During the COVID-19 reaction clients have called to ask if the Crown Isle real estate market is active. Yes, absolutely it is. There are currently 27 homes on the market and there were five sales in March and one in April even though we were in lock-down mode at the time.. May numbers will be out shortly but they will not tell the full story because many of the deals completed in May will not be completed until the June or July time frame and later.  There is a good selection of single-family homes in the $700,000 to $800,000 price range and some go up to over $1.2 million. Custom and semi-custom homes are the most common types and sizes are typically in the 1700 to 2500 square foot range.

Move over to the quaint seaside town of Comox and yes there is activity there as well. There are 60 homes for sale and the vast majority are single family. Most of the homes on the resale market are in the $500,000 to $800,000 range and the styles span a spectrum from the fairly common split level variety to West Coast contemporary. Within Comox there were 10 sales in March, 7 in April and 5 already reported in May. Sale prices ranged from $430,000 to $920,000. Resale home offerings can be found in most of the popular family neighbourhoods and listings continue to get added to the market each week. So, if you are in need of a home in this area perhaps now is the time to start looking so that you find the one that meets your needs before school starts in the fall – which is only just over 3 months away.

Courtenay is the powerhouse of the overall housing market is this region and there are 148 single-family homes for sale in many different price ranges throughout the five resale areas (Courtenay City, Courtenay East, Courtenay West, Courtenay North and Courtenay South). There were 44 homes listed in the month of May. Many of the homes are being offered in the $500,000 to $700,000 price range with a few that top the $1 million level. This part of the market has the most to offer in terms of numbers of homes and areas within the city. Why not drop by and take a first-hand look for yourself? If you are serious about buying or selling contact Brett in advance and make an appointment to discus your needs and he will tell you how he can help meet your real estate needs and what he does differently from others.

Before discussing Crown Isle real estate, let’s mention how Christmas in Crown Isle is magical. Drive around this community of high-end homes at night and take in the Christmas decorations and lights. There are a number of social events that take place at this time of the year as well. The Christmas Market at Crown Isle takes place on the 15th of December along with a breakfast with Santa. Do not forget about the Christmas Dinner Buffet on the 25th of December at the Crown Isle Resort.

What about real estate? The Crown Isle Resort and Golf Community is a jewel in the Comox Valley real estate market. While it only accounts for a small faction of the overall home sales in the Comox Valley, it does account for a significant number of high-end executive and luxury home sales.

The entry level for single-family homes in Crown Isle was about $600,000 in 2017. At the end of 2019, these same homes are being sold for about $750,000. A total of 36 homes exchanged hands as of mid Dec 2019. Prices ranged from a low of about $571,000 to a high of 1.04M. Most of the home sold were above $700,000. Ranchers and ranchers with bonus rooms were among the most popular styles of homes sold.

In 2019, only one home sold for more than $1M. Prior to 2010 there was one home that sold above $1 million and the next million-dollar sale did not occur until 2013. Five years later there were four million-dollar sale in 2018. As of mid December 2019, there were five homes listed for more than a million dollars and time on the market varied from 11 days to 120 days. Clearly, this luxury homes market has gone through some interesting cycles, particularly those of 2018 with the wild swings in prices month to month. As of the writing of this update, there were 27 homes of all types on the market in this golf course bordered community, and their time on the market ranged from 11 days to 331 days. Like all real estate markets, Crown Isle is local and it is affected by a number of local influences.

Yes, 2018 was a significant real estate year in Crown Isle but at the end of 2019 there are definite signs of change and more stabilization. Prices are starting to follow a more normal cycle and prices, in a number of instances, have stabilized and even corrected downwards slightly is some segments of the home market. This resale home market has been in direct competition to the new home builders’ market that continues strongly as it moved to encircle Crown Isle Drive and extend down Crown Isle Boulevard towards the Comox Peninsula. Having said this, soon, the new homes market will taper off as lots for sale have dropped in numbers commensurate with this development approaching its capacity. As new construction tapers off, it will shift outside of Crown Isle to the next big home development that is expected to be approved for Union Bay. If you are looking for a luxury home in an established high-end neighbourhood close to many amenities, contact Brett for more information on Crown Isle.

