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Special thanks to Eitan Pinsky, our Mortgage expert for the folloing info; 

Buying and Selling - How Dates Can Line Up

I wrote this article in my monthly newsletter to clients and received A LOT of positive reviews on it. If you haven't had a chance to read it, it's really good stuff.
 
Buying and Selling – How Dates Can Line Up
It can be fairly complex when you want to buy a new property and you need the equity in a property you want to sell. IE, how can you buy and sell at the same time? How do the dates work?!

When you purchase and sell, you can either get a new mortgage and pay out your existing mortgage, or, you can port your current mortgage to your new property. If you’re upsizing and are in need of more money, check out our “porting” article here, which discusses all about how increases to your mortgage can be done.

Before we go any further, I want to identify specific dates that are important, and then chart them for various scenarios.
–Purchase Accepted Offer (PAO): Your offer to purchase is accepted.
–Purchase Subject Removal (PSR): The deposit is due and you have removed subjects and gone “firm” on a property. Once you remove your subjects or conditions to your offer, you are legally required to purchase the property.
–Purchase Close (PC): This is the date at which you now own the new property.
–Sale Accepted Offer (SAO): This is the date at which you’ve accepted an offer to purchase your own property; you are under contract to sell your property.
–Sale Subject Removal (SSR): This is when the purchaser of your property is now firm or legally required to purchase your property.
–Sale Close (SC): This is the date at which you have sold your old property and you no longer own it.
 

Possible Scenarios from easy to complicated:
A) Sell your property fully and then purchase.
In this scenario, you sell your property with subjects removed and then close. Then purchase, remove subjects on the purchase, pay your deposit, then close on the purchase. Easy peazy because we’ve received the proceeds (sale price minus mortgage (if applicable)) from our sale of our property.

B) Sell your property with subjects removed and then purchase a new property.
B1 The closing date of the sale is before the purchase.
OR
B2 The closing date of the purchase is before the sale.
In the scenario above, you sell your property with subjects removed and then purchase.

If the sale of your property (SC) happens before the purchase of your new property (PC), then we’re in easy peazy territory; no extra financing is required.

However, if the purchase (PC) happens before the sale (SC) of your property, then you wouldn’t have received the proceeds from your sale yet. This means that bridge financing is required.

Bridge Financing: This is when we have had the subjects removed on the sale of our property (SSR) and have purchased another property (PC), but have not yet sold a property. As long as the subjects on the sale (SSR) have been removed, lenders are willing to “bridge” you the money from when you purchase to when you sell. Basically, the lender is willing to give you a mortgage for what you would need after the sale is all said and done, and also lend you more money, the bridge financing, in order to complete the sale. The bridge financing is paid back to the lender as soon as your sale closes (SC).

C) Sell and purchase, or purchase and sell and remove subjects on the purchase just after removing subjects on the sale.
In the scenario you only committed to the purchase once you’ve made sure the sale (SSR) of your property is firm and binding. In this way, lenders will give you a mortgage assuming that the property that you’re selling is already sold. In other words, as well as the buyer of a property you’re selling as removed subjects, from a lender’s point of view, you no longer own that property and the debt associated with the property is negated.

Again, like in B) above, as long as the subjects have been removed on the sale of your property, you can get Bridge Financing.

D) Purchase and sell, or sell and purchase and remove subjects on the purchase before the subjects have been removed on your sale of your own property.
In the scenario above where you’ve committed to purchase a new property (PSR) and you have not yet sold your current property (SSR), the time in between, the red arrow and red line, identifies uncertainty for you.

The key question here is: can you purchase and close this new property (PC) if you are not sure that you can sell and close your current owned property (SSR and SC).

If you do decide to go firm on the purchase of a property (PSR), you must have a backup plan. The backup plan cannot be wishful thinking in terms of: “I hope that someone buys my property…”

The backup plan must be:
1. You can get approved for a new mortgage even if you have not sold your current property, and/or,
2. You have “interim financing” available for you.

Interim Financing: This financing is like bridge financing but much more expensive. It assumes that both properties are still owned. There are usually fees involved, with much higher interest rates; bridge financing can cost anywhere from $5,000-25,000. Interim financing is a last resort…

Interim financing could be considered in the following scenario:

You have found your dream house!! You would do anything to purchase this next property and paying a fee and higher mortgage interest costs is OK for you. In this case, if you do find your dream house and must go “firm” on the purchase of your property, interim financing would help you know that you can actually purchase this property (PC) and hold both your current property and this new dream house at the same time. The interim financing would be paid back/off once your property sells (SC).

