For many homeowners, the concept of professional home staging is shedding new light on how to promote a home in their real estate marketplace. If you’re thinking of selling your home, deciding on the best ways to organize your property before the “For Sale” sign is erected can help sell your home. Following are some tips that may help you sell your home faster and at a higher price.
1. Make a great first impression. Prospective buyers make up their minds about your house even before they get out of the car. To ensure they have the right idea, clean up your yard, get rid of unsightly weeds, and sweep/shovel your driveway and porches. Get out the rags and cleanser and spend 30 minutes scouring your front door, porch, railings and steps. Then tuck away all your recycling cans and bins at the back of the house or in a corner of the garage.
2. Declutter. A common phrase used to describe the importance of decluttering is: Clutter eats equity. So purge your closets, empty cupboards and box up small appliances. You may even want to rent a storage locker to keep items you simply cannot part with, while throwing out items you’ve collected over the years that you don’t want to take with you to your next home. This will also save you time during your big move. Ensure you pay close attention to your countertops and coffee tables as well.
3. Impersonal works. You want buyers to imagine themselves living in your home, so stash anything connected to your family or personal interests. Hide your son’s hockey trophies, store family photos and remove all traces of day-to-day life. This also included removing personal effects from the bathrooms.
4. Keep it fresh. There’s nothing worse than stepping into a house that smells of smoke, dampness or pet odours. The easy solution is to keep your windows open for 10 minutes a day. This strategy works better than deodorizers since a lot of people have allergies to artificial room fresheners. The oldest trick of all? Leave chocolate chip cookies baking in the oven. Yes, it’s hokey, but the smell does do wonders to help buyers bond with your home.
5. Declare war on grime. Cleanliness helps put a buyer’s mind at ease since it suggests that you’ve probably taken good care of your residence in other ways as well. So clean everything: walls, door handles, light fixtures and pantry cupboards. And don’t forget to dust your furnace room and furnace, since this makes your furnace look newer. Power washing windows, walkways, eavestroughs and pathways can also do wonders for your home’s exterior.
6. Hire a handyman. If you don’t have the time or expertise to deal with the aesthetics of your home, consider hiring a professional. Dripping faucets, cracked tiles and mouldy caulking around the bathtub can knock thousands of dollars off the price of your home.
7. Colour it up. Your single best investment may be a fresh coat of paint in key areas of your home. Try painting your front door and placing some urns containing seasonal arrangements on your front step or just inside the entryway. Remember that small touches can make a house seem cared for and important.
8. Reduce furniture. An easy way to create a sense of space is to get rid of some furniture. Moving a sofa and end tables into storage can give a small room some much-needed breathing space. If your furniture dates from the Mulroney era, consider packing it away and renting or borrowing some modern, stylish furniture or a couple of well-chosen pieces of wall art. Keep your rooms clean and simple like a hotel room or the showroom for a new house.
9. Lighten up. The brighter and sunnier a space, the easier it is to sell. If you don’t have the time or energy to clean all of your windows – inside and out – it may be a wise investment to hire a professional window-cleaning company. Thoroughly clean the shades on your light fixtures, change light bulbs and add floor lamps if an area seems dim. Finally, when it comes time to show your home, make sure all the lights are on, especially in hallways.
10. Add a touch of humanity. A couple of planters containing seasonal arrangements on your front porch, a vase of flowers on your dining room table, or even a simple rose in a vase can warm up a room. Candles can also do wonders in lighting and warming a room.
It used to be a good idea to stage a home. It set your home apart from the majority of other homes on the market which were not staged. Nowadays, with all the magazines and television programs aimed at this industry, it is almost a necessity.
I would be happy to help walk through your Mission or Abbotsford home to give you specific hints to prepare for helping you get it sold for the most money in the shortest time!
Friday, December 31, 2010
Thursday, December 30, 2010
BCREA Mortgage Rate Forecast
The unexpected rise in yields prompted a fairly dramatic re-pricing of mortgages in November. After falling to an all-time low of 5.19%, the 5-year mortgage rate has leapt 25bps to 5.44% while the 1-year rate increased from 3.20% to 3.35%.
