Balanced-Buyers Market in March

The Victoria Real Estate Board statistics for March are out!


The sale/listing ratio is 41.4%. When this number is at 50%, it means we are in a balanced market. A balanced market is when the supply of homes equals the demand for home. The above stats show we are leaning slightly towards a buyer’s market, where there are more listings than sales and therefore a greater supply. Overall this would have a slight downward pressure on prices.

So why is it that some homes sell quickly and for above asking price? Every area in Victoria and the Capital Region is different. For example, there are some places where the supply of homes is very low and there is a pent up demand of buyers waiting for listings to come up in that area. As soon as a listing hits the market (and is priced reasonably), people jump at the opportunity to own the home.

If you are interested in moving to a certain area of town and are worried you will miss an opportunity, please fill out my buyer request form here and I can set up an automated search that will send you notification when a new property hits the market that matches your criteria.

New Mortgage Rules

On March 18th, 2011 the Canadian federal government will implement new mortgage rules as follows:

1. The amortization of high-ratio mortgages (where the down payment is less than 20%) will be reduced from 35 years to 30 years
2. Canadians can only borrow 85% when refinancing a home, down from 90%
3. The government will no longer insure lines of credit secured by homes, ie. Home equity lines of credit (To be implemented April 18th 2011)

I would like to point out some positive and negative aspects of the first rule above for home buyers

If you’re planning on paying less than 20% down on a home, you will not have the option of extending your mortgage to 35 years after March 18th. This will result in higher mortgage payments.

Let’s look at an example of a condo worth $250,000 with a 5% down payment ($12,500), at 4% interest and insured through CMHC. A 35 year amortization period will result in payments of approximately $1077. A 30 year amortization period will increase your payments to $1162.

(-) Your payments increase $85/month
(+) This saves you over $34,000 in interest over 30 years
(+) You will pay off your mortgage 5 years faster
(-) If you cannot afford the extra $85/month, you will need to save up more than double the down payment to have payments equal to $1077

If you are considering purchasing a home this year, your first step should always be to organize your finances. I recommend setting up an appointment with a mortgage specialist to discuss your situation and find out what your options are. Please feel free to contact me and I can refer you to a mortgage broker.

New Ubertor website coming soon!

I`ve decided to take the plunge and start paying some money for a website. The original intent of my Wix site (www.sairawaters.com) was to have an online presence and present my listings. It looks pretty but it`s really not functional. Being a flash site, the search engines don`t even pick up the text from the site. I think the only way you would find it on Google is by searching my name. Not very effective at picking up new clients or leads.

With Ubertor, I hope to keep the prettiness of my website but add more functionality. So far things are going well. I`ve asked Mike Blaney (www.mikeblaney.com) to help me get started.

I`m looking for beautiful photographs of Victoria and the surrounding area for the flash banners along the top of the site. So far I have 3 photos but I`d love to get more. If you know a photographer who has some shots I could purchase for the site, please contact me.

I have big plans and big goals for 2011. It`s going to be critical to have a website that doesn`t take up so much of my time! Stay tuned for more blog posts (on my new site!)

Sneak preview below :)

October Market Slice

Here is my most recent newsletter (in Blog-form). To see what it really looks likes, check out the most recent edition here.
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It’s that time again! Welcome to the newest edition of Market Slice, a piece of real estate delivered to your inbox every other month.

National: The Bank of Canada rose its rate, however the five year conventional mortgage rate (or “posted rate”) is still very low at 5.39%. There are discounted rates available as low as 3.45% for a five year fixed rate mortgage. There is some confusion over the Federal Government lending rules so I just want to clarify some points. First, you can still get high-ratio financing with as little as 5% down. Second, if you are getting a five year fixed rate mortgage, you only have to qualify at the discounted rate (3.45) instead of the bank rate. When in doubt, ask your mortgage broker or I can refer you to one.

Provincial: The HST referendum has caused some uncertainty in the new housing market. To reiterate, HST only affects new housing and not re-sale homes.

