Victoria Safe from "Bubble," Real Estate Board Says!!

The capital region is largely insulated from economic factors affecting housing in other parts of the country, says the head of the Victoria Real Estate Board, responding to a warning from economists that home prices are showing signs of a "classic bubble."



"The important thing to remember is that real estate is local," board president Dennis Fimrite said Monday. Not only has B.C.'s economy proven stronger than those elsewhere in Canada, the local market is bolstered by the limited amount of land for construction.



"If you look specifically at Victoria, we haven't seen any slowing of the economy here, although there's a little bit of government downsizing. There are still developers who are breaking ground on new projects."



Victoria's economy is protected because this is a retirement town, a government centre with a strong high-tech sector and an attractive place to live, he said.



A new report from Bank of America Merrill Lynch economists Ryan Bohren and Sheryl King said that in contrast to the U.S., Canadian home prices set new highs this year and are "now showing the signs of a classic bubble.



The report estimates the housing market nationwide is 10 per cent overvalued, adding the number would be higher if mortgage rates weren't at record lows. "Under more normalized interest rates, home prices would actually look 25 per cent over-valued based on current prices."



Although Canada is somewhat shielded from the fallout of Europe's debt crisis, it is not impregnable, they said. The housing market is one of the most vulnerable sectors in a weakening economic environment as Canadians head into 2012 holding record debt and the unemployment rate shows potential to rise.



Bohren and King expect housing prices will decrease by about five per cent as demand slows in the first half of next year, with prices flattening by the end of 2012 as economic activity picks up.



However, a grimmer scenario could see home prices slide by 10 per cent if unemployment rises above eight per cent and the S&P/TSX falls below 10,000, the report said.



Greater Victoria's employment rate of 6.1 per cent is better than that for Canada as a whole, at 7.4 per cent.



Last month, a total of 482 properties sold through the Victoria Real Estate Board's multiple listing service. The average price for a single-family house was $592,034 and the median was lower at $530,000. The average price of a condominium was $320,558 and the median was $296,000.

Casey Edge, executive officer with the Canadian Homebuilders Association's Victoria office, noted that Bohren and King singled out the condominium market as being vulnerable, specifically mentioning Toronto. "But if you look at B.C.'s overall housing starts for the year, condos are also driving the B.C. numbers, mostly coming from the Lower Mainland.

Single-family housing starts in most B.C. communities, including Vancouver, have seensignificantdeclines this year, said Edge, blaming the province's harmonized sales tax and transition back to the provincial sales tax. "As a result, single-family-housing starts are the lowest in 10 years."

By the end of the year, Edge expects between 616 and 626 new single-family homes will have been built in 2011 in Greater Victoria. Previously, the lowest number of starts was 629 in 2001, followed by 635 during the 2008-2009 global meltdown.

"The silver lining in this very dark cloud is a buyer's market has emerged," Edge said.

cjwilson@timescolonist.com

LAWLESS BROWN MORTGAGE TEAM at CityHub Victoria

LAWLESS BROWN MORTGAGE TEAM at CityHub Victoria:
Here to help you! The mortgage process can be stressful and overwhelming;
we've been there and that's why we are here for you!

LAWLESS BROWN MORTGAGE TEAM at CityHub Victoria

LAWLESS BROWN MORTGAGE TEAM at CityHub Victoria:
The mortgage process can be stressful and overwhelming; we've been there and that's why we are here for you!

3 Classic Mistakes Sellers Make when Staging a Home for Sale

Posted by Carole VanSickle on Tuesday, October 11th 2011

According to numerous surveys, potential buyers make critical judgments that determine whether or not they are going to purchase a home within just minutes of entering that home. Some research indicates that they make that decision within seconds of opening the front door! In order to maximize a property’s appeal, it is vitally important to enhance the advantage initiated with good “curb appeal” by staging the interior of the home as well. You have probably heard real estate agents talking about baking cookies to give a home a, well, “homey” feel, but baking alone does not stage a home adequately in today’s competitive market. In this report, we’ll review some of the “classic” mistakes that people make when staging a home and how to fix them for optimal buyer appeal.

