"The New Normal" is a phrase I try not to use, mostly beause it's overused but does seem appropriate now, both for good & bad.  There is a generation of home buyers & sellers who've only known very low interest rates that make home buying much more affordable (good) & a high pressure atmosphere for buying & selling homes (bad)

Now, Buyers are feeling no pressure to make a decision, can actually go on home tours with a few homes that meet their home buying criteria, & write subject offers.  All good.

However, they can't believe they have to pay a 5% interest rate on their mortgage (the old normal). Bad. Those of us who bought & sold real estate before 2000 only knew 5% interest, or even higher.

Looking like a few years of this new, but old way of doing real estate.  What's that phrase?  "everything old is new again"

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People pay too much attention to the headlines but that's why they're there.  Clickbait.

It's far more helpful & reliable to get your real estate information directly from someone who's on the ground, working with Buyers & Sellers, & speaking with other realtors.

What am I hearing?

  • Lots of action under $1million, & with properties in the suburbs where you get more bang for your buck, it can mean multiple offers.  Over $1million means 20% downpayment  so more Buyers under.
  • Sellers aren't always waiting & are willing to take offers as they come, as fast offers are usually strong offers. It's about risk tolerance
  • For those of us who've been in the business for some time, we're used to Buyers taking a time out after a news event, like higher interest rates, the financial collapse, or even CoVid.  That often lasts weeks or even a few months & then,,,many, if not most, jump back into the market.  When we're asked "what's going to happen", we can only go by our historical experience.  Interest rate hikes aren't a 1 off this time, but are being sustained over months, so only time will tell what its effect on the market will be.  We've all become used to cheap money!
  • With more expensive properties, Buyers feel they can wait a bit before making an offer.  Sellers might be more flexible after a week or 2 on the market.
  • Pricing is important to draw Buyers in.  They'll sit out an overpriced listing until the Seller is ready to be realistic.
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it's the tipping point for the amount of down payment required by the lenders.

Once the price is $1 million or more, the downpayment increases to 20%.  Monthly payments aren't the problem but the downpayment is for many Buyers.

This helps to explain why we are seeing more activity in sub $1million price range-it's still doable for many Buyers who don't have the $200K or more for the down payment..

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With rates on the rise, it's time to get creative with mortgages.  We've been conditioned to think that the only options are a Variable mortgage or a 5 year Fixed...but there's more.

What happens if you lock in for 5 years & in 3 years time, rates are dropping again, leaving you with higher costs & a mortgage no Buyer would assume?  Of course that means putting some thought into what might happen over the next few years & assessing your risk tolerance.

Good information again in the Globe and Mail from Robert McLister that is worth a read.  3 economists weigh in

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in the new market (since interest rates went up) what should you do if you already own a home & want to move??

It really depends on what youre selling & where you're selling.  That's always been the case but it's especially true now.  In the city, I see over ask sales primarily for homes under $1million & for homes that sold in March.  In suburbs like Burnaby, I'm seeing over list sales for townhomes over $1million, just as an example of how types of homes & areas make a difference.

I've also heard from mortgage brokers that Buyers who bought before the interest rate increases & then listed their homes to sell, were surprised that they only received one offer.  If you've bought then the pressure is on to fulfill your obligation & your ability to negotiate or wait for a better offer is limited.

If you're thinking of moving, ensure that you're getting current information from a professional & experienced realtor who can advise you as to what's happening in your neighbourhood, what the risks might be with both choices, & what makes the most sense for you.  Get informed to make the right decisions for you!

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City of Vancouver is pushing through a lot of planning decisions but you have a chance to get more information & offer your opinion.  It is our city after all!

Currently we are in Phase 4, so if you haven't been paying attention, now is the time.  You can find out a lot more here & even take the survey which closes on April 24th.

We should care about topics like the infrastucture to support the building plans.  Areas of the City already struggle to service the needs of the residents.  Many schools are at capacity, roads can't handle current traffic levels, parking to support small businesses has been removed in favour of bike lanes, & the list goes on.

Are these plans about improving the quality of life with thoughtful planning or just clickbait for housing that doesn't meet our needs?.  Take a look & decide for yourself.

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Rate holds are keeping Buyers happy while they search for a new home but they're due to expire in the coming weeks.  There will be a push from Buyers to buy & complete in the next 6 weeks or so but what comes next??

Some Sellers have already experienced some surprises when instead of multiple offers, they have received just 1.  If they'd already bought, like most Sellers today, that means they'd be forced to work with that offer.

Buyers who are more conservative or risk averse are beginning to take a wait & see approach between increasing interest rates & world events that do have an impact on us all in some way.

I'm expecting changes ahead but how long they take to show up we don't know.  Prices always go up a lot faster than they come down.

