Market Minute

The Money Takes a Ferry Ride

July 3rd, 2017


A recent study indicated that over 30% of the buyer group in the Comox Valley comes from the lower mainland. The active, even aggressive feeding frenzy continues. Competing interest on listings is still common place, with initial offers often above the asking price. In one case, an offer was $60,000 over the  list price, received  from a buyer who had been ‘left at the altar’ on two previous attempts.

In both market sectors, the Days to Sell continues to fall; down 55% in the Comox Valley to 19 days.  In Campbell River, the Days to Sell is down 20% to 44 days.

Finding a buyer is the easy part, getting the best possible price may require a little assistance.  This is especially important if you must sell and then buy in the same market. 

When we track private sales on Craig’s list or other means, two things seem clear. Some people beat the system and get great buys. Others, thinking they have beat the system, often pay over the odds.

This is the most dynamic market I have experienced in my 30 years in real estate appraisal. If you are thinking of selling, a good Realtor is essential, and can often more than pay for themselves.


A Tale of Two Cities…

June 1st, 2017


In its day, Dickens’ classic was a best seller. There may still be some lessons to learn from his genius. I will leave his European comparisons for another time, but today I would like to consider the high cost of Regulation.  In 2018, the Comox Valley will celebrate ten years since the adoption of the Regional Growth Strategy. Thus far, Campbell River has avoided this additional layer of regulation.

We have highlighted the issue of low inventory levels, and have documented the strong upward pressure on price.  Again, this month, the upward pressure continues. At a recent council meeting of the Town of Comox, an 18 lot subdivision was approved. A reliable source told me that this is the first subdivision to be approved in three years.

The average lot price in the Comox Valley is $214,801, compared to the level of  $141,358 for Campbell River. The average house price in the Comox Valley is $443,930. In Campbell River, the average price is $365,526. These differences beg three questions……What is the cost of Regulation? Is the tail wagging the dog? For all the talk of ‘affordability’, is an average lot price of over $200,000 really necessary?


Well Guess What…

May 1st, 2017


Prices are up again.

 

The law of supply and demand is perhaps the simplest economic concept to understand.

The market continues at a torrid pace, but across most sectors, inventories are down; approximately 50% from levels at this time last year.  Prices have only one way to go…..up, up and up!

 

The average single family lot price in the Comox Valley pushed past the $200,000 mark to $201,006 on 66 sales in the past 12 months.  This makes Campbell River look like a bargain at $139,605.


So, you think the house market is Hot? Have you tried….

April 1st, 2017


Renting?

Both communities continue to show strong upward pressure in terms of sales volumes and price.  For March alone, the average price on 84 sales was up 18% to $465,892. Campbell River was very similar with a 19% increase to $399,456.

The vacancy rate in the rental market is at a record low level. This is pushing rents up and is forcing more buyers into the market. In some cases, it is cheaper to own than it is to rent.

The price of residential investment properties is determined by two factors; net income, and a multiplier, called the Capitalization Rate or ‘Cap Rate’. Understanding the upward pressure on rents, which most often reflects higher net incomes, is straight forward. The issue of Capitalization rates is somewhat counter intuitive; the lower the Cap Rate, the higher the value or price of the investment. The low interest rate environment has been pushing Cap Rates down for some time. We believe that this trend of low, and lower interest rates will continue.

Investors stand to benefit from rising rents and lower Cap Rates. Another bonus is that developers may be coaxed back onto the scene.

 

A word  from the land of rice and curry……

Some readers may be aware of my involvement with India which started as a supporter of a small children’s home about ten years ago. Strong friendships have developed over the past decade. Together with my family our desire to help the poor in India has re-focused to healthcare. To this end, we traveled to India in February to launch Mummy’s Village, Spreading Health in India. We are very excited about this model which was developed by some English friends with great success in Cameroon. To learn more or to follow our progress check out MummysVillage.com


Last Place To Warm Up And…

March 15th, 2017


the first place to catch a cold.

This old adage is sometimes used to describe the rural acreage market. The volume of sales for improved Comox Valley acreages is up 119%, with a 36% increase in the average price to $680,087. In simple terms, this means that the average price for a house on an acreage is up over $180,000 from last year at this time. The average price for raw land is up 28% to $303,308. The volume of sales is up 71%.

In Campbell River, there are fewer acreage sales but a similar trend exists. The volume of sales for improved properties is up 73%, with the average price up 12% to $543,635.

If these indicators are a barometer, then the market appears set for continued upward sales and price pressure in 2017 across all sectors.


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