experts: real estate column Wednesday, February 04, 2004

On Interest Rates and the Price of Plums

When will we get sufficient supply to satisfy the demand of those wanting to abide on our North Shore? ­ I'm beginning to think, never! Am I being overly dramatic? Maybe ... but?

By Alan  Skinner

An odd title indeed this month (fortunately not the price of eggs!) The reason I use plums is that they are seasonal (read, sometimes very scarce) and I wanted to illustrate (again!!!) the excessive force that low supply and intense demand exert on our real estate market. In the past 2 days I was one of eight Realtors who represented eight buyers, each attempting to acquire the same North Van (Canyon Heights) home. Asking price $609,000 - sale price (some 6 hours after the "offering" began) - $675,000. The plum was ripe and plum demand, obviously great ...and, no, I don't feel the market is "plum crazy"! Not in that sense, anyway. When will we get sufficient supply to satisfy the demand of those wanting to abide on our North Shore? ­ I'm beginning to think, never! Am I being overly dramatic? Maybe ...but?

Interest rates continue to be "as low as ever" and, yes, this is certainly helping to fuel the desire (and ability) to be a homeowner. With 5 year mortgage rates below 5% (one of my clients received 4.7% last week), and 1 year and variable (floating) rates in the 3.25 ­ 4% range , the "pre-approved" and the imminently "approvable" groups are out there in force. Although we will always see a wide range of different opinions, I am inclined to go with the "low rates are here to stay for a while" theory. I think that any 1˝% to 2% shift is probably at least a year or more away ­ remember this is only an opinion! If you’re risk averse ­ lock in.

The status of our beloved North Shore follows ­ North Van average prices are all up over last year at this time. Detached +8% , attached +13% and apartments +37%. Inventory is down ­ detached -32%, attached -3% and apartments -35%. Number of sales for the year, mixed ­ detached -25%, attached +11% and apartments +12%.

West Van ­ all average prices are up ­ detached +17%, attached +69% and apartments +24%. Inventory mixed ­ detached -31%, attached +9% and apartments +14%. Numbers of sales for the year slightly mixed ­ detached + 5%, attached from 4 to 9 in Jan and apartments down from 12 to 2 in Jan.

Please join the group subscribing to the e-mail version of this "update" - send a request now to northshore@canada.com and you'll be assured receipt; phone me at (604) 988-7368 or visit www.AlanSkinner.com.




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