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Yes, even in a Sellers' market, it's possible not to sell at anything close to list price or to sell quickly. Here are the top 5 mistakes that some Sellers are making:

  1. Incorrect pricing-the market sets the price NOT the Seller so listing too high will turn Buyers off, not on.  There is an art & a strategy to pricing to get the best possible result.
  2. Failing to market the property effectively-is it easy for Buyers to view, has sufficient time been set aside to get all interested parties in, is the description accurate & focusing on key features for Buyers, etc?
  3. Not staging the property-if a property is vacant, staging will make a big difference to speed of sale & sale price.  Staging makes a home look larger & shows Buyers how a space can be used. I've even used partial staging, editing & adding to existing furniture.  Professional stagers know how to stage for the target market.
  4. Hiring the wrong agent-hiring a professional & experienced agent will eliminate a lot of potential problems. The property should be ready the day it's listed complete with all necessary documentation.  I've experienced too many listings where strata docs aren't available, the agent doesn't know the area or the type of property &...don't hire your brotherinlaw who just got his licence Surprised, at least not without another experienced agent.
  5. Not aligning on goals-have an honest discussion with everyone involved in the listing, from the agent to partners about availability for showings, timing of offers, list price, needs & timing for next property, & more.  Your agent has a fiduciary duty to you so all conversations are confidential & goals must be clear to all parties.

On a recent scan of sales over the last month, some took over a year & discounts were up to 30% from list price.  Not necessary!

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This is a question many of us have.  How can there be so little available when so many are looking for homes??

In a recent Redfin report, we discovered that people are simply choosing not to sell.  They compared 2021 to 2012 & found that 31% more owners are just staying put.  In addition 33% of homes are owned by those who are 65+, up from 28% in 2012.  I look around my neighbourhood & I have to agree.

Looking ahead, what are the trends?  People are living longer & often healthier lives & are able to stay in their homes.  Increases in interest rates could mean staying put is more appealing.  I find that many of my neighbours are creatures of habit & want to stay close to where they currently live, so if there aren't any good options, it's easier not to move at all.

In other words these low listing levels could be here to stay for a while.  What can you do about it?  Like so many other things, not all areas are the same.  Younger people tend to more more frequently for instance, as their needs change.  An experienced & professional realtor can show you areas where you might have a better chance of finding a home so don't give up before checking out your options.

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Win/win renovations are the ones that bring value to the owner while living in their home & also add value if & when they decide to sell.

When I'm working with Buyers now I hear them talk about homes being "move in ready".  Since CoVid, costs for building & renovations have skyrocketed, & in combination with long lead times or unavailability of everything from appliances to construction materials, Buyers would prefer to not deal with those problems.

When I say "move in ready", Buyers aren't being overly demanding either.  They want functional & worry free, & feel they can make cosmetic changes over time if necessary.  They'll even tackle more signicant alterations at a later date.

The key areas for Buyers are kitchens, bathrooms, & often storage.  With other parts of the home, it's often mostly cosmetic, ie paint, wallpaper, or carpet which are easy fixes.

I posted some photos on my IG page @karinsmithrealtor if you're looking for some inspiration

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Just this week I heard an American housing expert say that the most important thing to Buyers is the monthly mortgage payment, not the cost of the home in response to a questions about rising interest rates.

It got me thinking.  It's a tricky question as the 2 are definitely related so I ran a questionnaire in my IG stories & 2/3 of respondents agreed.

I agree too & here's why based on my experience.  When interest rates are low, Buyers realize that they're able to pay more (important in our multiple offer real estate world) without a big impact to their mortgage payment.  They are focused on that monthly figure more than the big one-the cost of the home.

When interest rates begin to rise, Buyers once again look to what that rising cost will do to their monthly payment, Because so many Buyers are stretched to their limit, expecially in large urban centres, that increase in payment could take Buyers out of the running.

So, yes, the major cost of a home is important but it's all about the regular mortgage payments for Buyers.

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I spent part of the long weekend reading strata documents along with my clients.  We did this prior to viewing the property.

Why is it important to do this each time you consider buying a Strata property?

In this case we found the documents to be very revelatory & influenced our assessment of the property when we did see it,  & the subsequent decision not to move forward with an offer, even though there was lots to love in this home.

What important information is in those Strata documents?:

  • the usual financial information which indicates how healthy the Strata is financially
  • Depreciation Report as an asset management tool.  If they don't have 1 or something similar, it's a red flag as to how well the building is being maintained without that information
  • Depreciation Report next steps-are they following recommendations or did they just tick off that box?
  • The dynamics of the Strata.  Some have many rules & Bylaws, some have very few, & most fall in the middle.  What's your comfort level?  
  • AGM's & SGM's say a lot about overall plans & spending & how current owners vote to support them
  • Insurance deductibles can vary a lot & may add unexpected costs to Buyers
  • What's the dynamic with the owners?  There can be a pattern of behaviour, unresolved issues, unwillingness or inability to support proper maintenance or...just the opposite in a well run & maintained building.
Real estate is expensive & not reading these documents could make it a lot more expensive down the road
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In recent meetings with clients, they've told me about friends or people on social media who are talking about becoming a realtor or a mortgage brokers as a great way to make money.  Well, it is a job, but...

