2008 Predictions

2008 Predictions

You have probably seen enough of them already, but I would be remiss if I did not add my thoughts to this column so that you can take all the information you have gathered and process it.

In a recent discussion with some other REALTORS® on a local volunteer Board, I was discussing the fact that my crystal ball seems a little foggy this year and that is not usually how I start the year off. It has been a more than interesting 2007 with all kinds of records broken for real estate transactions, interesting dynamics with the Canadian dollar strength, inflationary pressures induced by the energy sector causing rising mortgage rates that are now receding as we discover that the inflation may not in fact be a true hard core read on the strength of the economy,

So what do we have to look forward to in 2008? CMHC has told us to expect high single digit appreciation in the housing sector. As this applies to the whole of BC, what can we expect for the Okanagan? In my opinion, slightly better performance than that. We are still positioned in the market place to be dealing with inbound pre-retirement and retirement migration. Lots of people, lots of money and as of today, not a great selection of inventory. That simple equation will keep upward pressure on housing prices.

The change I believe will be in the aggressiveness of the buyers. I believe we will see some more caution applied to the real estate purchase. Buyers likely will shy away from multiple offer environments rather than be willing to push the envelope to get that dream home they desire. More caution is already being seen with the buyers in the market place today. Early reports indicate very busy REALTORS® with buyers holding back from making offers in great numbers, but that is a seasonal trend in the valley.

Notwithstanding, we have found ourselves very busy at this time of year and I suspect many offices are still seeing a high volume of transactions.

We predicted last year that developer sell-outs on first day will diminish and likely not be the sales process of choice. Of course, in any market place, the developer will weigh up the pent up demand for the type of product he is going to be selling. If the pent up demand is high enough, the program will see success. The public however is tiring of the inability to dispose of the asset after purchase.

Lets look at that last statement in more detail and it reflects exactly what we have been talking about for the past few years. The true market for real estate consists of end-users and renters, not investors who don’t have ample access to renters! Ozzie Jurock, the famed Vancouver real estate guru talks about defining what type of purchaser you are, shark, flipper or investor. The investor will hold property, knowing that it will cash flow and appreciate over time. The flipper wants, in and out, the shark trolls around courtrooms looking for great deals! What we experience to large degree is many clients who call themselves investors yet truly are flippers and they are being enticed in to projects in large numbers with a false promise of a fast exit. A quick scan of the MLS system will show vast quantities of brand new, unused inventory in buildings like Centuria, The Verve, Aria and others. There is no end user in a short time frame for this amount of inventory.

If you consider yourself a “flipper” to use Ozzie’s lingo, consider carefully what you are getting into and what predictions you can think about for disposition of the property. Today if you purchase in a 200 unit condo development, you may find there are 100 more people with your same appetite, leading to an overly competitive market on the back side of your investment!

Where is the upside for this year? We maintain, that it is an increase in branded tourism accommodation infrastructure such as Hyatt, Hilton, Sheraton, etc, all of whom will be looking closely at this market place. Coupled with the airport runway expansion, that will allow us to transition very nicely into a tourism market that brings international buyers to the area. Those buyers are conditioned to the values of recreational real estate globally, and everything we have to offer in the Okanagan competes very handsomely with any resort you can find overseas.

Overall, we expect a very positive 2008 with a little more sanity. If you are planning on selling a property this year, talk to your REALTOR ® about a marketing plan that can demonstrate the value of your purchase and be aware that our feeling is that buyers will be that little more cautious in their approach to making an offer.


Mark Jennings-Bates is a realtor with Coldwell Banker Horizon Realty and a resort development consultant for international resort projects. His website www.BCResortHomes.com allows visitors to sign up for eZines and market updates with accompanying analysis. Together with Sally Hollingsworth, Mark offers real estate advice and services to buyers and sellers in the Okanagan region of British Columbia.

Off-season recreational property purchase

Buying a recreational property in the off season

The demand for cottages has increased over the years, and what was once a relatively low cost alternative for a family getaway has now become a significant financial investment. One way to get good value for your money is to consider buying a cottage in the off season.

All things being equal in terms of lot size and square footage, its features and general state of repair, there are three important factors that will tend to determine a cottage’s value compared with other similar properties. These three factors should be given careful consideration when choosing a cottage:

* its commuting distance from a major urban center
* its proximity/convenience to leisure activities (either waterfront for summer, ski hills in winter or both), and
* its accessibility/ability to be used throughout the year.