Classic Mistake #1: Mistaking Clutter for Décor

You know that you’re supposed to remove your personal items from a staged home when possible to make it easier for buyers to imagine living there themselves. However, you also should stick to minimalism when it comes to “décor” items. The seller’s personal taste should be as little in evidence as possible, which means that not only should the million “Precious Moments” figures be packed away for the sales process, but excessive containers, sprays of dried flowers and even lighting should be removed. Does this mean that you should eliminate all lamps and flour canisters? Not at all! But it does mean that the five tiffany lamps could probably be thinned to one or two and outside of the classic “flour, sugar, coffee and tea” canisters, extra kitchen storage should be out of sight as well. When it doubt, pack it up! Your buyers want to see clean, clear surfaces that are open for their own personal decorative interpretations.

Classic Mistake #2: Out of Sight is Not Necessarily Out of Sight

When you consider purchasing or renting, do you simply walk through a property and then leave? No! You look around; you open closets and you peer inside cabinets to check out the storage options. And in today’s competitive market, storage is huge. So you need to stage the interior of your closets and cabinets the same way you stage the rest of the rooms in a home: with clean, clear lines and surfaces. If cabinets are full of dishes, that’s definitely life. But you want it to be very clear to buyers that they will have plenty of room for storage. Pack up extra dishes, seasonal items and any non-uniform glasses or storage containers so that your cupboards are neat and organized. Is this the way your buyer likely lives? Probably not. Is it how they wish their cupboards looked? Probably so. And giving them the cupboards, cabinets and closets of their dreams could be the thing that pushes a buyer toward your property and away from another one.

Classic Mistake #3: Small Repairs can be a Big Deal

While it may not be necessary for you to oil the hinges on the front gate in order to get a good price on your home, it could make a huge difference in how a would-be buyer perceives your property. Often, sellers are so consumed with major repairs on their homes that they forget the little things. And, unfortunately, it’s the little things that buyers tend to notice. Hit all hinges with a little WD-40 and if you have cracks in the wall, dripping faucets or burnt-out light bulbs in the bathroom vanity, take a few minutes – or even a few hours – to address these tiny cosmetic details before a buyer comes to view your home. It will make the property more inviting and can even make bigger issues like the fact that you couldn’t afford to paint this year seem like something easily-remedied because the buyer has already started to imagine living there.

Staging is definitely a delicate “science,” and there are a lot of schools of thought out there on how to get the most out of your home when it comes to presenting it to buyers. Generally speaking, “less is more” in nearly all staging decisions, so if you opt not to hire a staging professional, just go with your gut when it comes to removing items from the general viewing area and not your emotional attachment to an item. Remember, you get to take that item with you, so if it attracts you personally rather than contributing to the look of a room you are better off removing it so that your buyer can better imagine themselves in that setting.

Thank you for reading this article in the Bryan Ellis Real Estate Letter’s Educational and Training Series.

lawlessbrown.com

No rate hikes until 2013: BMO

·· By Eric Lam, Financial Post

BMO Capital Markets pushed its rate hikes forecast back to 2013 on Tuesday, citing continued serious economic risks both home and abroad.

The new forecast pushes the expected time frame for the Bank of Canada to raise its benchmark interest rates back from previous expectations of the second half of 2012.

As recently as this spring, economists had been speculating about a rate hike before the end of 2011, but the market turmoil of the past few months sparked by the eurozone debt crisis has changed all that.

"As global economic risks have escalated, casting commodity prices and the Canadian dollar much weaker, the Bank of Canada's diminishing tightening bias has probably diminished further," Michael Gregory, senior economist with BMO Capital Markets, said in a report.

Mr. Gregory noted that the market has now actually swung all the way into cut territory pricing in two 25-basis point rate cuts by April 2012. But with inflation slightly below target, a weak loonie and credit markets still functioning, movement in either direction is unlikely.

"The policy easing bar remains high. Short of signs of imminent recession, the bank should remain on hold," he said.

Mr. Gregory also forecasts the loonie to tumble further, down to US93¢ before recovering to parity by 2013.

Read more: http://www.ottawacitizen.com/business/fp/rate+hikes+until+2013/5500200/story.html#ixzz1ZuLldhA5

lawlessbrown.com

It’s Time to Think About Winterizing Your Ride

          Driving in the colder months will require you pay attention to a few things on your car. Winterizing your car is important if you want it to continue to be reliable.

Get a Good Tune up    

(we can help you with this)
           

Nothing is worse than breaking down in the dead of winter. Instead of chancing this, have your vehicle looked over and tuned up. Check for cracked hoses, dry belts, water pumps, spark plugs, and the battery. If any of this needs to be replaced do this before the cold weather rolls in.

