After a record-breaking March and April, many consumers are left wondering what to expect as home sales start to cool down in the Great Vancouver Area.
James and Denny provide an update on the trends they are currently seeing in the market, and what buyers and sellers should expect during the upcoming months.
This episode will focus on the continued migration of people moving away from the big city, the effect of a new stress test, rising construction costs, predictions for condo popularity in the future, and the impact of lower competition and fewer offers in real estate.
Buying a home is an important financial decision that can quickly become overwhelming without proper guidance.
James and Denny share the helpful advice that they offer their clients when trying to buy a home.
This episode will focus on a ranking system that can better direct your real estate search, the clarity that comes with seeing many properties, comparing budget versus location, and the importance of learning about the amenities and community offered in a potential neighborhood.
There are many lessons to be learned (and a few mistakes to be made) when starting a career as a Realtor.
James and Denny take a walk down memory lane and recall the challenges and successes of their first year working in the real estate market.
This episode will focus on the benefits of having an experienced mentor, the steep learning curve to being a competent Realtor, the perks of specializing in geographic areas or product types, the value in attending home inspections and asking questions to learn more about the process, as well as the changing technology and strategies of the business.
Buying an older home provides an opportunity for customization, character, and history. Unfortunately, the older the house, the more probability for issues to arise.
James and Denny walk you through some of the concerns you should be mindful of when buying an older home, depending on when it was built.
This episode will focus on what to be aware of when buying into older strata, when to worry about asbestos, the negative implications of an oil tank, the material types that can cause a leaky condo, and what issues to look out for regarding a home’s plumbing and electrical.
March 2021 was a record-setting month with no signs of slowing down in May. As more listings become available, Realtors and their clients find it challenging to know what to offer and how to stay competitive.
James and Denny provide pointers to buyers and sellers who may be experiencing fatigue and frustration while trying to navigate the current real estate market.
This episode will focus on an increase in selection as more inventory becomes available, the proper mindset for multiple offer situations, making a strong first impression with the listing agent, and the frustrations of not getting a call back after making an offer.
Currently, the amount of real estate inventory available to homebuyers is increasing. This is exciting for buyers as it provides more selection and reduces the risk of extreme multiple offer situations. Even still, many individuals are finding it challenging to know the best way to navigate the real estate market and may be feeling tired after looking for so long.
As a buyer, how can you overcome real estate fatigue?
Make sure your finances are in order
Ensure that your mortgage specialist has all the required documentation. This is very important, and something that you have total control over – preparation is key!
Do your due diligence before making an offer
Perform pre-inspections and review permit history
Be prepared to make a strong offer on a home that you love
Understand that many homes are still selling subject free
Have a deposit in hand when you make the offer
If it is a multiple offer situation, do everything you can to improve your chances
Write a personalized letter that is edited specifically for the property you are making an offer on. Include a picture and note saying how much you love the home and what it will mean to your family.
Emit confidence when viewing a home. Try to introduce yourself to the listing agent and make a strong first impression so that they will remember you when going through offers.
Do not be afraid to try! Make an offer on the home that you love
Focus on market value (do not fixate on list price) to make an offer that you feel comfortable with.
Offer at a price that if you lost the property by $5,000 or $10,000, you would not be upset.
Don’t expect a call with feedback after making an offer
Not all Realtors will provide updates; you may not know how your bid is doing compared to other offers.
Be resilient! Buying a home can be an emotional process.
Try not to get disappointed when seeing a home with a high number of showings.
Know when it is time to step down if there are a lot of offers on the table. Furthermore, pick a number that you believe to be “a lot” – this could be, 6 offers or 12+ offers.
For entry priced homes, recognize that 90% of the value is in the land. Try not to get caught up in the small details of the structure if you love everything else about the property.
As a seller, how can you overcome real estate fatigue?
Listing price is more important now than what it has been in previous months
In January and February 2021, the final sale price could be drastically higher than the list price because of limited selection and multiple offers driving it up. Currently, prices are not increasing to the same extent due to the higher number of listings available. Be cautious when using the pricing strategy of listing your property low to increase interest.