Local: The market in Victoria since August has been very slow. Sellers are being forced to lower their prices while buyers have been taking their time with purchases, chasing the low prices down. The prices will not continue to go down forever. I believe we’re reaching a tipping point where sellers are going to take their homes off the market and wait to sell or rent instead. As listings become restricted the prices will level off. The market in Victoria is cyclical in that prices move up and down but over the long run, they will continue to go up (so long as we stay the most temperate city in Canada!). If you are planning to move, find a home you’ll be happy in for at least 5-10 years and don’t panic when prices drop slightly.

Riding the roller coaster

I love how the media has a way with words “some agents are having to take on second jobs to make ends meet amid declining sales”.

Well let’s do the math. There are 1330 agents in Victoria and only 395 sales in September (that’s 790 ends) therefore many realtors did not have a single sale last month.

A good portion of the public doesn't realize this: Realtors work in a commission based industry. We do not make any money if we do not make a sale. Also, we do not get a salary from our brokerage! In fact, we pay an arm and a leg to be a part of a brokerage. We pay to have an office, colour copies, parking, coffee, sale fees, listing fees, board fees… and then we pay a percentage of our commissions as well. It`s a very expensive industry to work in so it`s no surprise to me agents are taking on a second job or getting out of the market completely.

When the market slows down, it can be stressful. Listings we thought were going to sell 2 months ago are still on the market. When the homes eventually do sell, we do not get paid until completion. There is a lot of uncertainty about where your next pay cheque will come from and how much of it has already been accounted for by the long list of expenses. That`s why it`s important to have three months of income in the bank at any given time.

These slow times don`t last forever though because markets are cyclical. There is always going to be ups and downs. The lack of sales from August and September means there`s a lot of buyers out there waiting to buy. I feel like there is pent up demand in Victoria and in October and November we`ll see an increase in sales again. As an agent, it`s important to become an expert at riding the real estate roller coaster.

Why Real Estate?

I’ve heard this question many times from friends, family, clients, colleagues and strangers: Why did you choose real estate as a career? Good question! The answer is: lots of reasons.

1. It seemed like a great idea.

I was in my last semester of University and I knew I needed some further education to help kick start a career. (Funny how a University education can still leave you working at a bookstore or Starbucks…) It was between finance and real estate. Frankly, the idea of working in a bank made me shudder so real estate is was!

2. I love MLS.

I bought my first property in 2008 and I became obsessed with MLS. I would check it every day and start to dream up scenarios such as “If I had 500,000 to spend, where would I live?” After going through the process of buying real estate, it solidified my desire to follow through with the course.

3. It was a good fit.

My degree is in Economics so I can certainly talk the talk when it comes to markets. My interest is in business and marketing. My mom and dad are both entrepreneurs so it only made sense to eventually be my own boss. My background is in customer service and I truly love helping people

Now that I’m in this business, there are a few reasons why I will stay here

1. I’m in it for the right reasons.

Many people think real estate is glamorous and big money. The honest truth is it’s bloody hard work and not a get-rich-quick scheme. I was lucky enough to have my parents support (emotionally and financially) to get started, but to carry forward, it’s going to take everything I’ve got. The first two years, I am told, are the hardest (financially and emotionally). I say, bring it on! I’d much rather be broke and working my ass off than have money in the bank and be miserable everyday having to drag myself to work. I’m not here to get rich, I’m here because I love the work I do.

2. I learn something new every day.

Every day is different and every day is a challenge. This is the type of environment I thrive in. I can’t handle the mundane. I’ve never held a job longer than a year that didn’t offer me something more. Real estate provides an environment where I’m constantly learning; whether it be through courses, seminars, or just the transactions and people I deal with. The real estate industry is constantly evolving as well; whether it be industry guidelines or new strata property laws. There’s always something to stay on top of and learn about.

3. I love the “warm fuzzies”

Call me “emo”, but I really like the personal side to this industry. Residential real estate lends itself to many situations in a person’s life. There’s downsizers, up-graders, first time buyers, newlyweds, divorces, estate sales, new to town, moving out of town, just had kids, empty nesters. You get the idea... With every situation there is one or a set of people dealing with something very emotional. Happiness, sadness, frustration, stress, nervousness, excitement. As a realtor, I really enjoy being a part of these pivotal moments in people’s lives. In some situations, you inadvertently become a councilor, and that’s okay. I can tell you, there’s nothing more gratifying than helping someone find their dream home, or enabling someone to move on, or help someone start a new chapter in their life. Being there for these moments gives me warm fuzzies, and I wouldn’t trade it for anything!