I'm not aware of any successful realtor who got into it "for the money."  We chose it as maybe like me, we always liked real estate.  I started getting interested at about 10 years old because my Dad was.  I even helped my parents find a house to buy when I was just 13!  Combine that interest with a love of problem solving, using my business experience to create mini product launches with every new listing, & a real interest in helping people find the right home has served both me & my clients very well.  I really love what I do & it shows.

When you get into a business, any business, for the wrong reasons, that shows too.  Clients may feel pressured to make decisions, may not get the attention that they deserve, may not get the expertise that they need, or that generally this  just doesn't feel right, leaving them frustrated & disappointed.

Real estate is actually about relationships.  I spend a majority of my time listening, not talking.

When you're looking for a realtor, look for one who got into it for the right reasons!

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some Sellers think that in a Sellers' market, the home sells itself.  Well, it will sell but...

 I've yet to meet a Seller who doesn't want the best results.  That enables them to buy another home, maybe better than what they thought they could afford, or help their children get into real estate, or put more into the retirement fund.

Using a professional & experienced agent to sell your home & one that doesn't cut corners because "it's a Sellers' market" will always get the best results for a Seller.

What does experience bring to the deal?   Here are just a few:

  • Knowledge-we know what Buyers want-we've listened to them.  It's helpful for preparing or showing your home
  • easy tips to make your home look better
  • relationships & trust with other agents built over time.  Negotiations will run more smoothly.
  • professional photography & floorplans to make it easier for Buyers to see your home along with Social media
  • neighbourhood & building knowledge-we've spent a lot of time in them!

It means we bring something extra to selling your home & getting the best possible price.  Experience counts!

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Those January numbers arrived in my mailbox early this morning.

The total number of listed homes on MLS in Metro Vancouver is down 31.8% compared to January/21.  Of course each area of Metro is a little different & sales to listing ratio for single family homes is lower than townhomes which are highest.  Condos fall in the middle so it may be easier to find a home to buy than a townhouse, depending on where you live.

What might change in the next few months?

  • interest rates are going up so some Buyers might not find it worthwhile to make a move now
  • more sellers tend to think of a "spring" market & usually listings do begin to pick up beginning in March
  • snowbirds, at least those that did head south this year, come back in the Spring.  If they have any plans to sell, they'll do it in the Spring.
  • some of those Sellers sitting for months with unrealisting pricing will decide to be more flexible on price, at least they will if they truly want to sell.

There is hope for Buyers; we just have to be patient :)

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to have a look at your mortgage interest rate.  We've been warned-interest rates will be going up.  What can you do about that?  

If you're a Buyer still searching for you new home, you can check with your bank or mortgage broker to find out how you can update your rate hold to secure the lowest rate for the longest period of time.  We know it takes a while to find a new home with the current low level of listings. Typically lenders hold rates for 60-90 days so find out how can you make the most of a rate hold.  

While you're speaking with your rep, you could also discuss fixed versus a variable mortgage.  What best suits your needs?  In today's Globe & Mail Business, Robert McLister wrote about the 2 mortgage products.

There are a lot of good reasons to go with a variable & the best one is that the variable wins over the next 5 years.

Always stay in touch with your mortgage rep.  They're busy so may not reach out to you, but most will be happy to discuss your needs, what you can expect in the next couple of months, & what can be done to secure the lowest possible rate.

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Sellers often think of Spring & Fall markets as being the best time to sell their homes.  That used to be true!

Because there are now more factors driving real estate, the best time to sell is based on market conditions.  What are those?

Market conditions can be 1 or more of interest rates, supply vs demand, weather, school cutoff dates for registration, geographical location, & now of course, CoVid.

What seems to be universally true are a couple of these.  We don't have enough supply for the demand which has been the case for some time, interest rates will be going up sooner rather than later so the Buying dollar won't go as far, & CoVid has actually increased demand for homes now that we have to spend so much time in them.

All we know is what we know to be true now so interest rates haven't changed, there is huge demand for all types of homes, & listings are at an historic low.  Is there a better time to sell?

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It's hard to avoid the subject of real estate, no matter where you live.  With so much information coming at you, it's overwhelming, especially if you've been away from it for a while or you're new to it..

Does it have to be?  Not really.

What's the trick?  A couple of helpful tools for Buyers & Sellers:

  • Harder than it sounds but try to stay focussed.  It's NEED TO KNOW, not NICE TO KNOW. For example, if you're going to be listing your home, focus on the latest  news on your type of home & your neighbourhood, NOT others.
  • establish a timeline-Buyers.  Have your agent walk you through the steps of Buying, starting from lender pre approval through making an offer to closing & possession.
  • establish a timeline-Sellers.  You'll want to know the steps & timing from signing the listing contract through photography & floor plans to how showings & offers will be done.     
These are just a couple of ways that the stress & surprises of real estate can be reduced for Buyers & Sellers.  Knowledge gives you power over your situation,. & having an experienced & patient Smile  agent on your side helps-a lot.
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