JeffreyStark

So here we are. Everyone is an expert in predicting what real estate will do in the next year. Me included.

Why not? My predictions are as good as any of the experts out there. Does any one rem,ember what they were telling us just a year and a half ago? Predicting doom and gloom, just like in the USA. Prices will collapse and you will be able to buy a home in Vancouver for half the price.

I said it would not happen and if you are interested I can tell you why. But that is not what this blog is about. By the way all those experts actually got paid for all those doom and gloom predictions. I didn't.

So assuming that we, just like the weatherman who has a lot more scientific meteorological help in predicting the weather, really don't know what is ahead. And the weatherman only predicts a few days ahead.

But here is what I know for sure. The numbers. Ahh , the numbers. You can make anything work with numbers.

Anyway. let's assume that you decide to buy this TH in Burnaby listed for $289,000. Yo got 5% down payment, and that will leave you a mortgage of $274,550. At 3.99% interest rate on a 5 year term and 25 year amortization, O.A.C., (and I heard of lower rates), your monthly payment would be $1442.

But, listening to all those experts, you say to yourself, I will wait for the prices to come down. So you wait and sure enough, the prices are down 10% in a year from now and you decide it's the right time to buy.

Wait!. While you were waiting for the prices to come down, the mortgage rates went up 1% to 4.99% (same terms as above) Your calculation on a lower selling price shows that your mortgage will only be $260,100 and your payment $1435 p.m.
Not much difference in payments, but you saved $25,900 off the price. Sounds pretty good, right?

Well, lets just look at the details. At 3.99% over 5 years you would have paid $35,585 towards the principal, and at 4.99% you would have paid $28,431.

Applying these two amounts to the two different mortgages, it would still leave you with a lower balance even if you paid 4.99% interest, by $7276 after 5 years.

So you are still better off by waiting, right? WRONG!

Unless you were staying in your parents basement, you were probably renting. A one bedroom apartment would have cost you, conservatively, $750 p.m., x 12 = $9000. You saved $7276 but paid someone else $9000 for rent.
You actually LOST money. $1724! You could have taken your sweetheart for a nice holiday and have some shopping money left.

Not a great deal.
This calculation does not include some incidental expenses, but it was designed to illustrate that low interest rates are more important that a price of the property.

Unless you are investor/flipper, and you have gobs of money burning a hole in your sock, this is not for you. You can wait and pick your time.

But for the rest of us mortals, the message is, if you are ready to buy, do it now. It won't get much better than this.

Happy HOMEHUNTING! 

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If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-290-7890 or email me at jeff@jeffreystark.net

With all the heat we have had in the last few weeks, it didn't seem to have much effect on the local real estate.

It's cooling and cooling fast.

We have just started a new report; MID MONTH REPORT FOR SALES ACTIVITY
which will update sales trends in detached and attached, (condos and townhomes),  category.

If you like me to add you to the email list for this particular report, just drop me an email with send me mid month report in the subject line.

What this report will give you a sneak peek at the trend in sales activity, so you don't have to wait for the Real Estate Board monthly sales report.
If you are thinking of selling or buying, this report will tell you what you may expect when you decide to buy or sell a property.
A rise in sales activity would be good sign to buy, before the prices respond to stronger activity, or if you were sitting and waiting for a market move to sell, this would give you heads up before everyone else find out and start listing.
This month report shows that sales activity is still in decline anywhere from 30% to 100%, depending on the area and type of property.

Here is this months Mid Month Report

 If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-290-7890 or email me at jeff@jeffreystark.net

 June 1st, Paul Vieira, Financial Post  

OTTAWA -- For the first time in nearly three years, the Bank of Canada on Tuesday hiked its key interest rate by 25 basis points to 0.50%, as the domestic economy rebounds strongly against the backdrop of an "uneven" global recovery.
However, it signalled in its accompanying statement there is "considerable uncertainty" in the economic outlook given fiscal and financial unrest in Europe. As a result, further rate hikes "have to be weighed carefully" against global and domestic developments.
"This decision still leaves considerable monetary stimulus in place, consistent with achieving the 2% inflation target in light of the significant excess supply in Canada, the strength of domestic spending and the uneven global recovery," the central bank, led by governor Mark Carney, said.
That led some analysts to suggest there is no guarantee the central bank would raise rates again at its next scheduled meeting in mid-July.
"The July meeting is not a slam dunk," said Jonathan Basile, an economist at Credit Suisse in New York. "The downside risk is causing policymakers to lower the hawkish sails."
The statement's ambiguous, cautious tone led to a pullback in short-term bond yields and a US1¢ drop in the Canadian dollar. Douglas Porter, deputy chief economist at BMO Capital Markets, said it was as if the central bank was "almost bending over backward to indicate that this is not necessarily the start of a relentless campaign to crank rates higher."
Still, with the move, the Canadian central bank becomes the first among its Group of Seven peers to raise rates, and one of the few industrialized countries to do so. The last time the Bank of Canada raised its benchmark rate was in July of 2007.
The move signals higher borrowing costs for households and businesses that have loans tied to prime rates charged by chartered banks. (Prime tends to move in unison with the central bank's benchmark rate.)

