Mystical Statistical!

After my last column I exchanged a few emails with a reader who was querying the most recent board stats. I had heard rumours that the sky is falling (again!) in the Okanagan and look at the Board stats. On reviewing the stats, I did not see anything else other than an affordability issue and lack of inventory in the lower levels of the market place (sub $400,000) and above that, I saw an active market that was running approximately 12% -15% up on last ears comparable numbers in most of the pricing categories. Well thanks to Dan who reads the column regularly and who did a fantastic amount of research and number crunching, he came to the same opinion also. Thank you Dan!

It remains to be seen what will happen for the rest of the year, but when oil is running at $120-$130 per barrel and natural gas is now trading in the $11 range, one might expect that Alberta’s resource heavy market place might be purchasing some more real estate this year, despite the state of the housing market in some parts of Alberta.

So far we are seeing some typical spring trends with waterfront buyers starting to show up on weekends and by all accounts, the slightly increased amount of listed inventory is still not satisfying the buyers tastes very well which will buoy prices in this slightly sluggish market.

Recreational Property Financing

Two notable areas of change in the finance markets are development project financing and recreational real estate financing. In many instances, complicated title arrangements ensure that a main street bank may shy away from financing a recreational purchase. This alone is very good reason for developers to work with realtors prior to the launch of their product since the inclusions in the disclosure statement can be restrictions to retail financing. Whilst many recreational purchases are made with existing home equity, some purchasers prefer to actually mortgage their property. Recently we have been referring some buyers to a unique product that allows purchasers to access self directed RRSP funds to acquire recreational property.

Several years ago, I wrote an article titled “FUN-vesting”. It was published in a journal called the Canadian Rockies Resort Forecast and it talked about the ability to buy recreational property using RRSP funds. At that point in time that was no easy feat for the developer with several layers of bureaucracy and legal filings required prior to sale and complications on the back end with bank financing!

Last year I had the pleasure of meeting the President of a fund that will organize the ability for you to move self directed RRSP funds into a bond that will then lend you the money for your purchase at a reasonable mortgage interest rate whilst also depositing a bond level of return into your RRSP account. Our clients have so far been very happy with the results and with the stock markets continuing to be as volatile as ever, it makes sense to many people to move their investment into real estate. Once the Harper government follows through on it’s commitment to remove any capital gains on real estate investments, you can expect this very popular product to really take off.

Feel free to contact us to find out more about this innovative product.

BCResortHomes is a Coldwell Banker Horizon Realty Team that routinely qualifies in the top 25 teams in Canada. This article can be used for other distribution services but must carry credit for BCResortHomes.com at the foot and if electronic, a hyperlink to www.BCResortHomes.com.

Is Kelowna the 13 most expensive real estate market in the world?

Like me, that is probably what you were left thinking after a recent news report. So much so, that time and time again in coffee shop discussions I have heard the statement “We are now the 13th most expensive city for housing in the world”. It sure left me confused, and it was interesting to see the reaction of people, which ranged from horror to glee that their houses might be worth so much on a global scale.

Since I have been touting the line that Kelowna offers some of the best value resort real estate in the world, I though it was time to go digging.

Firstly, whilst Kelowna is indeed a City and whilst the Economic Development Commission have done a fantastic job of creating economic diversity within the region, there is no doubt that Kelowna will transition into a full service resort region with strong retirement and pre-retirement demographics. Straight away, one of the first things that came to mind is why did we not consider resort markets in this comparison instead of major urban centres? Certainly, Kelowna cannot be considered a major urban centre although if you have lived here for your whole life, you may not be comfortable with the changes and size for the City today. Taking a comparison within a similar real estate market will give us a very different glimpse of the world. If we were to look at Whistler, Canmore, Telluride, Aspen, Palm Springs, Puerto Vallarta, Carmel, Cannes, Majorca and other world renowned resort destinations, there is no doubt at all that Kelowna is one of the least expensive regions to offer one of the most fantastic retirement lifestyles.

That thought made me realize that I should study the actual survey in more detail. Perhaps it was in fact categorizing us unnaturally, at least in my opinion. Then I started to think about international City’s, like Perth Australia, New York, London, Dublin, Paris, San Francisco, Los Angeles, San Diego. Just a short list of cities, that if I travel to, makes me think twice about moving there because of the cost of housing in the urban areas. What was I missing? In short, the detail behind the study!