Heightened volatility in bond markets could mean a re-testing of mortgage rates lows, particularly if a deepening Euro-crisis prompts a flight to safety in US and Canadian treasuries.
A more likely outcome is that mortgage rates will stay flat for the next quarter as investors re-evaluate growth and inflation expectations in the context of a QE2 world. Our expectation for 2011 is that rates will begin a slow march upwards, hovering slightly higher than current levels for the first half of 2011. Rates will then be prompted higher by expectations of renewed, but cautious, rate tightening by the Bank of Canada in the second half of next year.
The BCREA forecast for the 1-year mortgage rate to average 3.3% in 4th quarter of 2010 and to reach 4.4% by the end of 2011. The 5-year fixed mortgage rate will average 5.30% for the 4th quarter of 2010 before increasing to 5.90% in 2011.
For the full report, go to: http://www.bcrea.bc.ca/economics/forecasts/MortgageRateForecast.pdf
Heightened volatility in bond markets could mean a re-testing of mortgage rates lows, particularly if a deepening Euro-crisis prompts a flight to safety in US and Canadian treasuries.
A more likely outcome is that mortgage rates will stay flat for the next quarter as investors re-evaluate growth and inflation expectations in the context of a QE2 world. Our expectation for 2011 is that rates will begin a slow march upwards, hovering slightly higher than current levels for the first half of 2011. Rates will then be prompted higher by expectations of renewed, but cautious, rate tightening by the Bank of Canada in the second half of next year.
The BCREA forecast for the 1-year mortgage rate to average 3.3% in 4th quarter of 2010 and to reach 4.4% by the end of 2011. The 5-year fixed mortgage rate will average 5.30% for the 4th quarter of 2010 before increasing to 5.90% in 2011.
For the full report, go to: http://www.bcrea.bc.ca/economics/forecasts/MortgageRateForecast.pdf
Sunday, August 15, 2010
10 Worst First-time Homebuyer Mistakes
According to a recent story in the Globe and Mail, (the full article can be viewed at:
http://www.theglobeandmail.com/globe-investor/personal-finance/10-worst-first-time-homebuyer-mistakes/article1647390/), there are 10 things a first-time buyer should avoid to maximize their success:
10) Not thinking about the future
9) Not choosing to hire a REALTOR®
8) Neglecting to inspect
7) Compromising on the important things
6) Being swept away
5) Lacking vision
4) Being too picky
3) Failing to consider additional expenses
2) Skipping mortgage qualification
and #1 - Not knowing what you can Afford
While it's good to familiarize yourself with Real estate procedures and tips, working with a professional Realtor® can help you to maximize your chances of success on your purchase. I can guide you through the process to make sure no important steps or information are missed. My specialty is helping buyers and sellers in Mission and Abbotsford save money and make educated decisions based on their wants and needs, combined with the current state of the local market.
Just as doctors know medicine, accountants know taxes, and mechanics know engines, REALTORS® know real estate. Your purchase or sale of homes and property is most likely to be successful with professional help.
http://www.theglobeandmail.com/globe-investor/personal-finance/10-worst-first-time-homebuyer-mistakes/article1647390/), there are 10 things a first-time buyer should avoid to maximize their success:
10) Not thinking about the future
9) Not choosing to hire a REALTOR®
8) Neglecting to inspect
7) Compromising on the important things
6) Being swept away
5) Lacking vision
4) Being too picky
3) Failing to consider additional expenses
2) Skipping mortgage qualification
and #1 - Not knowing what you can Afford
While it's good to familiarize yourself with Real estate procedures and tips, working with a professional Realtor® can help you to maximize your chances of success on your purchase. I can guide you through the process to make sure no important steps or information are missed. My specialty is helping buyers and sellers in Mission and Abbotsford save money and make educated decisions based on their wants and needs, combined with the current state of the local market.
