From The Toronto Star, Oct 20, 2009
Consumers can expect to be barraged with some headline-grabbing record home sales numbers over the next few months. But don't forget to put them into context.
Last September, investment bank Lehman Bros. filed for the largest corporate bankruptcy in history, setting off a global credit crunch that seized markets. Consumer confidence waned in October, as buyers put off buying a home and the country slipped into recession.
"The markets completely froze. No one was buying anything," said Sal Guatieri, senior economist at BMO Financial Group. "So this year, the numbers are going to look really good in comparison."
The first of the favourable year-over-year real estate numbers came out Monday, showing home sales increased a hefty 34 per cent in the first two weeks of October, from the same period a year earlier
The Toronto Real Estate Board reported 3,631 sales in the first half of the month versus 2,700 the year ago. Average price was up 17 per cent to $414,475.
"People were starting to get anxious about the housing market in October of last year, and then it was just terrible in November and December. So you'll see a lot of positive numbers for the rest of the year," said Toronto housing analyst Will Dunning.
Much of the current demand is driven by sales in Toronto where buyers have bid up prices on homes in choice neighbourhoods.
The City of Toronto average price was $455,001 while the 905 average price was $386,311.
Much of this year's buying activity has been from young first-time home buyers attracted by low interest rates.
Year to date, sales are up 6 per cent from 2008. Also, analysts expect this year to be the second best on record, with the peak year being 2007.
A recent bump in the five-year mortgage rate by most major banks of 0.35 percentage points last week will likely pull some pre-approved buyers forward this year, says Dunning.
TREB says a lack of listings will contribute to tight market conditions going into the fourth quarter. But more listings are expected in 2010 as consumers regain confidence and list their homes while buying move-up properties.
Meanwhile, a survey by TD Bank Financial Group released Monday says buying a house in the city, as opposed to condos or town homes, is still preferred by the majority of Canadians.
That typically means fixer-upper homes for young Canadians (18-34) because of cost. About 35 per cent of young people chose a home they planned to fix up.
"Buying in the city often means choosing an older home that needs work, so many are looking at renovating soon after they purchase," said TD Bank.
But paying off the mortgage does not have the same priority with younger Canadians according to the TD poll.
Fewer than half (49 per cent) of young Canadians agree that paying off the mortgage is a priority, even though it is for 64 per cent of those 55 and older.
You can find great local Toronto, Ontario real estate information on Localism.com Frank Bott is a proud member of the ActiveRain Real Estate Network, a free online community to help real estate professionals grow their business.
Tuesday, October 20, 2009
Friday, October 9, 2009
Wednesday, September 9, 2009
How To Get A Better Mortgage
Renewing a mortgage
Arranging a new mortgage is one of life's milestones. I mean, how often do you sign your name and immediately assume responsibility for a chunk of debt measured in six figures?
Once, maybe twice, in a lifetime for most people, which is why this chapter starts off with advice on renewing a mortgage, something you could easily do half a dozen times or more until your home is yours, free and clear. Here's some math from a former bank mortgage executive that emphasizes how important the mortgage renewal is: as of mid-2006, the total amount of outstanding mortgages was worth roughly $660 billion, with about $80 billion of that representing new mortgages and the rest representing existing mortgages. Of that $580 billion or so in existing mortgages, about one-third ($193.3 billion) was up for renewal during the year. Given the rather immense amount of money being renewed each year, it's a surprise to hear from our former mortgage insider how many people sign and send back the mortgage renewal form sent to them by their banks, even though the rate being offered is not discounted at all. "If I told you how many people do this, you'd be floored," the insider said. "It's close to 30 per cent."
Would you buy a car and pay the price listed on the sticker on the window? If you pay your bank's off-the-rack mortgage rate, you're making the same mistake, but maybe five times worse (car: $30,000; mortgage: $150,000). Never -- repeat, never -- simply renew a mortgage without trying to arrange a better deal. In fact, mortgage renewals should be treated as an opportunity, not a formality. After living with whatever choices you made the last time you arranged a mortgage, you're now back in the cockpit with a chance to do better. Here's your game plan:
1. Research the market: Find out where mortgage rates are, and where they're expected to go. Then, see what deals lenders are offering.
2. Call, e-mail, or visit your lender: Who knows, you may be offered a great deal right off the top, thus ending the renewal process. Failing that, get your lender's best offer and go elsewhere to see what you can do to beat it. And, yes, you can conduct mortgage negotiations by e-mail. I once renewed my mortgage through an exchange of e-mails over several days with a mortgage rep at one of the banks I patronize. We never met face to face.
3. Choose your lender: It's always easiest to keep your mortgage where it is, so give your bank one last chance to hang on to your business. Frankly, the convenience of staying put is probably worth an incrementally higher interest rate.
If your current lender won't deliver the rate you want, then you'll find other banks, credit unions, and mortgage brokers eager to win your business. Often, they'll demonstrate their eagerness by absorbing any legan and administrative costs involved in transferring your mortgage (these could add up to several hundred dollars otherwise). As well, your existing lender may charge a mortgage discharge fee of $150 to $250. Be sure to ask your new lender to pick up the tab -- remember, it's competitive out there.
Arranging a new mortgage is one of life's milestones. I mean, how often do you sign your name and immediately assume responsibility for a chunk of debt measured in six figures?
Once, maybe twice, in a lifetime for most people, which is why this chapter starts off with advice on renewing a mortgage, something you could easily do half a dozen times or more until your home is yours, free and clear. Here's some math from a former bank mortgage executive that emphasizes how important the mortgage renewal is: as of mid-2006, the total amount of outstanding mortgages was worth roughly $660 billion, with about $80 billion of that representing new mortgages and the rest representing existing mortgages. Of that $580 billion or so in existing mortgages, about one-third ($193.3 billion) was up for renewal during the year. Given the rather immense amount of money being renewed each year, it's a surprise to hear from our former mortgage insider how many people sign and send back the mortgage renewal form sent to them by their banks, even though the rate being offered is not discounted at all. "If I told you how many people do this, you'd be floored," the insider said. "It's close to 30 per cent."
