For many farmers across the country and around the world, it is already too late to
procure alternate fertilizer sources in order to grow this years crops.
For many families across the country and around the world, it is already too late to stockpile enough food and fuel to remain warm and well fed next winter.
And for many property owners across this country and around the world, it may already be too late to list and sell their investment at top of the market prices, to advance or
retire with financial security.
The alphabet soup of our shuttered domestic economy mixed with tense geo political events has reached a boiling point, and there doesn’t seem to be an adult in the room to turn off the stove. Get ready to be fed the fallout of recent decisions made by western NATO leaders. No amount of modern monetary policy will be able to reverse the
economic downturn that will ensue.
We are being impoverished by record high inflation, on the precipice of a recession, and in trillions of dollars of national debt. There is no need for mandated lockdowns,
inflation at 40 year highs is actually a devastating form of financial lockdown. Residents that can’t afford to go anywhere, stay home, and stop spending. Businesses that can’t afford to manufacture products at a profit, stop making them. Developers and
contractors that can’t afford to build, stop erecting houses and buildings.
A pivotal, catastrophic shift has taken place in many critical global markets, and this shift has already been felt in our top of cycle Canadian real estate market. Homeowners who are planning to make a move or to retire in 2022 need to make haste, price
correctly, and have a solid re-entry plan of where it is you are moving.
The BCREA stated, February sales activity remained strong heading into spring, even though they estimate 40,000 new listings are needed province wide for a balanced
market to exist. At a glance, prices continued to rise amid even lower inventories, the only exceptions being Powell River and Chilliwack who saw active listings increase this February over last. The numbers showed a -17% decrease year over year, in total residential unit sales across the province. Fraser Valley sales dropped – 35%, Chilliwack sales dropped -21% year over year, and even the most active regions of the province, Vancouver Island & Victoria saw -18% and -20% drops in year over year unit sales.
The southern BC Markets have shifted, with an influx of new inventory giving buyers more choices amid a slower paced sales and multiple offers have all but disappeared, for now. In the active Harrison Hot Springs market, we have seen initial listing prices quickly reduced after open house events have yielded zero offer situations. Canada’s national housing starts were down in February by 2,285 units over last year, an indicator to watch that will predict further economic pullback. The most recent Bank Of Canada 0.25% interest rate hike had small but immediate effect on demand, and we won’t be waiting long for another as the BOC has announced further hikes in April, June and July that are rumoured to be half point increases. We should expect a BOC year end policy rate of around 2.75%, and more balance to replace the frenzied 1% rate demand volumes seen during the last several years.
Steve Huebi, for Canadianmortgagetrends.com published March 24th, a stark outlook
titled: New Forecasts Suggest Home Prices Declines Are Likely. The article highlights that Oxford Economics has forecast a 24% decline in home prices by mid 2024. Tony Stillo, director of Canada Economics at Oxford stated, “ Prices were 19% above the
borrowing capacity of median households as of late 2021, and expected to reach 38% by middle of this year.” “We believe this will cause the housing market to reach a breaking point and crash under the weight of its own success before year-end.” The article goes on to report that “not everyone thinks home prices are about to turn negative, at least not yet.” Huebi included forecasts from RBC Economists, who predict growth by 6.%, and the CREA who did forecast a 14.3% gain over 2021 prices. Predictions that the rapidly escalating global energy and commodities crisis may have changed in a mater of weeks.
To conclude, BC still has market exits and entrances that can see you receive high
returns on your nest egg investment and come out cash positive after your next
purchase, but the best advise I can give is do not wait, if you are planning to list, pull the trigger, now! Waiting has no benefit and your listing will receive less attention amid the
expected spring influx of freshly priced competition. Get out ahead to ensure that you reach your estate goal and the beat higher inflation, higher interest rates and increasing
economic uncertainty.
Freddy & Linda Marks, 3A®Group RE/MAX Nyda Realty