A cottage that can be used in winter as well as summer will have the broadest appeal, and usually has more amenities to suit its many usages. That can also translate into a higher asking price. However, a year-round property also tends to offer a better potential to increase in value over time for the same reasons.

If you’re considering a year-round cottage, winter is an ideal time to view the property. It will give you a realistic idea of how accessible the roads are and how long it will take to get there under challenging road conditions. If the roads to the property are not plowed in winter, that may result in the property only being accessible by snowmobile or ATV. That will have a major impact on its selling price and future resale value. Viewing the cottage in winter also lets you see the heating system in action. Wood stoves and fireplace inserts do a far better job of heating a space than just an open fireplace, but few people would find them adequate to meet all the demands of a cold Canadian winter. If there’s no back-up heating system in place -- either electric baseboards or a furnace -- you may want to allow for the expense of installing one as part of your budget. Remember that if you plan to add baseboard heaters, they draw a lot of power, and you’ll need to be sure the cottage wiring has the hydro capacity to handle the demand.

The best news about viewing a cottage in winter is that there are usually fewer buyers around to compete with your offer – especially if the cottage’s primary usage is just as a summer getaway. If the property is water access only, then the seller’s options are seriously limited. The seller may not be looking forward to carrying the expenses until next summer approaches, so an offer now could have a great deal of appeal. This could be just the right time to make your move. Ask your REALTOR® how to turn the winter season into your buying advantage!

As the season comes to an end, it would appear the Okanagan sales have been at a record pace again with almost a billion dollar increase of last years sales volume.

Have a very merry Christmas and happy New Year. I wish you all the best for a significant 2008.

Mark Jennings-Bates is a realtor with Coldwell Banker Horizon Realty and a resort development consultant for international resort projects. His website www.BCResortHomes.com allows visitors to sign up for eZines and market updates with accompanying analysis. Together with Sally Hollingsworth, Mark offers real estate advice and services to buyers and sellers in the Okanagan region of British Columbia.
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Fall 07 Report

As the mercury drops a little into the fall, so does the temperature of the real estate market. The edge has disappeared a little in the past few weeks, although often this time of year, there is a lag between kids going back to school and Mum and Dad home shopping again. I would expect activity to pick up a little into October before we see most people hunker down for the end of the year.

In our last Insider Report we beat up a little on reacting to news in the short term, and we are happy to report that stock markets are recovered from the crash that was so gloomy to so many, interest rates have not been adjusted and the dollar is the strongest it has been for 30 years!

The local Real Estate board has been reporting increases in sales volume both dollar and unit wise for the fall on a month over month comparison last year. CMHC is predicting housing prices will continue to rise at a calmer rate than we have seen and the sun continues to shine on the Okanagan.

In the mean time, the out of town investors looking at purchasing resort property in the Okanagan, buoyed by all these stats often find it hard to get accurate information to make their decision such as… What are rentals like at that resort? How does the strata corporation manage their affairs? What facilities are available at that resort? Who do I talk to, to get certain information?

In response to these questions and comments, and many others, we have recently launched a new web forum designed for Western Canadian resort home-owners, purchasers and investors. The web forum, www.ResortForum.ca will provide you with the ability to get those answers and dialogue with like-minded people about the Western Canadian Resort market place.

Forums on the internet can be complex affairs at first, but once you have found your way around them and understand how simple they are to participate in they can be invaluable. In many instances, if I am doing research, I will turn to a forum and look for the person on the ground in the area that I am researching who appears to be knowledgeable and writes a lot of posts to that forum. Our hope is that this will become a familiar place to consumers, realtors, developers and strata and property managers alike who can share information on their resort.

As the forum grows in demand we will add in more locations and break out forums into more detail. We hope it will be a useful resource for you,

With regards to new developments this year, Waterscapes stole the show with a very successful launch of their product and now the lakefront homes at La Casa are front and centre, attracting a lot of attention (www.LaCasaYachtClub.com). In our next article we will start to assess the upcoming ski season and some of the expectations we have for local ski resorts and development opportunities, in the mean time we don’t want to wish the summer away too quickly, so enjoy the fall wine festival and thanksgiving over the next few weeks.

Mark Jennings-Bates is a realtor with Coldwell Banker Horizon Realty and a resort development consultant for international resort projects. His website www.BCResortHomes.com allows visitors to sign up for eZines and market updates with accompanying analysis. Together with Sally Hollingsworth, Mark offers real estate advice and services to buyers and sellers in the Okanagan region of British Columbia.