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Hot real estate market hits Williams Lake

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Talk to realtors in Williams Lake and they will say they have been busy.

“It’s nuts,” said Anita Crosina, who has been in the Williams Lake real estate business for more than 40 years. “I’m going to say it’s been like that for a year or more.”

She said she is not exactly sure why the industry is so busy, except that it is almost impossible to find a rental unit in Williams Lake and there is not a lot of residential building going on.

Properties are selling quickly and if clients are working with a realtor who is keeping an eye out for them and the right listing comes up it is gone in a day or two, Crosina added.

“Of course realtors have access to the listings before the general public does, so if you have got a realtor working for you, you probably have a better chance of getting something than if you are working on your own or jumping from realtor to realtor.”

Clients will get better service if they deal with one realtor, she added.

Susan Colgate has been a local realtor for 13 years and said Williams Lake’s market has always been consistent, but she is seeing more buyers relocating to the Cariboo from the Lower Mainland and other areas.

Rural sales are definitely up and showing stronger numbers, she added.

“There have been some dips, but a lot of good consistent increases, and the other thing that helps is that interest rates are super low and it’s a good time for people to be making changes if they want to.”

Referencing July numbers from the Northern BC Real Estate Board she said average house selling prices are up by 13.4 per cent in July compared to the previous year.

 

The average home price has gone from $292,000 in 2018 to $347,000 in 2020.

With the COVID-19 pandemic, people are staying more local and reinvesting in their communities, she added, noting there are more people doing repairs and updates to their homes as well.

“Williams Lake is an amazing community and a great place to raise a family, and the secret is getting out,” Colgate said.

“I think a lot of people, maybe from the Coast and other areas, are rethinking living in a townhouse or condo when they could be raising their children on some property.”

The initial shut down at the beginning of the COVID-19 pandemic did have an impact on the real estate industry, said Tanya Rankin, noting as time went on and Williams Lake slowly opened up, a pent-up buyer demand for housing took on a life of its own.

“It has condensed an active spring selling market to a very condensed seasonal market, meaning you’ve got this real offset of supply and demand. There are far more buyers than sellers, creating a very strong sellers’ market.”

While sellers might want to wait until a safer time to buy, buyers are wanting to have a safe place to live, making for an ‘odd’ market, she added.

A realtor for 30 years, with a small break when her children were young, she described the present market as ‘unprecedented’ and very stressful for realtors.

“If you love what you do, the stress that goes along with it for your buyers and sellers is extremely difficult on them and when you care for people, it affects you.”

For example, she said, everything goes into multiple offers, there is always someone furious at a realtor, or disappointed if they don’t get a home they wanted.

“If you are the listing agent, they cannot help but think they should have had another chance. It’s one of those markets where someone is going to be very disappointed and someone else is going to be very happy.”

Echoing Colgate, Rankin said the prices have been increasing and she attributed that to a lack of supply, and said the COVID-19 pandemic has really compounded it.

The market is also a touch fickle, she said.

“You’ll list something or see something another agent is listing and think ‘oh my gosh that is going to sell immediately,’ and then it hasn’t even had an offer. That makes no sense, but I think that also could just be like anything in the summer. When the weather turns nice, everyone puts their house buying on hold and goes to the lake.”

Pauline Smith, owner/realtor with RE/MAX Williams Lake Realty, agrees any properties that are priced right are getting accepted offers within a few days, and that 2020 is likely even busier than last year due to the market delay caused by COVID-19.

“We’re calling August the new June,” said Smith, noting while prices are going up the cost of owning a home in Williams Lake is still affordable compared to other southern cities in B.C.

She believes the Cariboo is especially attractive because of that affordability factor, coupled with its nearby lakes, rivers, biking trails and new highway improvements which makes the trip to the coast quicker and easier. Of course, the people here are friendly too, she added.

“Williams Lake is a great place to raise a family.”

Her advice to anyone considering buying a home is to have your financing in place and be ready to make a fair, solid offer.

“If you don’t have that in place in can be heartbreaking for both the buyer and the seller.”

Smith, Crosina, Colgate and Rankin said they are seeing a strong mix when it comes to who is buying homes.

Some are from the Lower Mainland, others are from Alberta or back East who may have always dreamed of living in B.C.

Twenty years ago it was unusual to have someone call and say they were thinking of retiring in Williams Lake, whereas now that is not that uncommon.

