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Strength in Numbers

Who knew? Even after the introduction of the new mortgage rules last Friday (see last blog for full details) homes are still attacting situations the likes of these 2 guys to the left. Many homes, priced well, not really below market value, as has been the strategy in the past, are garnering more than one, two or even 3+ interested parties! That to say, the Toronto real estate market is not following the predicted trend of slowing down. This was the general assumption that was anticipated after stricter rules were implemented last week. It's early days, but clearly the proof is in the pudding. In the last ten days alone, over 40 homes were sold in the Leslieville/Beach/East York area, half over the asking price, many of those $30K+ over the listed price. There is strength in numbers! Much of this we can put this down to a couple of factors; location, condition and price of the home. So, if you're interested in selling and want the best result, make sure your home is in tip top shape, sound and priced well. You're sure to get the attention of more than one interested buyer. And buyers, don't despair! Yes, bidding wars occur, but this is why this market is termed a 'goldilocks' market. It's not TOO hot and not TOO cold - it's just right. Meaning that while homes can sell quickly and over asking price, there are also many nice homes, well priced that are selling for asking or just under. No pressure there. So enjoy the coming months in either your search or sale of a new home. Everyone is bound to be happy with their result.

The Heat is On

Well, officially Spring is almost here, although you wouldn't know it outside. It's a brisk -18C as I write this.

With winter so far being a steady diet of warm, cold, warmer, colder, our Toronto Real Estate Market is riding the same path it seems.

Typcially, early January is a very quiet time indeed for real estate activity, but it was soon followed by a bit of a surge in sales late into the month. Early February was again a little quieter, and it appears now, as I write (March 2nd) the Spring Market has definitely Sprung. While this is a little atypical so early in March, the Federal Finance Minister, Jim Flaherty's mortgage changes for 2011 have seen a surge in listings and hungry buyers out to purchase a home before the new rules come into affect March 18, 2011. Which are:

1. The maximum amortization period for a government-insured mortgage was lowered from 35 to 30 years.

2. The upper limit that Canadians can borrow against their home equity was lowered from 90 per cent to 85 per cent.
3. Government insurance backing on home equity lines of credit, or HELOCs, has been removed.
While these rules make sense and force Canadians to tighten their belts a bit, it does mean higher mortgage payments over a shorter amortization period (approx $96/mth more) and that's enough to get buyers out in the cold to shop.

However, the confidence in our economy seems to be bourgeoning and it's unlikely the market will come to a standstill after March 18th.
It looks like a healthy, steady market is here to stay; for a while at least. There is no plan to increase the low interest rates we've been enjoying, just yet
so if you're a seller or a buyer, this could be a fruitful time for you. Enjoy the experience and (the soon to come we hope) warmer weather!

Spring has Sprung! Brrrrr

While most of us consider the Spring real estate market to coincide with bulbs blooming and crocuses popping their heads out, it should really be renamed the Winter Market. Once Christmas credit card bills and the indulgence of holiday time comes to an end, so does the resting brain. Every year buyers get a second wind around mid January and like to start their search for a new home. It's a great time for sellers to put their homes up for sale as traditionally there isn't much 'product' (ie; homes) on the market. With a burgeoning group of buyers this can lead to disappointment and not much variety. Having said that, each year more and more sellers are seeing this trend and 2011 is one of the better winter markets that continues to grow. By 'Spring' there will be more competition (ie; more homes for sale) and buyers will have more options. So, here's a tip. Don't worry that your garden isn't in full bloom for prospective buyers in February/early March. Pull out some pictures from last year's garden party and put them together in a binder for potential buyers to see just how lovely the garden WILL look when the thaw arrives. Because once the weather warms up, homes will be popping up like tulips and you may have more competition for a buyer.

For buyers, your time is 2011. As predicted late in 2010, come Spring, the market trend is predicted to be more stable and without the huge discrepancy in terms of supply/demand seen in the last 6-7 years. So, it looks like a win/win for sellers and buyers in 2011. The government has curbed its lending strategies, but for those who were able to afford a home prior to this new legislation, they will probably still be able to now. After all, you don't want to be buying a home when you only have the bare minimum eligibility anyway. It's risky and when buying a home, you want to feel safe and 'sound'.

