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How to keep a cool head in a declining market | #DrinksWithDarin July 2022

Hey, everybody. I want to welcome you back to the latest episode of #DrinksWithDarin. It is July, you're hopefully out enjoying this beautiful weather. I am shooting this video from my front porch here to send you the most, latest and greatest information about what is going on in the realtor estate market locally, nationally, what's happening with rates.

You're going to hear all this sort of stuff going on. So I want to make sure that my clientele, the people that help take care of me, know exactly what's going on because there is certainly a lot right now.

Hey, what's going on everybody? It's #DrinksWithDarin. We are back. It is July. It is beautiful outside.

We're writing this blog from my front porch because it's so nice outside. And why not? Today's post is going to be all about not freaking out about what is going on in the environment around us. You're going to hear a lot in the media. You're going to have a lot of opinions flying at you about what's happening with the real estate market. 

So this is where you can get your information directly from the source. You know exactly what's going on and it may help you make plans in the future moving forward, whether you are thinking of buying, selling, or maybe you have to renegotiate a mortgage in the next little while. So if that all sounds good, let's get into it. For those of you that this is your first time seeing a #DrinksWithDarin video, this is where I get into sit and have a beer with the people that I love to chat real estate with you guys, let you know exactly what's going on and everything real estate related and also talk about the market stats. It wouldn't be #DrinksWithDarin without featuring one of our premium beers.

And we have got some beers on the way for our great clients where they're actually going to get to sample it. But until that time, this is actually a test version of a wheat mango beer that is so good. I've already been into it. But this is what we're going to be enjoying today on #DrinksWithDarin. So as we're getting into this, one of the things I wanted to start this post off by talking about is to not freak out about what's happening right now.

The day that I'm writing this, rather, is the day that the bank of Canada announced a 1% rate increase in its overnight lending rate, which is fairly significant. That's really the first time that that has happened since 1998. Cheers. Now that is a good beer. That is a really good beer. I'm excited for you guys to get to try this.

So it was a big day and you're going to hear all about it on the news tonight. This post won't come out on the same day. Obviously. But you're going to hear all about this in the media for the next foreseeable bit and you're going to hear lots of opinions on people saying that the real estate market is tanking and crashing and all the fun stuff that people love to say about the Canadian real estate market. The lower Mainland real estate market. And just real estate in general. A few things that I want to give you in today's video are just this one thing to consider is everyone thinks that the rates are crazy high and just abnormally high.

And the biggest point I want to make is back in one of our real estate booms of 2006 to 2008, the rates actually today are still significantly lower than they were during one of these boom periods. Now, albeit prices were lower at that time, back in 2006 to 2008, everything still felt very expensive and the rates were significantly higher than they are now. So we still had an incredibly productive real estate market, even when rates were higher than where they are today. Before anybody starts getting concerned about what's going on, I want to remind everybody out there that the fundamentals to a really healthy real estate ecosystem are still there. I did a video on this months back and I'm going to link it in the description here so you can check it out.

But we have things coming to Canada like record immigration. The amount of people coming into BC or the Lower Mainland in general is astronomical. And whether they rent or buy, those people all need a place to sleep. And this is all in the middle of a housing shortage. We were talking about housing shortage months and months ago because of how crazy the market was.

And that was part of the reason it got so crazy. That didn't just go away overnight because the sentiment to the market started to change and interest rates started to change. There's still lots of people out there that need to buy homes or just need to live somewhere. There's some other factors out there as well, but one of the other ones is obviously the government can't completely crater the economy by continuously ratcheting up the interest rates. So while they have to deal with inflation, there does have to be a balance there somewhere and they are going to find it, they just haven't found it yet.

One thing that's important to note is this is really just a season or a chapter in the overall story of Vancouver or Lower Mainland or Surrey BC real estate, regardless of where you live, it can't always be all roses and it can't always continuously go up. Otherwise that would be incredibly unhealthy, which it was incredibly unhealthy just months ago. It really is good and while knowing that this is just a season, it will come and it will go. So the real estate market has always, over history, come back even bigger, better and stronger than where it left off. While we don't know how long that might be until we see that we know that has happened again and again and again in the past.

It has happened every single time in history. It's also worth mentioning, too, you've got to be very careful about statistics. I'm going to give you some statistics today as an example about what's going on with detached homes, townhomes condominiums, all in the Fraser Valley. Well, that's all good, and it's here to try and help you guys and help serve you. There's no such thing as a Fraser Valley home.

They don't all move in. Congruency. There is such thing as a detached home in the sunnyside area of South Surrey, which is where I live. A statistic on that and how the market is performing is much more relevant to me than the average home in the Fraser Valley. So the point is, whenever you hear anything about the Canadian housing market or just a general stat in general, you need to ask yourself, how does this really apply to my current situation? Do I have to sell now? Do I have to renew my mortgage now?

