Nelson Real Estate

Your Guide to Buying and Selling Homes in Nelson, BC

Nelson Real Estate

The HemLoft

April 26th, 2012 · No Comments · Novelty Homes

Hey, I’ve attached a link to this post for a very interesting home.  I saw it featured on a Global TV news story last evening.   This place has been built (in an undisclosed location), but without the necessary permits.  I can see that there are some issues that may be considered safety related (like the front entrance), but the owner may be required to remove the home because it sits on crown land and doesn’t have the needed permits.

Link to the HemLoft

In any case, I haven’t done a post under the category of “Novelty Homes” in quite a while, and I thought this was a beautiful piece of work.   What do you think?

 

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More on the Spring Market

April 13th, 2012 · No Comments · Marketing Your Home

We are having a very active month with obtaining new listings.  This is expected during April and May especially.   I know from conversations and inquiries that there are more coming.

Here in the office we are busy updating our listing photos and virtual tour clips to replace the photos and tours with snow covered yards.  In the Uphill and Rosemont areas especially, it seems to have disappeared almost overnight!

Here’s an example of what I mean:

 

Photo taken March 22nd

Updated photo on April 11th

 

Info on this home is available here.

 

 

 

 

 

 

I suppose we’ll update again when the grass is fully green and there are flowers in bloom!  Thank heaven for digital cameras!

Other regions are also talking about a more balanced market this spring than we have experienced for a few years, with the exception of a couple of major markets that continue to flourish, largely due to offshore purchasers.

I’m also finding that more inquiries are being received from people interested in investing in commercial properties or businesses this year.  This, too, is an encouraging sign.

It may still be too early to plant your garden in Nelson (at least if what you are planting is frost sensitive), but I have taken a chance and taken off my snow tires as of today.  I hope I’m not being overconfident!

Get out and enjoy the area this weekend.  You can still ski, if you don’t mind hiking up the hill, and some golf courses in the area are open.  Lots of bicycles out on the road, and I’m told that fish are biting in the lake.  If, during all of this spring activity, you get to thinking about real estate, don’t hesitate to give us a call.

 

 

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Spring Selling Season

March 31st, 2012 · No Comments · Economic Information, Financing

I can’t get enthusiastic about this spring weather.  From where I am sitting in my office, I can see no mountains, which is a difficult thing if you are looking outside in Nelson!  The rain at least is washing the snow away from the Uphill areas, and the late season skiers are still very happy.  Personally, I’d rather be golfing!  (That however is another story, and not a particularly happy one!)

I am attaching a link to a recent article by a Realtor(r) in Chilliwack regarding the spring market.  It appears to be a more balanced market than we have been experiencing for a few years — without the hype of the major centres, as I have commented on more than one occasion.  Please check it out here.

Here is another post, this time from a Victoria Realtor (r) who has written an article on “The 5 C’s of Credit”.  This brings back memories of my days as a mortgage lender, and it is good information is you are looking for a mortgage approval.  You can check this one out here.

Locally, it seems that our market is quite active.  That is difficult to measure after only 1 quarter, because, quite frankly, there isn’t too much moving in the first quarter of a calendar year.  When I compare sales in Nelson from January 1st to March 31st of this year, I see that there are 16 sales  reported through the MLS system.  The prices ranged from $220,000 to $525,000 for those homes.

Last year, there were only 12 sales reported during that time, with prices between $44,900 (mobile home) to $499,000.  That’s too soon to predict a trend, but it is encouraging.

Well, I must run, as I have an open house in an hour from now.  Trying to make another sale before the month is truly over!  You can check out our open house schedule on our calendar.

 

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The Low Interest Rates Continue

March 10th, 2012 · No Comments · Economic Information

30 years ago I was employed as Loans Manager at the Nelson Credit Union.  In October, 1991 we experienced the highest interest rates ever.  We were quoting mortgage rates of 21.5%, and we would only guarantee that rate for 6 months at a time.  As it happened, when the 6 months was over, the rates were on their way down, but we didn’t know that when we loaned the funds.

Just to emphasize the change that has occurred, a payment on a $100,000 mortgage at 21.5%, with a 25 year repayment period (amortization) would cost $1,726.79 per month.  That is $17.27/1000

At today’s rates, that same loan would cost $487. per month, over the same 25 year repayment period.  That’s $4.87/1000

If you would like to do your own rate calculations, here is a link to the Royal Bank’s mortgage calculator site.

