A Vancouver designer explains why now is the best time to give his home a makeover
Many will recall that the Canadian housing market froze deeply at the start of the COVID-19 pandemic in 2020.
Meanwhile, a TD Bank economist hinted there was one thing owners could do.
That is to say, resist the pressure of “distress selling”, if they absolutely must not sell their properties at an advantageous price.
As TD economist Rishi Sondhi explained in an April 27, 2020 real estate forecast, a decline in home listings will counteract “potentially very negative feedback effects” in the market.
“This sets a floor on prices and maintains relatively tight supply and demand balances in most markets, allowing positive price growth to resume as provincial economies reopen,” Sondhi wrote. .
As everyone knows, the market rebounded in the summer of 2020, thanks to historically low interest rates, and reached record highs in that year and in 2021.
Currently, the housing market is undergoing a correction following a series of interest rate hikes by the Bank of Canada that began in March 2022.
With inflation raging across the country, the central bank has signaled that more increases are coming.
In Metro Vancouver, July 2022 home sales fell sharply from levels a year ago, and home listings edged up.
So what should owners do if they are planning to sell their property?
Just as the TD economist suggested more than two years ago, Vancouver interior designer George Verdolaga says homeowners don’t have to accept a price they don’t like. .
Verdolaga is the director of FlowForm Design Group and his business focuses on home improvement and space planning.
“What I’ve observed over the last two years when the market was hot is that you could sell your house with $500,000 to $1 million more than the demand, with $300,000 more than the lowest demand,” Verdolaga said in a phone interview with the Right.
With the current market correction, sellers can expect less.
“Now it’s usually closer to being assessed [property assessment value], or an overstated premium of $100,000 or $200,000 is feasible. But you won’t be able to do it that quickly,” Verdolaga said.
Before, there was usually a long line of buyers bidding for a property.
“You have to buy anything just to have a house. Now the market has changed slightly, so buyers can wait and see. They can choose a bit,” Verdolaga said.
That means one thing for a determined home seller.
“If in the last two years you haven’t had to renovate or renovate as well, now you have to be more careful, especially if you want to get a premium on your assessment, which is always possible”, Verdolaga said.
The director of FlowForm Design Group cited some basic industry standards on what a home renovation can do.
Verdolaga said the most important areas to remodel are the kitchen and the bathroom.
He said kitchen renovations can increase a home’s resale value by up to 12.5%.
Meanwhile, remodeled bathrooms can add an average of seven percent.
After doing the interior, improving a home’s curb appeal will also make the property more attractive to buyers.
Verdolaga said that, based on typical industry standards, good landscaping can increase resale value by up to 11%.
For the finishing touch when a home hits the market, Verdolaga recommends staging, which means making aesthetic touches like putting in a piece of art or a beautiful piece of furniture or lighting.
“Never show your home unstaged,” Verdolaga said.
The Vancouver home designer noted that staged properties can sell for between 5% and 25% of the listing price.
Metro Vancouver real estate boards have released information on the level of home listings.
In the Greater Vancouver market, 3,960 single, semi-detached and apartment properties were newly listed for sale in July 2022.
This number represents a 9.5% decrease from the 4,377 homes listed in July 2021, and a 24.7% decrease from the 5,256 homes listed in June 2022.
In July 2022, the total number of homes for sale in Greater Vancouver was 10,288, an increase of 4.4% from the July 2021 level of 9,850 and a decrease of 1.3% from the 10 425 registrations from June 2022.
The sales-to-active listings ratio for July 2022 is 18.3%. A market is considered balanced when the ratio is between 12% and 20%.
In the Fraser Valley, the region’s real estate board, whose jurisdiction includes Surrey and North Delta, 3,332 new listings came on the market in July 2022.
This represents an increase of 7.2% compared to July last year and a decrease of 8.2% compared to June 2022.
Returning to Verdolaga, the director of FlowForm Design Group said that some things do not change in the face of the vagaries of the market.
“A potential buyer walks into an older home that is mostly in its original condition. The person starts calculating in their head that the property needs around $50,000 to $100,000 to fix. The buyer would prefer the seller to do the work and pay extra,” Verdolaga said.
In another scenario, the potential buyer would offer a lower price than the buyer requested.
“Let’s face it: nobody wants to buy an ugly house,” Verdolaga said.