were put off or priced out these past years. If the market continues to dip a bit there will still be purchasers ready to act. Other world-class North American resort towns like Vail, Aspen & Lake Tahoe, saw housing prices decrease significantly less during the great recession than the national average.

Our demographic is different here than in other regions of British Columbia. We have a lot of high-net-worth individuals here in the corridor, who purchased in cash or with a high down payment. Many of the homeowners here are investors who own multiple cash flow-positive properties and are able to make enough money to cover mortgage payments if rates continue to increase. Whistler has a high number of properties, that have been passed down through families. These tend to be fully paid off or have incredibly low mortgages.

Due to the geographical barriers of mountains and the ocean, there is limited useable land to develop more houses in this region. The Sea to Sky highway is another major limiting factor for future growth. Emergency evacuation routes are not able to support more residents, specifically in Whistler. This has led to limited development allowances and zoning changes from the municipalities. All of these factors will help keep supply relatively lower than in other areas of Canada helping keep demand high.

The benefits of a balanced market

It’s still a good time for Sellers

The average home in North America increased in value by 36% in 2021 alone. This means homeowners who purchased anytime before this are sitting on a lot of equity. While the market may no longer favor sellers as heavily as it did from the end of 2020 to the start of 2022, they will still most likely be able to sell their homes for more than they bought for.

If your goal is purely to sell at a premium and very quickly, you may have missed the mark. Sellers may have to be a little bit more patient and manage expectations. Right now, houses that are priced right and leave a great first impression are still selling, but more slowly.

This is actually a really great situation for any sellers who are also buyers.  Sellers can still profit off of their sales and move up the property ladder without being priced out on the buying side.

It’s good news for buyers

Buyers rejoice, your time has come!

Anyone who has tried to buy in the past two years experienced frustration and stress from the market. Properties were selling within hours, in competing situations, and for way more than the list price.

As we head to a more balanced market, properties will sit for longer periods of time. This will lead to some price reductions, as well as taking the frantic sense of urgency we have been seeing for buyers away. As houses continue to sit longer, there will be more time to do your due diligence and allow you to put subject conditions into offers such as financing, selling your existing property, or inspection.

We will likely also start to see fewer competing and multiple bid situations. These were one of the primary causes of skyrocketing house prices in BC. If you were put off by the red hot market and fed up with being in multiple offer situations, this is the opportunity you’ve been waiting for.

More to choose from

The Seller’s market we are starting to shift away from had historically low levels of inventory. Super-low interest rates and feeling like they couldn’t purchase another property prevented many people from putting their homes on the market.

As I mentioned previously, we might not see the same increase in listings as other markets might. But houses will sit for longer and continue to come on, giving buyers more choices. Homeowners can sell their properties to climb the housing market or downsize You can spend your time exploring a property and a neighborhood before you purchase.

For Buyers:

There is always a risk to any investment and it might always feel like the wrong time to jump into the market. Yes, prices could drop even more and rates could increase, but the opposite could also happen. Consider taking advantage of the low level of competition right now. Acting while others sit back might lead to a great deal and could pay out in the long run. Be aware that nothing is ever guaranteed and this dip might not last as long as some people think.

Getting into the real estate market as soon as you possibly can is one of the quickest and safest ways to improve your personal wealth. Money losses value over time and stocks and bonds fluctuate. But property holds its value.

For Sellers:

Take a deep breath and relax!  You may have missed the red hot market, but prices remain high. You might not be selling your home the week it comes onto the market, or receive multiple, competing, over-asking offers right now. However, if you’re patient you will likely be able to sell your home for quite a bit more than you purchased it for. A bit of extra effort to get your home market-ready is going to be key.

This is a chance to reassess your goals. You might be able to use your equity to reinvest in the real estate market.

The takeaway

Stay calm…

It’s easy to worry about the future, but the bottom line is there are opportunities in every market if you make well-informed and rational decisions. Heading to a more balanced market might actually help you achieve your real estate goals. 

Stop going onto those click-bait websites that use scare tactics to get traffic.  Listening to all those armchair experts who treat opinions like facts can make you act rashly, which is often the primary cause of a deal you will regret down the line. Instead, think about the life you want and how real estate can help you achieve it. Educate yourself through credible and reliable sources. If you have questions or are uncertain about your specific local market, it’s always best to talk to a licensed and trusted real estate advisor.

The bottom line is we are shifting back to a market that will have benefits for both sides.

We know that real estate has consistently proven itself as one of the most solid long-term investments and will continue to trend upward in the long term, even if there is a slight dip.