The Canadian real estate market has been hot over the past few years. Real estate is, first and foremost, about location. It is, therefore, important to select the right location that best meets your needs before taking the plunge and investing your hard earned money is a specific area. Once invested make sure that you take a longer term view and that you are not just there to flip a property in the short term.

Toronto and Vancouver are the two market areas that are almost always in the news. Toronto is a city of more than 2.7 million people (actual number 2,731,571) according to the latest 2016 census numbers. This represents an increase of 6.2% in growth since the previous 2011 census. This number grows to close to 6 million (actual figure 5,928,040) when you add in the census metropolitan area that includes all of the city’s suburban areas. Toronto ranks number 1 among the country’s 35 census metropolitan areas.

In contrast the city of Vancouver is home to 631,486 people in the metro area and the Greater Vancouver area is home to a population of nearly 2.5 million (actual number 2,463,431) people. The most recent population census confirmed that population growth in the metro Vancouver area outpaced the national average by about 5%.

Both cities are quite diverse in many different ways. Toronto sits on the shore of Lake Ontario in the Province of Ontario just north of the state of New York. Vancouver is a bustling sea port on Canada’s West Coast and it is situated about 4 hours north of the similar sized city of Seattle in the State of Washington.

The BC government introduced a 15% surtax on foreign homebuyers on the 2nd of August 2016 as part of a plan announced to tackle the city’s affordability crisis for the average person. Although home prices dipped for a while after the introduction of the tax, they started bouncing back in early 2017. Shortly after the introduction of the tax Toronto home prices started skyrocketing – an effect linked to the Vancouver foreign buyer tax. The new BC government announced a review of this tax.

Home prices in Toronto soared in early 2017 and the average home price was up about 25% in April compared to the 2016. Amid fears of a housing bubble the Ontario government announced a package on the 20th of April that was called the Fair Housing Plan that included a 15% tax on foreign buyers. The tax had an immediate cooling effect on the market.

What about other markets? Home sales across Canada in October were up by a seasonally adjusted modest increase of 0.9% over September according to the Canadian Real Estate Association. The increase was led by the Greater Toronto Area and the Fraser Valley on the West Coast. CREA added that Greater Vancouver prices were up about 12.4% and the Fraser Valley was up by more than 17%.

Starting in October 2015 the newly elected Liberal government began to tighten mortgage lending rules. Additional changes were announced in October 2016 and again in October 2017. The most recently announced rules will take effect on the 1st of January 2018.

On one hand the provincial governments of BC and Ontario introduced foreign buyer taxes to make housing more affordable in their respective largest cities. On the other hand the federal government continued to tighten and change mortgage rules that will continue to make it harder for the average person to get a mortgage. The foreign buyer taxes had nothing more than a temporary effect on sales. The federal mortgage changes will make it harder for may people to get mortgages and the changes may push some people to consider riskier financing options.

The Ontario Real Estate Association, commenting on the new changes coming for 2018, said that the Liberal Federal Government changes are overkill and that they “will hurt middle class families and punish careful savers most”.

The federal government claims to be helping the middle class but their actions are not helpful. In fact, the impact of things like the federal government’s tax changes, according to the Financial Post, will have the middle class paying more under Trudeau. It is difficult to see how Trudeau is helping the middle class when he has increased taxes (with more such as the Carbon Tax to come) and made it harder for people to get mortgages. At the same time, the BC NDP government has also already announced income tax increases. Let’s hope that no more increases are forthcoming.

Locally, the Comox Valley continues to see increased prices and lower supply in its housing market. While it remains to be seen what the real impact of these federal changes will be, most experts do not expect positive results. If house prices continue to rise as mainland residents look towards Vancouver Island for more reasonably priced home options, and the Trudeau government continues to make it harder for people to get mortgages, local residents may find it harder to afford local homes. Tax increases at the federal and provincial levels will only exacerbate the problem of affordable homes. Stay tuned for a market update in the new year.

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• The 2017 Forecast for the Comox Valley Real Estate Market

The 2017 Comox Valley real estate market forecast examines trends throughout the year. There have been three peak real estate sales years in the Comox Valley since 2000. They occurred in 2004, 2007 and most recently in 2016. In addition to increasing sales, prices also rose in 2016 starting in April and running through most of the subsequent six months. The median price of a single family home in Comox nearly broke the $400,000 level in July 2016 and median and average prices continued to climb. Two years earlier the median price sat at $345,000. In July 2017 the median price had climbed to nearly $480,000 with an average price just over $555,000. Prices corrected statistically in Aug and Sept but since the number of listings and sales was small and most listings in the lower price range this change cannot yet be considered a change in trend.