Would you buy a car and pay the price listed on the sticker on the window? If you pay your bank's off-the-rack mortgage rate, you're making the same mistake, but maybe five times worse (car: $30,000; mortgage: $150,000). Never -- repeat, never -- simply renew a mortgage without trying to arrange a better deal. In fact, mortgage renewals should be treated as an opportunity, not a formality. After living with whatever choices you made the last time you arranged a mortgage, you're now back in the cockpit with a chance to do better. Here's your game plan:
1. Research the market: Find out where mortgage rates are, and where they're expected to go. Then, see what deals lenders are offering.
2. Call, e-mail, or visit your lender: Who knows, you may be offered a great deal right off the top, thus ending the renewal process. Failing that, get your lender's best offer and go elsewhere to see what you can do to beat it. And, yes, you can conduct mortgage negotiations by e-mail. I once renewed my mortgage through an exchange of e-mails over several days with a mortgage rep at one of the banks I patronize. We never met face to face.
3. Choose your lender: It's always easiest to keep your mortgage where it is, so give your bank one last chance to hang on to your business. Frankly, the convenience of staying put is probably worth an incrementally higher interest rate.
If your current lender won't deliver the rate you want, then you'll find other banks, credit unions, and mortgage brokers eager to win your business. Often, they'll demonstrate their eagerness by absorbing any legan and administrative costs involved in transferring your mortgage (these could add up to several hundred dollars otherwise). As well, your existing lender may charge a mortgage discharge fee of $150 to $250. Be sure to ask your new lender to pick up the tab -- remember, it's competitive out there.
Wednesday, September 2, 2009
Toronto Real Estate Board: Sound future for residential real estate in GTA
Ownership has become a passion for the people of our city.
In fact, annual records for the highest number of resale housing transactions in our city have been set in three of the past five years. In 2004 there were 83,501 sales; in 2005, 84,145 homes changed hands; and in 2007 there were an incredible 93,193 transactions.
The Multiple Listing Service is a database of property listings accessed by realtors who use it to match buyers' preferences with properties listed for sale. It posts sales volumes, average prices, days on the market, housing type and neighbourhood.
Statistics are published in TREB's monthly Market Watch report, which is available on our website, torontorealestateboard.com.
The most recent data shows that, after a lull in the early part of this year, our real estate market has returned to its former vitality. Both June and July set monthly records for sales volumes.
Last month, GTA realtors reported a record 9,967 sales, up 28% from July 2008. The average price for July transactions was $395,414 - up 6% compared with the same month last year.
In Toronto, there were 3,880 sales, up from 3,132 in July 2008, with an average price of $421,110 compared with $395,343 a year earlier.
In the 905 region, 6,087 transactions were reported, up from 4,674 a year ago, with an average price of $379,035 compared with $355,401 in July 2008.
With 16,915 properties available for sale, July's active listings were down 36% from a year ago when 26,543 properties were on the market.
Most significantly, low borrowing rates continue to make homeownership more affordable. Immigration is another key factor. Toronto welcomes nearly 100,000 newcomers to Canada each year, the vast majority of whom eventually purchase a home.
The autumn months may bring some seasonal moderation to the market, however, this summer's numbers demonstrate that the future is bright for GTA real estate.
On the national front, the Canadian Real Estate Association reported 147,351 sales in the second quarter, up 1.4% from the second quarter of 2008, marking the first year-over-year increase in quarterly activity since the fourth quarter of 2007.
Parts of the U.S.'s resale housing market are also gaining traction. According to the National Association of Realtors, home sales in June rose from the previous month, marking three consecutive monthly increases.
Even if you're not a real estate buff, it's important to keep an eye on market activity, as it reflects the overall health of our economy. In fact, according to a study by the Canadian Real Estate Association, one out of every 100 jobs depends on spending associated with resale housing transactions - on things like renovations, furniture and appliances. This study also found the average resale housing transaction in Ontario generates more than $47,000 in economic spinoffs.
In fact, annual records for the highest number of resale housing transactions in our city have been set in three of the past five years. In 2004 there were 83,501 sales; in 2005, 84,145 homes changed hands; and in 2007 there were an incredible 93,193 transactions.
The Multiple Listing Service is a database of property listings accessed by realtors who use it to match buyers' preferences with properties listed for sale. It posts sales volumes, average prices, days on the market, housing type and neighbourhood.
Statistics are published in TREB's monthly Market Watch report, which is available on our website, torontorealestateboard.com.
The most recent data shows that, after a lull in the early part of this year, our real estate market has returned to its former vitality. Both June and July set monthly records for sales volumes.
Last month, GTA realtors reported a record 9,967 sales, up 28% from July 2008. The average price for July transactions was $395,414 - up 6% compared with the same month last year.
In Toronto, there were 3,880 sales, up from 3,132 in July 2008, with an average price of $421,110 compared with $395,343 a year earlier.
In the 905 region, 6,087 transactions were reported, up from 4,674 a year ago, with an average price of $379,035 compared with $355,401 in July 2008.
With 16,915 properties available for sale, July's active listings were down 36% from a year ago when 26,543 properties were on the market.
Most significantly, low borrowing rates continue to make homeownership more affordable. Immigration is another key factor. Toronto welcomes nearly 100,000 newcomers to Canada each year, the vast majority of whom eventually purchase a home.
The autumn months may bring some seasonal moderation to the market, however, this summer's numbers demonstrate that the future is bright for GTA real estate.