Prices are starting to trend down slightly for the first time in a while but are still up from this time last year! 

I’m intimately involved in real estate for the corridor and am always happy to have a chat with you about your real estate goals and how we can achieve the in the current market.

Give me a call or sign up for my monthly and weekly newsletters to stay up to date on the Sea to Sky housing market.

Waterfall Hike

There are several waterfalls in the Sea to Sky Corridor, some with easier hikes than others. Shannon Falls, closer to Squamish, Brandywine Falls, just south of town, and Nairn Falls, at the entrance to Pemberton, are all worth looking into!

River of Golden Dreams

This mostly calm river starts at Alta Lake and is do-able in a canoe, kayak, or for the extra adventurous, a stand up paddle board. Make sure you determine your exit point before hand and have transportation planned!

The Adventure Group Activities

TAG has something for everyone. From ziplining, to aerial obstacles, to rafting and Rzr tours. They are based at Cougar Mountain, just north of Whistler Village. You seriously cannot, not have fun if you book their activities!

Golf

with three courses to choose from in Whistler (see my previous blog) and two in Pemberton, golf is always a good choice for activities during the summer in Whistler. Get in touch with me and maybe we could play a round!

Spring is upon us and golf season is about to really take off here in Whistler!

You probably already know, but in case you don’t, Whistler is home to three world-class courses, all within a few minutes of Whistler Village.

Whistler Golf Course:

Beautiful 007 bent grass greens await you at the Arnold Palmer designed Whistler Golf Club. The par 72, 6,722 yard course makes the most of its scenic and pristine setting. Broad fairways, interlaced with gentle streams and lakes, are bordered by majestic old-growth cedars and firs. This course is also home to a public driving range.

Nicklaus North Golf Course

This is the setting that inspired the great Jack Nicklaus to create a golf course as unique as himself. This par 71, 18-hole course winds along a gentle valley floor offering you a spectacular setting as your golfing skills are tested to the fullest.

Fairmont Chateau Whistler Golf Club

The Fairmont Chateau Whistler Golf Course is 18-hole Audubon-certified, and traverses creeks, ponds, stands of ancient Douglas fir and granite rock, creating a naturally spectacular and challenging golf experience for all levels.

I hope I see some of you out on the links this summer!

I’ve been noticing a little bit of a trend lately. Many sellers are hoping to capitalize on the hot real estate market but have tenancies in place.

In these situations, the seller can either wait the appropriate amount of time to legally end the tenancy in place or list it with tenants.

Ideally, before you list a property your home is vacant so you can have staging and a professional cleaner in. Not only will this make your home look its best, but it is also easier to show your home and easier for interested buyers to closer quicker. Listing your home with a tenant can create additional challenges, but sometimes it is the only option. If you do want to list your tenanted home, here are some helpful tips to keep in mind.

Work with an experienced Realtor

Real estate is one of the biggest investments and decisions most people will make in their life. It is crucial that you have a Realtor on your side to help you navigate your local market and make informed decisions. When finding the right Realtor for your situation, ask if they have ever worked with tenants before and how they navigate the challenges. Your Realtor should have a good understanding of the BC Tenancy Act and will help protect you from any legal action.

Understand the BC Tenancy Act

The BC Tenancy Act, linked here, is the legal guidelines that must be followed when listing your tenanted property for sale. These guidelines go into depth on the amount of notice that must be given for each type of lease, as well as, the rules which must be followed by the tenants, the landlord, and the real estate agent. Be sure to give this a deep read so you understand how to work with your tenants while your home is on the market and how to legally.

Be Open & Transparent

Everyone appreciates being kept in the loop. Let your tenants know ASAP if you are planning on listing your property. This will give them more time to start making arrangements. Have an open conversation about what your expectations and goals are with this sale. Why are you selling? What do you think the timeline will be for closing?

Most tenants will appreciate the honesty and be happy to work with you.

Consider introducing your tenants to your real estate agent. That way your tenants can direct questions to them that you may not know the answer to. This will also give them a touch point person to voice any concerns to. If your tenants feel involved in the process it is more likely that they will be helpful while your home is on the market.

Respect their schedules

If you have tenants, your home is also their home, and no one wants to feel uncomfortable at home! Ask your tenants about the best method of communication to use with them to request access.  Have a conversation with your tenants about what you can both expect while your home is on the market. Get your tenants to share their schedules so you and your Realtor can try to navigate showings while they are already out of the house.

