Archive for the ‘Home Selling Advice’ Category

I have to thank a client of mine for the inspiration to write this blog article. The spotlight as we all know is on the economy. Nowhere is this more apparent than the media attention being given to the ‘hot’ housing market.

Here are some common real estate questions that I am being asked with increasing frequency by prospective buyers and sellers. I preface that the responses below are my opinion only. If I had a crystal ball, I would use it to make my fortune and retire early but alas I am still sitting here.

1) What is your gut feel on what will happen this summer after new mortgage restrictions have kicked in?

To clarify, Finance Minister Jim Flaherty announced last week the following changes to housing market rules: 1)all new borrowers will have to meet standards for five-year, fixed-rate mortgages even if they’re seeking a shorter, variable-rate loan 2) The government is lowering the maximum amount Canadians can withdraw when refinancing to 90 per cent of the value of their homes, from the current 95 per cent 3) The government will now require a 20-per-cent down payment for government-backed mortgage insurance on “speculative” investment properties.

My gut is that the mortgage restrictions aren’t going to have a significant impact on the resale market in Oakville. It may have a bigger impact on the Toronto condo market where there are more speculators affected by the refinancing and speculative down payment restrictions. What the press didn’t really publicize is that mortgage lenders were basing approval ratings on 3 year fixed rates prior to the new rules taking effect. Changing the approval requirements to a 5 year fixed rate is not a significant leap given that most of the buyers I know aren’t maxing out their qualification amount anyways. A bigger impact would have been made if Flaherty reduced amortization or to a lesser degree, increased the down-payment rules. Most first time buyers I know are usually putting more than 5% down but many take advantage of the longer 35 year amortization just to keep their monthly costs lower. Regardless, Flaherty didn’t touch amortization or down-payment requirements so this is a moot point. From my perspective, the new mortgage rules do a good job of reducing the market swings that could be caused by speculators while maintaining the opportunity for credit-worthy buyers to purchase property.

2) What is your gut feel on what will happen this summer after HST is implemented?

The harmonized HST which comes into effect July 1, 2010 will mainly affect service costs in the resale market (commissions to real estate brokerages, legal fees, etc). In the new home sales market, HST will be applicable on any home over $400,000. Purchasers of new homes valued between $400,000-$500,000 will be able to claim a proportional rebate on HST paid while homes under $400,000 will be exempt from the tax.

Some realtors are worried that the HST rules are contributing to people’s motivation to sell before the tax comes into effect. I personally don’t know anyone selling now to save on HST costs (it really only affects commissions, legal services, and other related closing costs). I think HST is having a much bigger factor on the new home market which as far as I can see is going absolutely crazy right now. There isn’t a ton of detached new home sales in Oakville right now but when they do start selling off the land North of Dundas Street, I can see how it will be more difficult for developers to keep prices in line with resale prices given the new HST tax applicable to new home sales over $400,000. If anything though, this should have a slight positive effect on keeping demand for resale homes high.

3) What is your gut feel on what will happen this summer after interest rates start to rise?

The Bank of Canada has publicly announced that they will not raise the overnight lending rate until midway through 2010. Mortgage rates tend to follow overnight lending rates and bond rates therefore, when the overnight lending rate starts to rise as expected in the back half of 2010, mortgage rates are also expected to rise.

Interest rates should have the greatest effect on the housing market. Typically the Bank of Canada doesn’t raise rates more than 0.25% each quarter although I suppose the rate will ultimately depend on how strong our economy rebounds. I think there is a lot of hype being written about the benefit of locking in rates right now which is motivating buyers. I would expect demand to soften slightly in the back half of this year which in turn should reduce the rate of housing price increases. The big BUT for me is that lower demand does not necessarily mean lower prices. Unless we see another huge catastrophic economic event like we did in Q4 ‘08, I suspect that housing prices will continue to rise albeit at a slower rate than they are now. Even with last year’s economic crash, housing prices dipped for only a few months before rebounding. During that period, I met a lot of people who were scared and feeling the pinch of the economy but there really weren’t a lot of foreclosures/power of sales, etc. People hung on to their homes to ride out the storm and if they had to move, many decided to lease out their properties so they wouldn’t take a hit on the price.