Now, prior to actually closing the purchase (PC), if you do indeed find a buyer who removes subjects on your sale (SSR), you would now be able to get bridge financing. Phew.

…
So remember, if you’re purchasing a property and removing subjects (PSR), make sure the subjects have been removed  on the sale of your property (SSR), or have a backup plan.

Each situation is unique so please don’t hesitate to contact me if you have any questions! 
 
 
 

Eitan Pinsky

Owner - Mortgage Expert


m: 778-990-8950

e: eitan@pinskymortgages.ca

w: pinskymortgages.ca

550 - 2608 Granville Street,

Vancouver, BC, V6H 3V3 -Map
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Home prices continue to rise in Metro Vancouver’s housing market to kick off the summer...

VANCOUVER, BC – July 5, 2023 – Continuing the trend that has emerged in the housing market this year, the benchmark price for all home types in Metro Vancouver1 increased in June as home buyer demand butted up against a limited inventory of homes for sale in the region.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales2 in the region totalled 2,988 in June 2023, a 21.1 per cent increase from the 2,467 sales recorded in June 2022. This was 8.6 per cent below the 10-year seasonal average (3,269).

“The market continues to outperform expectations across all segments, but the apartment segment showed the most relative strength in June,” Andrew Lis, REBGV’s director of economics and data analytics said. “The benchmark price of apartment homes is almost cresting the peak reached in 2022, while sales of apartments are now above the region’s ten-year seasonal average. This uniquely positions the apartment segment relative to the attached and detached segments where sales remained below the ten-year seasonal averages.”

There were 5,348 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in June 2023. This represents a 1.3 per cent increase compared to the 5,278 homes listed in June 2022. This was 3.1 per cent below the 10-year seasonal average (5,518).

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,990, a 7.9 per cent decrease compared to June 2022 (10,842) This was 17.4 per cent below the 10-year seasonal average (12,091).

Across all detached, attached and apartment property types, the sales-to-active listings ratio for June 2023 is 31.4 per cent. By property type, the ratio is 20.9 per cent for detached homes, 38.5 per cent for townhomes, and 39.4 per cent for apartments.

Analysis of the historical data suggests downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“Despite elevated borrowing costs, there continues to be too little resale inventory available relative to the pool of buyers in Metro Vancouver. This is the fundamental reason we continue to see prices increase month over month across all segments,” Lis said. “With the benchmark price for apartments now standing at $767,000, we repeat our call to the provincial government to adjust the $525,000 threshold exempting first-time home buyers from the Property Transfer Tax to better reflect the price of entry-level homes in our region. This is a simple policy adjustment that could help more first-time buyers afford a home right now.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,203,000. This represents a 2.4 per cent decrease over June 2022 and a 1.3 per cent increase compared to May 2023.

Sales of detached homes in June 2023 reached 848, a 28.3 per cent increase from the 661 detached sales recorded in June 2022. The benchmark price for a detached home is $1,991,300. This represents a 3.2 per cent decrease from June 2022 and a 1.9 per cent increase compared to May 2023.

Sales of apartment homes reached 1,573 in June 2023, an 18.6 per cent increase compared to the 1,326 sales in June 2022. The benchmark price of an apartment home is $767,000. This represents a 0.5 per cent increase from June 2022 and a 0.8 per cent increase compared to May 2023.

Attached home sales in June 2023 totalled 547, a 17.6 per cent increase compared to the 465 sales in June 2022. The benchmark price of an attached home is $1,098,900. This represents a one per cent decrease from June 2022 and a 1.5 per cent increase compared to May 2023.

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1. Editor’s Note: Areas covered by the Real Estate Board of Greater Vancouver include: Bowen Island, Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, South Delta, Squamish, Sunshine Coast, Vancouver, West Vancouver, and Whistler.

2. REBGV is now including multifamily and land sales and listings in this monthly report. Previously, we only included detached, attached, and apartment sales, and these additional categories, which typically account for roughly one to two per cent of total MLS® activity per month, are being included for completeness in our reporting.

The Real Estate Board of Greater Vancouver is an association representing more than 15,000 REALTORS® and their companies. The Board provides a variety of member services, including the Multiple Listing Service®. For more information on real estate, statistics, and buying or selling a home, contact a local REALTOR® or visit www.rebgv.org.