Think Like a Farmer

I watched the following video by BNN where they interview Aron Cadeau, president, FlatFeeRealty.ca. I found it very interesting and thought provoking. Check it out here

The major point that does not stick with me was the answer to the question: how does Flat Fee Realty makes its money? Or, how does it afford to advertise like the other competing brokerages? The answer: volume.

What's wrong with this picture?

Personally, in the true spirit of Jerry Maguire, I think less clients and more personal attention is important in this business. A Realtor who earns a flat fee may focus their efforts on completing a transaction so they are free to move on to the next customer. As Brian Buffini would put it, they are interested in winning the battle but may lose the war. That is to say, they are interested in closing the deal, but may lose the client in the long run. In a transaction based business, closing deals (and earning a pay cheque) becomes the most important goal.

In relationship based business, or a referral business, the focus is shifted to personal attention and doing the best job possible for your clients. Even if a transaction doesn't complete, a relationship is cultivated. Who doesn't want to recommend a professional who has done an outstanding job for them? The goal is not to get transactions over the short run, but to build relationships and plant seeds for the long run. Think like a farmer.

Cadeau says their average Realtor in his company closes 30 deals per year compared to the average which is around 8. Although it would be nice to close 30 deals in a year, I would rather have fewer high quality experiences with my clients to ensure the continued growth of my business in the long run.

On another note, maybe I'm biased because I'm in the real estate industry, but I find it weird when an organization of professionals advertises themselves as being cheaper than the industry average. Would you go to a Lawyer or a Doctor who advertises themselves as being cheaper than the rest?

Gearing up for Real Estate Season

In the past couple weeks I’ve noticed a real change in the real estate energy in Victoria. People are buzzing about the approaching “real estate season” with the promise of many more listings this spring.

As of today, we have 2715 listings on the Victoria MLS system. At the end of January 2009 there were 3678 listings! So unless 963 new listings appear on the market in the next 6 days, we’re certainly low on inventory. What does this mean for buyers and sellers?

Right now we’re experiencing an interesting market. During 2009 consumers were quite nervous about moving because of the uncertain times ahead. At the same time, buyers were gearing up to purchase properties because interest rates are the lowest they’ve been in a very long time. So we’re left with a low inventory and a pent up demand of buyers. (Reminds me of a lesson from my first year micro economics class!) Low supply + high demand = increase in prices. We’re seeing an upward pressure on home prices (great for selling).

Buyers, on the other hand, are competing for the few listings which are available. Come spring, there will be many more choices and we should return to a balanced market. Interest rates are expected to stay low until the 4th quarter, so the cost of getting a mortgage will remain low.

The point I’m trying to make is, why wait until the spring to list your home? If you list, for example, in February and your home is priced right, you’re guaranteed to sell it. If you’re nervous about not finding the right type of property to move in to, you can set the completion date for April to give yourself lots of time to find the right place. Make sense?

Ahem, insert shameless self promotion

If you would like to know how much your home is worth, I do free market evaluations! Give me a call (250-384-7663) or send me an e-mail!

If you are interested in receiving monthly Victoria market updates, please click here to subscribe to my market news.




Notice how low the amount of listing are in the above graph!



In this graph the grey bars represent the listings while the blue squares represent the sales. In December, the amount of new listings almost equals the amount of sales! To date, this January there are 925 new listings and only 267 sales.

Real estate roller coaster

Everyone I've spoken to in this industry agrees on one thing: it's a roller coaster.

"You're going to have good weeks and bad weeks, good days and bad days, good hours and bad hours... you just have to get use to it".

It's hard when you've spent your whole life comparing yourself to others and being motivated by praise and results. Starting out in this industry, nothing is immediate unless you had something (cleverly) lined up before you got your licence; or you get lucky! Other agents may be at a high point while you're on a downhill or vice-versa. There are no apples to apples when comparing real estate agent's success at a given point in time.

Unfortunately I had one of those weeks last week where I spent 10 hours in the mall kiosks and barely received one quality lead (ho hum). It's hard not to feel slightly deflated... am I wasting my time here?

The answer is no. It's better to be at a mall kiosk trying to pick up leads and chatting real estate then sitting at home/in the office. So I keep pounding the pavement. Patience is key.