Just as doctors know medicine, accountants know taxes, and mechanics know engines, REALTORS® know real estate. Your purchase or sale of homes and property is most likely to be successful with professional help.
Saturday, August 7, 2010
Buyers on the Beach?
We have had a beautiful summer so far. Based on market data, it seems that many people are getting out and enjoying it, rather than looking at MLS listings and going to view homes with their REALTORS®.
July 2010 sales in the Fraser Valley Real Estate Board (FVREB) area were the lowest July sales recorded in the past decade. Besides the weather enticing buyers away, the slow July in real estate sales is probably also due to a combination of other factors. Misunderstanding and fears about the newly adopted HST, combined with recent interest rate hikes, as well as tightening in April of mortgage lending requirements are my main suspects for the activity slow-down.
Thankfully, for those of us living in Mission, our beautiful District did not fair as badly as some other areas in the FVREB. Year-over-year, Mission's sales of residential detached (RED) homes were only down 33.3% compared to -47.3% in the FVREB. Comparing sales of RED homes in June 2010 vs. July 2010, the FVREB showed -39.3% compared to Mission's -27.6%.
Mission homeowners will be happiest with the benchmark pricing stats. The housing price index of a benchmark RED home in the FVREB declined 1.5%, while in Mission we actually registered a month-over month gain of 1.8%.
Large differences in sales trends often occur in the various areas of the FVREB. It is therefore very important to enlist the help of a local REALTOR®, who understands the area's current market trends, when you are considering the sale or purchase of a home. It is with the help and expertise of a Mission area real estate expert, like myself, that you will ensure a successful real estate transaction on the purchase or sale of a Mission property.
Sunday, June 6, 2010
MANAGING THE STRESSES OF BUYING AND SELLING A HOME
By Stanley Popovich, guest blogger
Many people deal with the anxieties of buying or selling a home. This process can be confusing to many people. As a result, here is a list of ways that a person can use to manage the anxiety of purchasing or selling a home.
The first step is to determine your goals in purchasing or selling a home. Determine what you want to accomplish. It will save you a lot of time and money in the long run if you know what you are looking for. Sit down and think about the overall goal of what you are looking for and convey this to your real estate agent. Some people like to write down their goals on a piece of paper so they have something to go back to when they get stressed.
Educate yourself on the steps of purchasing or buying a home. Go to your local bookstore and find some books that will explain the process of buying or selling a home. There are many books available that can inform you of the process and will help reduce the anxiety of the situation. Most importantly, you will be able to make smarter choices that will save you time and money.
Find a reputable real estate agent that can help you accomplish your goals. Ask some of your friends on who they recommend and get in touch with them. Referrals from people you know are a great way in finding a good real estate agent.
Get your finances organized. Make sure you have an idea on what you can afford and also make sure that your credit is good. The financial aspect of buying or selling a home does not have to be scary if you have a sound business plan and a realistic budget. Some people may buy a home that they can't afford and this can cause problems down the road. Determine what you can afford and develop a budget where you will be able to keep up with your bills.
In addition to using the services of a good real estate agent, try to get a friend who is more experienced to help you. Chances are good that you know someone who has purchased or sold a home. You could ask them for their assistance and ask them questions on what to do and what not do. Having a friend who can assist you along the way can really help reduce the anxiety of the process.
Read the fine print on everything before signing and do not assume anything. Ask questions if you are uncertain on some aspects of buying or selling a home. A good real estate agent will not mind if you ask questions, however you should do your part and try to educate yourself on the entire process.
There will be times when everything happens all at once. When this happens, a person should take a deep breath and try to find something to do for a few minutes to get their mind off of the current situation. A person could take a walk, listen to some music, read the newspaper or do an activity that will give them a fresh perspective on things. Once you calm down, you will better able to make the right decisions.
