Posts in eNewsletter

November 21, 2008 eNewsletter

November 21st, 2008 Posted by eNewsletter, Market Commentary No Comment yet

Crunching the numbers…again

Most of you received my lengthy note about what the actual numbers say about the Toronto Real Estate market. There has definitely been a change in the overall market, but the annual average is still close to last year – up a bit here, down a bit there. The bottom line is that it’s now a buyer’s market, but the sky isn’t falling. Please call any time to talk about this in more detail, and/or email me if you didn’t get the note and I’ll be happy to forward you a copy.

Help a friend – refer to us!

In today’s volatile real estate market, we can’t over-stress how important it is to have a great agent – or in our case, 2 great agents! We all know that we are now in a buyer’s market; buyers need a strong negotiator to save them money and get them the best terms possible. For sellers, home prep and marketing are more important than ever. Emily’s expertise in that area will give them a unique edge. Also, a key characteristic of this market is a longer sell cycle. It’s important to maintain an active profile in the market; that’s why we don’t quit ’til the home is sold!
If your friends or family are planning to buy or sell in this market, put them in good hands – call us today!

Aviation in Canada: The Pioneer Decades

Many of you know that my dad is a book publisher. With over 30 titles, CANAV Books is Canada’s aviation heritage publisher. In honour of the 100th anniversary of flight in Canada, CANAV is producing a 3 volume tribute to the people, aircraft, and institutions of a uniquely Canadian story. Visit the Canav Books web site for more information about Aviation in Canada: The Pioneer Decades – and loads of other great titles. You can also ‘Like’ CANAV’s Facebook Fan Page

November 2008 eNewsletter – Crunching the Numbers on the Toronto Real Estate Market

November 14th, 2008 Posted by eNewsletter, Market Commentary No Comment yet

With all the noise out there, it’s hard to know what the Toronto real estate market is really doing, isn’t it? I’ve been telling people that it’s not as bad as the media says it is, and the numbers I just crunched basically support that. Naturally, some areas are doing better – or worse – than others. However, the handful of districts that I picked include where most of you live.

As you can see in the charts below, although the month-over-month numbers for October ’08 vs. October ’07 are down in some districts – by a lot in some areas like C03 and W01 – both the average and median prices year-to-date in ’08 are still higher in almost all sampled districts than the ’07 annual average and median. City-wide, the volume of transactions is way down; it’s no surprise that prices have drifted downwards, too. Notably, C03 and W01 are areas where the sales activity is roughly half of what it was last year. By contrast, in E02 (the Beach) the sales activity is roughly 85% of last year’s pace, and prices have remained stronger. This is also true in W12, where the median price (first-timer range) is up almost 14% from this time last year – and where there’s no City of Toronto Land Transfer Tax….

Also, I believe that the city-wide average is skewed by very high-priced sales. For example, in October of ’07 there were 252 sales for over $1,000,000. This October, there were only 77. Looking at all sales over $750,000, that segment accounted for 6.3% of transactions in October of ’07, and just 3.4% in October of ’08. (Note: TREB only publishes those numbers by the month, not year-to-date, so I have to limit the comparison to just October. However, I’m sure you get the point!) High-value sales are down by almost half, which has a serious draw-down effect on the ‘average’ sale price. Thus the exciting headlines! However, most folks buy in a range of $300,000 to $600,000, and in that range prices are much more stable.

This reality applies not just to sale prices of individual homes, but to districts where the average price is very high. I believe that this explains why the median price in E01 (Leslieville, where the average and median prices are in the first- and second-time buyer range) has remained positive while prices in C03 (pricy territory) are down.

So, what does this mean to you, the ‘average citizen’? If you are a seller, you shouldn’t panic; well-priced houses are still selling at a fair market rate. It’s a tougher market, as we have basically completed the transition from a seller’s market to a buyer’s market. Be prepared, be realistic, and be competitive. It’s not a market in which you should reach for the stars; your objective should be to sell at a reasonable price; if that means pricing for less than your neighbour sold, so be it. Keep in mind that you will probably also be buying in this market, so you’ll get some wealth protection there.