Consumers have now become used to these rates.  In Canada we are in a period of great stability in interest rates.   The “Bank Rate” set by the Bank of Canada has not changed in more than a year.  If current trends continue, it will likely stay at its current low rate for the rest of this year.

There are, of course, variables which could affect this.  Inflation is expected to be around 2% for 2012, which is in line with Bank of Canada targets.  It would be lower if not for the rising price of oil, which is largely because of uncertainty around the oil supply from Iran, and the renewal of political tension around that country.

The perception is that the European economic crisis is lessening.  Hopefully, further bailouts will be unnecessary.

The U.S. economy is also improving, if only slightly.  As long as it is trending in a positive direction, this will bode well for continued stable interest rates.  In Canada, our economic outlook is also improving, though, again, only marginally.  Our net exports to the U.S. has increased, which is a very good sign, especially in the face of a strong Canadian dollar.

So, with low interest rates, a marginally improving economy, better balance of trade statistics, where does that leave the housing industry?

As you have heard me say before, that is going to depend on where you are.  Vancouver, Toronto and Calgary are where the “hottest” markets have been.  People coming to Canada traditionally arrive in a larger centre.  More high paying jobs are found in those places.  A continuing strong demand will keep prices high.

Areas like Saskatchewan have found a way to attract people.  It’s called “jobs”.  Their economy is stronger than much of the rest of the country.  They have also had much lower real estate prices for many years.  Even today, you can find some real deals in parts of rural Saskatchewan and Manitoba.

There is a positive feeling in our area at this time.  Not too many sales occur in the winter months, but we are getting inquiries now, and anticipating a healthy market in the spring.  As our markets have been weak for 3 years now, there will likely be a rebound due to some pent-up demand for home ownership.  At the moment there is not too much product available for sale, but that should change over the next 6 weeks or so.

I’ll have to make a note to review this post in 6 months, to see if it came true!  In the meantime, here is a link to a Japanese TV commercial that I got a great chuckle from.  It’s only 30 seconds long.  Please check it out here.

Here is a link to the news release that CREA (The Canadian Real Estate Association) issued this week.

Finally, unless you live in Saskatchewan, or the East Shore of Kootenay Lake, make sure you remember to change your clocks, one hour  forward, when you go to bed tonight (Saturday).

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Home Energy Retrofit Program

March 7th, 2012 · No Comments · Financing, Home Renovations

EcoSave

Energy Retrofits Program

 

The City of Nelson has recently approved an Energy Retrofits Program run by Nelson Hydro, which will be launched within the next month.

 

This program, which is funded by Nelson Hydro, Fortis BC, Columbia Basin Trust and Natural Resources Canada, will assist homeowners in identifying areas within their homes where energy savings can be accomplished.  Once registered for the program an energy audit will be scheduled.  Following the energy audit, decisions will be up to the homeowner as to what retrofits will be completed.  The key benefit to this program is the offer of on-bill financing, which is a low interest borrowing arrangement through Nelson Hydro to cover eligible retrofits to be repaid on the participants utility bill upon approved credit.

 

This is the logo for the new EcoSave program

The program is currently limited to owner-occupied homes located within the city limits of Nelson.

This program basically follows the eligibility requirements set out under the LiveSmart program of the B.C. provincial government and covers such areas as:

► AIR SEALING AND MECHANICAL VENTILATION

► ATTIC INSULATION

► EXTERIOR WALL INSULATION

► BASEMENT INSULATION AND OTHER INSULATION

► WINDOWS, DOORS AND SKYLIGHTS

► PRIMARY SPACE HEATING

► OTHER SPACE HEATING

► WATER HEATING

► DISTRIBUTED POWER GENERATION

► APPLIANCES ARE NOT ELIGIBLE, BUT WATER SAVING MEASURES, SUCH AS LOW FLOW TOILETS WILL BE CONSIDERED

 

The maximum individual loan is to be set at $10,000.  The interest rate that the homeowner/borrower will be eligible may be the same rate that the City of Nelson can borrow funds through the Municipal Finance Authority.  Some of the details are still in development and finalizing stages.  These loans can be repaid over either a 5-year or a 10-year repayment period, which will be tailored to try and reflect the savings in energy costs by implementing the recommendations in the energy audit assessment.

 

Nelson Hydro has hired a Program Coordinator, Carmen Proctor for this position; she is currently taking names for a list of interest, and will notify those when registration opens.  She can be contacted at cproctor@nelson.ca or 250-509-2021.  You can also receive additional information from the City of Nelson web-site from the March 5, 2012 council agenda.  (Item 9 – Home Energy Retrofit Program).