The survey, The Demographia International Housing Affordability Survey actually defined it’s criteria as “ median house price divided by median household income to assess housing affordability”. Now I felt I was getting somewhere, because perhaps you, like me simply read (and heard on the radio!) “Kelowna ranked as Canada’s least affordable community”. That is not true, I just moved from Canmore Alberta and I have friends who live in Whistler… lets talk about affordability.

Clearly, with this data, the context of the report was very different to that portrayed in the headlines we all read. In relation to the average income in Kelowna, housing is less affordable. Does that mean we have the most expensive housing in Canada. NO!

It does indicate that most people moving here are less concerned about finding a job. That would match the demographic we have been talking about for a few years in our articles. It does mean that many people are making recreational property investments as we have been talking about for a few years. It also means that there is a challenge in inviting a labour pool to the community because of the relative affordability of Kelowna. That would be the reason that Mr. Robert Fine, from the Economic Development office, spends so much time on aircraft heading to other destinations and promoting Kelowna as a great place to live, work and set up business. Interestingly, those destinations are likely to have more expensive housing than Kelowna which is why we can say, on a global scale, Kelowna offers tremendous value to the property investor, retiree and pre-retiree and we don’t see that changing in the near term.

One good reason to work with a professional realtor is to have someone explain the ramifications of the statistics that can at first appear confusing or can be used by an overly aggressive media to create a headline that takes your breath away… it did mine!

Interestingly, in that same month as that report was released, the local real estate board issued a media release announcing continued growth in the real estate market in the month of January compared to the same month last year. What does the rest of the year hold… we’ll tell you more as we get into it.

Mark Jennings-Bates is a realtor with Coldwell Banker Horizon Realty and a resort development consultant for international resort projects. His website www.BCResortHomes.com allows visitors to sign up for eZines and market updates with accompanying analysis. Together with Sally Hollingsworth, Mark offers real estate advice and services to buyers and sellers in the Okanagan region of British Columbia. Reproduction of this article is allowed providing that credit is given to the author, Mark Jennings-Bates and an active hyper-link is created to www.bcresorthomes.com.

2008 Predictions

2008 Predictions

You have probably seen enough of them already, but I would be remiss if I did not add my thoughts to this column so that you can take all the information you have gathered and process it.

In a recent discussion with some other REALTORS® on a local volunteer Board, I was discussing the fact that my crystal ball seems a little foggy this year and that is not usually how I start the year off. It has been a more than interesting 2007 with all kinds of records broken for real estate transactions, interesting dynamics with the Canadian dollar strength, inflationary pressures induced by the energy sector causing rising mortgage rates that are now receding as we discover that the inflation may not in fact be a true hard core read on the strength of the economy,

So what do we have to look forward to in 2008? CMHC has told us to expect high single digit appreciation in the housing sector. As this applies to the whole of BC, what can we expect for the Okanagan? In my opinion, slightly better performance than that. We are still positioned in the market place to be dealing with inbound pre-retirement and retirement migration. Lots of people, lots of money and as of today, not a great selection of inventory. That simple equation will keep upward pressure on housing prices.

The change I believe will be in the aggressiveness of the buyers. I believe we will see some more caution applied to the real estate purchase. Buyers likely will shy away from multiple offer environments rather than be willing to push the envelope to get that dream home they desire. More caution is already being seen with the buyers in the market place today. Early reports indicate very busy REALTORS® with buyers holding back from making offers in great numbers, but that is a seasonal trend in the valley.

Notwithstanding, we have found ourselves very busy at this time of year and I suspect many offices are still seeing a high volume of transactions.

We predicted last year that developer sell-outs on first day will diminish and likely not be the sales process of choice. Of course, in any market place, the developer will weigh up the pent up demand for the type of product he is going to be selling. If the pent up demand is high enough, the program will see success. The public however is tiring of the inability to dispose of the asset after purchase.

Lets look at that last statement in more detail and it reflects exactly what we have been talking about for the past few years. The true market for real estate consists of end-users and renters, not investors who don’t have ample access to renters! Ozzie Jurock, the famed Vancouver real estate guru talks about defining what type of purchaser you are, shark, flipper or investor. The investor will hold property, knowing that it will cash flow and appreciate over time. The flipper wants, in and out, the shark trolls around courtrooms looking for great deals! What we experience to large degree is many clients who call themselves investors yet truly are flippers and they are being enticed in to projects in large numbers with a false promise of a fast exit. A quick scan of the MLS system will show vast quantities of brand new, unused inventory in buildings like Centuria, The Verve, Aria and others. There is no end user in a short time frame for this amount of inventory.