Locals also make up a good number of the buyers, whether it’s the younger generation being able to buy their first home, or someone wanting to move up or into a different area.

Similar to other sectors, responding to the COVID-19 pandemic, measures are in place to practice social distancing and when going into view a home, realtors are asked to wear a mask, pack hand sanitizer and use it, and encourage clients to do the same.

 

Before the pandemic, realtors may have drove to a house showing with a client, but now everyone is going in separate vehicles.

Crosina said she does worry about interest rates going up in the future for young people who have purchased higher priced homes.

“The worst I’ve seen it was in 1982 when the foreclosures were ridiculous because interest rates went up to 22 per cent in some cases,” she recalled. “Rates will have to go up sooner or later. Consistently for years and years they were at eight per cent.”


Source:– Williams Lake Tribune 

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What's unique to this hardened real estate insurance market – Canadian Underwriter

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At the same time insurers have a reduced appetite to take on real estate risks, real estate developers during a pandemic-induced economic recession have an aversion to investing a lot of money into risk-reduction measures. These twin dynamics are a recipe for a long and arduous hard market in real estate insurance lines, according to a real estate insurance expert.

“What we’re facing right now is a circumstance where there is less and less appetite to take on the broader and wider risk,” said Jeff Charles, managing director for Gallagher. “That’s the whole supply-and-demand issue that the market is facing. And then there is the multi-year accumulation of attritional losses compounded by cat losses. And it’s a zero per cent interest rate environment. The insurance companies are on their heels with where they can be profitable, and that is driving the focus on their underwriting.”

Carriers are looking for more information about risks associated with where developers are building, primarily in areas with a high flood risk, Charles observed. Absent the right amount of information, it’s easier for companies to say they’re going to pass on an application. “’It doesn’t suit our profile and we don’t have enough information,’” said Charles, reciting what brokers are hearing insurance companies say. “That’s becoming more common and, arguably, appropriate.”

iStock.com/BeeBright

Broker conversations with clients are now shifting, Charles said. Clients will be asked if they’re willing to fork over the money and take on the increased costs to transfer the risks to insurance. Or they have the option to do something different, like take that money and invest in actions to mitigate risks and be pro-active.

There’s no straightforward path for clients to take in this environment, Charles told Canadian Underwriter. He finds the market “fascinating,” since one developer will see things differently from another.

When asked if the aversion to investing in risk mitigation would mean a day of reckoning was coming, Charles said it’s already here.

“The reckoning is starting,” he said. “But what’s particularly unique about this [hardening market in real estate] is that as long as we continue to operate in this low interest rate environment, and insurers are restricted in how they generate their income — they’re playing with one arm tied behind their back with the investment returns — that’s going to leave a continued focus on underwriting profitability and potential reliance on generating the majority of their returns to shareholders from their underwriting profitability.”

Related: COVID-19 compounds ongoing real estate insurance challenges

In other words, insurers have to make better decisions about the risks to which they are deploying capacity, and how much premium they’re going to charge. “We’ve started to see price move and we’re starting to see limitations on terms and conditions,” Charles said.

This is not just a Canada-only problem, he pointed out. The same issues are playing out around the world. Compared to other countries, Canadian flood risk may be small potatoes for global insurers who operate in Canada.

“What’s missing from this conversation is the reinsurance conversation,” Charles said. “What kind of price increases is the insurance company seeing. And what’s the driving impact to the end-user of that cost of reinsurance? That’s where you see…the tolerance to take on additional water issues is being tightened fastest.”

Feature image by iStock.com/Warchi

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Canadian real estate shares drop on Ontario move to freeze rents – BNN

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Shares of Canadian apartment companies dropped after the country’s largest province said it plans to freeze residential rents in 2021.

New rules announced Thursday apply to the vast majority of rental units in Ontario. Without the change, owners of rent-controlled apartments, condos and houses would have been able to boost rents by 1.5 per cent next year. The legislation also extends a ban on evictions of small businesses.

Real estate investment trusts with rental properties in Ontario had been trading higher before the announcement. Ottawa-based Minto Apartment REIT fell to C$17.96 as of 2:37 p.m. Toronto time, down 3.2 per cent from its intraday high, while InterRent REIT sagged 1.8 per cent from its earlier high.

Canadian Apartment Properties REIT, the country’s second-largest real estate trust by market value, initially fell more than 1 per cent on the announcement before recovering. The REITs didn’t immediately provide comment on the rule change.