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Deconstructing the HST

February 18th, 2012 · No Comments · Housing Issues

Yesterday afternoon the provincial government released the schedule for transitioning away from the HST back to the 2 taxes of PST (Provincial Sales Tax) and GST (the Federal Good & Services Tax) as it applies to new home construction.

The HST will be fully replaced by April 1, 2013.  However, as of April 1, 2012 these transition rules will apply.  Under the HST a new home builder was eligible for a rebate of up to $26,250 which was to offset the effects of the HST when it was introduced in 2010.  This maximum amount was based on 5% of the cost of the home, and capped out when the cost reached $525,000.  Under the new rules, as of April 1, 2012, this grant is increased to $42,500 and is applied at 5% on the cost of the home, to a maximum cost of $850,000.  This grant will also apply to newly constructed secondary or vacation homes, provided they are located outside of the Greater Vancouver and Capital regional districts.

I had mentioned in my post last week that there had been limited new home construction in our area over the past 3 or 4 years.  I don’t mean to suggest that the HST was the reason for this decline in new home starts (the rest of the world’s economy certainly had a large impact on that), but these new rules should encourage new construction in those areas of the province which have been most adversely affected by the economic slowdown.

Rather than spell out all of the rules here, I am providing two links that you will find helpful, if you are interested in new home construction.  The first is a news story in yesterday’s Vancouver Province newspaper.

The second is a link to a Provincial Government web-site, explaining the transition rules in detail.

It should also be noted that there will be a temporary 2% tax on the cost of a new home.  This replaces the provincial portion (7%) of the current HST.  It is expected that this new tax will neutralize the effect of the HST portion, in conjunction with the rebate mentioned above, until the new structure of PST plus GST are re-instated next year.

Please keep in mind that these rules do NOT impact the sale of pre-owned houses in this province.  They have not and will not be subject to PST or GST.

I’m sure there will be more releases as people get their heads around the implication of these new rules.

Thanks for reading.

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Numbers

February 11th, 2012 · No Comments · Economic Information

Some of the statistical information gathered in last year’s census was released this week.  I thought I would take these numbers and try to compare them to our real estate market.

Nearly all of the communities in our area saw an increase.  Nelson was the highest increase in population in the West Kootenay area at  10.5% from the previous census figures, gathered in 2006.  Other communities were as follows:  Castlegar – 7.7%, Trail – 6.1%, Rossland – 8.5%, Creston – 9.9%.  The Regional District of Central Kootenay (Nelson, Castlegar, Creston, Slocan Valley) showed an increase of 4.6% while the Regional District of Kootenay Boundary (Trail, Rossland, Grand Forks) showed a smaller increase of 1.3%.  The only negative growth community I noticed in our area was Grand Forks, whose population dropped by 1.3%.

So, in Nelson we gained roughly 1,000 people in the past 5 years.  Where do they live?  We have seen the development of several condominium buildings over that time, including Silver Bay and Amber Bay (total of about 80 residences between those two buildings), The Graine (about 20 units) and Lakeshore Place Assisted Living (90 units).  There have also been a few smaller developments and 3 major (for Nelson) subdivisions, whose being John’s Walk (the old mill site), Fairview Heights (the old gravel pit) and Morning Mountain (between Perrier Rd & Selkirk College Rosemont campus).

There has also been a relaxing of the regulations for suites in homes and some in-fill construction (although that was primarily in 2006 and 2007, with not a great deal of new construction occurring in the past 3 years).

There has also been an upgrade and reopening of the student housing at the Selkirk College Fairview campus, but that did not occur until after the census date of July 1, 2011.

In an smaller community like Nelson, changes don’t have to be dramatically large to have a significant impact.  The increases I have described above allow for a 10.5% increase in our city’s population.  This is well ahead of the provincial average of 7% (The provincial population is now 4.4 million).

Nelson’s growth has come primarily with the addition of self-employed home based business people.  At this point in time our school populations are not growing, so we can determine that these newcomers don’t have too many school aged children.  Service industries (retail stores, restaurants, etc.) continue to grow with an increasing population.  I am convinced that the seniors’ population would increase more rapidly if there were more medical services available at Kootenay Lake Hospital.

While writing this piece, I decided to check on two more smaller communities in our area.  The Village of Salmo grew by 13.1% over the past 5 years, while the Village of Kaslo experienced a 4.3% population decline.  Both of those communities are home to just over 1,000 people.

