Local Business Express Optimism For 2010

Thursday, January 07, 2010 10:03 AM

Prince George, B.C.- When it comes to real estate, “It was a good end to 2009 and we’re looking forward to a good year in 2010.” Says Gary Shannon, President of the BC Northern Real Estate Board.

He says people shouldn’t be worried about a low assessment, “The market will decide what the value of the home you have to remember the assessments that came out this week are based on sales that happened in July of 2009, so they are already 6 months behind the times.”

Shannon was one of three local business people on the Meisner program this morning on CFISFM discussing the economy for the year ahead, and the impact of the HST which comes into effect in July.,

Dan Connelly is the Managing partner for Earl’s restaurant in Prince George. He says the HST will cause a lot of initial concern and angst, “It will definitely hit our dinner business and cause a lot of people to perceive it is too expensive to go out for dinner, but in other sectors, it will help. Personally I think it is only the first step, I think the government is looking towards price inclusive pricing, like gasoline, where you don’t know how much the tax is. So people will one day say wow, $17 dollars for a hamburger, that’s too high, but $12 dollars would be in tax and that makes the restaurant the bad guy not the government.” He predicts the 2010 Olympics will have a detrimental impact on the restaurant business in Prince George, “I don’t think people will go to a restaurant when there are big events, you won’t go out for dinner during the opening ceremonies or the men’s hockey games.”

In the automobile industry, Brent Marshall of Northland Dodge says the HST will help sell vehicles. “We buy a lot of accessories for cars and we pay provincial tax that we don’t get back, so I think the HST will be a good thing.” He says shop supplies are a major expense, oil, rags, they pay the PST up front, and the customer pays the tax again. “I think the way business is going, the big volume dealers are doing well, and the smaller ones will disappear, I don’t like to say that, because I support the family run operations in business, but that’s the reality of today.”

Housing prices are not rising dramatically but they are edging upwards. BC Northern Real Estate Board President Gary Shannon says 2009 ended very strong especially considering how slow the year started “A lot of agents worked right through Christmas, and the phones are ringing again.” He says investors are coming back as they are getting calls from all over B.C. from people looking to invest in properties.

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Posted on Thursday, January 07, 2010 10:03 AM in News by 250 News

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Comments

Posted by: lmorge on January 7 2010 10:14 AM

Good for businesses, bad for you and I.

Posted by: Junco on January 7 2010 11:00 AM

Pump, pump, pump.

Posted by: MrPG on January 7 2010 11:01 AM

Assessments mean nothing. They are a yardstick the City uses to establish tax rates. Most of the time in this town, houses sell below the assessed value.

Posted by: Junco on January 7 2010 11:08 AM

I would argue that most of the time houses sell above the assessed value. I think that most would agree.

Posted by: DPJ on January 7 2010 11:15 AM

the olympics will be good for delivering food for customers. Good for me at this point.

Posted by: Thunder on January 7 2010 11:29 AM

Why is it that I hear about all of the assessments all over PG going down, and mine went up? And wayyyy up?

Posted by: Andyfreeze on January 7 2010 12:25 PM

Pump and dump.
Pure unadulterated spin hype!

Posted by: MrPG on January 7 2010 1:09 PM

"I would argue that most of the time houses sell above the assessed value. I think that most would agree."

Really? I have had a few friends sell their homes this year and not get the 'assessed' value, but I do not have any other statistical information. Do you?

Posted by: StreetWise2 on January 7 2010 1:29 PM

Contact your realtor and they can give you the stats.

The assessed value is the base value. If you have an upgraded kitchen, flooring, furnace ect - you get more for your house.

I have seen several houses sell at or below appraised value and they were all handy man specials.

Posted by: NMG on January 7 2010 2:18 PM

I would tend to agree with Junco in that most houses do sell for more than the assessed value IF they are well maintainned.

For a limited period of time you can actually compare properties on the BC Assessment website and see the sales prices vs. the assessed values. I looked at a number of them and some sold for less, many sold for close to and many sold for more. Condition obviously plays a huge role. A few years back houses were selling for significantly more than assessed value. In some cases, it was actually laughable how much more they were selling for when compared to the assessed value, BUT people paid the asking prices and in a market economy, that's what matters.

At the end of the day, your house is worth exactly what you can sell it for in the open market. The assessed value may or may not have any bearing on what that will be.

Posted by: Resident on January 7 2010 4:30 PM

Of course the car dealers like the small town mom and pop shops. When comparing auto prices the multi brand large dealerships will always have a lower price and hence the sale. When the small dealerships disappears there can be no price comparison and the big dealers can increase their prices without retribution. Seems the big multi brand dealerships have a win win situation now and it will only get better for them in the future.

Posted by: gus on January 7 2010 8:45 PM

Look at it this way. Assessed value of a property, the way it works today, is a lagging indicator. A leading indicator would be the recent selling prices of properties.

Lagging and leading indicators will be relatively the same when it is percentage selling price changes which are being compared in a stable market place that does not have major up/down fluctuations.

So, if one wants to take a measure of how house prices are doing right now, one should be looking at sales over a recent period of a quarter or two. That means the price difference between now and last July for a two quarter period sampling.

The assessed value when compared to the previous year's assessed value is reflective of what happened more than half a year ago. It is a good indicator for people who wish to do some long term investments. Look at 10 years in PG, in Kamloops, in Kelownas and in Chilliwack and decide on that basis where you should have invested.

Of course, if you did not invest in one of those communities outside of PG, the thing you will now have to consider is whether than 10 year period is reflective of the next 10 year period.

Looking at current sales prices in conjunction with the lagging indicators, as well as other economic and geographical considerations might give you a hint.

Good luck with your real estate investment!! ... :-)

Posted by: IMO on January 8 2010 8:37 AM

My assesment went down 15,000.00! What worries me about this is ...what the hell is the city going to do with all this loss of their budget money? I am happy. Did not have any intentions of selling and now my taxes are decreased greatly. Lovely!