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BC Markets Showing Signs of Recovery As Supply Remains Scarce
Vancouver, BC – April 13, 2023. The British Columbia Real Estate Association (BCREA) reports that a total of 7,118 residential unit sales were recorded in Multiple Listing Service® (MLS®) systems in March 2023, a decrease of 38.3 per cent from March 2022. The average MLS® residential price in BC was 961,451 down 11.6 per cent compared to the average price of close to $1.1 million in March 2022, recorded near the market's peak. The total sales dollar volume was $6.8 billion, representing a 45.5 per cent decrease from the same time last year.
“The BC housing market is currently characterized by slow sales but also still very low levels of listings,” said BCREA Chief Economist Brendon Ogmundson. “Consequently, even though home sales remain about 20 per cent below normal levels for this time of year, the average home price in BC has now risen two months in a row, reaching its highest level since May 2022 as markets tighten due to a lack of supply.”
 
Active listings in the province are up 25 per cent compared to this time last year but have fallen for the second straight month in the wake of a modest recovery in home sales and continued weak new listings activity.
 


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Housing Market Faces High Rates
and Slowing Economy in 2023

BCREA 2022 Fourth Quarter Housing Forecast
Vancouver, BC – November 8, 2022. The British Columbia Real Estate Association (BCREA) released its 2022 Fourth Quarter Housing Forecast today. 

Multiple Listing Service® (MLS®) residential sales in BC are forecast to decline 34.4 per cent from a record high 2021 to 82,345 units this year. In 2023, MLS® residential sales are forecast to fall an additional 11.4 per cent to 72,960 units.  

“The factors that drove unprecedented housing market activity over the past two years, including record low mortgage rates, buyer preference for extra space and the ability to work remotely, are now unwinding,” said BCREA Chief Economist Brendon Ogmundson. “As a result, there has been a significant shift in the housing market, which we anticipate will continue through 2023.”

With continued high-interest rates and what looks like a difficult 2023 ahead for the Canadian economy, we anticipate that market activity is going to fall below normal levels next year. On the supply side, slow sales activity has led to an increase in inventory, but from record lows. The rapid shift in market conditions has weighed on prices in the second half of this year, though active listings growth has slowed and is short of levels where we tend to see more substantial downward pressure on prices. However, price levels have fallen from their peak earlier this year, so even flat prices from current levels will translate to the provincial average price being down about 5 per cent in 2023.
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Metro Vancouver home sales set a record in 2021

Metro Vancouver home sales reached an all-time high in 2021 as housing needs remained a top priority for residents in the second year of the COVID-19 pandemic. 


The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 43,999 in 2021, a 42.2 per cent increase from the 30,944 sales recorded in 2020, a 73.6 per cent increase from the 25,351 homes sold in 2019, and a four per cent increase over the previous all-time sales record of 42,326 set in 2015. 


Last year’s sales total was 33.4 per cent above the 10-year sales average. 


“Home has been a focus for residents throughout the pandemic. With low interest rates, increased household savings, more flexible work arrangements, and higher home prices than ever before, Metro Vancouverites, in record numbers, are assessing their housing needs and options,” Keith Stewart, REBGV economist said. 

Home listings on the Multiple Listing Service® (MLS®) in Metro Vancouver reached 62,265 in 2021. This is a 14.7 per cent increase compared to the 54,305 homes listed in 2020 and a 19.9 per cent increase compared to the 51,918 homes listed in 2019. 


Last year’s listings total was 11 per cent above the 10-year average. 


“While steady, home listing activity didn't keep pace with the record demand we saw throughout 2021. This imbalance caused residential home prices to rise over the past 12 months,” Stewart said.  


The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 5,236, a 38.7 per cent decrease compared to December 2020 (8,538) and a 26.7 per cent decrease compared to November 2021 (7,144). 

“We begin 2022 with just over 5,000 homes for sale across the region. This is the lowest level we’ve seen in more than 30 years,” Stewart said. “With demand at record levels, residents shouldn’t expect home price growth to relent until there’s a more adequate supply of housing available to purchase.” 


The MLS® HPI composite benchmark price for all residential properties in Metro Vancouver ends the year at $1,230,200. This is a 17.3 per cent increase compared to December 2020. 


Both detached home and townhome benchmark prices increased 22 per cent in the region last year, while apartments increased 12.8 per cent. 


Looking across Metro Vancouver, Maple Ridge saw the largest increase in benchmark prices at 34.7 per cent, followed by Pitt Meadows (29.8 per cent), and Whistler (27.8 per cent). 


Looking at area and property type, detached homes in Pitt Meadows saw the largest benchmark price increase at 42.2 per cent, followed by detached homes (38.5 per cent) and townhomes (35.2 per cent) in Maple Ridge. 