Buyers may have been burned by previous offers and can be skeptical of the listing price, asking if it is where it should be or if there will be another “bidding war.”
Be careful of underpricing! In some cases, this can generate a lot of interest and encourage too many offers (most of which are not competitive).
May and June are great months for putting your home up for sale
If you are entering July and August, get more aggressive with your pricing to attract more buyers.
Some things to keep in mind for conquering real estate fatigue:
Even though it has been a reoccurring trend, not every property sells over the asking price. Every situation is different, and Realtors and their clients may be using various listing price strategies. Some listings may be priced too high or low; focus on the home’s market value and decide whether it is worth it for you to make an offer. Remember that it will most likely be a quick sale with subject-free and multiple offers if it is a conservatively priced property.
Predictability is very challenging in June compared to February of 2021. Inventory is increasing, making it tricky for sellers trying to pick a list price and buyers deciding how much they should offer.
Some buyers may be fatigued from past experiences and not want to make an offer on a home even though they can afford it.
Try to avoid the term “bidding war” when discussing popular properties. It can be a scary term that can discourage homebuyers from making an offer in fear of overpaying. Instead, use the phrase “multiple offers.”
What is buyer fatigue?
Buyer fatigue refers to buyers who have seen so many properties, written too many unsuccessful offers, and are flat out exhausted with the buying process. Searching for the dream home can be an exhaustive undertaking and when you are losing out time and time again you start to feel like you will never win a bid.
As a homeowner, the Realtor you choose to sell your home can make the difference between maximizing the sale to its full potential and leaving money on the table. In some communities, market value has gone up 20-30% since last fall. Hire a realtor who knows the value of your home and understands how to get the best offer for you.
The G+D Realtors have been noticing a shift in the number of homeowners moving to the communities east of Vancouver in search of larger properties, more outdoor space, and more affordable prices.
James and Denny compare real estate over the last ten years in two of these surrounding cities: the charming inner-city suburb of New Westminster to the beautiful mountainous city of Port Moody.
This episode will focus on peak pricing in these regions, the difference in sale prices of comparable properties, the benefits that each city offers, and where the best investment opportunities and highest rent can be found.
Many homeowners wonder what kind of renovations can be done to get the most value out of their home.
James and Denny discuss what sellers should concentrate on when planning to upgrade certain aspects of their property.
This episode will focus on knowing your time horizon, understanding the property value breakdown (structure value versus land value), the importance of good construction, and the increase in renovation and raw material costs.
If you are thinking of renovating your home, you may have some of the following questions:
What type of renovations should I do to increase my home’s value? Is it worth it to renovate my home? What can I do to decrease my chances of overspending on this project?
The answers to these questions rely heavily on how long the homeowner plans to live in the home. This can also be called the homeowner’s time horizon.
How to Effectively Renovate your Home if you Plan to Live in it for Five Years or Less:
If you plan to live in your home for a shorter period, your primary motivation should be to achieve the maximum return on your investment.
Focus on projects that will substantially impact buyers and increase interest, such as an updated kitchen, cabinets, or flooring. You want to do the minimum amount of work to make it look as good as you can for reselling.
Many buyers consider the kitchen to be one of the main selling features of a home.
The average kitchen renovation in Vancouver costs around $50,000, with prices increasing substantially for large and luxury kitchens. This price can depend on the type of materials, fixtures, and contractor you use.
Updating the cabinets and faucets can significantly modernize the space. New paint and countertops are two of the most common changes that most homeowners make. A possible item to splurge on would be a high-end faucet that will act as a statement piece and add value to the room.
The Appraisal Institute of Canada suggests spending 25% of your home’s value on a kitchen renovation if doing it for yourself. However, a homeowner should only invest 10-15% of the home’s value in the kitchen if you plan to sell. It is essential to factor in your home’s location, compare what other kitchens in similar homes look like, and your budget when planning any renovation before selling. Speak with a contractor or Realtor if you would like more information to help make these decisions.