Bottom line for me is that current demand is not sustainable but prices are. Canadians have too much equity in their homes to walk away from them and while I have no evidence of this, the vast majority of Oakville properties are principle residences so the influence of speculators is much less than it is in say Toronto or Vancouver. I’m working with a number of buyers right now and I have to say that some of the sale prices seem ridiculous given their comparables but these new prices are the comparables of the future. There really would be no reason to think that a new listing would be worth less than a comparable listing recently sold unless demand somehow just drops off. For this to happen, we would need to see a sharp, fast rise in interest rates (unlikely given the economy) or a significant new economic development (while domestic and foreign debt is to me a real long term concern, I don’t think it is an immediate threat to local housing prices).

If you have questions about the local Oakville real estate market, I would love to hear from you. I can be reached at lindsay@remaxaboutowne.com or 905.338.9000.

Regards,

Lindsay

I am a bit of a learning junkie.  If I could, I would spend hours reviewing current events then spend several more discussing them with family and friends.  My husband jokes that dinner with me is a two hour affair as it takes me that long to tire of discussing the day’s events.

I recently watched an episode of Allen Gregg’s program on TV Ontario that I think is worth sharing with you.  The program is focused on financial planning in general however several points are made about real estate investing, most people’s largest investment.

At the very end of the clip (around the 24 minute mark), financial guru David Bach gives his take on realtors which of course made my ears perk up.  Below is the full clip, enjoy!

Luxury homes sales continue to accelerate as economic recovery takes hold in major markets in Ontario and Atlantic Canada, according to a report released today by RE/MAX.  Below are the details of the full press release.

The RE/MAX Upper End Report found that momentum is building in St. John’s, Saint John, Halifax-Dartmouth, Ottawa, Kingston, Greater Toronto, Hamilton-Burlington, and London as purchasers realize that the best buying period in recent history is about to come to a close.  Sales are already on par or ahead of last year’s levels in 50 per cent of cities surveyed, while the remaining markets are set to reach 2008 figures by year-end.

“Twelve months of healthy home buying activity have clearly been crammed into five short months,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada.  “It’s hard to believe that the transition in the market began in May. We’ve seen steady upward momentum since that time, with solid year-over-year gains posted each and every month.”

Pent-up demand and greater affordability have been the catalyst.  Increased selection in all markets—except Greater Toronto—as well as record low interest rates have also helped fuel move-up activity from Ontario to Newfoundland.

Leading in terms of sales appreciation is London, Ontario where the number of homes sold, priced in excess of $500,000, has climbed 11 per cent from January to September 2009, compared to one year ago.  Greater Toronto and Ottawa both reported a one per cent increase in the number of homes sold in the top end during the same period.  Within the GTA, Richmond Hill/Thornhill is particularly heated, with sales up 24 per cent over 2008 levels, followed by Mississauga— up 10 per cent.  St. John’s, Newfoundland is on par with year-ago figures.

Of the six markets reporting a year-over-year decrease in sales, four are off by just a handful of transactions (10 units or less), including Halifax-Dartmouth (off eight units), Kingston & Area (off three units), Toronto – West End (off 10 units), and Oakville (off five units).  Activity in the remaining two markets—Saint John and Hamilton-Burlington—is on the upswing, with the gap between 2008 and 2009 narrowing each month.

“A considerable shift is underway in the upper end,” explains Polzler.  “The price correction that we witnessed earlier in the year is over and prices have since firmed up.  Conditions are more balanced across the board or leaning toward seller’s territory once again.  The one exception is the Greater Toronto Area — now largely a seller’s market — with bidding wars making a comeback amid tight inventory levels.  The strength of the luxury segment is evident.  This is now a real estate market with all sectors working in tandem.”