Do I live in this specific area? Is this talking about the type of home that I have? How relevant is that information to you and anybody watching this that the client of mine knows? Anytime you guys need a stat specific to your neighborhood or even a neighborhood evaluation or a market evaluation of your home to give you a good idea of what it's worth in today's environment, we're always happy to do that for you. For any of my clients watching, we've got a link below where at any time you can request a home equity health check from us and we'll let you know exactly what's going on with your specific home type in your neighborhood.

You get postcards in the mail for this every six months to let us know if you'd like one, and we're happy to do that at any time. So please make use of that if you're watching this video and interested. And for those of you watching this video that aren't one of our clients, even though you're not an existing client or a previous client, that doesn't mean you're not important to us. And there is a link below where you can schedule time in my calendar to either talk about buying a home or selling a home directly with me. And we'll give the information you need to help you be successful.

So hopefully that helps everybody out there trying to navigate what's going on right now, because I know some people are fearful and there's really nothing to be scared of. You're not selling your house today, and if you are, you're going to buy your home at a lower value than what you would have paid for it months ago. So it's all a moot point, but just because your home was up in price, you're still way up in price compared to the start of the pandemic. You're up way in price from the start of 2021. And for almost everybody watching this video, your home is worth a hell of a lot more than you paid for it.

So regardless of the turbulence happening right now, don't let it scare you too much. Now, a piece of advice for anybody watching this is if your mortgage is coming up for renewal, you want to start planning that early. So you get some very good advice from your mortgage provider if you are starting to find that monthly payments are starting to get a little too high for you. Also, if your mortgage is due for renewal and you're worried about the current interest rate, there is planning strategies that Morris Professionals can offer you. So just get that conversation started earlier than later.

And sometimes, unfortunately, there might be some of us watching this video that maybe bid off a little more than we can chew. Meaning when their mortgage is up for renewal, whether it be in six months or a year from now, they're going to find the payments under the new rates way too high for them and it's going to be really hard to keep up. I get it. For anybody that might be in that boat as well, bring us into the conversation and we are more than happy to give you all the information you need to help you make good decisions. Whether you choose to keep your home, whether you choose to upgrade downgrade or whatever you choose to do, we want to make sure that you're comfortable in wherever it is that you call home.

All right, so I want to get into the stats now because it's interesting to see where the stats have taken us. Obviously, I think everyone is probably fairly aware that sales are quite a bit down from where they were year over year. They're down a ton. But I got a caveat that because they're down from a crazy, crazy market that was historically high, the highest ever, in fact. Take it for what it is when I say sales in the Fraser Valley are down just over 52%, year over year, month over month, though, and this is from May to June because we're in July now, but month over month are down about 5.8%, which is a little more comfortable and that's a lot more normal of a summer market.

To be honest. The market usually does cool in the summer. We have had such terrible weather this year up until about a week or two ago that how can you blame anybody if they want to go do something else other than look at real estate if they don't have to? So for all product types, I got good news and I got bad news in the last few months. Let's start with detached homes.

As an example, in the last three months, detached homes are down roughly about 7% in the Fraser Valley. In the last year though, they are up about 22%, which is completely wild and awesome. Townhomes are very similar, they're down about 3.7% in the last three months. So we're starting to see this trend across all different product types now, not specific to just one product type. Year over year, however, townhomes are up 26.6% in the Fraser Valley, which is a great increase for anybody that's on their home for quite some time.

Condos, which started to see the movement a little bit later in terms of price growth and then in price decline, are down about 3% in the last three months and in the last year they're up 25.9%. So there you have it everybody. Just remember that what's going on is just a season and just a chapter in everything that is in the book of Vancouver, Surrey, Langley, Delta, White Rock Real Estate. If you're not going anywhere, it doesn't matter if you're selling to go buy again. It doesn't matter if you got a mortgage renewal coming up in the next short while, whether it's a year, two years, six months, give your mortgage broker a call early, let them know what's going on.

If you need our help, give us a call early, bring us into the conversation, let us help you where we can as well. Make sure you're set up for success. We want all of you to have a very prosperous summer and I hope everybody is healthy, happy and enjoying everything that is going on right now outside in your house. Thanks for reading the #DrinksWithDarin posts and we'll see you on the next next one. Bye everybody.

Video- Think the BC housing market will implode due to Bank of Canada's rate hike? | 6 reasons why it won't
https://www.youtube.com/watch?v=Sgz8sGWMyD4

Watch the full video here: https://youtu.be/e770Gi7X0qg

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https://germyn.ca/fallingmarket.html

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The Germyn Group
Darin Germyn PREC* & Adam Howsam
Macdonald Realty LTD
homes@germyn.ca | 604-542-2444 | germyn.ca
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