If you are a buyer, don’t get too cocky. There are some deals out there – indeed, some sellers are putting fire-sale prices on their houses. However, there are still enough buyers out there to generate the odd bidding war, as we’ve seen in a few cases recently. If you are trying to buy at the bottom of the market, you sure don’t have to rush out and buy today. However, timing the bottom of any market is a difficult thing to do. Once the financial markets get their ‘confidence’ back, I predict that the Toronto market will see a bit of a ‘bounce’, as those buyers who have been waiting to see what happens next decide to jump back in to real estate. Take advantage of this flat real estate market, and also take advantage of today’s cheap lending rates. Keep in mind that you will probably be taking out a standard 20 year mortgage. Today’s rates of around 5% are very low by historical standards, and whatever rate you get today will likely be much lower than the rate you pay towards the end of your mortgage… that’s a bit tricky to calculate, but the point is that money now is cheap; it may not be so cheap in the future. Thus, buying sooner rather than later still makes sense. In this climate you can take your time, think it over, and then make a conditional offer in most cases.

Toronto is definitely in difficult times – with high and rising city taxes adding to a difficult environment. However, we haven’t seen big job losses yet, interest rates are still low, and our economy will probably not tank like some U.S. cities. As I have said before, real estate is still a good investment compared to your other options. Besides, we all need somewhere to live! J By the way, the last time October sales were down around 5000 transactions was in 2001; at that time the average price for a house in Toronto was $251,479!

The charts don’t fit here; please email me if you would like to see them! 🙂

October 2008 eNewsletter

October 17th, 2008 Posted by eNewsletter, Market Commentary No Comment yet

Happy Fall! You may recall that for the last few years I have supported a local school by buying pumpkins at their fall fundraiser. Once again I’ll be spending a few days delivering those pumpkins to clients and friends! If you would like one (they’re biggies!) please call or email me and I’ll drop it off one day next week. Happy Halloween!!

Market Slow, Hallmark Busy: Hallmark volume up 7% amid market decline

Solid job growth and continued low interest rates have been swamped by fear of the “market meltdown” happening in the financial world. Both volume and prices declined in Toronto in September, and have continued that direction in the first half of October. However, RE/MAX Hallmark, as the leading real estate brand in Toronto, experienced a significant volume increase of 7% in September. As the market gets more difficult, home owners and buyers are turning to agents they can trust to get the job done!

By the way, it’s no surprise to me that the price declines are far steeper in Toronto than in the GTA outside of T.O. In September: Toronto -6%, GTA -1%; so far in October: Toronto -21%, GTA -15%. Although there’s not yet enough data to be sure, my own theory is that (amid the general decline) we are starting to see the effects of higher taxes in Toronto. Stay tuned for on-going reporting on that!

43 Glenmore Rd. – 3 bedroom semi

This is just a reminder that 43 Glenmore Rd. is still on the market. We just dropped the price to $389,900, which is a great price for a large 3 bedroom semi with parking in the UpperBeach (even in this market)! If you know anybody who might be interested please let me know.

September 2008 eNewsletter

September 16th, 2008 Posted by eNewsletter, Market Commentary No Comment yet

I hope that you had a great summer, and that you are enjoying this post-long weekend/back-to-school period!

As we enter fall, the real estate market is heading into a busy seasonal period. Despite a rainy summer filled with lots of negative news about the economy, etc., prices actually rose a bit in the GTA. Really, a 1% increase in the average sale price is more an indication of a ‘flat’ or ‘balanced’ market. From here, we’ll have to wait and see what happens in September and October to get some direction from the market. However, early indications are that the market will be busy this fall: the number of listings has increased slightly over the last couple of weeks, with some recent sales generating competition. Now that the media is no longer bombarding people with daily reports of impending doom, we just might see a bit of optimism make its way back into the market! 🙂 I’ll keep you posted!

RE/MAX Hallmark joins forces with RE/MAX Muskoka

RE/MAX Hallmark is the biggest RE/MAX franchise in the GTA – by far. So, it makes sense that we would join forces with the biggest RE/MAX franchise in Cottage Country to offer our clients seamless service from one market to the other. If you, or anybody you know, want to buy or sell in Muskoka, call me first and I will co-ordinate with RE/MAX Muskoka to ensure that you get the best service that RE/MAX has to offer!

July 2008 eNewsletter

July 10th, 2008 Posted by eNewsletter, FINTRAC, Market Commentary No Comment yet

I hope that you are enjoying the summer weather (between rain storms, that is)! Summer is traditionally a slower time in real estate, but there’s still plenty of inventory hitting the market on a consistent basis. If you are shopping for a house, don’t take this summer off!

Please note that this issue will deal a bit with the new FINTRAC legislation, and what it means to the real estate business – and you. I hope that you will take a minute to read it, and let me know if you have any questions.