Purchasing or selling a home does not have to be a bigger deal than it has to if you take the proper steps. There is help out there if you get stuck or confused. The most important thing is to do your homework. Determine your goals, educate yourself on the steps to reach your goals, ask questions, and take it one step at a time. If you follow this advice you will be better able to reduce the stresses of purchasing or selling a home.
BIOGRAPHY: Stan Popovich is the author of "A Layman's Guide to Managing Fear Using Psychology, Christianity and Non Resistant Methods" - an easy to read book that presents a general overview of techniques that are effective in managing persistent fears and anxieties. For additional information go to: http://www.managingfear.com/
Many people deal with the anxieties of buying or selling a home. This process can be confusing to many people. As a result, here is a list of ways that a person can use to manage the anxiety of purchasing or selling a home.
The first step is to determine your goals in purchasing or selling a home. Determine what you want to accomplish. It will save you a lot of time and money in the long run if you know what you are looking for. Sit down and think about the overall goal of what you are looking for and convey this to your real estate agent. Some people like to write down their goals on a piece of paper so they have something to go back to when they get stressed.
Educate yourself on the steps of purchasing or buying a home. Go to your local bookstore and find some books that will explain the process of buying or selling a home. There are many books available that can inform you of the process and will help reduce the anxiety of the situation. Most importantly, you will be able to make smarter choices that will save you time and money.
Find a reputable real estate agent that can help you accomplish your goals. Ask some of your friends on who they recommend and get in touch with them. Referrals from people you know are a great way in finding a good real estate agent.
Get your finances organized. Make sure you have an idea on what you can afford and also make sure that your credit is good. The financial aspect of buying or selling a home does not have to be scary if you have a sound business plan and a realistic budget. Some people may buy a home that they can't afford and this can cause problems down the road. Determine what you can afford and develop a budget where you will be able to keep up with your bills.
In addition to using the services of a good real estate agent, try to get a friend who is more experienced to help you. Chances are good that you know someone who has purchased or sold a home. You could ask them for their assistance and ask them questions on what to do and what not do. Having a friend who can assist you along the way can really help reduce the anxiety of the process.
Read the fine print on everything before signing and do not assume anything. Ask questions if you are uncertain on some aspects of buying or selling a home. A good real estate agent will not mind if you ask questions, however you should do your part and try to educate yourself on the entire process.
There will be times when everything happens all at once. When this happens, a person should take a deep breath and try to find something to do for a few minutes to get their mind off of the current situation. A person could take a walk, listen to some music, read the newspaper or do an activity that will give them a fresh perspective on things. Once you calm down, you will better able to make the right decisions.
Purchasing or selling a home does not have to be a bigger deal than it has to if you take the proper steps. There is help out there if you get stuck or confused. The most important thing is to do your homework. Determine your goals, educate yourself on the steps to reach your goals, ask questions, and take it one step at a time. If you follow this advice you will be better able to reduce the stresses of purchasing or selling a home.
BIOGRAPHY: Stan Popovich is the author of "A Layman's Guide to Managing Fear Using Psychology, Christianity and Non Resistant Methods" - an easy to read book that presents a general overview of techniques that are effective in managing persistent fears and anxieties. For additional information go to: http://www.managingfear.com/
Wednesday, May 26, 2010
Relax: It's Just The Housing Market Cycle
Here is the summary from a report from Gregory Klump, the Canadian Real Estate Association's chief economist, that was released today, May 26, 2010.
• Canadian home prices are unlikely to undergo U.S.-style correction.
• As part of a normal demand-driven housing market cycle, the price to income ratio reverts from its peak to its long-term average by way of income growth and stable prices.
• Homes purchased by retirees with accumulated wealth, not financed with income, may be upwardly skewing the British Columbia and national price to income ratio.
• Based on the longer-term relationship between price and income, the national price to income ratio will soon revert to its long-term average via increases in income, not sharp price declines.
• Warnings of a U.S.-style correction in Canadian home prices ignore solid Canadian mortgage market trends.
• Mortgage holders in Canada have borrowed conservatively and are accelerating mortgage repayment, providing options for the small proportion of homeowners that may face financial difficulty when their mortgage is renewed at a higher interest rate.