Highlights:

• Upper end sales started to move upward as positive indicators of economic recovery began to emerge.  The momentum is expected to continue as Canada edges closer to positive periods of GDP growth in Q4 2009 and in 2010.
• Locals are fuelling luxury sales in the majority of markets surveyed.  Activity among out-of-province and international purchasers has waned from one year ago, although their presence in still evident in some markets.
• Sixty-one properties in Canada are currently priced over $10 million, with 18 of those located in Ontario.  The priciest Ontario home is nestled in Toronto’s prestigious Bridle Path area, listed at $23 million.
• Three hundred properties currently listed for sale are priced over $5 million in Canada.
• In Atlantic Canada, there are 22 listings in excess of $2 million—13 in Nova Scotia, five in New Brunswick and two in Prince Edward Island.  The most expensive property in Atlantic Canada is a $7.75 million estate on a bluff fronting the Atlantic Ocean on PEI’s north coast.

RE/MAX is Canada’s leading real estate organization with over 17,000 sales associates situated throughout its more than 677 independently-owned and operated offices across the country.  The RE/MAX franchise network, now in its 36th year, is a global real estate system operating in more than 70 countries.  Over 6,700 independently-owned offices engage nearly 100,000 member sales associates who lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral, and asset management.  For more information, visit: www.remax.ca.

October statistics were just released from the Oakville Milton Real Estate Board which confirms everything we are seeing in the press - the real estate market is really hot right now. Sellers are enjoying high demand for their homes with most selling close to or higher than list price.
Many people have asked me if the lack of listings is causing upward pressure on prices however as the stats show below, the number of listings is actually up 7% year to date. The real issue is that growing consumer optimism and historically low interest rates are attracting buyers to the point where demand is dramatically outpacing supply.

October Oakville Real Estate Statistics

It’s important for anyone thinking about buying or selling to look at the short, medium and long term economic forecast. Even with speculation that mortgage rates will start to rise, I’m not convinced that housing prices will come down anytime soon. For this to happen, we would need to see the economy plummet again and/or see a spike (both fast and dramatic rise) in interest rates.
For now, sellers and buyers should expect that homes in desirable neighbourhoods and in good condition will sell quickly and for top dollar. My advice for anyone thinking about buying or selling is to speak with a respected agent that takes the time to educate you on the current market. The right agent will give you the peace of mind you need on the biggest transaction in your life. And this my friends, is priceless.

I often get messages from people asking for my opinion on the local housing market. Recently I received a letter from a local resident which I decided to post in the event that someone else out there had the same question. A special thanks to the resident who sent me the question. Hopefully you don’t mind my reposting it here…

QUESTION:
Why are contractors building so many large and luxurious houses when the real estate market is depressed? I feel there is something odd and illogical about the enthusiastic construction of these houses during a slump. What do you think?

ANSWER:
Thanks for your email. I am guessing you contacted me for my advice as a local realtor. I have to admit I’m not entirely sure the context of your question but I will assume you are looking for information to satisfy your own personal interest on the matter. With that said, here are my thoughts…

The housing market in Oakville has changed dramatically over the past year. My personal opinion is that the reasons for the change are threefold. First, reduction of mortgage rates to historically low levels has enticed many people (particularly first time buyers) to enter into the market, driving the demand for housing up. Second, it is also more affordable for owners of lower end housing (condo’s, semi’s, towns and smaller detached homes) to move into a larger home given the low mortgage rates. These homeowners are seeing their neighbours successfully sell their homes for strong prices and have now gained the confidence to move themselves. Consider this the ripple effect. Third, some home owners who planned to move in winter 2008/spring 2009 held off due to uncertainty with their own jobs and investments. Many of these people, particularly young, employed professionals have come out relatively unscathed from the recession and are now feeling confident about their ability to take on a larger mortgage/more expensive home. As their family grows, their housing needs change, thus the interest in larger/more expensive homes.

For the most part, demand for Oakville housing is now outpacing supply. This is all seen in recent real estate board statistics which show that housing prices are on the rise and days on market (average time it takes to sell a home) is on the decline. September saw a 15.5% increase in average housing prices and a 6.9% increase in median sale prices proving that a fair portion of this increase is attributable to high end housing. This differs from the market in the winter when high end housing was hit the hardest. Realtors are sending more and more messages to each other to try to generate listings for their firm buyers. The scales are now tipped in favour of sellers with many buyers frustrated with the lack of inventory on the market. Homes that represent good value are selling quickly; multiple offers are not uncommon. New home construction helps fill the current supply gap.