Sometimes, finding a time that works for potential buyers and your tenant isn’t possible. . Ideally, your tenant is willing to work with you and either step out or be respectful while the home is being shown. If your tenant is being less cooperative, know your rights. You are entitled to show the home if you give them 24 hours’ notice.

Make it easy

In a perfect world, your tenants are clean and tidy people and have lots of time to help your home looks its best for showings. Unfortunately, this is rarely the case. Most tenants have their own busy lives to worry about and won’t bother to do a deep clean before your home is listed. Offer to get the carpets and the home professionally cleaned before it’s listed, your tenants will appreciate this and so will potential buyers.

Give as much notice for showings as possible so that your tenants can tidy up or make arrangements. Consider offering a free lunch or even a night at a hotel if there is a certain day that there will be multiple showings or an open house. If you can, offer to reduce rent a bit if they agree to help tidy up the property. Giving a little bit and being generous can make the transaction much more smooth for you.

If it goes wrong…

Keep in mind that no one wants to move or be uprooted. Having your house listed can bring up a lot of negative emotions for your renters. Despite your best efforts, they may still be uncooperative. If a tenant unreasonably refuses access to show the unit or provides misleading or inaccurate information to prospective buyers, the landlord could:

Make sure you and your Realtor have a game plan in place to deal with the tenants BEFORE you list. This can help your home earn more money and be a much less stressful experience.

 

If you’re thinking of listing your tenanted property email me at madison@madisonperry.com for more tips and advice.

Glide down a variety of trails at your own pace and explore the beauty of Whistler’s great outdoors on a set of skinny skis. This exciting and accessible sport is good for all ages and abilities and there are lessons and rentals suitable for anyone. The Whistler trail system includes novice trails, scenic lookouts, picnic shelters and heart pumping climbs deep into the coastal forest. Whether it’s Lost Lake in the heart of the village or Callaghan Valley just a short drive south of Whistler, there are plenty of options for the inexperienced and experienced alike. Maybe you’re looking to head out of Whistler for the day too…head north to Pemberton where you can find some great cross country skiing with the most beautiful backdrop of mountains in the much smaller but equally as gorgeous community.

Where to go? I’ve listed some great options in Whistler and Pemberton to get your cross-country fix in.

Whistler

Valley Trail (Alpine)

In the winter, a 3.8 km portion of the Valley Trail from Meadow Park Sports Centre to Rainbow Park is groomed to enable free cross-country skiing.  Additional sections of the Valley Trail groomed for multi-use include the section of trail from Fitzsimmons Trail to PassivHaus and from the Riverside Campground dyke at Mons Road along Green Lake at Nicklaus North to Alpine Way. Dogs are permitted but must be on a leash on the Valley Trail.

Lost Lake

Lost Lake is located steps from Whistler Village. Over 32 km of perfectly groomed cross-country tracks run through the picturesque Lost Lake Park, the Chateau Whistler Golf Course, and the Nicklaus North Golf Course. Both beginners as well as experts can find their own routes here. Incidentally, 4 km of tracks are illuminated so that even the night owls can make a few rounds. The cross-country season runs normally from December to March.

Whistler Olympic Park/Callaghan

For skiers of all abilities, Whistler Olympic Park provides access to close to 90 kilometres of well-marked trails from green/easy, blue/intermediate to black/advanced. The Nordic venue of the Vancouver 2010 Olympic and Paralympic Winter Games, Whistler Olympic Park offers snow activities for all ages and abilities. Rentals, lessons, adult, and kids ski camps are available, plus dog-friendly ski and snowshoe trails. The park has a full-service Day Lodge with cafe, retail and rental shop and ski school.

Pemberton

The Nairn Falls Trail

Located just three minutes south of Pemberton is Nairn Falls Provincial Park where the ski trails are located. People and dogs must not walk on the groomed trails at any time.

The Beer Farmers

Located 10km up the Pemberton Meadows. Is there any better option than enjoying a lap around a family-owned farm then heading inside for a tasty beer!?  The cross-country skiing track that spans their large farming parcel including trails that run along side the Pemberton Meadows rivers. Please leave your furry friends at home when heading for a ski at Beer Farmers.

The Cranberry Farm

Located 20km up the Pemberton Meadows. Gorgeous setting and perfect place to enjoy a quiet ski.

Also stay tuned for the Spud Valley Loppet race. The Spud Valley Loppet is a 12 km snowmobile groomed track through several private properties in the Pemberton Valley. It is an event made to celebrate nordic skiing and winter activities in the Pemberton & District area. The event usually takes place at the end of February/beginning of March and is open to various age categories.