• Canada will avoid a massive oversupply of homes and a sharp drop in housing demand, so a U.S.-style correction in home prices is unlikely.
The information in this blog has been taken from a report provided by CREA and may not be appropriate for other purposes. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. The report contains economic analysis and views, including those on future economic and financial markets’ performance. These are based on certain assumptions, and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. Cyndi Polovina, Landmark Realty Mission Ltd., CREA and its member Boards and Associations are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered
• Canadian home prices are unlikely to undergo U.S.-style correction.
• As part of a normal demand-driven housing market cycle, the price to income ratio reverts from its peak to its long-term average by way of income growth and stable prices.
• Homes purchased by retirees with accumulated wealth, not financed with income, may be upwardly skewing the British Columbia and national price to income ratio.
• Based on the longer-term relationship between price and income, the national price to income ratio will soon revert to its long-term average via increases in income, not sharp price declines.
• Warnings of a U.S.-style correction in Canadian home prices ignore solid Canadian mortgage market trends.
• Mortgage holders in Canada have borrowed conservatively and are accelerating mortgage repayment, providing options for the small proportion of homeowners that may face financial difficulty when their mortgage is renewed at a higher interest rate.
• Canada will avoid a massive oversupply of homes and a sharp drop in housing demand, so a U.S.-style correction in home prices is unlikely.
The information in this blog has been taken from a report provided by CREA and may not be appropriate for other purposes. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. The report contains economic analysis and views, including those on future economic and financial markets’ performance. These are based on certain assumptions, and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. Cyndi Polovina, Landmark Realty Mission Ltd., CREA and its member Boards and Associations are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered
Wednesday, May 5, 2010
Active Spring Market in the Fraser Valley
It is not uncommon for us to see a surge of listings in the Spring, but this year's number of active listings in April, in the Fraser Valley, was second only to the April of 1995. There is a huge volume of listings available from which Buyers can choose their dream home, which is definitely affecting home values.
As with anything from widgets to oranges, with higher supplies and lower demand come lower prices. Fortunately the demand in the Valley remains high, and this is keeping prices stable. Prices remain rather unchanged, over the last few months, although year-over-year, we have seen a rise in prices of about 10% in most areas in the Fraser Valley, across most housing types.
Before I start giving you benchmark statistics to show you how prices have changed in the past year in various areas of the Fraser Valley, I need to explain the "HPI benchmark home" briefly. The HPI (Housing Price Index) is akin to the CPI (consumer price index.) In order to compare apples to apples, so to speak, a "benchmark" home is defined in an area, as being indicative of an average home that is sold in a given area. In the Fraser Valley a "typical" or benchmark single-detached home is 15 years old with a lot size of 7405 sqft, nine rooms, two bathrooms, a fireplace and a one-car garage. The idea is that if we measure how the "typical" home has changed in price, we can know how prices in all segments of the market have changed in price. It also enables us to compare prices in Langley with prices in Mission, since we are comparing the same kind of home, but in a different area.
While the Fraser Valley as a whole saw the HPI rise 13% year-over-year, April 2009 to April 2010, in Mission, the rebound from the price declines of 2008 and 2009 hasn't been as quick or significant. The price of a benchmark home in Mission only rose about 2.3% year-over-year, compared to an increase of a benchmark Abbotsford home from about $395,000 to about $442,000, or almost 12%!
When you compare benchmark pricing of $354,307 in Mission to a benchmark Surrey Central home at $533,000, or a benchmark Langley home at $523,000, you can see that there is clear value in buying into the beautiful communities of Abbotsford and Mission.
With prices in Mission still being depressed compared to other areas, there is great value in buying a home in Mission, which is only about an hour's ride from Downtown Vancouver by the comfortable and affordable West Coast Express train. Mission is a fantastic, family community with many amenities and services. I am proud to call Mission home, and I would welcome the opportunity to show interested buyers why they should consider purchasing a home here, or in our neighbour city, Abbotsford.