I have to reassure myself I'm doing everything I can to get things going. You can't force anyone to buy or sell real estate, you just have to be ready when they are! I quite like it when my life is in overdrive and have tons to do all the time but unfortunately there will be slow points in this career and I have to learn to like them.

As my manager said to me today, there will be times you're so busy you have no time to spend your money, and there will be times when you're so slow and broke and all you want to do it work. It's all part of the ride!

I think I can

I picked up the Power of Positive Thinking by Norman Vincent Peale from the library today. I realized in this profession, self doubt needs to be thrown out the window. The only thing standing in the way of me and the kind of success I’m driven to achieve, is the little voice in my head that’s saying “Nooooooooo” (imagine little helium induced voice).

The little voice, I’ll call her Debbie (Debbie the downer), pops up at the most inconvenient times. Real estate agents are meant to be notorious networkers/mover/shakers; you know… the ones at the party that talk to everyone! Over the holiday season I found myself in many situations where, yes, I approached and talked to many people. But there was one thing missing. A little dialogue I can say over and over and over again in my head, but for some reason, will not leave my lips. Even if I’d start speaking it Debbie would chirp in “Noooo no no no”. I’m SUPPOSED to say “Hey, guess what, I’m in Real Estate! If you or anyone you know was going to buy/sell a home, do you have a Realtor you’d refer them to?”…“No? Well I’d love to be that person!”

It sounds easy right?

Then according to Buffini I’m suppose to ask them for contact information and tell them I’m going to send them some “Items of Value”. Helpful information that everyone finds useful! This is where it really gets sticky for me.

I can’t decide if it’s a generational thing or what, but the idea of getting mail once a month from a Realtor, kind of makes me cringe. If it makes me cringe, how am I supposed to endorse myself in this way? More self doubt!

The truth is, I have a database of friends/family/past co-workers and most of them have either an address, phone number or e-mail address. I have been told I should be contacting people to give a “gentle reminder” each month that I’m a real estate agent. Hi, remember me, I help people buy and sell homes! By doing this, when someone I know runs into someone they know who is buying or selling, voila, my name pops into their head and a referral is born.

I have not 100% decided if I’m going to go the e-mail route or mail route. Mr. Brian Buffini would not approve of e-mail; I have no doubt in that. Really, if it’s e-mail, people can unsubscribe! I guess I should not be thinking people will want to unsubscribe… (AHHHH, Debbie getoutofmyhead!)

So if you’re reading this… FYI, you may receive a gentle reminder sometime soon...
And you will like it!

The never ending to-do list

I have not officially started yet, but my to-do list is about as long as my arm! I was up in Nanaimo for a course at the beginning of October full of new Realtors. The course is mandatory for any new Realtor in their first 6 months and it was a wonderful opportunity to pick everyone's brains about their company and ask what they had done so far. Quite quickly I realized there was a lot I could do before I actually started work as a Realtor.

The best part so far has been working on my website. I found this great site called Wix (www.wix.com) and it's so much fun. You can create an entire website using only flash. Now there are good things and bad things about this. Every real estate website out there has some sort of tool where Realtors can get leads, such as an online form to enter a client's property search criteria. With this site, I can't really do that! So I've been working on some snazzy PDF forms which can be filled out and e-mailed or faxed back to me! If I receive it by e-mail, I can easily compile all the information into an excel sheet to easily keep track of clients and their needs/wants. It has been exciting to plan how I will interact with clients and create neat tools which will help with the buying or selling process. It's fun to be creative again!

The next task is going to be promotional material. Since the Holidays are coming, I would love to send to my friends and family a little gift. Of course this gift will have my face and phone number plastered all over it... but it will be a gift none the less!

Which brings me to another thing I learned at my course... Referrals in this business are huge! A Realtor can get a lot of business just by referring an agent to someone. For example, I have relatives that live across Canada, and I can refer them a Realtor in their area and receive a fee for it. This is good, a) because I make money and b) because I can make sure friends or family abroad are well taken care of! I've already met so many wonderful people scattered all up the Island through the course in Nanaimo and I can't wait to send some referrals their way.

14 days until I start with Royal LePage! I can't wait to really get started.