On the national front, the Canadian Real Estate Association reported 147,351 sales in the second quarter, up 1.4% from the second quarter of 2008, marking the first year-over-year increase in quarterly activity since the fourth quarter of 2007.
Parts of the U.S.'s resale housing market are also gaining traction. According to the National Association of Realtors, home sales in June rose from the previous month, marking three consecutive monthly increases.
Even if you're not a real estate buff, it's important to keep an eye on market activity, as it reflects the overall health of our economy. In fact, according to a study by the Canadian Real Estate Association, one out of every 100 jobs depends on spending associated with resale housing transactions - on things like renovations, furniture and appliances. This study also found the average resale housing transaction in Ontario generates more than $47,000 in economic spinoffs.
Wednesday, August 26, 2009
GTA REALTORS® Report August Mid-Month Resale Market Figures
TORONTO, August 18, 2009 - In the first two weeks of August, Greater Toronto
REALTORS® reported 3,832 sales – up 27 per cent compared to the first two
weeks of August 2008. The average price for these transactions was up three per
cent year-over-year to $383,796.
"The results for the first half of August indicate that many households in the GTA
remain confident in their ability to purchase and pay for a home over the long
term," said TREB President Tom Lebour.
Year-to-date sales, at 54,303 are up slightly compared to 54,138 in 2008. Average
price, at $385,603 is down by less than one half of one per cent.
"Strong resale housing demand will contribute to broader economic recovery as
each transaction results in substantial spin-off benefits to other sectors of the
economy," explained Jason Mercer, TREB's Senior Manager of Market Analysis.
REALTORS® reported 3,832 sales – up 27 per cent compared to the first two
weeks of August 2008. The average price for these transactions was up three per
cent year-over-year to $383,796.
"The results for the first half of August indicate that many households in the GTA
remain confident in their ability to purchase and pay for a home over the long
term," said TREB President Tom Lebour.
Year-to-date sales, at 54,303 are up slightly compared to 54,138 in 2008. Average
price, at $385,603 is down by less than one half of one per cent.
"Strong resale housing demand will contribute to broader economic recovery as
each transaction results in substantial spin-off benefits to other sectors of the
economy," explained Jason Mercer, TREB's Senior Manager of Market Analysis.
Friday, August 14, 2009
What is Stated Income?
Did you know that Self Employed and Commissioned Sales people can still get approved for up to 95% financing on a mortgage without having to prove income? They use ‘Stated Income’.
What is Stated Income?
Stated income is where a client will state earnings without having to prove these earnings. For example, client makes 100K per year but only declares 35K on his tax return. Client is a self employed electrician. Client needs 65K of income to qualify for the mortgage. The lender will look at the application and decide if it is possible that this client could make 65K a year. If so the deal will be approved based on good credit score and having down payment from own resources. That is a self employed stated income deal.
The deal has to make sense to the lender. A client stating that he makes 90K per year to qualify for a mortgage with declared income of 20K and works in a profession where 90K per year is very unlikely will not be approved.
General Guidelines
· Must have proven minimum 2 years of self employment or commission sales. As proof must provide copy of Master Business license, Articles of incorporation etc. (For real estate agents a letter from employer is sufficient)
· Must have good credit. Minimum beacon score of 680 or better. Lower beacons scores still accepted from some lenders but down payment will increase.
· 90% financing available on refinances.
· Interest rates and terms the same as regular financing.
As with all posts on this blog, please consult a mortgage professional for proper details and explanations, items are posted here merely for general information.
What is Stated Income?
Stated income is where a client will state earnings without having to prove these earnings. For example, client makes 100K per year but only declares 35K on his tax return. Client is a self employed electrician. Client needs 65K of income to qualify for the mortgage. The lender will look at the application and decide if it is possible that this client could make 65K a year. If so the deal will be approved based on good credit score and having down payment from own resources. That is a self employed stated income deal.
The deal has to make sense to the lender. A client stating that he makes 90K per year to qualify for a mortgage with declared income of 20K and works in a profession where 90K per year is very unlikely will not be approved.
General Guidelines
· Must have proven minimum 2 years of self employment or commission sales. As proof must provide copy of Master Business license, Articles of incorporation etc. (For real estate agents a letter from employer is sufficient)
· Must have good credit. Minimum beacon score of 680 or better. Lower beacons scores still accepted from some lenders but down payment will increase.
· 90% financing available on refinances.
· Interest rates and terms the same as regular financing.
As with all posts on this blog, please consult a mortgage professional for proper details and explanations, items are posted here merely for general information.
Tuesday, August 11, 2009
One In Five Neighbourhoods Have Surpassed Pre-Recession Average Price Levels
Mississauga, Ontario (July 28, 2009) - In the midst of the recession, approximately twenty per cent of single-detached homes and condominiums in Greater Toronto Area neighbourhoods managed to post an increase in average price, according to RE/MAX.
The RE/MAX Return on Investment Report found that 11 (17 per cent) of the 65 Toronto Real Estate Board (TREB) districts reported an upswing in the value of a single-detached home in the first six months of 2009, despite one of the worst first quarters on record. The Beach (E02) saw the greatest percentage increase year-over-year at 3.79 per cent, with average price rising to $715,422, up from $689,278 in June, 2008. Pickering (E13) placed second, with the average price of a single-detached home climbing 3.72 per cent to $389,536, up from $375,577 from one year earlier. Willowdale, Newtonbrook (C14) ranked third, with a single-detached home rising in value from $754,470 to $779,537 -- a 3.32 per cent increase. Rounding out the top five neighbourhoods are newcomers Downsview, Weston (W04) – where prices have climbed 2.25 per cent to $384,485 from $376,007, and Rouge, Malvern (E11) where a 1.99 per cent uptick has brought year-to-date housing values to $345,468 (from $338,738).