The Comox Valley real estate market is not the same in all sectors. The following infographic shows this for three sectors in July 2017. Note that single family homes which comprise most of the market overall are selling most quickly

The next chart shows how single family homes in Comox have increased in price over the past year up to the end of July 2017 and then there was a correction in August 2017. There were only 15 single family home sales in Comox in August so it it too early to tell whether or not this one month drop will be the start of a trend or not.

So what will happen in the rest of 2017 and into next year?

First, prices are expected to continue to rise. How fast will depend on how many new listings hit the market. Increases in single family home prices in the 2 to 5% range are not out of the range of possibilities. Second, the number of sales has dropped in 2017 as they often do after a peak year. A drop of 20% has been experienced to date and this trend should continue the rest of the year because of high prices and mortgage approval changes that have forced some people out of their respective markets. Third, list to sell ratios will continue to favour sellers because of the diminished inventory. Fourth, our valley will continue to look like attractive to many people relocating from the mainland, and outside of the province. Fifth, higher end and specialty home listings began to sell at a higher rate in 2016 than in previous years and this trend should continue in 2017.

Multiple offers will continue to be part of the market but in numbers less than 2017. So sellers get ready to list your home if you plan to sell it in 2017. Contact Brett to list your home and obtain advice on when to get it on the market.

Buyers if you have a home to sell before you can buy one in the Comox Valley get in on the market early and get an unconditional offer on it BEFORE you start looking seriously to buy. Many sellers were not accepting offers subject to the sale of homes in 2016 and this trend will likely continue in 2017. Contact Brett to be your agent and have him set up an account for you to get you the latest listing information as soon as it becomes available.

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• Comox Home Prices Continue to Climb in this Hot Market

Comox Home Prices Jan 2015 to March 2017

The following chart shows that Comox home prices continue to climb when compared to the previous two years and how they continue to climb as we are into our third month of 2017.

To see why this past year has been remarkable let’s go back in time and look at home prices in the Comox Valley for the period 2010 to 2015.

Comox Valley Home Prices Jan 2010 to Jan 2015

Changes in the Market

Following the significant correction in our market right after the peaks of 2007 the market turned into a buyers’ market. In general over that time period listings were plentiful and prices oscillated up and down for about 5 years until they hit bottom in the fall of 2015. At that point in time there were signs that prices would start to rise as listings dropped off. By the spring of 2016 prices started their sustained upward trend and they have stayed that way since.

The Situation in March 2017

The current real estate market favours home sellers in many different (but not all) sectors. New listings and total listings are down from previous years and prices are up. This notwithstanding, sellers must still price homes competitively even in the current market. Home buyers are savvy and have a great deal of information at their fingertips with which to compare.

Here are a few examples of the current market:
Single family homes in the Town of Comox – average price up 27% over the past year
Single family waterfront in the Comox Peninsula – sell to list price of 97%
Single family homes in downtown Courtenay – days to sell average down to 56 from 111
Condo apartments in Courtenay East average sell price down 16%
Single family acreages in Courtenay North – total sales dollars down 40%

Clearly, statistics are informative but only to a point. They must be used and understand in the context of the entire market and applied to specific situations. While some homes sell like hotcakes in the current market this is not the case for all homes. Things like condition and presentation still play a very important role as do other factors. Take a look at the following chart for Dec 2016 to see some of the variances.

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Where is the Market Headed?

Expect the market to continue to favour home sellers in 2017 and into 2018 unless we experience a major change in the number of new listings or in the prime interest rate. As long as listings remain low, prices will continue their upward trend. With a provincial election on the horizon in early May, it is always possible to be surprised with the resulting impact. However, it is not just the provincial government that can adversely affect us and our livelihoods. The federal and municipal governments can do that as well.

