The 4 P’s of Winter 2014 by Linny Jenkins

The 4 P’s of  Winter 2014

This is a time of great potency and potential. We contemplate our lives and imagine different scenarios of how the year will play out. Good bad or indifferent.  We stargaze, wool gather, muse, and mumble into our hot chocolates. To downsize or not that is the question?   Should we buy up, or down or not at all?   Where are interest rates going and does it matter?  We think about changing our course of action, we want to be out with the old and in with new.  This is a great time to look at stats from last year, learn from our past actions,  clean house so to speak. All the action of past years that has brought us to this point lies dormant, quiet under blankets of snow.  How will we write our stories anew, polish and crystallize our vision for the new year. 

Good planning means we understand the past, and use this experience to develop our course of action. We sift through statistics looking for answers to our questions. I’ve noticed some interesting statistics which give some perspective to our current real estate climate

Our real estate market is moving slowly, but there has been a 13% increase in sales volume from 2012.  While volume of sales has increased, sales prices have remained stable, and competitive in last few years, with little changes being forecast.

Interest rates are currently low enough to encourage first time buyers, but our local employment figures are not robust, and will need to improve to boost sales in this sector.  If interest rates increase, there will be less flexibility from lenders to first time buyers, which will not help.  First time buyers are important, because they fuel the market and allow the buy up market to flourish. There needs to be affordable product in the marketplace for this segment to start the cycle.

Local people still account for almost 60% of the buyers in our area . Therefore job creation here is critical to encourage first time buyers, and allow the economy to grow.

The two largest segments of buyers are empty nesters and two parent families with kids, each with about 25% of the market. The purpose of Buying down, and Buying up, created the most movement.

Interesting to note that 31% of all buyers were cash buyers, 50% used conventional financing, and 20% of buyers used high ratio financing.  If interest rates do increase, then the first time buyers will find it more difficult to qualify and therefore to buy.

Over 55% of all buyers to our region purchased in the Kelowna and Central Okanagan area, 14% in Vernon area, and the balance scattered around the North Okanagan. In order to attract buyers to our area, we will have to offer more services, cultural amenities, retail, parks, trails  jobs /infrastructure, which means attracting more business and industry.  In short we will need to try to grow our local economies and pool resources. 

Propagation is about planting the seeds and awaiting growth.  A relatively stable real estate market provides opportunities for buyers and sellers, low interest rates can fuel growth, competitive pricing encourages sales; this can be a great time to make your move. Consider carefully all your lifestyle choices. If this is your first time buying a home, consider the interest rate climate, the wise choice of affordable options, and future growth potentials.  If it is a family home make realistic lifestyle choices consistent with your means and future plans, and if you are an empty nester, consider that now is a great time to move to a smaller strata or home designed to give you more flexibility for travel and leisure. Prices for strata have come down a lot in recent years.  This empty nest segment will only grow in coming years.  Time to beat the rush.

Outside the weather can be blustery, and the landscape white and barren, but if we ponder and plan our next move can be as sunny and bright as a spring day.  Let us help you make some plans, and your next move could be a bed of roses.