“Purchasers clearly moved to take advantage of greater affordability in the marketplace in the first half of the year,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “Prices were down in virtually every neighbourhood surveyed; supply of homes listed for sale was at an all-time high; and interest rates were at historic levels. If you’re a buyer, it doesn’t get much better than that.”
Given their more affordable price point, condominium properties fared slightly better than single-detached homes, with 13 (22 per cent) of 59 TREB districts posting an increase in average price. Condos in Cliffcrest, Guildwood (E08) in the city’s east end saw the greatest appreciation in value, with average price climbing 6.45 per cent to $175,855, up from $165,197 one year ago. North Toronto, Cricket Club (C04) ranked second with a 6.1 per cent increase in average price, bringing condominium values to $301,065 (up from $283,746). Downsview, Weston (W04) clinched third spot, with a 4.37 per cent increase in average price to $173,083 in June 2009, up from $165,834 one year earlier. Mississauga’s thriving Port Credit community (W12) experienced a 2.63 per cent increase in condominium values year-over-year – with average price hovering at $304,954. Bendale, Woburn, and West Hill comprise E09, where the average price of a condo appreciated 2.46 per cent over figures reported one year ago to $201,830.
“But that was then and this is now,” says Polzler. “Lower inventory levels combined with increased demand -- comparable to what we’ve seen in recent months -- is expected to place renewed pressure on housing values for the remainder of the year. As a result, average prices are forecast to be at par or slightly ahead of last year’s levels by year-end in almost all neighbourhoods.”
Case in point is areas like Toronto’s east end, where bidding wars are breaking out on single-detached properties daily. The average sale-to-list price ratio in E01 and E02 approaches 100 per cent. Average prices are up in four of the 18 East District neighbourhoods. Overall average price in the east is down less than one per cent to $346,597 from the January to June 2008 figure.
The areas with the highest percentage decreases in the average price of a single-detached home have also seen the greatest increases in the number of properties sold. The overall average price of a single-detached home fell by 5.17 per cent in the Central District to $884,036, down from $932,198 one year ago, while the North District dropped 4.49 per cent in value to $526,693, down from $551,452 in June 2008. Sales are up in both areas, with 2,000 homes changing hands in the central area (up 4.28 per cent over one year ago) and 4,249 properties sold in the north (up three per cent from June 2008).
Only one district reported an overall increase in the average price. Condominiums in the North District – comprised mostly of York Region – posted a 0.26 per cent increase in values – and now hover at $275,822, compared with $275,113 one year ago.
“The momentum going forward is expected to be healthy – buoyed by positive economic data and a return to stability in the financial sector,” says Polzler. “There may be some bumps along the road, but all in all, the worst is over for the residential real estate in the Greater Toronto Area.”
The RE/MAX Return on Investment Report found that 11 (17 per cent) of the 65 Toronto Real Estate Board (TREB) districts reported an upswing in the value of a single-detached home in the first six months of 2009, despite one of the worst first quarters on record. The Beach (E02) saw the greatest percentage increase year-over-year at 3.79 per cent, with average price rising to $715,422, up from $689,278 in June, 2008. Pickering (E13) placed second, with the average price of a single-detached home climbing 3.72 per cent to $389,536, up from $375,577 from one year earlier. Willowdale, Newtonbrook (C14) ranked third, with a single-detached home rising in value from $754,470 to $779,537 -- a 3.32 per cent increase. Rounding out the top five neighbourhoods are newcomers Downsview, Weston (W04) – where prices have climbed 2.25 per cent to $384,485 from $376,007, and Rouge, Malvern (E11) where a 1.99 per cent uptick has brought year-to-date housing values to $345,468 (from $338,738).
“Purchasers clearly moved to take advantage of greater affordability in the marketplace in the first half of the year,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “Prices were down in virtually every neighbourhood surveyed; supply of homes listed for sale was at an all-time high; and interest rates were at historic levels. If you’re a buyer, it doesn’t get much better than that.”
Given their more affordable price point, condominium properties fared slightly better than single-detached homes, with 13 (22 per cent) of 59 TREB districts posting an increase in average price. Condos in Cliffcrest, Guildwood (E08) in the city’s east end saw the greatest appreciation in value, with average price climbing 6.45 per cent to $175,855, up from $165,197 one year ago. North Toronto, Cricket Club (C04) ranked second with a 6.1 per cent increase in average price, bringing condominium values to $301,065 (up from $283,746). Downsview, Weston (W04) clinched third spot, with a 4.37 per cent increase in average price to $173,083 in June 2009, up from $165,834 one year earlier. Mississauga’s thriving Port Credit community (W12) experienced a 2.63 per cent increase in condominium values year-over-year – with average price hovering at $304,954. Bendale, Woburn, and West Hill comprise E09, where the average price of a condo appreciated 2.46 per cent over figures reported one year ago to $201,830.
“But that was then and this is now,” says Polzler. “Lower inventory levels combined with increased demand -- comparable to what we’ve seen in recent months -- is expected to place renewed pressure on housing values for the remainder of the year. As a result, average prices are forecast to be at par or slightly ahead of last year’s levels by year-end in almost all neighbourhoods.”
Case in point is areas like Toronto’s east end, where bidding wars are breaking out on single-detached properties daily. The average sale-to-list price ratio in E01 and E02 approaches 100 per cent. Average prices are up in four of the 18 East District neighbourhoods. Overall average price in the east is down less than one per cent to $346,597 from the January to June 2008 figure.
The areas with the highest percentage decreases in the average price of a single-detached home have also seen the greatest increases in the number of properties sold. The overall average price of a single-detached home fell by 5.17 per cent in the Central District to $884,036, down from $932,198 one year ago, while the North District dropped 4.49 per cent in value to $526,693, down from $551,452 in June 2008. Sales are up in both areas, with 2,000 homes changing hands in the central area (up 4.28 per cent over one year ago) and 4,249 properties sold in the north (up three per cent from June 2008).