Economic Storm Clouds are on the Horizon

Have you noticed how expensive groceries have become over the past year? The construction industry and many other businesses are feeling this economic pain in Canada as well. Our falling Canadian dollar and the growing debt and deficits at the federal and provincial levels are key contributors to this effect and rise in prices. When the cost of building materials goes up so does the cost of building homes and there is often a spillover effect into the resale home market.

Take a look at your net income and ask how you can raise it? Likely you will conclude that you either have to make more money, or reduce expenditures. Have you noticed lately how many Canadian businesses are starting to charge us in $US dollars for their fees, products and services online? When business expenses go up so does the cost of products and services. Almost everyone today is a consumer of internet products and services and like it or not the $US dollar is a key standard by which products and services are provided via the internet. When our dollar is low it costs us all more to live. Yes it is that simple. When it comes to trade, our country sends nearly 85% of what we produce to the US and they send about 25% of what they produce to us. A low Canadian dollar currently sitting at around 74 cents to the US dollar is not good for us. It was not that long ago when we read an article that said Loonie below par for the 1st time since November.

Governments that are not pro business or ones that spend recklessly and rack up our deficit and add to our debt can do damage to our real estate market and other areas of the economy. Within BC our total debt sits around $67 billion and within Canada our debt sits at about $680 billion. At the federal level the deficit and debt are both increasing dramatically and the impact on us could be significantly negative. The counties economic growth projections have been reduced to only 1.7% over the next five years. Federal government spending is costing us too much and too much of our tax dollar base is being wasted. At the current debt to GDP nearly 30% of all government tax dollars collected goes to paying interest on the debt instead of being directed at programs that benefit us. This article by the Fraser Institute that our combined Canadian Debt stands at about $1.3 trillion dollars – a staggering figure for a country of over 35 million people. What is even more concerning is the more than $600 million of the total debt that is owed to creditors outside of our country. We should all be alarmed by governments such as the current federal government that is making this situation worse. If we all continually spent more than we made we would be bankrupt.

Besides the dollar and our country’s debt and deficit, government inefficiency also costs us money as taxpayers. Bureaucrats at all levels share some blame in this. Yes there are bureaucrats who work tremendously hard to provide us services but there are far too many who seem to forget why their jobs exist in the first place. Having worked within and with bureaucracies for more than 44 years there is not much I have not seen or experienced. Consider the following few examples:
a public servant who is entitled to two sick days a month and always take them (often on Fridays);
a public servant who does not delegate decision making so when they go on holiday for a month things grind to a halt;
a public servant who do not believe that they are responsible to us as taxpayers; and
bureaucrats who ensure that they spend “end year” money at the end of each fiscal year to ensure their budgets do not get cut.

As I said earlier this attitude is not rampant in government but every instance of such behavior is bad for us as taxpayers.

So, a low Canadian dollar, a high debt and deficit and inefficiencies in governments at all levels are contributing to the rising costs that we are all now facing. The real estate market is affected by rising costs like many other sectors of our economy and we all end up feeling the economic pain.

What Can Be Done?

Three things:
1. Hold the Prime Minster accountable for getting the deficit back to ‘0″ and for starting to reduce the debt;
2. Hold Premiers to the same standard;
3. Hold the Prime Minster accountable for explaining to us what he is doing to peg our dollar to the US dollar, a currency owned by our single largest and most important trading partner and one which is a standard measure for most of the world; and
4. Holding all levels of government accountable to eliminate inefficiencies and red tape that cost us time and money. Do we really need all of the local bureaucracies (City, Town, Village, Region and District level) for a population of 66,527 people?

We all share a responsibility to elect people to represent us who will be economically responsible with the tax dollars collected from us. Yes we all like services being provided to us but they all cost money. How many people do you know that talk about free health care in Canada. It is NOT free. Health care in Canada costs us nearly $230 billion each year and the costs are rising. If our government were to get our deficits eliminated and over time get our debt back to 0 (yes it used to be 0) think of all the money currently spent on paying interest on the debt (to creditors within and outside of the country) that could be freed up to provide us needed services.

Summary of Our Real Estate Market

Our real estate market is experiencing low supply and rising prices. While local conditions do impact our market so do much larger economic issues. Our beaten down dollar compared to the $US dollar, government spending that is racking up annual deficits and total debt, and inefficient bureaucracies all make things worse economically. The price of construction materials has gone up significantly and this, in part, has drive up prices in our market.