What is FINTRAC? – Financial Transactions and Reports Analysis Centre of Canada

According to their web site, FINTRAC “receives, analyzes, assesses and discloses financial intelligence on suspected money laundering, terrorist financing, and threats to the security of Canada.”

Statistics show that over 60% of money laundering in Canada is done through real estate. Empowered by recent legislation, FINTRAC has raised the obligation of Real Estate Brokers from simple reporting of suspicious transactions, to taking efforts to prove the identity of all parties to all transactions. From now on, all buyers and sellers will be required by law to show photo ID and fill out a form including either their passport number or license number.

This law over-rides privacy legislation. However, to protect your personal data, RE/MAX Hallmark will store all information in digital format at a secure location; the forms will be destroyed. (FYI, I will not personally retain any of the information.) The data will only be forwarded to FINTRAC if we note suspicious behavior by one of the parties involved. In the normal course of things, we will hold the data for 5 years, and then delete it.

Rest assured, Realtors did not ask for, nor do we want, this responsibility. We have been burdened with this over our objections. Please feel free to contact me with any questions or concerns.

Market Activity – Say it with me: “Volume down, prices up

You have heard me say this all year, and it was true again in June. Across the GTA, sales volume was down 18%, but prices were up 4%. Despite the large drop in volume, it still registered as the 5th busiest June ever – these things are all relative, aren’t they? On the listing side, there’s about 22% more supply, so that should mean lots of selection for buyers through the summer months (which are usually very tight). Although still very active by historic standards, this more balanced market should be more sustainable than the pace of previous years.

May 2008 eNewsletter

May 9th, 2008 Posted by eNewsletter, Market Commentary No Comment yet

Well, it sure has been an interesting few months in real estate. We have been bombarded by the media with stories of doom and gloom, but despite that buyers and sellers have been busily buying and selling houses and condos! Volume is definitely down, but prices have continued to climb at the same rate as previous years. See below for more information!

By the way, Pub Night was a blast! Next time I’ll bring my camera and will post a few pics for those you can’t make it! 😉

What’s happening so far? Volume still down, prices still up

The volume of houses sold in the GTA has been lower through the first few months in 2008. However, prices are up over last year by 6% in Janurary, 4% in February and 4% in March, and 6% in April.
Obviously, price increases have been stable so far this year.

The fact is that we remain in a sellers’ market (sorry buyers!), still due to continuing tight supply (and low interest rates). However, that could change a bit if we see the usual surge of listings that we expect in the spring. If you are (or will soon be) a seller, keep in mind that we usually want to hit the market by mid-June at the latest. After that we roll in to the summer market, which typically has a slower pace. Most houses sell, regardless of the time of year, but it’s best to strike while the market is still hot!

I’ll keep you up-to-date with what’s really happening in real estate. If the market does change, you’ll get the facts ASAP! As always, call me any time to discuss market conditions and/or your personal real estate needs. I’m here to help you!

Referrals: Do you need a mortgage broker, lawyer or contractor?

I like to give referrals just as much as I like to receive them! Call me if you would like me to connect you with a contractor, electrician, mortgage broker, lawyer, painter – you name it. I also have a great chiropractor, car salesman (he does leases, too), web master and a mobile device guy! I can give you their contact info or have them call you any time – just let me know how I can help.

April 2008 eNewsletter

April 25th, 2008 Posted by eNewsletter, Market Commentary No Comment yet

There has been a great deal of discussion lately regarding the state of the real estate market in Toronto. The media is desperately trying to tie the Canadian real estate market to the situation in the US real estate market. Obviously, the US and Canadian economies are related, but that certainly doesn’t mean our real estate market will follow the US real estate market.

To get some insight into the state of our market, the Broker/Ownership team at RE/MAX Hallmark met recently with Craig Alexander, the Deputy Chief Economist for TD Bank Financial Group. He pointed out a few major differences between the U.S. and Canadian markets (some of which I have mentioned in previous emails) and gave us some guidance for the future.

In the United States, the real estate plunge has been devastating, and may not have hit the bottom in some major markets. House prices in the States are down 9% (on average nationwide) from their peak. It is widely viewed that the decline in average house prices nationwide could reach a decline of 15%. What caused this meltdown? It can be largely attributed to the inappropriate lending practices of some mortgage institutions. In recent years, up to twenty-five per cent of all new mortgages in the States were sub-prime loans, often to borrowers who wouldn’t normally qualify. This speculative segment was caught off guard when the US Federal Reserve increased their prime rate from 1% to 5.25% in fewer than 24 months. That steep increase to interest rates made mortgage renewals too expensive for many borrowers, who were forced to either sell or walk away from their mortgages. That caused an over-supply of houses for sale and tipped off a decline in prices, leaving huge exposure for the speculators, lenders, and their backers. The ripples moved up the lending chain – and across the lending industry – resulting in the much talked-about ‘credit crunch’.