Only one district reported an overall increase in the average price. Condominiums in the North District – comprised mostly of York Region – posted a 0.26 per cent increase in values – and now hover at $275,822, compared with $275,113 one year ago.
“The momentum going forward is expected to be healthy – buoyed by positive economic data and a return to stability in the financial sector,” says Polzler. “There may be some bumps along the road, but all in all, the worst is over for the residential real estate in the Greater Toronto Area.”
Sunday, May 31, 2009
Buyers' Market? What Buyers' Market
I took clients out to see two great homes last week, semis in Leaside and East York. Fortunately they decided not to put offers on either house. This was a week after they had an offer rejected for an Upper Beach semi offering full asking price (over $550,000.00).
I say fortunately because the two properties both sold well over asking. The property in Leaside that was priced in the low 600s sold for more than 700k and the East York property, priced in the mid 500s sold for 160k over asking after 23 offers.
So, back in October when the Stock Market crashed everyone said get ready for the correction in the housing market, after years of sellers driving the market now it's the buyers turn. Problem is that the prognosticators tend to only use national or regional numbers. You can't compare what's happening in a market like Oshawa with the devastation of the auto industry to a local market like Danforth Village in Toronto's east end that is being driven by walking distance to the subway system, low crime rates, great culture and schools and a historically lower price point than similiar neighbourhoods on the west end.
Record low interest rates are driving a market where people can qualify for as much as four times their gross annual income in mortgage amounts but we are also experiencing a market with as much as 60% fewer listings than last year so the people who do have their homes listed are getting lots of attention and top dollar. I have one couple who are working every waking minute to get their home ready for sale to benefit from this phenomenom.
Bottom line is that if you are a seller or thinking of selling, now's the time if you live in a hot market. If you are a buyer, be patient, don't jump at the first thing you see, especially if you want to live in a neighbourhood that offers all the amenities that today's urban dwellers want.
Check out this clip
http://watch.ctv.ca/news/clip177030#clip177030
I say fortunately because the two properties both sold well over asking. The property in Leaside that was priced in the low 600s sold for more than 700k and the East York property, priced in the mid 500s sold for 160k over asking after 23 offers.
So, back in October when the Stock Market crashed everyone said get ready for the correction in the housing market, after years of sellers driving the market now it's the buyers turn. Problem is that the prognosticators tend to only use national or regional numbers. You can't compare what's happening in a market like Oshawa with the devastation of the auto industry to a local market like Danforth Village in Toronto's east end that is being driven by walking distance to the subway system, low crime rates, great culture and schools and a historically lower price point than similiar neighbourhoods on the west end.
Record low interest rates are driving a market where people can qualify for as much as four times their gross annual income in mortgage amounts but we are also experiencing a market with as much as 60% fewer listings than last year so the people who do have their homes listed are getting lots of attention and top dollar. I have one couple who are working every waking minute to get their home ready for sale to benefit from this phenomenom.
Bottom line is that if you are a seller or thinking of selling, now's the time if you live in a hot market. If you are a buyer, be patient, don't jump at the first thing you see, especially if you want to live in a neighbourhood that offers all the amenities that today's urban dwellers want.
Check out this clip
http://watch.ctv.ca/news/clip177030#clip177030
Tuesday, May 5, 2009
Purchase Conditional On The Sale Of Your Property
It is totally possible to ask sellers to accept your offer to buy their home subject to you successfully selling your existing home.
You don't have to wait to sell your home before entering a contract to buy a new home. However, you do need to do one very important thing if you want the seller to accept your offer. Your home must be listed for sale in MLS. Otherwise, sellers will believe you are not a committed buyer, and they will tell you to come back when you are serious.
This is a strategy that hasn't been used much in recent years because of the Sellers' Market but now that we have returned to a more balanced market we are starting to see it again.
You don't have to wait to sell your home before entering a contract to buy a new home. However, you do need to do one very important thing if you want the seller to accept your offer. Your home must be listed for sale in MLS. Otherwise, sellers will believe you are not a committed buyer, and they will tell you to come back when you are serious.
This is a strategy that hasn't been used much in recent years because of the Sellers' Market but now that we have returned to a more balanced market we are starting to see it again.
Friday, April 24, 2009
RE/MAX Hallmark presented with Children’s Miracle Network award for Top Contributing Office in Ontario
Toronto, ON (April 24, 2009) – RE/MAX Hallmark Realty was honoured once again for their outstanding contribution to the Children’s Miracle Network—and Sick Kids Hospital— in 2008.
Broker-Owners Ken McLachan and Debra Bain were presented with the coveted award for Top Contributing Office in Ontario before an audience of their peers at the Four Seasons Hotel in Toronto. RE/MAX Hallmark Realty contributed over $93,000 to Sick Kids in 2008 through the Miracle Home Program and various other fundraisers, making them the top contributing RE/MAX office in Ontario.
“This award has a very special meaning to our team which includes all of the RE/MAX Hallmark offices in the GTA,” says Debra Bain. “One hundred percent of RE/MAX Hallmark agents have contributed a portion of their commission from each and every sale to the Miracle Home Program. We would like to thank our sales associates and support staff who have worked tirelessly to raise money for those less fortunate in need.”
The majority of funds were raised through the RE/MAX Miracle Home Program, which allows sales associates to donate to a portion of the sale of each home to Children’s Miracle Network. In Canada, 12 children’s hospitals and foundations are supported by Children’s Miracle Network. Monies raised fund research, programs, medical equipment and pediatric care for over two million sick children annually.
“The Top Contributing Office award is presented to a RE/MAX office that has made a significant difference in the lives of others through outstanding charitable work,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “The RE/MAX Hallmark team is comprised of truly caring individuals who really go above and beyond for this worthwhile cause. We commend them for their efforts.”