The decision emerged a day after Statistics Canada reported the domestic economy reported its strongest quarterly performance in over a decade, as GDP expanded by a robust 6.1% in the three-month period ended March 31. The economy benefited from strong consumer spending, a robust goods-producing sector and an aggressive rebuilding of inventories by businesses.
There was a tug of war of sorts in the marketplace in the days leading up to Tuesday's decision about whether the Bank of Canada would pull the trigger and raise rates. A set of stronger-than-expected economic data, from retails sales to inflation, suggested a rate hike was warranted. Countering that, however, was market uncertainty over the spillover of fiscal problems in certain southern European nations, and the health of that continent's banking system.
In the end, the central opted to raise its key rate, and begin the process of withdraw extraordinary stimulus from the economy. But the Bank of Canada's statement explaining the rate hike went to some length to acknowledge the present risks to the global and domestic outlook.
"The global economic recovery is proceeding but is increasingly uneven across countries," the central bank said, noting the strong momentum in emerging economies and the "possibility" of renewed weakness in Europe.
The recovery in "most" developed economies remains "heavily dependent" on low interest rates and government spending, it added.

Read more: http://www.financialpost.com/news-sectors/story.html?id=3096853#ixzz0pcxzDvSr  

If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-290-7890 or email me at jeff@jeffreystark.net

2300 Kingsway East Vancouver

Just visited the new project at 2300 Kingsway. For you that remember, not too long ago the site was a home of the Eldorado Hotel and Bar. Great swinging place. A little on a border line as to the type of customers that used to frequent the bar, but a good place for some fun.

Well now, Wall Financial has kicked of through Bob Rennie Marketing a two building project with a high rise at the corner of nanuimo and Kingsway and the smaller building along the Kingsway. The project has a nice functional design, it is right on a bus line and only a few blocks to the Nanaimo SkyTrain station. Functional floor plans are complimented with nice finishes, gas cook top ranges, stainless steel appliances etc.

The interesting fact is that most of the suites are small in size, and most will be bought by investors and rented out or bought by first time buyers who will eventually outgrow them and move on.

There is a good number of suites available for around and under $200,000. These are junior studio+flex space at around 450 s.f. Parking included with most.
According to current rentals you could rent one of these for $1000.

Roughly calculated, if you put a down payment of $60,000 (30%) and assuming the rates go up and by the time the project is finished in couple of years, you have to pay an extra point and get a 5 year mortgage at $5.39%, your payments would be around $845 p.m. Ad to that the strata fee and taxes, estimated at $150 t0 $160 per month, your rental should cover your expenses.

After 5 years you will have paid down your mortgage by some $15,000. With an original investment of $60,000 you have received a 25% return. Not bad!  All you need is to have the market price increase by 12% or better to cover your purchase taxes-HST. Possible? In 5 years? I think so.

If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-290-7890 or email me at jeff@jeffreystark.net

Things are changing and the Buyers are slowly getting the upper hand. A you can see from the attached graph, most of the properties are taking more than 5 months to sell.

The graph represents the months it takes to sell a home or a condo ion various areas of Greater Vancouver.
Five months being a balanced market and anything above that means that the inventory levels have increased and more competition is on the market.

Bad news for the sellers? Not really. Properties will always sell, even in a tough market, just not above the market values.

Even at the lowest point of the past short real estate recession locally, there were properties that sold. Currently we are at the highest value levels we have ever seen around here. If have had your home for a few years, you will make a nice profit, and if you are moving to another property in the area, being a move up, or move down, you will get a good deal also.

For the Sellers it means that they have to be more realistic as to where they price their properties and do whatever they have to to maximize the best return on the sale.

They Buyers will not probably make multiple offers, because there is a good selection. They will take their time.
The Sellers will have to keep their homes in pristine conditions with good curb appeal and provide complete information about their home.

Good idea  is to have an inspection done by a certified and now, required to be licensed in BC, home inspections specialist, before the home is put up for sale. The report may indicate some easy fixes to the home that may otherwise rise Buyers suspicions and delay their decisions. Small investment that may pay off with a better return and avoid  inspection traps, you should know about.

If you are looking to Buy or to Sell real estate in Vancouver area, give me a call. My consultations are FREE. The benefits to You, may be worth a lot of money.
Call Jeff Stark at 604-290-7890 or email me at jeff@jeffreystark.net

For a list with pictures of Burnaby 2 bed/2bath condos in a price range between $250k and $500k visit:
http://www.burnabybestbuys.com