Last weekend I was attending meetings in the Vancouver area.  I decided to drive by the neighbourhood where I grew up, between Cambie and Main Streets and between 41st and 49th Ave.  It seems that there haven’t been too many changes, although some of the homes have been replaced with larger ones, and the ones remaining (like our old house) look much older.  Here is a photo of Sir William Van Horne School where I attended for 6 years.

Sir William Van Horne School, Vancouver, B.C.

Please click here if you wish to view more statistical information from the census site

Lorne

 

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Canadian Housing Bubble?

February 8th, 2012 · No Comments · Economic Information, Housing Issues

Here is a post from the Economist on a housing “bubble” in Canada.  Please note that they are, once again, talking about the over-active markets in Toronto and Vancouver.  I don’t think that we will experience this in much of the country, because our prices have not been increasing, nor have we been experiencing multiple offer situations.  The article expresses some concerns about our economy, but most of the real estate concerns are focused around those two major centres.

Please check out The Economist

 

Lorne

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New Strata Regulations

January 28th, 2012 · No Comments · Housing Issues

When one is considering buying a strata property (usually a condominium or townhouse) one of the important things to consider is the financial statement of the strata corporation.  A strata corporation is the group (formed into a legal entity) of owners that make up and enforce (when necessary) the bylaws of the development.  A strata corporation usually takes over when a development is finished and the initial owners move in to their new homes.

A strata development will have a strata fee.  This fee covers many things.  Maintenance of common property (e.g. elevators, parking garages, etc.) insurance on the building(s), landscaping & snow clearing and a provision for repair and replacement of items over time.  It is this last item that the new regulations will affect.

As a buyer, you should know what amounts have been set aside to cover roof replacement, repainting, common area improvements (e.g. hallway carpeting in an apartment style condominium building), and how large is the contingency fund.  A contingency fund will cover emergencies such as flooding or vandalism (although the corporation will likely have insurance for this as well).

Here is an article that arrived this week from the B.C. Real Estate Association, written by Mike Mangan, who is a lawyer and course instructor who contracts with BCREA.  In the 2nd paragraph of the article (below) the author refers to a “licensee”.  This is the term for a licensed real estate salesperson, aka REALTOR(R)

CONDO DOCUMENT ALERT

The majority of all new housing starts involve strata properties. In a dozen municipalities, strata properties now make up more than half of all taxable properties.1

In December 2011, the provincial government changed several important strata requirements.2 Whether a licensee markets strata properties or manages them, the licensee needs to know about these developments. The changes mainly concern depreciation reports and contributions to a strata corporation’s contingency reserve fund (CRF). Some changes are immediate, while others come into effect at different times over the next two years. This is a summary of the changes that most concern licensees.

Depreciation Reports
A strata corporation’s depreciation report estimates the life expectancy of major items and the ultimate cost of their repair or replacement. Effective December 13, 2011, every strata corporation must periodically obtain a depreciation report, unless otherwise exempted. A strata corporation whose strata plan contains less than five strata lots is excused from this requirement. So too, where a strata corporation by 3/4 vote waives the requirement for a depreciation report, the corporation may defer compliance with this requirement for up to 18 months.

With some exceptions, a strata corporation has two years (in most cases, until December 13, 2013) to obtain the mandatory depreciation report. After that, a strata corporation must update its depreciation report every three years, unless exempted. Only a qualified person may prepare the report, which must involve an onsite inspection. The report must project the anticipated costs of maintenance, repair and replacement of major building components over the next 30 years. The depreciation report must also contain certain information, including a financial forecast that offers at least three cash-flow funding models for the CRF.

Strata Records
Effective December 13, 2011, a strata corporation must keep among its records any depreciation report obtained by the strata corporation. The strata corporation must also keep any reports respecting the repair or maintenance of major items in the strata corporation, including engineers’ reports, risk management reports, sanitation reports and reports respecting any items for which information is mandatory in a depreciation report.

Effective March 1, 2012, whenever a strata corporation issues an Information Certificate (Form B), the corporation must attach to it, among other things, the corporation’s most recent depreciation report.

In addition, effective, January 1, 2014 the Information Certificate (Form B) will change. At that point, the Form B will require a strata corporation to disclose if there is any parking stall or storage locker allocated to the strata lot and if so, whether the parking stall or storage locker is a separate strata lot, part of a strata lot, or part of the common property.