December summary 

REBGV reports that residential home sales in the region totalled 2,688 in December 2021, a 13.1 per cent decrease from the 3,093 sales recorded in December 2020, and a 21.6 per cent decrease from the 3,428 homes sold in November 2021. 


Last month’s sales were 33.4 per cent above the 10-year December sales average. 


There were 1,945 detached, attached and apartment properties newly listed for sale on the MLS® in Metro Vancouver in December 2021. This represents a 19.3 per cent decrease compared to the 2,409 homes listed in December 2020 and a 50.9 per cent decrease compared to November 2021 when 3,964 homes were listed. 


For all property types, the sales-to-active listings ratio for December 2021 is 51.3 per cent. By property type, the ratio is 35.1 per cent for detached homes, 75.6 per cent for townhomes, and 60.8 per cent for apartments. 

Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months. 


Sales of detached homes in December 2021 reached 794, a 22.6 per cent decrease from the 1,026 sales recorded in December 2020. The benchmark price for a detached home is $1,910,200. This represents a 22 per cent increase from December 2020 and a 2.1 per cent increase compared to November 2021. 


Sales of apartment homes reached 1,464 in December 2021, a 1.4 per cent decrease compared to the 1,474 sales in December 2020. The benchmark price of an apartment home is $761,800. This represents a 12.8 per cent increase from December 2020 and a 1.2 per cent increase compared to November 2021. 


Attached home sales in December 2021 totalled 430, a 27.5 per cent decrease compared to the 593 sales in December 2020. The benchmark price of an attached home is $1,004,900. This represents a 22 per cent increase from December 2020 and a 1.5 per cent increase compared to November 2021. 


source: Real Estate Board of Greater Vancouver

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November 2021 Continued low inventory levels in Vancouver Lower Mainland

Home sales activity remains up, listings down across Metro Vancouver’s housing market

As we near the end of 2021, home buyer demand remains well in excess of long-term averages and the supply of homes for sale continues to decline across Metro Vancouver’s* housing market. 


The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 3,428 in November 2021, an 11.9 per cent increase from the 3,064 sales recorded in November 2020, and a 1.9 per cent decrease from the 3,494 homes sold in October 2021. 


Last month’s sales were 33.6 per cent above the 10-year November sales average. 


“We expect home sale totals to end the year at or near an all-time record in our region,” Keith Stewart, REBGV economist said. “We’ve had elevated home sale activity throughout 2021 despite persistently low levels of homes available for sale. With a new year around the corner, it’s critical that this supply crunch remains the focus for addressing the housing affordability challenges in our region.” 


There were 3,964 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in November 2021. This represents a 2.6 per cent decrease compared to the 4,068 homes listed in November 2020 and a 2.1 per cent decrease compared to October 2021 when 4,049 homes were listed. 


The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 7,144, a 35.7 per cent decrease compared to November 2020 (11,118) and a 11.1 per cent decrease compared to October 2021 (8,034). 


For all property types, the sales-to-active listings ratio for November 2021 is 48 per cent. By property type, the ratio is 33.8 per cent for detached homes, 74.3 per cent for townhomes, and 53.7 per cent for apartments. 

Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months. 


“The imbalance between supply and demand, coupled with some buyers wanting to use rate holds on lower rate fixed-term mortgages, is keeping upward pressure on home prices in this traditionally quieter time of year for the market,” Stewart said. 


The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,211,200. This represents a 16 per cent increase over November 2020 and a one per cent increase compared to October 2021. 


Sales of detached homes in November 2021 reached 987, a seven per cent decrease from the 1,061 detached sales recorded in November 2020. The benchmark price for a detached home is $1,870,000. This represents a 20.8 per cent increase from November 2020 and a 1.1 per cent increase compared to October 2021. 


Sales of apartment homes reached 1,828 in November 2021, a 33.3 per cent increase compared to the 1,371 sales in November 2020. The benchmark price of an apartment home is $752,800. This represents an 11.4 per cent increase from November 2020 and a 0.9 per cent increase compared to October 2021. 


Attached home sales in November 2021 totalled 613, a three per cent decrease compared to the 632 sales in November 2020. The benchmark price of an attached home is $990,300. This represents a 20.2 per cent increase from November 2020 and a 1.6 per cent increase compared to October 2021. 


Source: Real Estate Board of Greater Vancouver

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Great time to list your home!... Listings are in demand throughout Vancouver.
 
