Real Estate Trends – Top 10 changes in Vancouver Real Estate

Real Estate Trends

Top 10 changes in Vancouver Real Estate

Over the last 18 months I’ve seen several significant real estate market changes in Vancouver. Here are my Top Ten Changes I see in this year’s real estate market: 

  1. A shift towards income producing properties: The fear of rising interest rates will place a premium on revenue generating properties. Condos and Commercial real estate lead the way as investors find ways to lock in long term cash flow producing properties in today’s relatively low-interest rate environment.
  2. In person human approach: With the rise of social media, online forms, computer-driven follow-up programs and lack of personalized service in today’s world, there is a demand for the human touch. People crave connection and this is lost in today’s fast-paced world. Much like other service industries, real estate is no exception. At the end of the day, people want to work with people they like and have a connection with. My core values include a high level of “hands-on and in person” service that gives our clients individual personal attention.
  3. Networking & Relationships: Gone are the days of Yellow Pages. In the new world of endless information via Google, you are lost in a sea of contacts. There is no end to options when hiring service people today.  In my experience, most people hire someone that they have already worked with, or have been referred to, versus hiring online blindly. The stronger your network, the more your business will thrive – especially in today’s rapidly changing markets.
  4. Artificial Intelligence: Like it or not, technology is faster and more powerful than any one human, or even a team of them. Companies that are first to market implementing AI will no doubt take over their marketplace. Figuring out how to implement this technology while maintaining the “human element” will be the greatest challenge of all.
  5. Crowd Funded Real Estate Purchasing: Many of the younger generation looking to get into real estate are feeling defeated as if they have missed the boat. Crowdfunded or Group funded real estate purchases will allow developers to package up opportunities and to sell them to real estate investors at scale. Eventually, you will be able to buy a piece of real estate with a $1000 investment. These platforms are already out there and it’s just a matter of them gaining popularity before this becomes commonplace.
  6. Rising Interest Rates: Many of my “long term” clients remember buying their first homes when interest rates were 10-15%. The conversation about rising rates is a popular topic. With fixed interest rates of around 3.5%, money is still at historical lows. People are complaining about interest rates rising, and I remember just over 10 years ago when I bought my first property, my fixed rate was 5.3% for a 5 year term. A significant change in rates is coming  – we just don’t know when. Be prepared!
  7. Improved Data: The public’s opinion of real estate agents have has long been of the opinion that we “covet” sales information as if it were something only a “select few” had access to.  It’s just a matter of time before every consumer will have real-time sales data. The important thing to differentiate is that a sale isn’t a sale until it completes. Our real estate board publishes sales to our members before completion to give us up to date information, so our clients can make informed timely decisions. Sales should not be discussed until money and title have changed hands. I don’t see this trend changing anytime soon!
  8. Dynamic Selling Techniques: Auctions have been around for hundreds of years. Allowing buyers to see what others are willing to pay creates competition and ensures that full market value is established. It’s a transparent transaction that allows for the buyer to know that they paid no more than they had to. Technology has created platforms for salespeople to react to pricing based on demand. In rising markets, using these platforms will ensure developers and sellers get the most possible for their properties, while still holding out for their minimum price (reserve bid). We are already seeing companies handle this for individual residential sales, but public awareness is still a couple of years behind this being mainstream.
  9. Rent to Own and Vendor Take-back Mortgages: In downward and sideways markets, creativity is often required to make sales happen. If interest rates rise above 5% you will see sellers taking advantage of these rates and essentially competing with banks. Sellers will keep their name as a charge on title lending out a portion of the value of a property to buyers that don’t quite qualify for the full amount. Buyers will pay vendors back over a period of time just like and in addition to their regular mortgage.
  10. Hybrid or Joint ownership: As lending criteria continue to become more challenging for home buyers, in the next few years you will see many people resort to borrowing and purchasing in creative ways. One of the ways to do this is to purchase a property jointly. This will include everything from “the bank of mom and dad” to “colleagues buying 50% share in a detached house to qualify”. So long as partnership contracts are well contemplated, these opportunities can be used effectively to gain leverage in the real estate market.

 

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