Funding the CRF
In the past, the Strata Property Act imposed a CRF ceiling. In simple terms, once a strata corporation’s CRF exceeded the amount of the previous year’s operating budget, the law prohibited further CRF contributions, unless the eligible voters by 3/4 vote decided otherwise. Effective December 13, 2011, the CRF cap disappeared. Now, so long as the strata corporation has the statutory minimum amount in its CRF, the corporation may approve further contributions as part of the ordinary budget approval process after considering the depreciation report, if any.

This is only a summary of these important changes; the new requirements for depreciation reports, for example, are reasonably complex. A licensee can view the legislation at: www.housing.gov.bc.ca/strata/regs/OIC-SPA.pdf. Every listing licensee and buyer’s agent should immediately add to their list of requisite documents any depreciation report, as well as the related documents listed above. Every strata property manager may learn the specifics of these changes by attending those industry events where these developments will undoubtedly be discussed in detail.

Mike Mangan
B.A., LL.B.

1. British Columbia, Ministry of Energy and Mines and Minister Responsible for Housing, Information Bulletin, 2011ENER0125-001607, “New strata property regulations introduced” (14 December 2011) at 1.
2. OIC 623/2011 (13 December 2011)

One of the biggest reasons that this is important to an owner or a buyer of a strata unit is to protect against the necessity of having to levy a “special assessment” which all owners would be required to pay if their contingency or replacement reserve fund is not adequate to pay for a needed repair, such as a new roof.  It can also prevent significant increases in monthly strata fees at some point when a strata council realizes that they are under-funded for an upcoming planned expense.

Please don’t hesitate to give us a call if you have questions on this topic, or other real estate related issues.

Do you have topics you would like to see discussed here?  We welcome your suggestions.

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Looking Forward

January 21st, 2012 · 1 Comment · Economic Information

Last week I looked back on the sales statistics for 2010 and 2011 through the Kootenay Real Estate Board for Nelson and Nelson Rural Properties.  This week, rather than looking into a mirror, we’re going to look into a crystal ball and try to see the future.

There is no doubt that the continuing low interest rates will help the housing market.  Currently there is no indication that rates are going to rise — the Bank of Canada has left its key lending rate (The Bank Rate) alone.  It has not changed since September, 2010, and I understand that this is the longest period of stability in the history of the Bank of Canada.  Retail rates (the rates the banks and other lenders charge their clients) have actually fallen in recent months.

Currently a $300,000 mortgage will have a payment of just over $1,300 per month (on a 30 year repayment schedule).

According to a recent article in the Vancouver Sun prices will rise a modest amount during 2012.  Please remember that, according to Canada Mortgage and Housing (CMHC) statistics, 2011 showed a significant increase of around 15%.  However, in many parts of rural British Columbia that wasn’t the case at all.  Vancouver prices, which are among the highest in Canada, continued to climb, while much of the rest of the province languished.  The simple fact is that more people live in Vancouver, and the activity there influences all other areas of our province.

Still, I am optimistic about our local market.  We haven’t seen much of a rebound since the major downturn of 2008.  The economy continues to putter along, showing some signs of improvement, with jobs increasing and confidence slowly growing.  Even in many parts of the U.S.A., where the real estate slump has been much worse than here in Canada, there are some positive signs as vacant land sales increase and new house starts are increasing.  Their default and foreclosure level is still far too high, but that is more than an economic situation — that is still the result of poor lending practices going back over 5 years now.  Both Republicans and Democrats are optimistic that things will improve after the fall 2012 elections.

Another factor that gives me confidence is the idea of pent up demand coming forth.  Last year saw the emergence of first time home buyers in our area, who were taking advantage of great interest rates and lower home prices.  I believe this will continue.  Our inventory of available homes did not grow to a huge number last year.  Right now we are short on inventory, but that is a normal factor in the winter market.  Once the winter retreats, we will see more “For Sale” signs appearing, probably about the same time as the crocuses bloom.

Interestingly, British Columbia has the 2nd highest percentage of mortgage-free households at 47%, behind only Cape Breton on the East Coast of Canada.  Average home prices in Vancouver are nearly $800,000, while the national average is just under $340,000.  The Nelson area is very close to the national average.

graph courtesy of www.bcrealtor.com

This chart shows the Bank of Canada rate from 1975 to 2011.  Aren’t you glad you no longer have rates like 1981?

If you have an opinion about this post, please share it.

Thanks for reading.

 

 

 

 

Lorne

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