Check the Cooling System   

Antifreeze will protect your car in extreme temperatures. It's not a bad idea to flush the system and start new before winter comes. While this isn't necessary, it's going to save you from a frozen engine block. At the very least, check the levels and make sure the system isn't leaking.

Replace Wiper Blades  

 Have you ever tried to drive in freezing rain or snow with worn down wiper blades? No fun! Wiper blades are inexpensive and there is no reason to not have them replaced before cold weather sets in. Also be sure to turn the blades off before stopping your car. If they end up freezing to the window while the car is parked you can burn the motor out when you turn the car back on.

Keep your Gas Tank Full 

Keeping your tank full during the winter serves a few purposes. First, keeping a full tank will allow you to start up the car more easily on very cold mornings. Secondly, if you do happen to break down or get stuck you will have fuel to keep the engine idling and keep you warm while you await rescue.

Test your Rear Defroster    

Driving with an icy rear window isdangerous.. Be sure your defroster is working before you need it. Also keep a good ice scraper handy for the other windows.

Understand Your Car   

It should go without saying, but many people drive around not knowing if they have front wheel or rear wheel drive. In the winter, this is pretty important to know. You should also know if you have anti lock brakes, traction control, stability control, and other features that may change the characteristics of your car while driving on ice or snow.

If you have any questions, come in and chat or give us a call.  We also answer Facebook and email.

Cheers

Chris and Blaine

5252 Motorsports

Where Torque and Horsepower Meet

The secret to the sudden increase in variable rate mortgages

Why could I get Prime minus .90 last week and today it is Prime minus .25?

September 22, 2011 (Vancouver)

A great question, says the Mortgage Brokers Association of BC (MBABC), especially when fixed interest mortgage rates are remaining the same. The quick answer? As with many things, it all boils down to money.

Over the last couple of months, banks and other lenders have been offering historically low variable interest rates to qualified homebuyers in an effort to attract new clients and mortgage business. In the short term, lenders have been prepared to accept these low profit margins with the knowledge that, as the prime rate inevitably rises, so too will their profit on variable mortgages – a similar ‘loss leader’ tactic used by retailers to get consumers into their door.

“However”, says Geoff Parkin, MBABC’s president, “the recent announcement by Bank of Canada governor, Mark Carney has changed the mortgage lending landscape.” Carney stated that, because of poor performing global markets and continuing economic uncertainty, the benchmark interest rate would remain unchanged. The long-term outlook indicates continuing low fixed interest rates with no significant increases to the Prime rate. “In a nutshell”, says Parkin, “the bank’s theory of anticipating rising profits on variable rates was proven wrong. They’ve had to quickly respond to this situation by reducing the variable rate discount in order to gain back profit.”

What does this mean for consumers who have variable rate mortgages? Much of the same, says Parkin. “We continue to see low fixed rates and the variable rate is under 3.0%. There may still be value in going variable over fixed, but because consumers all have different financial situations and mortgage needs, we recommend they obtain expert financial advice from their MBABC mortgage broker.”

courtesy of MBABC

LawlessBrown.com

HIGHLIGHTS OF THE WEEK

United States

• A coordinated move among leading central banks to provide short-term U.S. dollar funding in Europe helped instill confidence, and contributed to a solid rally in equity markets this week.

• Yet worries about the economy have not changed, so markets will be carefully tuned into the Fed’s policy meeting next week.

• This should prove a most interesting meeting indeed, as the ongoing divergence of opinions at the Fed come to the fore. Proponents of more stimulus will point to a weak economy and sluggish job growth, meanwhile the hawks will point to the ongoing rise in inflation.

Canada

• Stricter mortgage insurance rules have taken some steam out of the Canadian housing market. Home sales fell 0.5% in August, a fifth contraction in the past seven months, while home price pressures eased. However, the impact has not been overly dramatic and the level of housing activity remains healthy.

• Shaky consumer confidence will likely weigh on the housing market in the near term. However, a continued low interest rate environment will likely help support a modest pick up in housing demand in early 2012.

• The key implication of a lower-for-longer interest rate environment, and the resulting elevated level of housing demand is that the Canadian household debt-to-income ratio is likely to rise further.

Courtesy of TD

lawlessbrown.com

BoC holds key rate at 1 percent

* Cites Europe, U.S. woes as backdrop for policy shift

* Sees Canadian growth resuming in second half of year

* Says inflation pressures dampened

* Cdn dollar gains, markets pare rate cut expectations (Adds details)

By Louise Egan and Randall Palmer

OTTAWA, Sept 7 (Reuters) - In a dramatic policy shift, the Bank of Canada said on Wednesday it saw less need to raise interest rates, becoming the latest major central bank to take a more cautious stance about the worsening global economy.

