RomRealty

Tag: first time home buyers

  • Rom’s Real Estate Market Opinion – Feb 2024

    Rom’s Real Estate Market Opinion – Feb 2024

    The Real estate market in January of 2024 is sending us mixed messages.

    The stats for January indicate that the market is actually down in the Central Okanagan. The absorption in the Central Okanagan is below 10% for the second month in a row. If you look at these statistics you would say that the market is still correcting.

    However, I know that is not true from what other Realtor colleagues have been telling me. Every Realtor I know has been saying that the year started out strong or at least increasing from 2023.

    We have to remember that our stats are always 2 weeks to a month behind reality. When a Realtor writes a deal, the deal is not recorded as sold until the conditions are removed – which means the statistics could be outdated by up to a month.  You will likely see the absorption rise in February.

    We expect prices to rise in 2024 and we expect a fairly strong year. You can see, when we take a closer look at the MLS system, that even though the absorption is down for the month, sales increased in the last half of the month.

    In summary, in the next few months you will see an increase in sales, prices and absorption and a decrease in days on market to sell. This is called a recovering market. The spring market will create some of that upward pressure but as we compare month over month you will see that is increasing as well.

    As always, this is just the real estate world according to Rom. Contact me today for all of your real estate needs!

  • Rom’s June 2023 Real Estate Market Opinion

    Rom’s June 2023 Real Estate Market Opinion

    Okanagan Market Prediction

    Okanagan Real Estate Market

    I hope you are having a fantastic summer and staying cool in this heat!

    The real estate market in the Kelowna area is remaining strong and steady. Average absorption is rising and in some areas of the Okanagan, has passed the 30% mark.

    That tells us that the market will remain strong throughout at least the rest of this year unless the government decides to put up interest rates aggressively. Sales have caught up from the downturn starting in the second quarter of 2022 and extending to the first quarter of 2023. We have now surpassed the sales numbers of last year month over month.

    Home Price Index

    Hot topic: Interest Rates

    On July 12, 2023, the Bank of Canada hiked another 0.25%, bringing the rate that sets all rates to 5.0% and bank prime rates to 7.20%. We haven’t seen the policy rate start with the number 5 since 2001.

    For variable-rate mortgages, monthly payments will go up by about $15 for every $100K of mortgage balance. Stay tuned for the next rate decision on September 6.

    As always, this is just the real estate world according to Rom. I hope you are having an amazing summer!

    Please remember, I am NEVER too busy for any of your referrals!

  • Rom’s May 2023 Real Estate Market Opinion

    Rom’s May 2023 Real Estate Market Opinion

    Okanagan Market Prediction

    Market on the Rise

    When interest rates stopped rising and leveled-off, we changed our predictions to a slow gradual increase over the balance of this year. That was contradictory to a lot of opinions that were more negative. It appears we may have been a bit light in our optimism.

    The market is actually heating up at a more robust pace than we anticipated. Absorption is up well over the 20% mark. Prices are continuing to rise. Even though the inventory remains a problem and demand is far exceeding supply, sales are rising compared to last year at this time.

    People are figuring out how to cope with and deal with the highest prices in Canada because people want to move to paradise.

    Interest Rates

    However, the Bank of Canada pushed up the overnight interest rate on June 7 by 1/4 of a point for the first time since the end of last year. In my opinion their reasoning is obvious. Inflation was steadily marching down from a peak of 8.1 % in June of 2022 to 4.3% in April of 2023. Then it jumped to 4.4% in May. The target rate is 2%.

    House prices across the country have started to increase and although that is good for homeowners it is not good for home buyers. The bank will continue to raise interest rates until it sees inflation resume its downward direction.

    However, you always have to remember, this is just the real estate world according to Rom. Have an awesome month and enjoy the upcoming summer.

    Please remember, I am NEVER too busy for any of your referrals!

  • Rom’s April 2023 Real Estate Opinion

    Rom’s April 2023 Real Estate Opinion

    Okanagan Market Prediction

    Cruising along

    The market is cruising along as we expected it would once the interest rates levelled off.

    Absorption is rising and is now above 20%. Prices are starting to inch up as well. Sales activity is still lower than normal when you compare April 2023 to April 2022. The reason for this is a lack of inventory.

    Fun Fact

    Here’s a fun fact… Of the G7 countries (Canada, France, Germany, Italy, Japan, England and the United States), Canada has the lowest housing per 1,000 people. France is in first place.

    In order for Canada to catch up to France, we would have to build 3.5 million more homes on top of the 2.3 million homes expected to be built by 2030. On top of that, Canada has now increased its annual immigration goal to 500,000 per year.

    What all this tells us is that the inventory problem is not going away any time soon and is going to get worse before it gets better. The result of that is continued upward pressure on prices; the very thing the government is trying to avoid.