How to Effectively Renovate your Home if you Plan to Live in it for Ten to Twenty Years (or more):
If you plan to spend a significant amount of time living in the home, invest what you can afford into the upgrades you want. The longer you live there, the more you can justify doing big-ticket items that may not necessarily increase the sale price of your home. This can include drain tile and updating electrical or plumbing.
It is important to remember that a large part of the sale price is based on the land value of that lot. For example, a post-war bungalow home may sell for $1.4 million, but the actual structure is only worth approximately $100,000 because of its age.
Furthermore, in East Vancouver, a house was recently sold for $2 million and then was promptly torn down, signifying that most of that sale price was actually for the 33-foot lot of land in a desirable neighborhood.
Real estate land value is an appreciating asset that will continue to grow as the market does. Under these circumstances, you will not necessarily need to worry about getting a significant return on your renovation investment if you plan to live in the house for a more extended period. When you finally decide to sell in the future, the land value will have likely increased to an amount that would cover those upgrade costs.
Things to Keep in Mind to Effectively Renovate your Home:
Contractors are extremely busy right now, so plan well in advance and start talking to a contractor six months to a year before renovating. Keep in mind that the cost of construction and raw materials are increasing.
City processes are also more expensive and can include costly surveys, arborist reports, and energy requirement updates. Always check in with the city to determine if your total renovation dollar amount could trigger any unanticipated required updates with the city.
Consequently, the sooner you do the renovation, the less expensive it will probably be.
We have seen this trend over the past two years in the suburbs:
Two years ago (2019), building costs were approximately $150 per square foot
In the last year (2020), the base price for building costs rose to $200 per square foot (this would be for less expensive finishes and a strict budget project)
Throughout the next three years (2024), this price is expected to increase from $250 to $300 per square foot
For comparison, the building costs in Vancouver would be approximately $400 per square foot in 2021.
Considering the Building Size When Renovating Your Home
Be cautious of your renovation spending if the home does not take advantage of the full potential of a lot.
For example, if you live in an undersized home (only takes up 60% of the space allowed for that lot), potential buyers could tear down the current building to make a larger house or split the lot. In this case, renovations are likely unnecessary, and you may not receive a return on your investments.
Moreover, there is a market for undersized entry-level homes as more people want to own a house. These potential buyers may already be stretching their finances to buy the home without the renovations. It is essential to know who your sellers may be and what they are looking for in the market.
If the house is close to or larger than zoning potential, use renovations to make it the best version that it can be. Try not to move walls unless you have to.
The value of good construction on a new or well-renovated home has room to appreciate the land value and the structure value over the next five years. There is a higher chance that the next homeowner will keep the building if it is a large house, is built well, and has a great layout.
Every home is unique and requires specific considerations. Contact us for more information on what might be the best type of renovations to get the most value out of your home.
A seller must consider various factors when selecting a listing price for their home. These factors can include market trends, time of year, inventory availability, uniqueness of the property, and the homeowner’s current financial situation.
James and Denny share their process and classification system for selecting a price point for their client’s homes.
This episode will focus on understanding what potential buyers are looking for, the dangers of pricing your listing too low or too high, the value of a great location, and the difference between pricing condos, townhouses, and single-family homes.
The strategies behind selecting a home’s price when listing is constantly changing. This process depends heavily on the following factors:
Current Inventory and Time of Year
Inventory is likely to be low in the first few months of the year. A seller may opt to list their home at a low price and then rely on multiple offers and bidding wars to increase the final sale price to a number equal to or above market value.
More inventory will likely become available in late Spring, which will decrease the amount of competition. The market is still hot during this time, but sellers will see fewer multiple offer situations.
The real estate market may begin to cool down as the year progresses into the winter months.
Know what types of homes are popular at this time. Entry-level single family homes are getting a lot of interest and selling quickly. In these circumstances, pricing conservatively can work in your favour. Mid to upper-priced homes should be listed at or above market value. This can give the homeowner some wiggle room to negotiate price if needed.
If you have already bought another property and need to sell your current one quickly, the best option in most situations is to list your home just below recent sales. This strategy will increase interest and hopefully secure a quick deal.