The bank held its overnight rate unchanged at 1 percent, where it has been for the past year, and took its previous talk of a rate hike off the table.

"In light of slowing global economic momentum and heightened financial uncertainty, the need to withdraw monetary policy stimulus has diminished," the central bank said in a statement.

In its July interest rate announcement, the bank said stimulus "will be withdrawn" provided the economy kept growing, leading markets to expect a rate hike later this year.

That forecast looks outdated now, given the European debt crisis, slowing U.S. growth and volatile markets.

Investors were not surprised by the more dovish tone, although many had expected a sharper policy reversal. Most economists still expect the next move in rates to be up rather than down, but it could be a year or more before that happens, and the bank's cautious language left the door open to an eventual move in either direction.

Goldman Sachs this week became the first major financial institution to forecast a Canadian rate cut later this year.

"There is really not much hint that the bank is considering cutting rates, but at the same time, they've pretty much put rate hikes firmly on the shelf," said Doug Porter, deputy chief economist at BMO Capital Markets.

Courtesy of Reuters

LawlessBrown.com

Misconceptions about mortgage brokers

A Few Misconceptions

Misconceptions occur in every business and the mortgage business is no different.

A recent example is this post by Boomer & Echo (B&E), a prominent blog that we typically enjoy. In it, B&E opines on why not to use a mortgage broker.

In the piece, the author gets some stuff wrong. As often happens, we came across it in our weekly blog scan and feel obliged to offer some counterpoints.

B&E makes four claims. They are:

1. Brokers push 5-year fixed rates.
   
   Counterpoint: Brokers sell a higher ratio of variable-rate mortgages than bank salespeople, and have for quite some time. That’s per executives we’ve questioned at banks with both broker and retail channels (e.g. CIBC and Scotiabank). In general, however, all mortgage professionals (bank or broker) sell a lot of 5-year fixed product. It’s the most popular term (has been for decades), it’s the easiest to qualify for, and it has the most competitive discounting (albeit, not presently).
   
2. Loyalty to your bank pays.
   
   Counterpoint: The Bank of Canada concluded exactly the opposite (more). To summarize, it’s research found that existing customers pay more than new customers. What’s more, no one lender continually has the best mortgage options. By comparison shopping, good brokers can save homeowners interest and identify the lender with the right flexibility/value tradeoff. The best brokers provide expert term analysis, proper deal structuring and helpful strategies to reduce a borrower’s amortization.
   
3. Bankers have better reputations
   
   Facts: The RBC specialist incident last April proved that reputation should be judged individually, not by virtue of where a mortgage advisor works. Generally, brokers and bank specialists are both paid by commission and the commission is similar whether they sell a 5-year fixed or variable. Neither is holier that the other in that respect, except that bank reps are hired to push only one brand.
   
4. Your better off doing it yourself
   
   Counterpoint: We have visions that people will someday get a mortgage online like they buy a stock at iTrade. But we’re not there yet. Good brokers provide counsel that saves time and money. Do-it-yourselfers sometimes discount the value of advice, mesmerized instead by brokers/bankers who can save them a few basis points in rate. For most, that’s a mistake because:
• Few individuals grasp the mortgage math needed to perform proper term selection. Term selection impacts borrowing cost far more than rate selection. A “good rate” alone does not equal a “good deal.”
• There are lots of creative techniques that skilled advisors can use to help people whittle down principal quicker.
• Lenders rarely disclose all of their mortgage restrictions until you sign their contracts. Brokers know the benefits and pitfalls of multiple lenders, and advise borrowers in advance.

It is possible to pick your own investments, do your own taxes or write your own will, but people still hire financial planners, accountants, and lawyers. There’s only so much time in a day and we can’t specialize in everything.

In all of those industries there are great and not-so-great practitioners. Brokers are no different. Interview several before picking one. Ask questions like:

• Which lenders they use most often and why
• How long they’ve been in business full-time
• Why their term recommendation is mathematically sound for your specific needs.

Sense if you can trust them. If they seem to care about you, and are competent, and make you feel comfortable, you’ll be glad to have them on your side

Courtesy of Canadian Mortgage Trends

lawlessbrown.com