3 HUGE opportunities in the real estate market in 2022 + the stats #DrinksWithDarin Sept 2022

So it's time for this month's episode of #DrinksWithDarin. We're gonna be getting into this while we work on this blog post, but you definitely want to hang around because today's post is all about the three biggest opportunities that I see happening in the marketplace right now. So if you're someone who's considering doing something or you're just curious about generally what's going on, this is definitely a post for you. You want to hang on, read all of this, and get the stats that you're used to getting. Do you have a drink with me?

 Let's go.

So I wanted to give you a post that was all about the opportunities that are out there in the marketplace right now. And there is a ton of opportunities. If you're a news junkie and you watch the news and read the headlines and stuff like that, it can be pretty scary out there. There's a lot to kind of decipher and what I want to do is actually in my YouTube videos. If you are a subscriber of our YouTube channel, we produce probably about two videos per week trying to give you fact driven and data driven information.

If you're really curious about what's going on, this is a great place to start and great place to go. And we've done some really great videos as of late that I think you'd probably really enjoy. People seem to find what they're looking for and we've kind of got videos on both sides of the fence. If you're a doom and gloom type person and you think the world is absolutely on fire, we've got recent videos that you might really enjoy. Things like for those of you in a fixed payment, variable rate mortgage, you need to be aware of something called a trigger rate.

We just did a great video on that. We also just produced a really fact driven video on where is the bottom of what is happening and what's kind of going on. Of course, there are those of you that are more optimistic about what's going on. You have strong belief in the real estate system and owning a house, and we've got videos for people like you as well. There's a really great video we just did on the very real problem of the housing shortage that still exists in our marketplace and a lot of fact and data behind that one.

There was also a really fun one that we did about shaming people that bought during the peak of the market. If you thought it was cheaper to buy a home today than it was at the peak of the market, you're probably actually mistaken. So that's a really interesting video for you to check out as well. So there you go. You've got lots of stuff to go check out if you've got the time.

We're going to get into the stats just after today, but I want to talk about three opportunities that are very real in this market. We've all, of course, heard the quote by Warren Buffett, be fearful when others are greedy, and be greedy when others are fearful. That just means that there's lots of opportunity in this marketplace right now. Here's opportunity number one that you might have not considered, and that is becoming a move up buyer. What a move up buyer is, is somebody that maybe has something that is a little bit smaller than what they'd like to live in or something that's a little less expensive and they'd like to move into maybe a more luxurious, bigger type home that costs more money.

A market that has been in a decline is a fabulous market for a move up buyer. And here's the reason you actually save so much more money by doing this in a marketplace like this, because you're buying a more expensive property, which is likely having faster declines in value than what you're experiencing with your own. I want to give you an example. The average or benchmark price of a Surrey home is down almost $239,000 according to the Fraser Valley Board's Home Price Index. And this is since the peak of the market in about February of March.

Now, a townhome over the same time frame is actually down about $130,000. This is a big difference. And for somebody wanting to move from a townhome into a detached home, they are actually saving almost $110,000 by doing it in a market like this. The other benefit, of course, is not only are you actually saving money, but you also get to have full conditions on your offer at this point. And you've also got lots to choose from and lots to look at without a lot of competition from other buyers.

So a much better market to be a move up buyer in. The second opportunity that I wanted to bring up is I get phone calls from you guys all the time about getting into the investment game. Should you start getting into investment condominiums, should you start buying townhomes or detached homes. You want rental property and you're very excited about it, which is awesome. Obviously, you need to get qualified by your mortgage professional, see if that's even going to work for you.

But pending it does, this is a fantastic market to start considering stuff like that. There is bundles and oodles and tons. Put in whatever word you want here. But there is tons of condominiums and townhome projects that are going to be completing either later this year or in 2023 or in 2024. And if the prices don't start to recover based on where they are today, when those property or projects start to complete, there could be a lot of people in trouble.

And here's the reason why. A lot of those properties were bought up by so called investors. Now, when we think of investor, we think of someone who's on their game and knows exactly what they're doing and they know the ins and outs of what can happen in the market. But that's not necessarily the case. The amount of phone calls that I feel.