    Rest of 2023

    Prices will rise slightly for the rest of 2023. Interest rates look like they are going to remain steady for a while which will gradually increase buyer demand further.

    It’s a great time to buy Real Estate in the Okanagan!  However, you always have to remember, that’s just the world according to Rom.

    Please remember, I am NEVER too busy for any of your referrals!

  • Should You Buy or Wait?

    Should You Buy or Wait?

    It is hard to believe January is already over. Is it my age, or is everyone feeling the time is going by faster?

    As the market is slower everywhere it is important to reach out to Buyers. Buyers have the impression not to buy or do the wait and see approach… sitting on the fence.  

    Is this a good time to buy real estate? I often get this asked. The answer is Yes!

    Rate-sensitive markets like real estate have fallen over 20% depending on the individual market due interest rates increases and inflation. But this is still an excellent opportunity for investors and new home buyers to take advantage of much lower real estate prices despite the current higher mortgage rates. It’s worth noting that despite much higher rates with lower purchase values, the monthly payments in many cases are very similar. Either you pay top dollars in a high market, 100,000+ more with a lower interest rate, or purchase a property much lower, with higher interest rates.

    Example:

    Taking the average Canadian sold price, a buyer today would save almost $160,000 on the down payment despite having a higher monthly payment of $257.

    With a short-term rate strategy, this buyer can lock in a 1-2 year fixed rate to ride out the current rate cycle and then be in a position to renew/refinance at future lower rates.

    Whereas waiting until rates come down, we could see real estate values return to growth, which would mean higher down payment requirements and more competition.

  • Tax Fighter Guide for HomeOwners

    Tax Fighter Guide for HomeOwners

    Tax Fighter Guide for the Homeowner

    Here is your guide to appealing your property assessment notice. Pay your fair share of property taxes and not a penny more! Click the TaxFighter link below:

    TaxFighterPDF

  • Rom’s Oct 2022 Real Estate Opinion

    Rom’s Oct 2022 Real Estate Opinion

    Okanagan Market Prediction

    The market in the Okanagan for October is responding pretty much the way we anticipated. It continues to “Stabilize” or flatten out.  We are starting to experience the seasonal slowdown that we experience every year at this time. However, sales are down compared to last October.

    Past to Present October

    We need to keep in mind last October was not a regular October. It was a boom. The absorption is also down although not substantially. The Central Okanagan absorption is 12.49%. Basically, that number indicates that we are at the very bottom of a balanced market where absorption extends between 12 and 20%. If you look at the prices, they have come down approximately 10 to 14% since the first quarter of 2022. However, they seem to have leveled off.

    At the end of October, the Bank of Canada raised the overnight lending rate by 50 basis points (1/2 of a percentage). I believe they will do the same thing (maybe this time .25%), in the beginning of December.  Although this is a fairly aggressive rise in interest rates it’s not as aggressive as we’ve seen in the past few months. The overnight lending rate has gone from .25% to 3.75% in just a few months.

    Conclusion

    Although, the lending rate is having its effect on the market, and it is slowing down inflation and decreasing sales I think you will see the market pick up again as we step into the spring market at the end of February. We see a slow down every year at this time.

    As always, this is just the real estate world according to Rom. If you have any real estate questions give me a call or send me an email at any time.

    Please remember, I am NEVER too busy for any of your referrals!

  • Rom’s July Real Estate Stats & Opinion

    Rom’s July Real Estate Stats & Opinion

    Okanagan Real Estate Report July 2021

    Rom’s Real Estate Opinion

    The market is progressing exactly in the direction that we anticipated. Things are settling down but definitely not crashing.

    Think of the market in the last year as something like a Chicken Little scenario from the 1943 Disney Movie. For the last 6 months the market has been running around with his hands waving in the air screaming and yelling that the sky is falling. In other words, the absorption was ridiculously high, the inventory was ridiculously low, monthly sales we’re breaking all historical records and price increases we’re breaking all historical records.

    What’s happening now is Chicken Little is settling down. The absorption in the Central Okanagan (Peachland to Lake Country) has now dropped to between 40 and 50%. The inventory is still very low and sales have dropped to a reasonable level. However, let’s keep this in perspective. Absorption between 40 and 50% is still off the charts for our area. A balanced Market is considered to be 12 to 18% depending on which expert you listen to. Below 12% indicates that you can expect price decreases and it is also considered a strong buyer’s market. Above 18% is considered a seller’s market and you can expect price increases with this level of absorption. 40% is a long way above 18%…

    Where is the market going to go from here and why?

    What has to change in order for prices and sales to drop dramatically? If we look at the inventory for July 2021 and compare this with inventory levels in July 2020 and 2019 then this July inventory level is less than half the other 2 year averages.  Although over time inventory levels will typically gradually increase as more houses will be built, more construction and development. However, in order for the market to change dramatically to even approach a balanced Market the inventory has to increase dramatically; likely more than double. Is this going to happen? This is the big question.  We will not get rid of multiple offers on the same property until that inventory increases. That is just basic logic. 

