Where we're going next

When you talk to most people these days, the prevailing attitude is that our real estate market has shifted from greed to fear.

Sellers and developers are fearful that they have missed out on the top of the market.

No matter what way you look at it, there is risk involved. If you take your property off the market or refuse to budge on price, you may kick yourself a few months down the road when more homes come on the market to compete with yours.

However, there’s always the hope that the market will suddenly turn into last year's and you’ll have a chance to realize an amazing sale price.

A crystal ball during these times would be helpful, but it’s almost impossible to time things perfectly.

The concerns of sellers are warranted, and buyers are fearful too. Those looking for property are often scared that they’re going to make a mistake and buy at the peak.

However, those waiting to buy and hoping that prices will fall would be well advised to consider other factors.

In the current market, the potential cost of delaying a purchase, namely interest rate hikes, is often overlooked. Even if housing prices dip five per cent, the would-be savings are more than gobbled up by a half a percentage point increase in interest rates.

Moreover, any significant drop in housing prices is highly unlikely as the economy, inward migration and demographics have all aligned to create a growth market. This multitude of market influencers will prevent a real estate crash.

For the time being though, we will continue to see an increase in housing supply and softer demand as the market continues to balance out.

In some sectors, particularly high-end properties, it will become a buyer's market.

That said, buyers compressed into lower price brackets due to changes in lending will continue to drive demand for property at lower price points.

For this reason, entry-level homes under $600,000 should remain strong.

For most sellers in this market, a good piece of advice would be to have realistic expectations on what price you will get for your home. Increased inventory is forcing those looking to sell to compete with their neighbours to impress the limited and somewhat skeptical buyers who are looking for a deal.

Trends in the market 18 months ago caused me to predict that prices would soften. I believe the shift in supply and demand is just now beginning and the market will likely move even more in the coming months.

How long will it last?

No one knows for sure as many factors come into play. Not the least of which, is what will happen with our provincial government in October.

If our elected officials decide to scrap detrimental policies, the market could rebound aggressively.

However, if those in power decide to continue down the same path, we’re likely to head into a slump phase of the market. Remember though, regardless of government policies, market volatility is natural.

It’s important to remember that with our strong local economy, the sky isn’t falling and we won’t see a devastating correction like the one we saw in 2009.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.


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About the Author

AJ is the owner of Kelowna’s downtown boutique firm, Vantage West Realty. The firm takes pride in breaking the mould when it comes to how they practice real estate. With a well-deserved reputation as a real estate renegade, Hazzi has been shaking up the Kelowna real estate scene since 2002.

Having been a student of real estate through two market cycles, AJ has come to see an absence of truly qualified professionals specializing in investment real estate. This has become AJ’s role within the firm and the community: To educate clients on how to achieve financial freedom through real estate.

Arming his clients with knowledge on where to find positive cash-flow, how to renovate for profit, and other creative avenues that most agents completely ignore, Hazzi has carved out his niche as a real estate investment advisor (REIA), and loves nothing more than educating people on the right strategy to capitalize on both boom and bust years.  AJ is a firm believer that the Kelowna market is rich with opportunity, if one knows where to look.

If you are in search of an advisor who practices what they preach, consider that AJ has built his own real estate portfolio up to include multi and single family cash-flow rental properties, development property, resort property, fix and flips, and commercial properties. By sharing the lessons learned from his own experiences, his clients get the knowledge and confidence to invest without having to make the expensive mistakes he and many new investors have made along the way.

His goal is to impart on people, especially of the X and Y generation, that depending on RRSPs and Government Pension Plans to look after us down the road is risky business. Most people don't realize that as little as one or two properties added to your real estate portfolio now, can secure a comfortable, even lavish, retirement.

Bringing a consultant's approach rather than the tired, old-fashioned sales approach, AJ and his partners offer a world class service from finding, pre analyzing, and negotiating your next acquisition, to property management, all tailored to today’s busy investor.

To hear what AJ Hazzi's clients have to say about his service view the testimonials.

Contact Information

For more details or to reach AJ Hazzi, please visit www.vantagewestrealty.com

Email [email protected] Cell 250.864.6433

The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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