Nanaimo Real Estate Blog
WHAT HAS INFLUENCED THE REAL ESTATE MARKET IN NANAIMO FOR 2010? Several factors have shaped the real estate market in Nanaimo for 2010. Before I discuss these in detail, I wanted to share a bit of my own personal experience in real estate. When I was buying my first home, I looked for a home in a good area that was LESS than the amount I had been pre-qualified for by my lender, but needed a bit of TLC. I thought that I could add value through a bit of "sweat equity" (otherwise referred to as "elbow grease"). I bought it and fixed it up over time and resold it, and then used the money I made to purchase another home which I then fixed up, and in time, sold. I was able to use this process to gain more equity in each home that I bought, until I was able to purchase a really nice home with a healthy down payment and the "sweat equity" (doing the work myself). The funny thing is that the nice home that I ended up with was the same sized mortgage as my first "fixer upper" home! The lesson that I learned was that it is so important to add equity, but not accumulate debt. Many of the same issues that I faced many years ago still exist for buyers of real estate today. The real estate market is (and probably always will be) cyclical - meaning that it goes in cycles, yet increases overall in the long-term. We have seen a slight decrease in active buyers since July as many are "sitting back" as they feel that the market will burst and prices will drop by as much as 20%. Their information is garnered from the media and the 20 second "news clips" about the real estate market in Vancouver (which is vastly different than Nanaimo and the balance of the Island). However, it is often times such as the market now, that is ideal for buyers to negotiate excellent deals with motivated sellers, since often times, those same sellers will go on to purchase another property that they can negotiate a strong offer on as well. This was also the same situation in 2008 and as we know, our real estate market recovered very quickly and housing prices dropped only 3% at its worst. However, as Warren Buffet has always maintained "be fearful when others are greedy, and be greedy when others are fearful". We have seen many of our clients purchase properties at exceptional prices and seen a very healthy profit when selling, even during this more balanced market. It is fair to say that a good, quality product will always sell at a fair price, and the experience of your Realtor can go a long way in helping you achieve a stronger investment (whether it is your home or rental property) because of this expertise. With over 30 years in real estate, I can truly say that I have seen the many cycles of the market and have worked with many of the same clients throughout these decades. Even though mortgage rates did creep up slightly in the second quarter of 2010, they remained low in a historical perspective. The second factor has been an aging population. While this may not seem as important as the job forecast, it is imperative to the real estate balance in Nanaimo. Many retirees bring financial resources obtained elsewhere into our region, and one of the areas they spend those resources is on real estate. These retirees often have taken full advantage of the strong sales prices, and used the proceeds from the healthy sale price of their family home to buy a home or condo in Nanaimo. One direction that some retirees have taken is to acquire a secondary home for investment purposes, and generating a personal pension plan for themselves. One way that they have been able to do this is by leveraging the equity in their existing home to use as the down payment, helping finance the purchase of the second home. We have also seen the move towards multi-family developments, that allows first-time buyers and those wanting to downsize an opportunity to purchase a home without the hassles or additional costs of maintenance and upkeep. The slight downward shift in new multi-family development sales has been seen since July 1st, when the HST was implemented and affected the price for a new home, condo or townhome. WARNING TO HEED IN REAL ESTATE. What can you to protect your real estate investment? Nanaimo offers a diverse employment sector, easy access to main cities (such as Victoria and Vancouver) and amenities suited for retirees and soon to be retirees. Because of this, Nanaimo remains an excellent location for buying an investing in. When clients are looking to get into the real estate market, I caution them to seek mortgage advice from a trusted professional. Be wary of "interest only payments" or ads proclaiming "100% financing options" as they may have hidden costs that do not insulate you from any minor change in market trends. Make sure you are comfortable with your payments and the length and terms of your mortgage. If you are buying your first residence and you are 45 years old, is it reasonable to want to have a long-term mortgage for perhaps 35 years since you would be 80 years old by the time you are mortgage-free? A good mortgage broker can help you make educated decisions. I can provide you with a list of proven professionals with excellent track records for our clients. My advice whether it is for your principal residence or an investment property is to "get it paid off as soon as possible" as life is a lot less stressful for people with less debt. SELLING? If you are interested in selling your home or property, please feel free to contact me to get a FREE market evaluation of your home and learn the current value of it in today's market. This is completely at NO COST to you and you are under NO OBLIGATION to list your home. However, like any investment, it is wise to know the value of your home so that you can make informed decisions when making any changes to your investment plan or portfolio. BUYING? If you are interested in buying or investing in real estate, view some of my featured listings on my website at www.mmshomes.com . Feel free to call me anytime at 758-7653 or toll-free at 1-800-779-4966. I look forward to hearing from you. Best Regards,Brian* & Myles McCulloughFEATURED HOME OF THE WEEK: 501 Otter Place - $339,900THIS MAGNIFICENT VIEW home offers the luxury & elegance one would expect upon arrival. Located in Long Lake Heights with amazing views extending from Newcastle Island to glass calm Long Lake to spectacular snow - capped coastal mountains, this open floor plan is perfect for entertaining. Views are simply spectacular & there is no yard maintenance to concern yourself with. With privacy guaranteed by large mature trees & cul de sac location, outdoor living (including spacious sun deck for BBQ's) blends with indoor living to create perfect atmosphere. The kitchen is sure to suit the gourmet chef with an abundance of cabinetry & eating area. The home's oversized picturesque windows in main living areas & dramatic master suite on main level with double closets were designed to maximize views from almost every room in the home. The master bath features large shower/tub combination & neutral decor throughout. Downstairs, 2 guest bedrooms & rec room ensure private enjoyment. *Personal Real Estate Corporation
Brian & Myles McCullough have built their real estate business on the simple principle that "business is nothing without client trust and respect". Since 1979, Brian has helped thousands of home buyers, home sellers, investors and businesses achieve their real estate goals. His commitment to providing unparalleled customer service, leading edge marketing approaches, expertise in commercial and residential development sales, and skilled contract negotiations is unrivaled.