RE/MAX Hallmark Realty operates seven offices throughout the Greater Toronto Area, with a total agent count of 530. They are renowned in their community for their philanthropy efforts and fundraising events for Children’s Miracle Network and SickKids.
For more information please contact me.
Broker-Owners Ken McLachan and Debra Bain were presented with the coveted award for Top Contributing Office in Ontario before an audience of their peers at the Four Seasons Hotel in Toronto. RE/MAX Hallmark Realty contributed over $93,000 to Sick Kids in 2008 through the Miracle Home Program and various other fundraisers, making them the top contributing RE/MAX office in Ontario.
“This award has a very special meaning to our team which includes all of the RE/MAX Hallmark offices in the GTA,” says Debra Bain. “One hundred percent of RE/MAX Hallmark agents have contributed a portion of their commission from each and every sale to the Miracle Home Program. We would like to thank our sales associates and support staff who have worked tirelessly to raise money for those less fortunate in need.”
The majority of funds were raised through the RE/MAX Miracle Home Program, which allows sales associates to donate to a portion of the sale of each home to Children’s Miracle Network. In Canada, 12 children’s hospitals and foundations are supported by Children’s Miracle Network. Monies raised fund research, programs, medical equipment and pediatric care for over two million sick children annually.
“The Top Contributing Office award is presented to a RE/MAX office that has made a significant difference in the lives of others through outstanding charitable work,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “The RE/MAX Hallmark team is comprised of truly caring individuals who really go above and beyond for this worthwhile cause. We commend them for their efforts.”
RE/MAX Hallmark Realty operates seven offices throughout the Greater Toronto Area, with a total agent count of 530. They are renowned in their community for their philanthropy efforts and fundraising events for Children’s Miracle Network and SickKids.
For more information please contact me.
Friday, April 17, 2009
New Study Says Tax Harmonization Would Slam Door on Homebuyers
Ontario’s new homebuyers would face a massive tax grab under the proposed harmonization of the federal GST and Ontario PST, a new report released today concludes.
The report on the implications for sales tax harmonization on new home buyers in Ontario was written by veteran housing analyst Frank Clayton, PhD, of Canada’s largest independent real estate consulting and advisory firm Altus Group, for the Building Industry and Land Development Association (BILD). BILD is the Greater GTA affiliate of the Ontario Home Builders’ Association.
The report looked at nine Ontario municipalities and three different home types. It revealed tax increases for single detached homes ranging from $8,957 (Windsor) to $17,049 (Ottawa) in markets outside the GTA, and from $24,566 (Mississauga) to a whopping $46,676 (Toronto) within the GTA.
“All told, harmonization of PST and GST without any offsetting measures by the provincial government would rip $2.4 billon dollars out of the pockets of new home buyers, slamming the homeownership door shut in the face of many Ontarians,” said Stephen Dupuis, President and CEO of BILD.
BILD Chair Leith Moore added that the proposal for GST/PST harmonization couldn’t come at a worse time and runs completely contrary to the Province’s efforts to stimulate spending and jobs.
"There's no point putting the gas pedal to the metal from a stimulus standpoint while braking equally hard with the other foot, but that's what harmonizing the sales tax on housing amounts to," Moore said.
Meanwhile, Ontario Home Builders’ Association president Frank Giannone said harmonization is a “poison pill” for housing. “Housing is the only product that keeps on paying property tax after it is consumed. So to cripple the new home buyer market at this time not only damages the provincial economy, it also hurts governments in terms of revenues. In addition, the HST would also add additional tax to future renovation projects, and we all know tax increases drive consumers into the underground economy and into cash deals. It makes no sense,” he said.
Dupuis explained that builders are not fighting harmonization, but fighting for fair treatment of housing under a harmonized sales tax regime. “The reason housing gets hit so hard is that it is the biggest of the big ticket items and it’s not currently directly subject to PST, for good reason,” he said.
“As matters currently stand, builders are paying an average of two per cent PST embodied in the price of each new home and they’re prepared to keep on paying at that rate, notwithstanding all the other taxes, fees and levies they must endure.“What home builders are not prepared to do is to sit idly by while home buyers are hammered to the tune of $2.4 billion due to harmonization. That's not on," Dupuis concluded. (CREA 11/03/09)
The report on the implications for sales tax harmonization on new home buyers in Ontario was written by veteran housing analyst Frank Clayton, PhD, of Canada’s largest independent real estate consulting and advisory firm Altus Group, for the Building Industry and Land Development Association (BILD). BILD is the Greater GTA affiliate of the Ontario Home Builders’ Association.
The report looked at nine Ontario municipalities and three different home types. It revealed tax increases for single detached homes ranging from $8,957 (Windsor) to $17,049 (Ottawa) in markets outside the GTA, and from $24,566 (Mississauga) to a whopping $46,676 (Toronto) within the GTA.
“All told, harmonization of PST and GST without any offsetting measures by the provincial government would rip $2.4 billon dollars out of the pockets of new home buyers, slamming the homeownership door shut in the face of many Ontarians,” said Stephen Dupuis, President and CEO of BILD.
BILD Chair Leith Moore added that the proposal for GST/PST harmonization couldn’t come at a worse time and runs completely contrary to the Province’s efforts to stimulate spending and jobs.
"There's no point putting the gas pedal to the metal from a stimulus standpoint while braking equally hard with the other foot, but that's what harmonizing the sales tax on housing amounts to," Moore said.
Meanwhile, Ontario Home Builders’ Association president Frank Giannone said harmonization is a “poison pill” for housing. “Housing is the only product that keeps on paying property tax after it is consumed. So to cripple the new home buyer market at this time not only damages the provincial economy, it also hurts governments in terms of revenues. In addition, the HST would also add additional tax to future renovation projects, and we all know tax increases drive consumers into the underground economy and into cash deals. It makes no sense,” he said.