If you are selling your home and want to achieve a goal number to buy another property afterward, price it at a number you feel comfortable selling it for. In this circumstance, do not expect a bidding war to push up the price.
Current Strategies for April 2021
Underpricing your listing is a riskier strategy now than it was in February or March.
For example, in March, a homeowner may list their $1.5 million home for $1.399 million to get more interest and offers. In the recent market, there is less competition to drive up that price, so it is most likely the best idea to price it at the value you believe it should sell for.
If a homeowner decides to list it below its value to increase the attention the home receives, give it at least six days on the market before looking at offers. It is also important to understand that you may have to relist your home at a higher listing price down the line if you initially do not get the offer price you desired.
The Classification System for Pricing Strategies when Listing
When selecting a listing price, G+D classifies townhouses and single family homes into three different categories:
A – a great house with a fantastic layout on a prime street in a desirable neighbourhood
B – a good house on a less favoured street in a desirable neighborhood
C – a house with a poor layout or in need of renovations on a busy street
Currently, you can still get away with a multiple offer strategy (listing low and expecting a bidding war to raise the final sale price) for a home in the A classification group.
The low B and C classification group homes should be listed at the price you think the property is worth. There will be more products available in these groups so the competition may be lower.
Condos follow a different system when selecting a listing price:
The real estate market for condos is more price-sensitive and budget-conscious. Many buyers have a strict ceiling for the maximum price they are willing to pay. Because of this, homeowners have to be very cautious with their choice of listing price – they could list low to get more eyes on the property or stretch above the last sale price to encourage a higher offer.
The neighbourhood plays a huge role when selecting a listing price for a condo. Communities within each city are following different trends. In most cases, sellers should list their condo at the price point they want to sell it for. If it is a unique property with a great view or if it is a prime building that has not seen inventory in the last couple of months, you may be able to price more aggressively in the hopes of attracting more substantial offers.
Lastly, if you have a tenanted condo, try not to overprice it as it will most likely not outperform other available apartments for sale.
Planning a Pricing Strategy when Listing your Home
It can be challenging to choose the best price when listing your home. When trying to determine the value of a home, James and Denny go through the following processes:
Dig deep into the history of similar properties in that price point
Ex. Review prices of all 2002 condo sales
Review the sales in that area for the last 3 to 6 months
Ex. All sales in that building or complex
Break down the sales from the previous 30 days
Ex. Look for sales for the specific price range that you are thinking of selling at and compare them to your property
When choosing a listing price, it is essential to have a thorough understanding of the product and how properties at that price point have recently been performing in the market. Keep in mind that every home is unique, and it is best to speak with a Realtor who can help you find your home’s market value.
Do you have questions regarding current market trends in your neighbourhood and what your home could be worth? Contact us! We would love to help you maximize your property’s value.
When looking for a realtor, it is important to ensure that they are the right fit for your home and your family.
James and Denny share the three most valuable questions you should ask a realtor before listing your home:
1. How will you market my property? 2. How do you manage showings? 3. How will you handle multiple offers?
This episode will focus on maximizing exposure on social media, the importance of preparing and promoting advertising materials before listing a property, the advantage of allowing buyers to perform pre-inspections to promote confident offers, and the benefits of proactive communication between realtors during multiple offer situations.
Single-family homes are hot right now, and some homeowners are thinking of selling their property to benefit from this trend. It is a great idea to hire a Realtor to help you with this significant decision; but, how can you be sure that they are the right one for you?
We have broken down the three most important questions to ask your Realtor before listing with them:
Question #1: HOW WILL YOU MARKET MY PROPERTY?
Marketing is an important part of listing your home. This is especially the case in the current real estate climate when houses are selling relatively quickly.
Posting your home on MLS is a great place to start. Many buyers visit this website to see what is available. However, with homes selling so quickly, some potential buyers may not see the listing in time and miss the opportunity to make an offer.
In addition to MLS, other platforms can help to maximize your home’s exposure. Social media is a popular marketing outlet with a broader reach to get more property views.