The truth is that no one has a crystal ball to determine what will happen in the future. I personally believe that Oakville is and will remain a very desirable place to live for years to come. Oakville is also very fortunate to be part of Canada’s largest and most diverse economy which protects housing prices to a degree. People are willing to pay more to be a part of the Oakville community. With a good reputation for safety, education levels, parks, services, etc, I believe Oakville can support higher than average housing prices and a luxury housing market.

There were people lining up overnight at the last two new housing releases in Bronte Creek as well as the Waterlilies release on Dundas so the demand for new housing is definitely strong in Oakville right now. I also continue to meet prospective buyers who are interested in buying in the area that is yet to be developed North of Dundas. Given what I’ve been seeing in the market, I don’t think the enthusiasm of construction is illogical. That said, I think much of the housing boom right now is based on mortgage affordibility so demand and prices will be determined by the pace with which mortgage rates change. The other major factor to consider are investors. I have no evidence to support or repute this but there is a possibility that part of the demand for new housing in particular is with investors who see real estate as a better alternative to traditional forms of stock market investing. Even so, the most popular housing investments are new condo/semidetached/townhomes so it doesn’t explain the quick sales of more expensive homes in Bronte Creek.

Hopefully this gives you some food for thought. Thanks for the message. If you have any other questions, please don’t hesitate to ask.

Regards,
Lindsay

If you have a question or comment about the local real estate market, send me an email at lindsay@remaxaboutowne.com or call me at 905.338.9000.

It’s hard to believe but Thanksgiving and Halloween are just around the corner. Where has the year gone? The real estate market certainly out-performed the weather, sweeping aside the dark economic clouds despite a forecast of doom and gloom in the media at the beginning of the year.

Throughout this year, buyers and sellers obviously focused on neighbourhood and chose to ignore negative national and provincial headlines on market conditions. The simple fact is that the only meaningful real estate marketplace is the one you are in, so it is important to look closely at your own community’s real estate activity. The road to good real estate buying and selling decisions is via a market analysis provided by a local Realtor who knows the ins and outs of the neighbourhoods you are most interested in. Just like our weather, there will always be some hot real estate markets and others that will be cold as we have seen across the GTA this year. Pricing trends that have emerged in 2009 are likely to continue for the balance of this year if, as predicated, interest rates remain low. While interest rates do remain low the simple facts are that buyers who want to buy will buy and sellers who want to sell will sell.

According to the sales data for September the average time for homes that sold, to be on the market in Oakville was 26 days and in Milton 18 days. The current resale housing stock in Milton tends to be mainly in the newer sub-divisions and is attracting first-time buyers looking for a newer home with almost immediate occupancy.

Oakville continues to offer a wide range of properties and prices. Most activity (nearly 50%) in recent months has occurred in the $300,000 to $600,000 price range. If you are looking to buy or sell, I would love to hear from you. I can be reached at 905.338.9000 or lindsay@remaxaboutowne.com.

Regards,

Lindsay

A couple of months ago, Oakville town council reviewed the results of a report measuring the satisfaction and priorities of Oakville residents.  Craig Worden, the Vice-President of Public Affairs at Pollara (the market research firm conducting the poll) had this to say about the 2009 Oakville Citizen survey results - “Based on experience this is among the most positive results I’ve every seen.  It’s really quite uncanny that we had to point to areas of improvement but those areas you actually had positive scores on”.

This is an excellent survey to flip through, especially if you’re curious about what people have to say about Oakville.  To view a copy of the report, please click on this link 2009 Oakville Citizen Survey.

To learn more about issues affecting Oakville, please contact me at 905.338.9000, lindsay@remaxaboutowne.com or visit my website at www.lindsaywalls.com.

Regards,

In mid-June, Halton District School Board trustees confirmed the final ruling on the Southeast Oakville (Ward 3) public school closures. After months of debate and community input, the trustees voted in favour of an option put forth known as Hybrid 3B. If you’re like me, Hybrid 3B means nothing to you so I’ve summarized what this means below.