    Conclusion

    I think we will see this present direction of the inventory, absorption and sales start to level off at these relatively higher levels. The market has settled down from its Chicken Little level to its “normal” place in the regular cycle. 

    If you would like to find out what your home is really worth in a market like this give me a call or text me at 250-317-6405 and I would be happy to evaluate your home. It can be done completely remotely if you prefer. It is totally free.  As always have to remember that’s just the Real Estate World according to Rom.

  • Rom’s May Real Estate Stats & Opinion

    Rom’s May Real Estate Stats & Opinion

    Okanagan Real Estate Report May 2021

    Rom’s Real Estate Opinion

    There is a very tiny crack in the foundation of the Real Estate market in the Okanagan right now. Sales are actually down in the Kelowna area. If you look back over the years there is almost always an increase in sales from April to May. The tiny crack continues into the absorption rate (the amount of sales versus the amount of listings at any time). There is almost always an increase in absorption from April to May; this year it is actually down.

    One of the phrases that I use in real estate is “A month does not make a market”. In other words this may just be a slight downward blip. If this is a real trend, it will continue for at least the next few months. I do believe this is what we will see. There will be a slight flattening of the market in the next few months but it will hardly be noticeable.

    There are 2 possibilities to explain this change. First, the market is starting a minor (or major!) correction. We have peaked and will start to see things settle down. Second, the market is “too good”. We saw this happen in 2007. The demand is so high and the supply is so low that sales are decreasing because people have nothing to buy. In my ever so humble opinion it is a combination of the two.

    The market was so ridiculously hot that it could not sustain itself. It was inevitable that it was going to slow down at least to light speed. Many Realtors are saying that their buyers are saying “I give up”. They have been disappointed so many times making offers on houses and losing out to other buyers. Some buyers have decided not to make their move until the market slows a bit and there is more inventory to choose from.

    Conclusion

    Personally, I am glad to see this crack in the foundation. The market was super hyper.  It was no fun telling my buyers to go into a multiple offer battle, $50,000 over list and still have no chance of getting the property they want. It needed a bit of a time out.

    If you would like to find out what your home is really worth in a market like this give me a call or text me at 250-317-6405 and I would be happy to evaluate your home. It can be done completely remotely if you prefer. It is totally free.  As always have to remember that’s just the Real Estate World according to Rom.

  • Rom’s April Real Estate Stats & Opinion

    Rom’s April Real Estate Stats & Opinion

    Okanagan Real Estate Report April 2021

    Rom’s Real Estate Opinion

    In the current whirlwind real estate market, we are hearing many stories emerging of how fast-paced and wild the home buying process has become. I wanted to share a story with you all today.

    Home Buyers Debacle

    A local realtor detailed an experience she had trying to find a home for her clients to purchase. Her buyer clients had lost out a few deals by being out bid. They finally found a home they were not going to be outdone on and they offered $100,000 over list price. They considered not putting in any conditions because their financing was a slam dunk at only 20% loan to value and they trusted what they saw in the house when they viewed it. However , they were advised by their mortgage broker to put a condition of financing in anyways.

    They did not get the deal. The were told the winning offer was $50,000 less than their offer but had no conditions. The sellers put more value on getting a firm decision than getting another $50,000. My Realtor said the buyers were angry and blaming the other side. However, this is like no fault insurance. The sellers are just taking the best offer for them in their minds. The seller’s Realtor is just looking after their client. The buyer’s Realtor was careful not to push them to go into a risky situation. The mortgage broker was being cautious and protecting the buyers. If anyone is to blame it would be the buyers because they did not choose to take the risk. How can anyone truly blame them for that?  This is one crazy market when we are actually discussing that putting a single condition on an offer and offering $100,000 over list price was too conservative. At the end of the day people have to calculate and be comfortable with their risks. Then they have to accept the consequences and move on.

    Kelowna Stats

    The Stats this month are off the charts, in the stratosphere, or any other similar metaphor I can come up with. This month Kelowna’s absorption is 88%. That means that 88% of all the houses on the market on April 1 sold in April. The average days on market to sell (DOM) was 23 days in Kelowna. What that means is that the listing was activated, an offer was negotiated and all conditions were removed in less than 23 days.

    Conclusion

    On top of all that there is not a shred of hard evidence indicating that this market is going away anytime soon. Those who believe the bubble is going to burst are simply speculating and guessing at this point. However, even a broken clock is right twice a day. Sooner or later things will change.

    If you would like to find out what your home is really worth in a market like this give me a call or text me at 250-317-6405 and I would be happy to evaluate your home or it can be done completely remotely if you prefer. It is totally free.  As always, this is just the Real Estate World according to Rom.