Squamish is Officially a Buyer’s Market | What you need to know about buying in 2019.

Posted on by Meghan

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Property buyers can breathe a collective sigh of relief (really, take a big exhale).

The whirlwind real estate market that we’ve experienced since 2015 is behind us. In Squamish in the short span of two years we saw property prices increase 52 percent, multiple offers creating bidding wars, limited inventory and high demand, and many would-be buyers were pushed to the side-lines as property prices rose far beyond their zone of affordability.

If you’re a buyer either looking to buy your first home, wanting to buy something larger, or purchase an investment property, this recent market must have you feeling all the feels (admit it, you’ve cursed the real estate market at least once in the last 12 months).

Buyers, I have some great news.

You can now feel confident that after this unprecedented seller’s market the times are changing in your favour. The end of 2018 saw a shift in the market. Home prices have begun to stabilize (and in some categories decline), sales have slowed, and the market absorption rate, which is a fancy label for a ratio which compares active listings to sales (and is the best indication of the type of market), finally indicated a buyer’s market as of Fall 2018.

Now before you start jumping out of your seat with excitement (I know you can hardly contain yourself), the current market is by no means a home-run. There are some important considerations to know about the new real estate landscape which we will see for 2019. Before we get stuck into the details of the buyer’s market ahead of us, remember this…

2019 is your year to purchase property (if you wish it to be). If you desire to enter the property market, or acquire another property, we will make it our commitment to see that this happens for you.

With the right information, the right strategy and the right team to support you, your dreams of property ownership are achievable. Understanding the new real estate environment for 2019 is the first step, so you know what to expect when planning for this purchase.

The New Real Estate Environment in 2019

It’s an interest(ing) rates situation…

The new real estate environment is one of higher interest rates and tougher lending practices. Though these both sound like major blocks when it comes to buying a home, when put into perspective they really aren’t so scary.

Here in Canada we have enjoyed historically low interest rates for a long time now; currently (at the time of writing) the Bank of Canada interest rate is 1.75 percent. According to Trading Economics Canada interest rates in Canada averaged 5.89 percent from 1990 to 2018 with rates reaching an all-time high of 16 percent in February of 1991! Interest rates are not predicted to get anywhere close to that high with most predictions forecasting rates sitting at about 2.75 percent for the next few years.

Knowing that interest rates are trending upwards is an important consideration when financing a property. We will connect you with the best lenders and mortgage brokers in the business to ensure you are well taken care of when choosing a mortgage.

Tighter lending conditions

You’ve probably heard the term ‘mortgage stress test’ passed around recently. As of January 1 2018, all Canadians acquiring a new mortgage or refinancing their current mortgage, are required to undergo a stress test to ensure they are able to manage their mortgage despite the rising interest rate environment.

The new stress test now requires mortgage applicants to qualify at the Bank of Canada’s 5-Year Benchmark Rate (currently 5.14 percent) or two percentage points higher than their contracted rate. What this means is that if you qualified for a mortgage with an interest rate of 3.0%, you would need to qualify at a rate of 5.0% as a buffer in order to be approved for the lower rate.

This means what although you could afford a home for $600,000 in 2017, you may now only be able to afford one for $550,000. Though property prices (in most categories) are adjusting downwards to offset the stress test price disparity.

Stabilizing (and declining prices)

Interest rates, the stress test and housing (un) affordability have created the perfect storm for prices to cool, and it couldn’t have come a moment sooner! If prices were to continue on their current trajectory that Valleycliffe special (two story box home) which was $590,000 in 2010 and $845,000 in 2016 would have been $1.2 million by 2022! Unsustainable.

In the last few months we have seen property prices in Squamish stabilize (and even dip), this is great news for buyers who have been waiting for a break. Which leads us to our next point.