If you consider yourself a “flipper” to use Ozzie’s lingo, consider carefully what you are getting into and what predictions you can think about for disposition of the property. Today if you purchase in a 200 unit condo development, you may find there are 100 more people with your same appetite, leading to an overly competitive market on the back side of your investment!

Where is the upside for this year? We maintain, that it is an increase in branded tourism accommodation infrastructure such as Hyatt, Hilton, Sheraton, etc, all of whom will be looking closely at this market place. Coupled with the airport runway expansion, that will allow us to transition very nicely into a tourism market that brings international buyers to the area. Those buyers are conditioned to the values of recreational real estate globally, and everything we have to offer in the Okanagan competes very handsomely with any resort you can find overseas.

Overall, we expect a very positive 2008 with a little more sanity. If you are planning on selling a property this year, talk to your REALTOR ® about a marketing plan that can demonstrate the value of your purchase and be aware that our feeling is that buyers will be that little more cautious in their approach to making an offer.


Mark Jennings-Bates is a realtor with Coldwell Banker Horizon Realty and a resort development consultant for international resort projects. His website www.BCResortHomes.com allows visitors to sign up for eZines and market updates with accompanying analysis. Together with Sally Hollingsworth, Mark offers real estate advice and services to buyers and sellers in the Okanagan region of British Columbia.

Off-season recreational property purchase

Buying a recreational property in the off season

The demand for cottages has increased over the years, and what was once a relatively low cost alternative for a family getaway has now become a significant financial investment. One way to get good value for your money is to consider buying a cottage in the off season.

All things being equal in terms of lot size and square footage, its features and general state of repair, there are three important factors that will tend to determine a cottage’s value compared with other similar properties. These three factors should be given careful consideration when choosing a cottage:

* its commuting distance from a major urban center
* its proximity/convenience to leisure activities (either waterfront for summer, ski hills in winter or both), and
* its accessibility/ability to be used throughout the year.

A cottage that can be used in winter as well as summer will have the broadest appeal, and usually has more amenities to suit its many usages. That can also translate into a higher asking price. However, a year-round property also tends to offer a better potential to increase in value over time for the same reasons.

If you’re considering a year-round cottage, winter is an ideal time to view the property. It will give you a realistic idea of how accessible the roads are and how long it will take to get there under challenging road conditions. If the roads to the property are not plowed in winter, that may result in the property only being accessible by snowmobile or ATV. That will have a major impact on its selling price and future resale value. Viewing the cottage in winter also lets you see the heating system in action. Wood stoves and fireplace inserts do a far better job of heating a space than just an open fireplace, but few people would find them adequate to meet all the demands of a cold Canadian winter. If there’s no back-up heating system in place -- either electric baseboards or a furnace -- you may want to allow for the expense of installing one as part of your budget. Remember that if you plan to add baseboard heaters, they draw a lot of power, and you’ll need to be sure the cottage wiring has the hydro capacity to handle the demand.

The best news about viewing a cottage in winter is that there are usually fewer buyers around to compete with your offer – especially if the cottage’s primary usage is just as a summer getaway. If the property is water access only, then the seller’s options are seriously limited. The seller may not be looking forward to carrying the expenses until next summer approaches, so an offer now could have a great deal of appeal. This could be just the right time to make your move. Ask your REALTOR® how to turn the winter season into your buying advantage!

As the season comes to an end, it would appear the Okanagan sales have been at a record pace again with almost a billion dollar increase of last years sales volume.

Have a very merry Christmas and happy New Year. I wish you all the best for a significant 2008.

Mark Jennings-Bates is a realtor with Coldwell Banker Horizon Realty and a resort development consultant for international resort projects. His website www.BCResortHomes.com allows visitors to sign up for eZines and market updates with accompanying analysis. Together with Sally Hollingsworth, Mark offers real estate advice and services to buyers and sellers in the Okanagan region of British Columbia.
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Fall 07 Report

As the mercury drops a little into the fall, so does the temperature of the real estate market. The edge has disappeared a little in the past few weeks, although often this time of year, there is a lag between kids going back to school and Mum and Dad home shopping again. I would expect activity to pick up a little into October before we see most people hunker down for the end of the year.

In our last Insider Report we beat up a little on reacting to news in the short term, and we are happy to report that stock markets are recovered from the crash that was so gloomy to so many, interest rates have not been adjusted and the dollar is the strongest it has been for 30 years!

