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Hello!

The topic of today's newsletter is, as you may expect, The Market.  

It has become evident over the past few months that change has finally come.  In the industry, we've been seeing/hearing and feeling that new weather was on the horizon and now the numbers are starting to show it.

Let's look at some of the causes:

- Prices literally doubling across the lower mainland over the past 3-4 years.
- Interest rates rising.
- Speculation tax.
- Foreign owners tax.
- Mortgage rule changes / stress test.

All of these things put downward pressure on the buyers ability to purchase.  Even with the extremely strong demand, there is only so much people can afford.  Speaking of demand, I should clarify something.  At this point, when looking at the recent statistics, the detached market (single family dwellings) is the first to feel these changes simple because of the price.  For the majority of cities across the lower mainland, the detached market is now operating in a balanced or buyers market.  In contrast, the attached market (condo's & townhomes) are actually still operating in a sellers market and are quite hot.

This is all relatively fresh, but it takes time for people to accept reality and subsequently see these consequences in the marketplace.  What happens is this: since there are now less buyers, this means less demand which means more inventory.  What happens when there is more inventory for the buyers to choose from?  The Sellers will reduce their price in order to be competitive.  This is the nature of supply and demand.

Right now, we are floating, amidst change.  Sales volume has dropped off considerably, April was over 20% below the 10 year average.  If the volume doesn't pick up, it's just a matter of time before we see prices start to come down.

 If you are thinking about selling in the near future, my advice would be to do it soon.  I know, typical sales pitch right?  But that's just my opinion for the given scenario!

Thank you for reading and for your business, we really do appreciate it!! 
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I was honored to be contacted by a local news reporter looking for information about the remaining agricultural land in East Port Coquitlam.  Certainly many people in the area feel at some point in the near future a portion of that land will come out of the ALR but of course none of us really know when.  Buyers in the area are speculating and prices have soared in certain locations.  The Fremont connector is likely to shake things up as the road is punched through.  Local hobby farmers say the soil is not ideal but the ALC claims it can be remedied.  But at what cost?  It's a complicated topic and I'd be happy to chat further with anyone who's interested - you know how to reach me!

 

You can find a link on my Facebook Page here: https://www.facebook.com/ParrottaRealEstate/

 

Or check out the original article here with the Tri City News: http://www.tricitynews.com/news/what-s-the-future-of-port-coquitlam-farmland-1.2291823 

 

Thanks for reading!

Brad. 

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  1. Tri-City Stats!

    Coquitlam
    Detached - 21.24% (Seller Market)
    Attached - 17.95% (Balanced Market)

    Port Coquitlam
    Detached - 34.86% (Strong Seller Market)
    Attached - 19.57% (Balanced Market)

    Port Moody
    Detached - 19.8% (Balanced Market)
    Attached - 18.41% (Balanced Market)
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Check out the stats for the Tri-City area for the month of May, 2013.  If you'd like stats for a different area - just let me know!  I can even break them down by community so you can see how your little pocket is performing within the city.



Coquitlam
Detached: 20.08% (Top End of Balanced Market)
Attached: 14.53% (Low End of Balanced Market)
Days on Market - Detached: 34 / Attached: 35

 


Port Coquitlam
Detached: 29.87% (Strong Seller's Market)
Attached: 13.11% (Buyer's Market)
Days on Market - Detached: 19 / Attached: 25


Port Moody
Detached: 17.16% (Balanced Market)
Attached: 17.52% (Balanced Market)
Days on Market - Detached: 32 / Attached: 28


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Coquitlam
Detached - 23.06% Sales Ratio (Seller's Market)
Attached - 19.02% Sales Ratio (Balanced Market)


Average Days on Market
Detached: 25, Attached: 41




Port Coquitlam
Detached - 21.15% Sales Ratio (Seller's Market)
Attached - 21.45% Sales Ratio (Seller's Market)

Average Days on Market  
Detached: 27, Attached: 36



Port Moody
Detached - 19.57% Sales Ratio (Balanced Market)
Attached - 18.31% Sales Ratio (Balanced Market)


Average Days on Market
Detached: 42, Attached: 26

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We're definitely seeing prices start to decline.  Although it's not a "bubble about to burst" the market will indeed do some correcting.  Some local analysts predict about 10% over the next 2-3 years.  Keep in mind this won't be a plunge so to speak, but a gradual balancing out.  With this in mind it's the perfect time for you buyers out there with interest rates being so low to dive in.

There's a saying in the industry - don't wait to invest in Real Estate, invest in Real Estate and wait.  The market will always be cyclical, but the sooner you get in, the sooner you start building equity.  The key point here is to make sure you have a plan when investing, an exit strategy, etc.  You want to avoid selling in a valley of course, so get that crystal ball out and try to give yourself options for when the time comes to sell - if the market is down - you should have a way to avoid selling until it bounces back.  Ex. - extending the tenancy agreement, using funds from somewhere else, etc.

Hope this helps everyone, don't hesitate to contact me with any related questions or concerns! 
Have a great summer,

 

Brad. 

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