Also, the pain in the US real estate market has not been limited to re-sales, but has naturally hit the new home construction segment hard. House construction is a huge economic driver (think of the building materials, appliances, furniture, transportation and jobs), so the drop in new home construction has had wide ranging consequences for the US economy.

By contrast, here in Canada we have much more conservative lending practices, so we haven’t experienced those mortgage problems. We also have more conservative building practices. In the US, they typically build on speculation, while in Canada 80% – 90% of a development has to be pre-sold before the shovel breaks the ground – a lesson Canadians learned in the early 1990s.

Quite simply, when we look at the two big problems in US real estate and compare directly to the Canadian market, we see that we have neither the credit issues nor the high degree of speculation that have caused them so much misery. So, what is driving our Canadian (specifically Toronto) real estate market? Here are some statistics that help to explain the strength of our market:

– 5.8% national unemployment rate, a 33 year low
– 6% unemployment in Ontario (down from 7% at this time last year)
– 2% national inflation, near the record low
– 5.7% increase in wages and salaries (year-over-year)
– 3% increase in purchasing power
– 60 – 70% of first time buyers choosing 40 year amortization terms, which has created a whole new pool of (qualified) buyers
– Cheap entry points in our market, including condos and townhouses/row houses

We know that in the long term, household (or family) formation drives housing demand. Immigration will continue to be a big contributor to that. The big Canadian cities such as Toronto, Vancouver, Calgary and Edmonton will have the largest population growth because immigrants to Canada tend to flock to these big centers – particularly Toronto. (The City of Toronto web site states that Toronto received an average of 69,000 new residents per year from 2001 to 2005 – and everybody has to live somewhere!) Population growth will continue to drive the housing market in these centers.

Naturally, there are things to watch for that may negatively influence our market. Real estate could suffer if either of the following occurs:

– Steep increase in the Bank of Canada prime lending rate over a short period of time
– Sudden spike in house prices in Toronto over just a few months (above recent trend of 5% – 8% per year)

At this point, it is not likely that the Bank of Canada will push rates up any time soon. In fact, the expectation today is that interest rates will continue to go down, perhaps by as much as 150 basis points (1.5 percentage points) over the next few BoC meetings. With this decrease, variable interest rates for mortgages will come down, but 5 year fixed rate mortgages may remain constant. (Talk to your mortgage broker or lender about your options.) That’s good news for the economy as a whole, and real estate in particular.

The bottom line is that the Toronto real estate market is stable. There is no reason to expect a sudden price spike or price drop. This spring, activity and appreciation have moderated in some areas, which is good for longer-term growth. (Some of that may have been weather related, as much of the city was slowed down by the snow. Also, it’s not clear if the new Toronto Land Transfer Tax had – or will have – any impact on the local re-sale market.) Supply is still tight, but is currently increasing as the spring market picks up. All in all, we have high employment, low inflation, increasing purchasing power and low borrowing rates combining to keep homes affordable. Based on that, we expect the market to continue its healthy trend through this year into next. (By that time the US should be through the worst of its current problems, and we can put all of this behind us!)

As always, please contact me with your questions and/or comments, and feel free to forward this to anybody thinking of buying or selling real estate this year!

March 27, 2008 eNewsletter

March 27th, 2008 Posted by eNewsletter, Market Commentary, Uncategorized No Comment yet

March 27, 2008

Spring is here! Well, almost…. In the real estate world, now that we are past March Break and Easter the ‘Spring Market’ is upon us. You will soon notice a surge in the number of ‘For Sale’ signs around town – and weekend Open Houses will be packed with snoopers and buyers. If you are planning to sell this season, start prepping your home. If you are planning to buy, now is a good time to review your financing options, and make sure that I have the up-to-date specs for your automatic listing search. Things move fast at this time of year, so it’s best to be prepared!

What’s happening so far?
Volume down, prices up
The volume of houses for sale in the GTA has been down over the first couple of months in 2008. However, prices are up over last year by 6% in Janurary, 4% in February and 5% so far in March. These increases are consistent both with the past few years, and with recent forecasts for ’08.