The local Real Estate board has been reporting increases in sales volume both dollar and unit wise for the fall on a month over month comparison last year. CMHC is predicting housing prices will continue to rise at a calmer rate than we have seen and the sun continues to shine on the Okanagan.

In the mean time, the out of town investors looking at purchasing resort property in the Okanagan, buoyed by all these stats often find it hard to get accurate information to make their decision such as… What are rentals like at that resort? How does the strata corporation manage their affairs? What facilities are available at that resort? Who do I talk to, to get certain information?

In response to these questions and comments, and many others, we have recently launched a new web forum designed for Western Canadian resort home-owners, purchasers and investors. The web forum, www.ResortForum.ca will provide you with the ability to get those answers and dialogue with like-minded people about the Western Canadian Resort market place.

Forums on the internet can be complex affairs at first, but once you have found your way around them and understand how simple they are to participate in they can be invaluable. In many instances, if I am doing research, I will turn to a forum and look for the person on the ground in the area that I am researching who appears to be knowledgeable and writes a lot of posts to that forum. Our hope is that this will become a familiar place to consumers, realtors, developers and strata and property managers alike who can share information on their resort.

As the forum grows in demand we will add in more locations and break out forums into more detail. We hope it will be a useful resource for you,

With regards to new developments this year, Waterscapes stole the show with a very successful launch of their product and now the lakefront homes at La Casa are front and centre, attracting a lot of attention (www.LaCasaYachtClub.com). In our next article we will start to assess the upcoming ski season and some of the expectations we have for local ski resorts and development opportunities, in the mean time we don’t want to wish the summer away too quickly, so enjoy the fall wine festival and thanksgiving over the next few weeks.

Mark Jennings-Bates is a realtor with Coldwell Banker Horizon Realty and a resort development consultant for international resort projects. His website www.BCResortHomes.com allows visitors to sign up for eZines and market updates with accompanying analysis. Together with Sally Hollingsworth, Mark offers real estate advice and services to buyers and sellers in the Okanagan region of British Columbia.

Interest Rate Jitters!

In the past month we have seen moves by the Bank of Canada to soften the ever-charging Western Canadian economy. There have been many conversations I have had in the past month about the affect that will bring to bear on the real estate markets here and I would like to reinforce last years comments… very little.

Whilst the impact will be felt mostly by first time home buyers and immigrant workers moving to the region from other provinces, that is not what is fueling our housing market here.

It is noticeable to me at least that the resource market success of Alberta is now strong in Edmonton as well as Calgary. Whilst Edmontonians have always sought retirement properties in the Okanagan, more recently, many of my conversations have been with Edmontonians looking for recreational properties here. In the resort market place we typically draw a four to hour drive time around our region and look at that as our primary market for drive in traffic. Whilst some Edmontonians choose to fly, many are defying that “rule of thumb” and are driving with their families to this beautiful part of the world.

Hungry for recreational property, today’s buyer is undeterred by interest rates and more concerned for prime lakeview, lakefront or ski-hill locations. This is certainly the case with other strong market segments such as international markets. Whilst the UK investor has always had a strong affinity with Canada, heightened awareness of opportunities in Canada, coupled with a strong sterling exchange rate and a switch to a more left leaning government in the UK are all indicators of increased appetite here. Sadly, we do a pretty bad job of promoting our product to the UK and rely on the inbound visitors to drive our market. With a more sophisticated approach, the Okanagan could be taking the real estate market to the UK with great success (which we will be doing this fall) and letting them know what a beautiful region this is and what great value it represents and how accessible it is on an increasing basis.

The south Okanagan continues to attract much attention and in particular, Mount Baldy, which is currently installing it’s new lift to the summit of Sugarlump as well as servicing a new subdivision and commencing construction on two new real estate projects. This gem of an opportunity is attracting tremendous interest from investors as far away as the UK and Chiccago. Contact us for more information on what opportunities exist there and are anticipated in the future.

In general, the Okanagan still struggles with high competition for limited quality listings and the market is definitely in sellers mode and will likely continue that way into the near term future. Whilst the next forecast 0.25% interest hike may dampen the spirits of locals getting into the market or upgrading their homes, it will do nothing to soften the appetite of the out of province buyer. The local real estate board media release for June indicated an almost 60% increase in sales volume over June last year as well as a 27.11% increase in the number of units sold with only a 12.86% increase in listings (a net deficit over last year!). These are strong indicators in a market that has been hot for some time. Whilst the market could benefit from some softening, don’t expect a radical change anytime soon.