Dupuis explained that builders are not fighting harmonization, but fighting for fair treatment of housing under a harmonized sales tax regime. “The reason housing gets hit so hard is that it is the biggest of the big ticket items and it’s not currently directly subject to PST, for good reason,” he said.
“As matters currently stand, builders are paying an average of two per cent PST embodied in the price of each new home and they’re prepared to keep on paying at that rate, notwithstanding all the other taxes, fees and levies they must endure.“What home builders are not prepared to do is to sit idly by while home buyers are hammered to the tune of $2.4 billion due to harmonization. That's not on," Dupuis concluded. (CREA 11/03/09)
Sunday, April 5, 2009
Are You Fit To Sell?
New RE/MAX program helps Canadian homeowners secure the value of their biggest investment. As home sellers across the country adjust to new market realities, RE/MAX is set to launch Fit to Sell, an innovative new program designed to secure homeequity in uncertain times.
“The stark reality is that more than 2,000 properties are listed for sale every day in Canada,”
explains Michael Polzler, Executive Vice President, Regional Director, RE/MAX Ontario-Atlantic
Canada, “yet only a quarter of them will be sold. With the creation of Fit to Sell, RE/MAX is
intent on helping Canadians get the most out of their biggest investment – their home.”
RE/MAX has enlisted the help of popular staging expert Carla Woolnough, host of the DVD series ‘How to Stage your own Home’ and owner of Nex-Step Design, to develop Fit to Sell. The program encourages existing homeowners to increase their stake in the home-selling process by working with their real estate professional to bring their home to the market. Fit to Sell ultimately rewards their participation by maximizing sale price and minimizing on-market time.
“Sellers are no longer in the driver’s seat but there’s also no reason for them to take a back seat,” explains Polzler. “We know that location, price, and condition are the three major factors that come into play when selling a home – and while location and price are clearly choices made by the buyer at the onset, condition is the one factor that a seller can influence. Sellers who make the right moves in preparing their home for sale can maximize their housing potential and ultimately improve their bottom line. After all, there are still buyers in the market and they are looking for quality product.”
RE/MAX and Carla Woolnough, the national spokesperson for RE/MAX Fit to Sell, have created a checklist of the top 10 priorities for preparing a property for sale, ranging from air quality to furniture placement and lighting. The checklist and tips can also be found on www.fittosell.ca
“By following these simple and inexpensive tips, homeowners across the country can secure top dollar for their properties,’ says Carla. “All it takes is a little upfront planning and some advice from your RE/MAX sales professional.”
“The stark reality is that more than 2,000 properties are listed for sale every day in Canada,”
explains Michael Polzler, Executive Vice President, Regional Director, RE/MAX Ontario-Atlantic
Canada, “yet only a quarter of them will be sold. With the creation of Fit to Sell, RE/MAX is
intent on helping Canadians get the most out of their biggest investment – their home.”
RE/MAX has enlisted the help of popular staging expert Carla Woolnough, host of the DVD series ‘How to Stage your own Home’ and owner of Nex-Step Design, to develop Fit to Sell. The program encourages existing homeowners to increase their stake in the home-selling process by working with their real estate professional to bring their home to the market. Fit to Sell ultimately rewards their participation by maximizing sale price and minimizing on-market time.
“Sellers are no longer in the driver’s seat but there’s also no reason for them to take a back seat,” explains Polzler. “We know that location, price, and condition are the three major factors that come into play when selling a home – and while location and price are clearly choices made by the buyer at the onset, condition is the one factor that a seller can influence. Sellers who make the right moves in preparing their home for sale can maximize their housing potential and ultimately improve their bottom line. After all, there are still buyers in the market and they are looking for quality product.”
RE/MAX and Carla Woolnough, the national spokesperson for RE/MAX Fit to Sell, have created a checklist of the top 10 priorities for preparing a property for sale, ranging from air quality to furniture placement and lighting. The checklist and tips can also be found on www.fittosell.ca
“By following these simple and inexpensive tips, homeowners across the country can secure top dollar for their properties,’ says Carla. “All it takes is a little upfront planning and some advice from your RE/MAX sales professional.”
Monday, March 30, 2009
TREB - Torontonians Want Toronto Land Transfer Tax Repealed: Poll
TORONTO, March 30, 2009 - With Toronto City Council scheduled to debate and vote on the City’s proposed 2009 Operating Budget tomorrow, public opinion poll results, released today, show that 65 per cent of Torontonians believe that the Toronto Land Transfer Tax should be repealed.
The poll was conducted by the Environics Research Group Ltd. for the Toronto Real Estate Board. “REALTORS® strongly believe that Toronto City Council should scrap the Toronto Land Transfer Tax, and the public agrees,” said Maureen O’Neill, President of the Toronto Real Estate Board. “The Toronto Land Transfer Tax is not a fair tax and is hurting Toronto’s economy.”
The poll also found that 57 per cent of Torontonians believe that the Toronto Land Transfer Tax is hurting the real estate market and 62 per cent believe that the City has not taken adequate action to help stimulate the economy. “Torontonians want more action from the City on the economy, and they understand that the Toronto Land Transfer Tax is having a negative impact,” said O’Neill. “One of the best ways that the City can take action to help with the current economic situation is to roll back the Toronto Land Transfer Tax.”
A recent study conducted by the C.D. Howe Institute and Economics Professors from the University of Toronto determined that the Toronto Land Transfer Tax is having a significant impact on Toronto’s real estate market, reducing housing sales by 16 per cent and values by 1.5 per cent in 2008 alone. A separate recent study, conducted for the Canadian Real Estate Association, found that one out of every 100 jobs depends on spending associated with re-sale housing sales, on things like renovations, furniture, and appliances. This means that approximately 14,000 jobs in Toronto depend on re-sale housing transactions. TREB believes that, by impacting the real estate market, the Toronto Land Transfer Tax is risking these jobs.