The winter months are always slower, in part due to the weather. Near-record snowfall this winter has definitely been a factor. Warmer, sunnier weather will certainly make it easier to cruise open houses! With the seasonal increase in listings we’ll soon see an increase in sales volume. Expect prices to increase in the 5% year-over-year range for the next few months. (Note: that is a GTA average; some neighbourhoods will see a slightly lower increase, some may see a much bigger increase.)

It’s also important to note that supply in Canadian cities is still relatively tight – that’s why prices continue to rise. This is the opposite of what has happened in the States. There, listing volume spiked, causing the market to ‘tip over’. I’m not aware of any major Canadian city that has an excess of supply. At this point, we are miles away from the sort of market conditions they are experiencing. With continuing economic strength and low interest rates, our real estate markets should have another year of solid gains.

Referrals
They mean more to us now than ever before
More than a third of my new business last year came through referrals, up from 20% in ’06. My business plan has always been to work hard for my clients to build respect and friendships that will generate a lifeline of referrals to family and friends. It looks like that is really starting to bear fruit, and I want to thank everybody who has complimented me with a referral. The time I save by NOT having to prospect for new business is time better spent serving the needs of referral clients. I am looking forward to another year of increasing referral business, and building with those clients the same kind of relationships that I have with so many of you. Thank you!

March 5th, 08 eNewsletter

March 5th, 2008 Posted by eNewsletter, Market Commentary No Comment yet

Most of you have probably heard about the 50 basis point drop in the Prime lending rate. Although they don’t always do this, the major banks have passed that on to consumers by lowering their mortgage rates. Posted rates are now around 5.25% for a 5 year term. That’s pretty good, but not as good as the prime minus 80 points that I have on my variable rate mortgage.

With rates set to decline at least once more this year, it’s a good idea to at least weigh the option of a variable mortgage (or line of credit on your existing home, if you want/need that).

A neat feature of variable rate products is that the scheduled payment stays the same when rates go down, allowing you to chip away at the principal amount a little faster. Naturally, that works both ways, meaning that you should call your bank and increase your payment if/when rates go up.

Overall, it looks like we are finally seeing a bit of a slow-down in the economy – which is no surprise after 6 months of the media harping on about it. Nonetheless, I remain confident that Toronto will remain stable through the coming turmoil. The job market is strong, population growth (in Toronto) is steady, and interest rates are still very low.

Call or email me any time with your questions and/or comments!

February 08 eNewsletter

February 8th, 2008 Posted by eNewsletter, Market Commentary No Comment yet

2007 Set Records Nation-Wide Records all Around

What’s in store for 2008?

The big news in the last week or so is the turmoil in the financial markets. Everybody who bought a house instead of stocks in the last few years should give themselves a pat on the back! 😉 Of course, the markets will correct, then get back on track. The big question is what’s in store for the economy this year. A closely related question is what will happen in the housing market?

As a quick review, 2007 set both volume and price records nationally and in the GTA. (Please follow the Market Watch link on the left to see the details.) The most important numbers are probably the 7% year-over-year price increase in the GTA, and the 12% increase in sales volume.

The increase in volume is a sign of a healthy market with solid supply. The price increase, while higher than the average income increase, is still reasonable – especially compared to the 20%-40% seen in some Western markets.

For 2008, the Canadian Real Estate Association is forecasting slower but solid growth – even after last week’s wild ride. The 3 most important factors will be stable consumer confidence, healthy employment, and affordable interest rates (which should continue to go down throughout the year). These factors, combined with stricter lending laws, will likely insulate us from the slide in the U.S. housing market.

Basically, the housing market is expected to stay quite strong. If you are waiting for a housing market correction before you buy, this probably won’t be the year! It might be best to buy in and start making those equity gains.

REFERRALS

They mean more to us now than ever before! More than a third of our new business last year came to us through referrals, up from 20% in ’06. Our business plan has always been to work hard for our clients to build respect and friendships that will generate a lifeline of referrals to family and friends. It looks like that is really starting to bear fruit, and we want to thank everybody who has complimented us with a referral. The time we save by NOT having to prospect for new business is time better spent serving the needs of our referral clients. We are looking forward to another year of increasing referral business, and building with those clients the same kind of relationships that we have with so many of you. Thank you!

Baby Milberry – 4 is Enough!

Thanks to everybody for your warm wishes following the birth of our our first daughter (and 4th child). Marin is a real treat! We are enjoying (almost) every moment, and starting to look forward to the end of diapers….

As always, I look forward to speaking with you again soon. Have a great 2008!