The following 3 schools will be closed as of September 2010: Brantwood, Chisholm and Linbrook. A new elementary school will be built in Clearview and the remaining schools of Maple Grove, EJ James and New Central will remain open.

Facts:

• Maple Grove, EJ James and Clearview all qualify for a full-time Principal, Vice Principle and SERT (Special Education Resource Teacher). New Central will not qualify for a Vice Principal
• School closure project is expected to result in a positive cash flow of roughly $3.9 million after proceeds from land disposition and construction costs are accounted for
• Expected to reduce bussing requirements from 858 students to 565 students (34% drop)
• Ideal elementary school size has been deemed 450 students
• Total Southeast Oakville enrolment capacity is 1677 students. Projected enrolment in 2015 expected to be roughly 1470 students
• Construction costs are required to accommodate student enrolment changes (and school supplies) at the new and existing schools

Interested in knowing exactly where your child will be attending? Click on this link to see the proposed school boundary maps for the area.  Note that the Halton Board has a tendency to change boundaries based on enrolment projections so the boundaries may change between now and September 2010.

If you have questions about this or any other topic related to Oakville real estate, please contact me at 905.338.9000, lindsay@remaxaboutowne.com or visit my website at www.lindsaywalls.com.

Regards,

I had an epiphany a few days ago – in a car dealership of all places. My sister was looking for a new car and had asked me to come along with her to negotiate with the sale rep she met a few days earlier.

To protect the guilty, I will not mention the name of the dealership we went to however we were greeted with a warm welcome and immediately ushered into the salesperson’s office where things quickly fell apart. While the salesperson was very much interested in getting to figures, my sister was still trying to figure out if she liked the dealer’s cars and if so, which model to choose. I started asking some questions thinking that this would help her reach a decision. Questions along the lines of fuel efficiency, safety features, maintaining warranty protection, pricing structures – you get the picture. Apparently this was the wrong thing to do. The salesperson was convinced that a certain model was best suited for my sister and seemed offended that she would even have questions, questions that he wasn’t able to answer. The longer we sat there, the more he pushed; the more he pushed the less we listened. Perhaps it was just coincidence that there was an abundance of stock on the model he wanted her to buy; perhaps there really was a computer crash that prevented him from answering our questions but something in my gut (and my sister’s) just wasn’t buying it.

Much like car salespeople, realtors often get a bad rap for being pushy, uninformed, lazy, you name it. Let me be very clear though that my opinion of salespeople is not a negative one. I’ve come to appreciate the difficulty of sales roles and have had the privilege to work with some amazing people along the way. However, sitting across from this particular salesperson I was just a mad and frustrated consumer. I couldn’t figure out why this person was unwilling and/or unable to answer our questions. To make matters worse, I got the distinct feeling that he was trying to push something on my sister because it suited him with complete disregard for her needs and wants.

Reflecting on this experience, it occurred to me that there is a HUGE difference in how salespeople approach their roles. The salespeople I want to deal with are patient, knowledgeable, and listen to the needs and wants of their clients. Much like an educator, they equip me with the knowledge I need to make an informed decision. Conversely, there are those salespeople that come across as pushy, intimidating and self-serving. They are the people I like to think of as skilled at the hard sell.

The next time you meet a salesperson, ask yourself if they are trying to “SELL” you or if they are trying to “EDUCATE” you. You know yourself better than anyone else, including the salesperson you work with. A good salesperson knows this and works hard to give you the information you need to be comfortable making a decision for yourself. Next time you find yourself in a car dealership (or real estate office), look for the signs of a true educator and hang on tight when you do!

AS AN ASIDE: I walked into another dealership two days after the first salesperson debacle and had ALL my questions answered by a simply FANTASTIC sales person. My sister went back a day later armed with all the information she needed to make an informed decision and is now thrilled with her brand new car.

If you’re looking for a non-slimy salesperson, I would love to hear from you!  I can be reached at 905.338.9000, lindsay@remaxaboutowne.com, or www.lindsaywalls.com.