As an area expert, and professional Realtor, I can advise you about area amenities and also advise you about what pitfalls to look out for whether you are buying your first home, retirement home, or your dream home. I look forward to helping you make you home buying experience a positive one!
As with anything from widgets to oranges, with higher supplies and lower demand come lower prices. Fortunately the demand in the Valley remains high, and this is keeping prices stable. Prices remain rather unchanged, over the last few months, although year-over-year, we have seen a rise in prices of about 10% in most areas in the Fraser Valley, across most housing types.
Before I start giving you benchmark statistics to show you how prices have changed in the past year in various areas of the Fraser Valley, I need to explain the "HPI benchmark home" briefly. The HPI (Housing Price Index) is akin to the CPI (consumer price index.) In order to compare apples to apples, so to speak, a "benchmark" home is defined in an area, as being indicative of an average home that is sold in a given area. In the Fraser Valley a "typical" or benchmark single-detached home is 15 years old with a lot size of 7405 sqft, nine rooms, two bathrooms, a fireplace and a one-car garage. The idea is that if we measure how the "typical" home has changed in price, we can know how prices in all segments of the market have changed in price. It also enables us to compare prices in Langley with prices in Mission, since we are comparing the same kind of home, but in a different area.
While the Fraser Valley as a whole saw the HPI rise 13% year-over-year, April 2009 to April 2010, in Mission, the rebound from the price declines of 2008 and 2009 hasn't been as quick or significant. The price of a benchmark home in Mission only rose about 2.3% year-over-year, compared to an increase of a benchmark Abbotsford home from about $395,000 to about $442,000, or almost 12%!
When you compare benchmark pricing of $354,307 in Mission to a benchmark Surrey Central home at $533,000, or a benchmark Langley home at $523,000, you can see that there is clear value in buying into the beautiful communities of Abbotsford and Mission.
With prices in Mission still being depressed compared to other areas, there is great value in buying a home in Mission, which is only about an hour's ride from Downtown Vancouver by the comfortable and affordable West Coast Express train. Mission is a fantastic, family community with many amenities and services. I am proud to call Mission home, and I would welcome the opportunity to show interested buyers why they should consider purchasing a home here, or in our neighbour city, Abbotsford.
As an area expert, and professional Realtor, I can advise you about area amenities and also advise you about what pitfalls to look out for whether you are buying your first home, retirement home, or your dream home. I look forward to helping you make you home buying experience a positive one!
Monday, January 18, 2010
The Dreaded HST and the Housing Market
What is the proposed HST going to do to the housing market? Even more worrisome is the forecast that interest rates are likely to rise around the same time as the HST kicks in. Low interest rates have boosted affordability and the combination of low interest rates and relatively lower housing prices have drawn first-time buyers into the market in droves. In fact, where first-time buyers would have made up approximately 25% of December sales, they actually accounted for 40% of December 2009 sales.
The proposed HST (Harmonized Sales Tax) will combine the PST and GST. Some items which were previously PST exempt will now carry HST, meaning a whopping 7% increase in taxes on those items. In recent years, purchases of building lots have only carried GST, not PST, but, if the tax comes into effect July 1, as expected, HST will apply, increasing the cost by 7%.
New home sales have also only carried GST, with some rebates allowed if the home was to be owner-occupied. That is also the case with the proposed HST. HST will apply on new homes where the Buyer takes ownership or possession on or after July 1, 2010. There will be some exemptions and threshold limits that may mean rebates of the tax for some home buyers.
Local Real Estate Boards did have some success in lobbying the government for increased thresholds for the proposed tax. It appears that the maximum threshold for rebates on HST will be raised from $400,000 to $525,000; Over $525,000, everyone will receive a rebate of $26,250, (71.43 of the provincial portion of the HST), if the home is going to be owner-occupied.
