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.
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.
posted by BCResortHomes.com at 6:38 PM
0 Comments:
Post a Comment
<< Home