PRICING YOUR PROPERTY

What a buyer is willing to pay for your property is the value of that property.

This value will change in different markets.  What a buyer is willing to pay is determined largely by what choices are available to him at the time of purchase. When doing a Market Evaluation, the question that Realtors® attempt to answer is “What will a buyer perceive your home to be worth in light of the current competition?” This magic number is called “Market Value.”

Market value then is the value of a property under current conditions. It does not reflect what the home may once have been valued at; it has no bearing on what was paid for the home, or what it cost to build. Neither the seller nor the Realtor® can change that fact or the conditions of the market place at the time the property is offered for sale. The market must be accepted for what it is.

There are many factors however, that enter into the comparison of the one property to another. Listed below are the more common parameters used in the comparison process to establish the price, or more specifically, the Market Value of your home.

Location! Location! Location!                                             Type of Exterior

Size                                                                                      Condition of the Exterior

Age of Home                                                                       Type and Condition of Roof

Type and Condition of Interior                                             Type and Condition of Foundation

Type and Sizes of Rooms                                                     Parking Provisions

Number and Location of Bathrooms                                    Quality and Quantity of Landscaping

Number and Location of Fireplaces                                     Outdoor Development (Patios)

Architecture                                                                          Land Use Classifications

Type and Quality of Construction                                        Proximity of Amenities

Quality and Quantity of Basement                                       Equipment Included

To Achieve a Sale in a reasonable time period.

    CREA* statistics published a few years ago indicated that if a listing is priced:

                 

                  At Market value………………………………..it has a 95% chance of selling

                  At Market value + 5%..........................it has a 50% chance of selling

                  At Market value + 10%........................it has a 35% chance of selling

                  At Market value + 15%........................it has a 25% chance of selling

    *Canadian Real Estate Association

Real estate market buoyed by first-time homebuyers

One of the bright spots in the pull back in housing prices over the last 4 to 5 years has been the emergence of first-time homebuyers as a catalyst for activity in the real estate market.  This trend is a national one according to reports released by several major real estate companies, but is particularly significant in the Central Okanagan according to Patricia Livingstone of Re/max Kelowna.  “With the average house price dropping more than 20% and mortgage rates at historic lows, many first-time home buyers are seizing the opportunity to make the transition from renter to home owner.”  In fact, the average single-family house price in Kelowna has dropped from a high of almost $554,000 in 2008 to $441,000 last month.

        There are many different paths to home ownership.  In January this year, a 25-year-old single man found great value in a foreclosure property.  “Although the home needs a fair amount of work, it was a perfect fit for this buyer as he works in the construction industry,” explains Patricia.        A single mother, was looking at paying $900 per month to rent a basement suite.  She was thrilled to discover that with the same amount, plus a modest down payment, she could purchase a recently built one bedroom condo.  She decided to convert the den into a bedroom for her 6 year old son. Patricia also recently helped, an Asian couple in their late forties find and purchase their first home.         The inventory of condos has decreased over the last few years, but a good percentage are still sitting empty.  Combine this with low interest rates, dropping prices and special incentives that are available to first-time-homebuyers – exemption from Property Transfer Tax and a tax credit – all these factors create a ‘perfect storm’ environment for renters looking to buy.        So far this year, roughly one half of home sales have been under $400,000, and first-time homebuyers make up a large part of that market segment.  Over 20% of sales this first quarter were by first-time buyers. This activity is expected to help jump-start more activity at higher price levels.A lot of buyers have been waiting for the bottom of our market, that may have been in March as the monthly activity in April was the highest we have seen since the down turn in 2008.  Time to get off the fence!

Year to date stats for Central Okanagan Real Estate

The average house price is on an upward trend.

Inventory remains stable.

Supply and demand are balancing out.

Kelowna Real Estate Exclusive for April 2013

154 Single family home sales

Kelowna Real Estate Monthly stats

February 2013 monthly newsletter

114 Single family house sales in February of this year.