Social Media and Real Estate Marketing
In 2016, homes were selling quickly in a very similar type of market as what we see today. James remembers receiving calls from interested buyers regarding a house that they had already sold. To prevent this disappointment, the G+D Realtors started doing a social media push with photos and videos one week before listing. This strategy would increase the amount of interest around the property and have buyers counting down the days until they could learn more about it! G+D continues to use this marketing approach today and has seen a lot of success with it.
In the 2021 market, the range of price possibilities for a listing is quite broad. In a lot of cases, the prices have gone up by 20% from last year. If you launch a listing, the sale price range could swing either way by an arguable 10% (or approximately $100,000). This number can depend heavily on the timing and marketing leading up to the offer presentation. In most cases, you only have one chance to create interest and hype around your property, so it is essential to advertise it properly.
Ultimately, the main goal of real estate marketing is to make sure that you are not missing a buyer. More marketing means more exposure and eyes on the listing, leading to more interest and showings. This point leads us to our next important question:
Question #2: HOW DO YOU MANAGE SHOWINGS?
Showings are an excellent opportunity for potential buyers to see the home and imagine themselves living in it. It also gives the listing realtor a chance to address any concerns or questions that a buyer may have.
For a maximized sale, the listing realtors should try their best to ensure that all interested buyers have an opportunity to see the home and make an offer. You never know who could make the best offer; it could be the first person or the last person to walk through the home. If you have a lot of interest, a strong strategy for the seller is to hold off viewing the offers until all buyers have had a chance to see the property and make a bid.
Trying to get the best offer possible
In some cases, Realtors are getting 50 – 70 showing requests for one listing. The COVID-19 pandemic has increased the number of restrictions surrounding showings, but protocols and safety measures can be put in place to keep everyone protected. It is common to see showings spaced approximately 15 minutes apart, and hand sanitizer has become a new staple item. If the home is larger and offers multiple floors, buyers can be spaced out and still safely view the property. Ask your Realtor how they plan to show your space and overcome any issues that may arise.
Another aspect that helps with buyer’s confidence is allowing them to carry out a pre-inspection. The hope with showings is that interested buyers can see the home, carry out their due diligence, and feel secure in writing competitive and subject-free offers. Jamie shares that as of March 2021, 87.4% of potential buyers are making offers without any subjects. To stay competitive, buyers feel the pressure to make subject-free offers, which is a large commitment with a substantial amount of money. Conclusively, offering buyers the opportunity to carry out pre-inspections can increase the seller’s probability of receiving a better offer.
Allowing enough time for everyone to see the property can increase the number of offers and chances for a highly successful sale. This takes us to our next question:
Question #3: HOW WILL YOU HANDLE MULTIPLE OFFERS?
Multiple offer situations are common for many listings in the Metro Vancouver area. If handled properly, this situation can result in more money for the seller.
Buyers’ agents need more guidance than ever in the current real estate climate. Unfortunately, many Realtors are guessing within a certain range what the offer price should be. As the listing agent, you can provide feedback and guidance on where the buyer stands and if they need to make a more aggressive effort.
It can be highly frustrating for homebuyers to put in an offer and then not hear anything back from the seller. Some single family home listings are receiving upwards of 20 bids. The majority of the time, only a few of those offers are competitive. Try to be courteous to the individuals who made a low offer and let them know if their bid is out of the running. You never know who could increase their offer if given a chance.
Furthermore, there is an opportunity for the seller when the top two or three offers are close. By letting the potential buyers know where they stand, they may increase their bid in hopes of winning out over the other interested parties. Proactive communication (instead of reactive communication, or even worse, no communication) in multiple offer situations can significantly influence a sale’s outcome.
Maximizing the Sale of Your Home
The Realtor you choose to sell your home can make the difference between maximizing the sale to its full potential and leaving money on the table. In some communities, market value has gone up 20-30% since last fall. Hire a realtor who knows the value of your home and understands how to get the best offer for you.
Many families who are hoping to move to the desirable neighborhood of Port Moody may be surprised at the single family home costs in this area.