Call us today for a no obligation evaluation of your property.
 
Gabe & Doron, 
604.788.1885
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COVID has Impacted our Real Estate Market... What's next?

SEPT 24, 2021.


People have migrated to Real Estate over the past year, but the market looks to be leveling out after a crazy Spring. Still, we are well above PRE-Covid levels.


The new pardigm of workers  (only some) able to work from home is not going to completely dissappear, even after we get past this pandemic. This means the home office is being re-priorized as a must have for many buyers. 


Note the "pre-covid" line at 100 below. Sales, went through the roof in the spring of 2021, then came down to 20% above pre-pandemic levels more recently. Lack of inventory is an issue right now. Definately a sellers market.


With current poor inventory levels, we are likely to see pent up demand continue to push up prices, although not likely at the crazy levels seen earlier this year.


Housing starts is a good indicator that builders/developers are trying to respond to the lack of inventory, but this is going to take time (12-24 months) to impact the market and is usually only a small percentage of total unit sales (re-sale vs new-construction).


Federal goverment polices promised by the Liberals during the fall federal election to increase supply are also welcome, but will again take some time to filter into the supply of affordable homes on the market.


Please call if you have any questions about the market. 


Gabe


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Market prices continue to remain strong. Inventory is very low. Time to list? Call Doron & Gabe today @ 604.788.1885 for the latest info!
 
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Home sale and listing activity in Metro Vancouver moves off of its record-breaking pace

The Metro Vancouver* housing market saw steady home sale and listing activity in May, a shift back from the record-breaking activity seen in the earlier spring months.


The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 4,268 in May 2021, a 187.4 per cent increase from the 1,485 sales recorded in May 2020, and a 13 per cent decrease from the 4,908 homes sold in April 2021.


Last month’s sales were 27.7 per cent above the 10-year May sales average.


“While home sale and listing activity remained above our long-term averages in May, conditions moved back from the record-setting pace experienced throughout Metro Vancouver in March and April of this year,” Keith Stewart, REBGV economist said. “With a little less intensity in the market today than we saw earlier in the spring, home sellers need to ensure they’re working with their REALTOR® to price their homes based on current market conditions.”


There were 7,125 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in May 2021. This represents a 93.4 per cent increase compared to the 3,684 homes listed in May 2020 and a 10.2 per cent decrease compared to April 2021 when 7,938 homes were listed.


The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 10,970, a 10.5 per cent increase compared to May 2020 (9,927) and a 7.1 per cent increase compared to April 2021 (10,245).


"With sales easing down from record peaks, a revised mortgage stress test that reduces the maximum borrowing amounts by approximately 4.5 per cent, and the average five-year fixed mortgage rate climbing back over two per cent since the beginning of 2021, we’ll pay close attention to these factors leading into the summer to understand what affect they’ll have on the current market cycle,” Stewart said.


For all property types, the sales-to-active listings ratio for May 2021 is 38.9 per cent. By property type, the ratio is 29.8 per cent for detached homes, 53.8 per cent for townhomes, and 43.5 per cent for apartments.

Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.


“The seller’s market conditions experienced throughout much of the pandemic highlight the need for increasing the volume and variety of housing supply across our region,” Stewart said. “Doing this requires a more disciplined focus on planning, reducing building costs, understanding demographic changes, and expediting the building approval process.”


The MLS® Home Price Index


The composite benchmark price for all residential properties in Metro Vancouver is currently $1,172,800. This represents a 14 per cent increase over May 2020 and a 1.5 per cent increase compared to April 2021.


Sales of detached homes in May 2021 reached 1,430, a 166 per cent increase from the 537 detached sales recorded in May 2020. The benchmark price for a detached home is $1,800,600. This represents a 22.8 per cent increase from May 2020 and a 1.7 per cent increase compared to April 2021.


Sales of apartment homes reached 2,049 in May 2021, a 213 per cent increase compared to the 653 sales in May 2020. The benchmark price of an apartment home is $737,100. This represents a 7.9 per cent increase from May 2020 and a 1.2 per cent increase compared to April 2021.


Attached home sales in May 2021 totalled 800, a 168 per cent increase compared to the 298 sales in May 2020. The benchmark price of an attached home is $936,300. This represents a 16.3 per cent increase from May 2020 and a 1.8 per cent increase compared to April 2021.

*Note:

Areas covered by the Real Estate Board of Greater Vancouver include: Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, South Delta, Squamish, Sunshine Coast, Vancouver, West Vancouver, and Whistler.

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