Jingle Bells, Houses Sell

Happy Holidays! It's been too long since I blogged last - October I see. Well, things have changed quite a bit since then. The shock of the HST has warn off, then the landslide win of underdog (?) Rob Ford took our breath away for awhile, and now....we are in the midst of holiday time. This has not stopped homes from being sold or bought in this traditionally slow season. However, this year has seen some changes of heart. While the summer/fall season was slow, confidence in the market re-established itself late in October and continues to stay steady. This is great news of course, despite the resurgence of grumblings by the Bank of Canada and its publication of Canadian household debtloads. Yes, we all carry debt - too much perhaps - but the low interest rates keep us confident that we can afford what we take on. The warning bells are real and we need to heed them as rates, the likes of which we may not see again, are going to climb - eventually. However, home prices are staying on the higher end price-wise, which can cancel out the term 'buyer's market' even as the interest rates are low. So be careful, and don't consume too much this holiday season! Instead, save for that new home in 2011. It'll be worth every saved penny to put towards a new home. In the meantime, enjoy time together with friends, family and share the gift of togetherness. It's free!

Competition Bureau vs Toronto Real Estate Board

Note: These are the personal thoughts of a respected colleague whose October newsletter has summed up this issue perfectly. I am sharing them with you to inform you about the pending case of the Toronto Real Estate Board and the Competition Bureau.

At the end of the month (Oct 29th) the Canadian Real Estate Association will be voting to resolve a battle with the Competition Bureau. The big question that everyone wants to know is how this will change the landscape of Real Estate in Canada.The answer is not very much…there have always been options for sellers whether it has been to sell privately, or to list with REALTORS® or Brokers who provide a multitude of services. I think that a lot of Sellers who would have previously chosen the “private for Sale” option will now be placing their properties on the MLS system with brokerage models who only offer that option.The misconceptions are out there: some consumers think that full service companies will now be forced to list properties on the MLS with little or no service or a schedule of services. This is not the case. It is up to the Owner/Broker to decide what offerings they will make as part of their business model.The BIGGEST misconception is that the Seller is the one paying the commission…think about the transaction. It is the Seller who writes the cheque but the price of the house is paid by the Buyer and the commission is deducted from that price. The Seller wrongly thinks that they are benefiting, but the benefit really goes to the Buyer….it is the Buyer who gets the lesser price to be paid and the Seller may be disadvantaged by not having a full marketing program.As a REALTOR®, I see myself as a marketer and negotiator providing services for a fee. If some Sellers feel that they can manage that part on their own, then I wish them all the best. It has taken years to develop a successful marketing plan. Good REALTORS® make it look easy, we act as a buffer and try to keep a very difficult process as calm as possible.Like any service well done it has lead consumers to think that the process is easy. Some consumers see the transaction as the only time we work; They don’t see the hours of preparing the house for sale, research to get the proper asking price, months of showings with buyers to educate them, licensing, ongoing education and insurance; one of our biggest jobs these days is to make sure that Bona Fide clients are exposed to the property and that clients do not lose proper perspective when negotiating.Unrepresentated Sellers would be well advised to hire a lawyer and use their services. However they should be prepared that Lawyers charge whether the Property sells or not whereas REALTORS® fees, for the most part, are charged on a successful completion of the transaction.There will be some confusion for a while as Sellers, REALTORS® and Buyers get used to some of these changes and some behaviours will have to change. Buyer Representation which involves a service contract between the Buyer and their agent, will become more and more important as it solidifies the fiduciary duty of the agent to the Buyer.Good agents will continue to offer many services to their sellers and Buyers. At the end of the day, competition allows great service providers to shine and this discussion is all about service.

Lazy Daze of Summer

Who would have thought that in three short months the booming Toronto real estate market would change so dramatically? It wasn't really a shock, but the HST put fear into the hearts and minds of buyers and sellers. And justly. While there was no dramatic financial concerns dealing with resale homes (no HST on a resale home purchase) the commissions and other services that come with a transaction had yet, another tax. At the same time as the introduction of the HST came a slight crackdown by the banks on mortgage qualification and the dissolution of 0% down for home buyers. Clearly, these are deterrents and the market has shown that. While sales are still constant, prices remain as they did in the earlier part of 2010 slowing the number of sales by roughly 30+% from the same time last year. On a positive note, interest rates remain low and for buyers, this is an opportunity to get into the real estate market sans bidding wars and stressful competition from 7 or 8 buyers for one property. With a 5% down payment (minimum) and a good credit rating and steady income, you are a good candidate for buying a home a good price. Without bidding wars and competition the process can be a more relaxing and thought out one. Sellers can expect to have their homes on the market a little longer than the traditional 'week' when the market is driven by supply and demand, but if you price well and your home shows its value you will be a satisfied seller. Let's hope the market wakes up this fall (traditionally a busier time than summer) and that both buyers and sellers find that perfect match! Until then, enjoy the rest of summer and have a great Labour Day weekend. Stay tuned for more updates in September.