The ability to demonstrate how far your dollar will go here compared to Whistler, Canmore, Park City, Utah, Vail, Aspen and Telluride Colorado is very simple. Do some research for yourself, and you decide if you need to invest further in recreational property or liquidate some assets. It is a personal choice and the systematic risk is easily managed in today’s climate.

Enjoy the summer.

Mark Jennings-Bates is a REALTOR® with Coldwell Banker Horizon Realty in Kelowna and a resort development consultant for international resort projects. His website www.BCResortHomes.com allows visitors to sign up for eZines and market updates with accompanying analysis. Together with Sally Hollingsworth, Mark offers real estate advice and services to buyers and sellers in the Okanagan region of British Columbia.

Okanagan Lakefront is still an option for buyers

If you’ve heard there are no more lakefront properties available in B.C.’s spectacular
Okanagan, don’t believe it.
In truth, the resale market for
several of these highly-desirable
shorefront homes remains as
brisk as ever, particularly on a
fractional-ownership basis.
Nor is there any truth to the
rumour that over-heated resort
property markets are on the
verge of cooling down in
Canada’s vacation wonderland.
Mark Jennings-Bates, one of
the most accomplished and
experienced professionals on the
scene, thinks otherwise.
“Our steadfast belief is that
we’re seeing the start of a very
long retirement trend in this area,
which is likely to last another 15
years,” notes Jennings-Bates,
whose opinion counts for plenty in
the Okanagan.
A licensed real estate agent
working out of Horizon Realty
in Kelowna (the No. 1 Coldwell
Banker real estate office in
Canada), Jennings-Bates has
put together a sparkling track
record as a consultant and
resort developer in the Central
Okanagan.
Together with his associate,
Sally Hollingsworth, Jennings-
Bates has virtually cornered the
market on expertise, savvy and
trust in luxury real estate circles.
Not many professionals
understand their market as
well as this dynamic duo.
Both these acknowledged
experts have built up an enviable
fund of specialized expertise
relating to fractional ownership,
which is why clients seek them
out in ever-increasing numbers.
In fact, Jennings-Bates and
Hollingsworth have attracted a
large inventory of available listings
of resort properties.
These are extremely luxurious
fractional-ownership opportunities,
giving browsers the chance to pick
and choose from a broad listing
inventory, including lakefront,
starting as low as $125,000.
“We’re focused on serving the
kind of discerning buyer who’s
looking for the unique Okanagan
experience, which most frequently
seems to be tied to lakefront
property,” Jennings-Bates
explains.
“Don’t let anyone tell you
lakefront is no longer an option
for buyers. There’s an active
resale market in fractional
lakefront properties.”
Of course, there’s a reason why
Jennings-Bates and Hollingsworth
maintain an important edge over
the competition.
Few realtors have developed
such in-depth and specialized
knowledge of the fractional and
strata-type lifestyle market.
Both these seasoned pros
understand the ins and outs of
this complex business, with a
thorough understanding of such
intimidating issues as division of
titles and leasing programs, for
example.
“These matters can be
confusing to a buyer and even
to their banker,” points out
Jennings-Bates.
“It’s important for buyers to work
with someone who realizes the
difference between a managed
rental pool and an optional rental
program, for example.”
Their proficiency gives
Jennings-Bates and Hollingsworth
an advantage over competitors
whose experience has been
limited solely to traditional
residential units. Naturally, it
gives their clients an important
edge too.

For more information, please
stop by the realtors’ website:
www.bcresorthomes.com and/or
call this toll-free number:
1.888-892-1897.

Or email Sally Hollingsworth
(sally@bcresorthomes.com)
and Mark Jennings-Bates
(mark@bcresorthomes.com).
Okanagan
real estate
experts can find
the home for you

The Okanagan shows signs of continuing strength

Housing Prices Soar

by Wayne Moore - Story: 26662
Feb. 12, 2007 / 10:00 am

The cost of purchasing a home in the Central Okanagan continues to rise.

According to figures released by the Okanagan Mainline Real Estate Board, the median house price in the Central Okanagan has climbed nearly 8% in the past month.

The median house price is $406,000, compared to $379,500 in December, 2006.

Meantime, the number of homes sold in January dropped, while the total value of those homes and the number of listings increased, in comparison to January, 2006.

Home sales dropped 6.7% in January, however, the dollar amount increased more than 9% and listings increased better than 11%.

Mobile home prices nearly doubled over the past year. Townhouses increased almost 45% while acreages showed a 37% increase.

Figures cover the area from Peachland to Lake Country.