G+D Realtor Monica joins Denny on the podcast to discuss the increasing prices and low inventory of detached homes in Port Moody.
This episode will focus on the lack of entry-level single family homes in the area, the approximate price points for desirable properties on Heritage Mountain, the growing activity surrounding ultra-luxury houses in Anmore, and low inventory driving up prices in the area and setting new benchmarks for future sales.
Port Moody has become a very desirable neighborhood to live in, and the current single family home prices reflect that. Traditional entry-level detached homes in this area are hard to find. Moreover, higher listing prices of these property types may prevent buyers from investing in Port Moody real estate altogether. It may also redirect their focus to more affordable options like condos. The families who can afford houses in this area place high offers (well above listing) in fear of not securing a home during a time with low inventory availability.
Questions to ask yourself when buying a single family home in Port Moody:
When buying a home, you are not just purchasing a property, you are joining a neighborhood. Here are a few questions to ask yourself before investing in a house in Port Moody.
Where do you want to live? Port Moody has many different areas, including Ioco, Heritage Mountain, Belcarra, and Anmore. To learn more about what this beautiful city offers, explore our interactive map of Port Moody.
What type of schools do you want your children to attend? There are seven elementary schools, one middle school, and two secondary schools in this region.
Do you want to be close to public transit? Port Moody is well-served by transit. The services include an express bus into Vancouver, two stations for the SkyTrain Evergreen Line, and a West Coast Express rail service stop.
Are you willing to renovate? Many of the houses currently on the market are 17 – 25-year-old homes that may require renovations. These renovations can include bathroom updates, kitchen remodels, or new flooring. Keep in mind that these projects can significantly increase the overall dollar amount spent on your home.
Port Moody Single Family Home Prices:
Monica begins the episode by sharing that the likelihood of buying a single family home in Port Moody below $1.5 million is relatively low. Smaller communities within the city offer different features:
Ioco area has been presenting a variety of prices for different types of properties. It has been relatively hard to know what to expect, as one homeowner may list their house for $1.4 million, and then an empty lot next door may be listed for $2 million.
Avalon Drive is a busy street just off of Ioco Road. In early December, a single family home on this street sold for $1.4 million. Recently, after 100 showings and 9 pre-inspections, a house sold for $1.65 million. In fact, this home was not considered a luxury home and had a less than ideal layout.
Heritage Mountain has become a hot spot for single family homes. Many of the houses range from 17-25 years old and were built with style in mind. This area offers excellent views and desirable schools. The latest listings in this region of Port Moody are $2.3 million to $2.4 million.
Holly Drive on Heritage Mountain has also become a desirable location. Monica comments that she has been visiting this area a lot for buyer showings. Many homes on this road would need a complete renovation, which could cost around $200,000. Properties are selling for approximately $1.5 million.
Heritage Peak Road on Heritage Mountain sets a new precedent for sales in the region, with single family homes selling for approximately $3 million. It has created a benchmark where there was not one before, making a definitive line of housing costs in the area.
Monica and Denny call Anmore an ultra-luxurious community. Anmore boasts private, large lots with beautiful 5,000 – 8,000 square foot homes selling in the $4 million range. In the past, houses would sit for years on the market with little activity. However, homeowners from Heritage Mountain can now sell their homes for a much higher value and afford property in the Anmore area. Because of this, Monica is expecting interest in this area to increase.
What to expect for Port Moody Single Family Homes in the future:
Each community within Port Moody is doing something different, but the G+D Realtors are seeing a general increase in activity and prices across the board. Consequently, some homebuyers are pushed out to the less expensive areas or opt to purchase a condo to build up equity. On the other end of the spectrum, we see families selling homes for over $1 million above what they originally bought it for and can now afford a house in more desirable areas such as Anmore.
As Port Moody’s real estate continues to grow, the competition for single family homes also increases. Monica and Denny believe that prices will continue to rise, causing a busy Spring 2021. Luxury communities like Anmore will start to see more activity and eventual price increases.
Do you want to learn more about real estate in this area? Visit the G+D Port Moody Realtors page for all the inside information on one of our favourite cities in the province!