Regards,

RE/MAX just released their latest Recreational Property report which finds that Generation X’ers (myself included) have become a major force in the acquisition of recreational properties. Without further ado, here are the findings…

Mississauga, ON (June 2, 2009) — Generation X purchasers are poised to replace aging baby boomers as the major force in recreational property markets across the country, according to a report released today by RE/MAX.

The demographic shift was noted in the 2009 RE/MAX Recreational Property Report highlighting sales, pricing, trends and developments in 50 Canadian markets. The report found demand from Gen X (those born between 1965 and 1980) has nearly doubled over one year ago. Seventy-four per cent of markets surveyed this year reported a marked trend toward thirty-something buyers snapping up affordably-priced product, ranging from waterfront cottages to resort condominiums, compared to just 40 per cent in 2008.

“After being priced out of most markets for the better half of the last decade, Gen X purchasers now have the financial wherewithal to buy recreational product at virtually every price point,” says Michael Polzler, Executive Vice President, Regional Director, RE/MAX Ontario-Atlantic Canada. “Gen X is ideally positioned to pick up any slack in recreational property markets caused by softer demand from baby boomers and retirees. They represent the next wave of recreational property owners in Canada and they know it.”

The financial strength of the cohort dovetails well with current market realities. Sixty-six per cent of recreational property markets surveyed reported a decline in the number of recreational product sold in the first four months of 2009, while 22 per cent indicated sales were either up or on par compared to one year ago. While the combination of inclement weather and a global recession clearly hampered sales activity earlier in the year, many major centres are currently experiencing an upswing in activity as the traditional cottage season gets underway.

“Much of the activity in the marketplace today has to do with the mindset of this particular generation,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “More important than the investment aspect is the commitment to lifestyle. The purchase of a waterfront home or a condominium is more than a simple transaction to Gen X purchasers – owning a recreational property underscores their dedication to family and balance.”

The time to buy has never been better. With four exceptions, recreational property prices have softened in most major markets across the country. Only on the Newfoundland Coast and in Ontario, from Innisfil to Oro, Kingston, and Beaverton, have values increased this year compared to 2008. Starting prices remain similar to one year ago and in some cases are even higher.

“While buyer’s market conditions exist virtually across the board, sellers of recreational properties from coast-to-coast are clearly content to wait out the storm,” says Polzler. “They are in no hurry to unload their product. Many have held on to their properties for generations – they’re fully-owned yet underutilized, which has prompted some aging owners to list them for sale.”

The report also found that while lowball offers are on the rise, very few meet with success. Through tough negotiations with multiple sign backs, purchasers who are serious tend to find out the hard way that sellers are serious too. As a result, the sales-to-list ratio remains relatively high in most recreational property markets across the country.

“The prospect of greater stability down the road is creating cautious optimism in the marketplace,” says Ash. “Purchasers are seeking to buy quality product, whether it be situated on lakes, rivers, or ponds, before values start to once-again edge up.”

Highlights:
• Supply is adequate in most markets, but heated activity in the lower-end has resulted in tight inventory levels for entry-level product in 18 per cent of markets including: Bancroft, Combermere, Honey Harbour/Port Severn, West Kawarthas, Orillia, Flesherton, North Saskatchewan, and Salt Spring Island.
• Older cottage owners, many who own their properties outright, are selling to younger purchasers with families.
• Some American cottage owners in Canada are taking advantage of the stronger dollar to cash out of the market.
• American purchasers have largely fallen off the radar, with some exceptions: Lake Winnipeg, Shediac Bay, and Sault Ste. Marie.
• Pent-up demand is a factor in the marketplace, as those purchasers who had intended on buying recreational properties in the latter half of 2008 deferred their purchases to 2009.
• Older Canadians continue to seek secondary homes in warmer parts of the U.S such as Florida, Arizona, California, and Nevada.
• Generation X purchasers are prepared to spend their hard-earned dollars on recreational properties, but at the end of the day, they want to know that they’ve negotiated the best deal possible.
• The upper-end has somewhat softened in markets across the country.

To download the full report, click on this link: FULL REPORT

Have a specific question about the real estate market or want to learn more about Oakville? I would love to hear from you. I can be reached at lindsay@remaxaboutowne.com or 905.338.9000.

Regards,