“The last thing I want any family to worry about right now is whether or not they can afford to stay in their home,” Ontario Premier Doug Ford said at a news conference in Toronto.

Ford’s government also imposed new limits on social gatherings in Toronto, Ottawa and Peel, where COVID-19 cases have been rising. Outdoor gatherings are now restricted to 25 people, down from 100, and indoor gatherings are limited to 10, down from 50. The rules are primarily meant to crack down on parties and don’t apply to restaurants, movie theaters and other businesses operating with less strict capacity limits.

Ontario reported 293 new cases of Covid-19 in the past day, 21% higher than the average of the previous seven days.

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Canadian Real Estate: More Buyer Opportunity in the Calgary Real Estate Market – RE/MAX News

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The province of Alberta has faced a myriad of challenges in the aftermath of the coronavirus pandemic. In addition to a global economic downturn amid the COVID-19 public health crisis, the price of crude oil crashed to levels never seen before. It was a double whammy for the western province that affected every industry throughout the region, including the Calgary real estate market.

Are conditions beginning to normalise? The energy sector has rallied, with crude prices advancing to their best levels since March. The broader economy has rebounded as the gross domestic product (GDP) surged 6.5 per cent in June, up from the 4.8 per cent increase in May. Much of the housing market has returned to pre-pandemic levels.

Is Calgary improving, too? The real estate market is beginning to see some improvements. According to the Calgary Real Estate Board (CREB), sales of single-family and townhomes recorded year-over-year gains in August. Last month, 992 single-family homes were sold, up from 945 at the same time a year ago. Townhome transactions totaled 216 in August, up from 194 in August 2019. Overall, August 2020 sales were about on par with August 2019 sales: 1,573 to 1,580.

The residential benchmark price was $420,800, down one per cent from last year.

But while Calgary faced a somewhat different situation than other municipalities, the city is seeing a resurgence, says CREB® chief economist Ann-Marie Lurie.

“Recent national reports have shown a bounce back to new record levels over the past several months. Calgary has seen improvements over the lows recorded during the lockdowns but is far from record levels,” said Lurie in a news release. “The situation in Calgary has been slightly different as the job losses were not isolated to sectors that are typically associated with rental demand. We have started to see improvements in the job market compared to previous months as some jobs start to return.”

Does this represent a buying opportunity in the Calgary real estate market?

Canadian Real Estate: More Buyer Opportunity in the Calgary Real Estate Market

According to the latest Statistics Canada data, Calgary’s unemployment rate was the highest in the country for the second consecutive month in August. But the good news is that nearly 27,000 jobs were added last month, and the jobless rate slipped one percentage point to 11.8 per cent. The recent figures suggest that the city is on a slow but steady recovery.

What’s more, there has been increasing consternation surrounding the sight of empty commercial space and dark tower floors in Calgary and throughout the rest of the province. Although some real estate agents anticipate this to be the case for the next little while, they are not convinced that this will be the new norm.

That said, until the employment situation returns to pre-pandemic levels and the lights are turned back on within commercial premises, this could trigger a buying opportunity in the housing market since prices still sit one per cent below what they were a year ago.

CREB notes that new listings are have started to ease over the last month, which has diminished existing supply. At the same time, says the CREB chief economist, “the pace of year-over-year decline has eased as inventory levels have trended up relative to levels recorded a few months ago.” Put simply, the housing supply is picking up, and this could put downward pressure on prices if demand cannot keep up.

But the window of opportunity might be brief because Calgary is starting to see tighter market conditions in individual pockets of the real estate market. This is especially true when you consider low interest rates will inevitably draw buyers from the sidelines.

Earlier this year, the Bank of Canada (BoC) slashed the benchmark interest rate by 150 basis points to around 0.25 per cent. Plus, the central bank reduced the benchmark five-year mortgage for the third time this year to 4.79 per cent. So, whether you are a real estate investor or a homebuyer, now would be the best opportunity to take advantage of the modest downturn in Calgary real estate.

The Role of Calgary’s Diversification in its Recovery

Calgary has become diversified in recent years, relying on more than just energy to sustain the local economy. Financial services, manufacturing, aerospace, retail, and film and television are just some of the industries that have become integral to Canada’s fourth-largest city. This diversification strategy allowed the city to flourish before the pandemic, elevating the Calgary real estate market. The pandemic affected every sector, so it was no surprise that the rest of the municipal economy suffered. Now that the recovery is underway, the housing market is looking positive.

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