Especially in a busy market. About people who think they can just put down a down payment on buying a new project property and wait it out and then assign that property before it completes without ever having to worry about even qualifying or being able to qualify for a mortgage on that property is insane and it's a little bit crazy that they might even do that. The website Better Dwelling posted some interesting information back in January of this year about the amount of properties that were owned by investors in DC and Vancouver. As an example, in the year 2020, they estimated that nearly 1/4 of all properties in Vancouver were owned by investors. For any properties that are considered newly built, that number jumped to 44%.

In my travels, I have met many people that have bought multiple new construction units that probably have no chance of ever being able to complete on them. And they've got a ton of them that are going to be coming due within the next year. Not only are they going to have to sell these properties likely at a loss from what they paid towards the peak of the market, but if the conditions prove to be difficult at that time, they're going to have to price them to sell because the alternative of losing a deposit of approximately 15% per unit as an example, that's pretty substantial. Also, we need to remember that the mortgage rates at the time, especially over the last two years, were incredibly low due to the COVID-19 pandemic and they are substantially higher today than they were at those times. Currently today almost 3% higher, which means they probably are lucky to qualify for even one of those, let alone multiple.

The last opportunity I wanted to jump into is first time home buyers. So if you're watching this, you are probably a client of mine. But if you're a first time home buyer watching this, or maybe someone in your family, or you have a friend that's looking at buying their first home, this is a great opportunity to get into the market. And why do I say that? Well, for the first time in quite a while, you have an opportunity to really capitalize on the fear that's going on in the marketplace.

Whether that fear is well placed or not, you do have a great opportunity to negotiate an incredible deal on whatever you're looking to buy. We'd all ideally like to time the bottom of this market, and if you are going to be buying something, you want to buy it at the absolute lowest, there's no doubt about that. However, the problem is timing. That the only way to really know when the bottom of the market is or to buy during the bottom of the market is to either get lucky or to buy after it's already started moving up and all the data that that is happening has been released. Interestingly enough, over the month of last month we saw some markets that started pushing the amount of sales that were happening versus the amount of inventory that was available in a seller's market territory.

What this means is if we start living in the seller's market territory for prolonged periods of time that means the prices are going to start increasing again. In fact townhomes in the Fraser Valley jumped from 16.5% to 24.8% in just one month. That means one out of every four townhomes that came to the market last month was selling. The longer that market stays with those sorts of numbers or even gets more aggressive the more it's going to have an impact on pushing prices upwards. So there you go.

Those are the three opportunities that I see in the marketplace right now. Now let's jump into the stats because I'm saying based on the last opportunity that I just said we've actually seen some really good numbers in the last month. We're going to give you the stats over the last three months though as we've normally been doing because one month is way too short term to be giving those to you. So here we go with three month and twelve month changes in the benchmark prices of properties in the Fraser Valley starting with condominiums. We saw condominiums come down in the last three months about -6.8% from where they were prior.

The good news is though is those condominiums are still up 18.4% year over year. Townhomes come in with a somewhat similar number at -8.4% over the last three months. However over the last twelve months you are still up a whopping 16.1% year over year. Detached homes which have probably been impacted the most since these changes have come into play are down about -11.6% in the last three months. Year over year however, they're still up 9.8%.

So the market is interesting right now. Who knows what's going to happen, who knows how what's going on is going to play out. But again if you're a subscriber and a regular watcher of our YouTube channel you're going to get some really good information on there that's going to help you make your plans moving forward. Now speaking of making plans moving forward, if you are someone reading this post that's looking to be a move up buyer to get into that bigger more expensive home, or if you're looking at someone that's considering selling their home or you're a first time home buyer, don't forget to check out the link below where you can book a time directly with me. You can put it right in my calendar and we'll help you with whatever your needs are whether you are buying or selling and giving the information to be successful.

Hey look everyone, I know the market is a little topsy turvy right now. I mean it's been that way for the last two to three years. But this is all to give you better information, to help you make greater eight decisions when it comes to probably your most major investment, which is, of course, your home. I want to thank you for watching, thank you for subscribing, and we'll look forward to seeing you next month. Cheers.

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Darin Germyn PREC* & Adam Howsam
Macdonald Realty LTD | 604-542-2444 |
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