Don’t get paralysis by analysis

If you are waiting for a crash, for the bubble to burst or for all of the stars to align you could be waiting forever. We have seen countless times when buyers over-think the process, get paralyzed by possible scenarios and then miss out on great opportunities, only to regret it months later. Don’t let that be you. Unless you are buying for investment purposes only, the best time to buy a property is when it aligns with your life and goals. So ask yourself this one question…

“Does it make sense in my life right now, based on my current life situation, to purchase a property?”

If the answer is yes, then deciding if Squamish is right for you is the next step.

Is Squamish for you?

You probably already know this, but we’re going to be pretty blunt here. Squamish is no longer an affordable place to live. Even if you’re moving from Vancouver, Squamish isn’t the screaming deal it was a few years ago. There are plenty of other less expensive places to purchase property in British Columbia. Campbell River, Nanaimo and event parts of the Okanagan will get you the same property at a fraction of the cost.

When you decide to buy in Squamish you are deciding to buy into a lifestyle. That is the motivator for nearly all of our buyers, those from within Squamish and those from other places. You need to decide that the value you place on this lifestyle justifies the price you’ll be paying for a property.

Squamish is also a rapidly growing town. If you’re attached to the way it was, or are seeking a quiet charming town, times are changing. Squamish is one of the fastest growing communities in the province and according to Stats Canada the population grew 16 percent between 2011 and 2016. With development happenings throughout the town Squamish is becoming a bustling community of 20,000 people and it’s growing quickly!

Besides just an awesome outdoor lifestyle and tight-knit community, there are other aspects of Squamish that affirm its value. Squamish is 45 minutes from Vancouver and 35 to Whistler. This proximity to a major city and world-class tourist destination is one thing that cannot be replicated anywhere else in the province. Whether you’re looking to raise a family, be close enough to the city to commute, or will be actively accessing the recreation all around, there are some aspects of Squamish that are truly unique.

Buying real estate in Squamish, is it a good investment?

If you think Squamish has boomed already, just wait. With a vibrant waterfront being built over the next 20 years, the potential of an all-seasons ski and mountain bike resort being built 10 minutes outside of town plus numerous other development projects taking place and on the books, you don’t have to be a savvy investor to know that Squamish is the next big thing.

The next little while provides a great opportunity for buyers to make their move in the real estate market. We have just come off a market cycle and are beginning a new one. Prices will likely stay stable for the next little while but with all the growth and future developments moving forward, it is safe to bet that the Squamish real estate market is insulated from major economic downturns.

Is property ownership on your agenda in 2019?

Entering a new year always begs the question, what do I want to accomplish for the year ahead? If you’ve been wanting to buy a home and believe that 2019 is the year to make it happen, know that your timing couldn’t be better (as they say, the best time to buy real estate was five years ago, the second best time is now).

As we promised before, we are committed to helping you realize your property goals and the first step to move forward is to schedule a strategy call from one of our real estate agents at Move to Squamish. During this call we will discuss what your real estate goals are for 2019 and beyond. We will uncover roadblocks and answer any questions you have. We will then create a customized plan for you to buy a property this year based on your unique situation and connect you with resources and professionals needed to help with the process.

To schedule your call BOOK HERE

Who is Move to Squamish?

Meghan and Nanci of Move to Squamish are a mother-daughter real estate team with over 30 years selling real estate in Squamish. Nanci has been a top-selling Realtor in Squamish since the 80’s with Meghan coming on the scene as a licensed real estate agent in the last few years. Both Meghan and Nanci are passionate about the Squamish lifestyle and cultivating a vibrant community to live, work and raise their families. Move to Squamish has helped hundreds of families make Squamish their home and are excited to help you make you real estate goals a reality this year.

About Meghan

Meghan is a real estate agent who is passionate about connecting lifestyle driven individuals to her vibrant town of Squamish, BC. Meghan was born and raised in Squamish, spent 15 years living abroad, and is now back partnering with her mother Nanci Fulton who has been selling real estate in Squamish for 30 years. Meghan loves representing buyers, welcoming them to her community and helping them find their perfect place to call home.