So, what does this mean for the real estate market? In Mission, the impact on prices and activity should be less severe than in more urban areas, since a large portion of our new homes being sold are below the threshold of $525,000. Independent of any interest rate hikes, which have a lowering effect on prices, due to decreased affordability, the newly-imposed HST could potentially have the impact of increasing prices to some degree, albeit not likely by as much as 7%. The problem is, what will that do to market activity?
The HST doesn't only affect new homes, since activity in one market segment affects activity in other market segments. Regardless of whether your home is the kind of home that first-time buyers are purchasing, or if your home is more in the second-home range, there are always “trickle down” effects of activity. For example, a person selling their home to trade-up for a newer one may not be able to afford a new build, but maybe you can. Perhaps your home is exactly the one that someone would want to trade up to, even if it is no longer meeting your family's space requirements. Perhaps this is the year to make that move you have been considering, to get into a brand-new home before the HST kicks in? (Particularly if you are thinking about buying a new home worth more than $525,000.)
The greatest likelihood is that the looming HST will mean that the number of sales will decrease after May 1, 2010, as many people will make sure their completion dates fall before July 1 to avoid the HST. I am expecting a very busy spring market, with lots of sales. But the likelihood is that the summer and fall months will experience fewer sales than we have experienced in recent months. And, don't forget that a drop in demand usually means a drop in prices, so waiting too long could cost you money.
With my skills, knowledge and area expertise, I can help you to use the right strategies that work to get your Mission home sold. Call me to help you make the most important decision of your life an INFORMED decision. Call Cyndi Polovina today at_604-820-7733!
The proposed HST (Harmonized Sales Tax) will combine the PST and GST. Some items which were previously PST exempt will now carry HST, meaning a whopping 7% increase in taxes on those items. In recent years, purchases of building lots have only carried GST, not PST, but, if the tax comes into effect July 1, as expected, HST will apply, increasing the cost by 7%.
New home sales have also only carried GST, with some rebates allowed if the home was to be owner-occupied. That is also the case with the proposed HST. HST will apply on new homes where the Buyer takes ownership or possession on or after July 1, 2010. There will be some exemptions and threshold limits that may mean rebates of the tax for some home buyers.
Local Real Estate Boards did have some success in lobbying the government for increased thresholds for the proposed tax. It appears that the maximum threshold for rebates on HST will be raised from $400,000 to $525,000; Over $525,000, everyone will receive a rebate of $26,250, (71.43 of the provincial portion of the HST), if the home is going to be owner-occupied.
So, what does this mean for the real estate market? In Mission, the impact on prices and activity should be less severe than in more urban areas, since a large portion of our new homes being sold are below the threshold of $525,000. Independent of any interest rate hikes, which have a lowering effect on prices, due to decreased affordability, the newly-imposed HST could potentially have the impact of increasing prices to some degree, albeit not likely by as much as 7%. The problem is, what will that do to market activity?
The HST doesn't only affect new homes, since activity in one market segment affects activity in other market segments. Regardless of whether your home is the kind of home that first-time buyers are purchasing, or if your home is more in the second-home range, there are always “trickle down” effects of activity. For example, a person selling their home to trade-up for a newer one may not be able to afford a new build, but maybe you can. Perhaps your home is exactly the one that someone would want to trade up to, even if it is no longer meeting your family's space requirements. Perhaps this is the year to make that move you have been considering, to get into a brand-new home before the HST kicks in? (Particularly if you are thinking about buying a new home worth more than $525,000.)
The greatest likelihood is that the looming HST will mean that the number of sales will decrease after May 1, 2010, as many people will make sure their completion dates fall before July 1 to avoid the HST. I am expecting a very busy spring market, with lots of sales. But the likelihood is that the summer and fall months will experience fewer sales than we have experienced in recent months. And, don't forget that a drop in demand usually means a drop in prices, so waiting too long could cost you money.
With my skills, knowledge and area expertise, I can help you to use the right strategies that work to get your Mission home sold. Call me to help you make the most important decision of your life an INFORMED decision. Call Cyndi Polovina today at_604-820-7733!
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