The Environics poll also found that 60 per cent of Torontonians think that the City is not being run as efficiently as possible. REALTORS® are calling on City Councillors to focus their budget efforts on options recommended over a year ago by an independent blue-ribbon panel of business and labour representatives, appointed by Mayor Miller.
“Over a year ago, the Mayor’s Fiscal Review Panel identified, literally, hundreds of millions of dollars in savings and efficiencies that the City could be taking advantage of,” said O’Neill. “The City’s budget efforts should be focusing on fair options, like those recommended by the Mayor’s Fiscal Review Panel.”
The poll of 500 Toronto residents aged 18 years or over was conducted by telephone between March 12 and March 15, 2009, and is considered accurate to within +/- 4.5%, 19 times out of 20.
The poll was conducted by the Environics Research Group Ltd. for the Toronto Real Estate Board. “REALTORS® strongly believe that Toronto City Council should scrap the Toronto Land Transfer Tax, and the public agrees,” said Maureen O’Neill, President of the Toronto Real Estate Board. “The Toronto Land Transfer Tax is not a fair tax and is hurting Toronto’s economy.”
The poll also found that 57 per cent of Torontonians believe that the Toronto Land Transfer Tax is hurting the real estate market and 62 per cent believe that the City has not taken adequate action to help stimulate the economy. “Torontonians want more action from the City on the economy, and they understand that the Toronto Land Transfer Tax is having a negative impact,” said O’Neill. “One of the best ways that the City can take action to help with the current economic situation is to roll back the Toronto Land Transfer Tax.”
A recent study conducted by the C.D. Howe Institute and Economics Professors from the University of Toronto determined that the Toronto Land Transfer Tax is having a significant impact on Toronto’s real estate market, reducing housing sales by 16 per cent and values by 1.5 per cent in 2008 alone. A separate recent study, conducted for the Canadian Real Estate Association, found that one out of every 100 jobs depends on spending associated with re-sale housing sales, on things like renovations, furniture, and appliances. This means that approximately 14,000 jobs in Toronto depend on re-sale housing transactions. TREB believes that, by impacting the real estate market, the Toronto Land Transfer Tax is risking these jobs.
The Environics poll also found that 60 per cent of Torontonians think that the City is not being run as efficiently as possible. REALTORS® are calling on City Councillors to focus their budget efforts on options recommended over a year ago by an independent blue-ribbon panel of business and labour representatives, appointed by Mayor Miller.
“Over a year ago, the Mayor’s Fiscal Review Panel identified, literally, hundreds of millions of dollars in savings and efficiencies that the City could be taking advantage of,” said O’Neill. “The City’s budget efforts should be focusing on fair options, like those recommended by the Mayor’s Fiscal Review Panel.”
The poll of 500 Toronto residents aged 18 years or over was conducted by telephone between March 12 and March 15, 2009, and is considered accurate to within +/- 4.5%, 19 times out of 20.
Is US Housing on the Mend?
The following was written by Peter G. Hall, Vice-President and Chief Economist, Export Development Canada.
Three cheers! US housing starts rose 22% in February, the first monthly increase since June, 2008. In a market hungry for good news, this was well-received, fuelling hopes that the industry where the global recession began is finally bottoming out. Is this leading sector on the mend?
Without question, the last 30 months have been quite a ride for US housing. Starts of new dwelling units tumbled in mid-2006, falling from 2 million units to the 1.5 million-unit level in just 5 months. At this point, it seemed that the market might stabilize. However, following a 9 month hiatus, activity dropped again, hitting the 1 million level. Following a small jump last June, markets went into freefall, bottoming out in January at a paltry 480,000 units. It is from this base that February starts surged, hitting a higher-than-expected 580,000 units. Hardly cause for a party.
You can’t blame the builders. They are simply following sales activity, which is similarly pathetic. Sales of new and existing homes have declined consistently for over three years, hitting a new low in January that is 44% below the mid-2005 peak. Prices also tell the tale. The median price of a new home fell to $200,000 in January, fully erasing the gains realized in the bubble years. Existing home prices have fallen further, notching just $170,000 in January.
Compounding the current weakness is the level of inventories. New construction may be low, but the number of units up for sale – many of them foreclosures – remains high. There is currently just under 10 months’ supply of new and existing homes on the market, well over double the “stable market” level. Put another way, there are now roughly 5.7 million excess units on the marketplace. That is down from the 7.9 million-unit peak last April, but at the current rate of work-down, the market will be well into 2010 before conditions are more balanced.
How did the excess get so high in the first place? Simply put, building levels were far higher than basic demographic requirements. The level of household formation in the US suggests that a sustainable pace of construction would be somewhere between 1.5-1.6 million units per year. The marketplace was generally in balance until 2002, when easy credit terms and a strong economy boosted sales, igniting prices and setting off a building frenzy. From 2003 through mid-2006, housing starts averaged a stunning 2 million units annually.
The good news in today’s numbers is that the huge excess is being worked off. Building activity is now well below fundamental requirements, and although levels are appallingly low, it stands that the lower the level of activity, the quicker markets will rebalance. Deep price discounting, evident in all sub-markets, should spark an even speedier return to balanced conditions. Also, recent substantial interest rate cuts and other stimulus measures will soon filter through to homebuyers. A key obstacle is the job market. Recent monthly job losses in the 600,000+ range weigh against restored balance in housing markets, and we can only hope that layoffs will abate soon.
The bottom line? It is still far too early to celebrate a turnaround in the US housing market. But we can take solace in the fact that the market has responded quickly, and is clearing. The sooner, the better, given housing’s role as a key bellwether of US, and by extension global, recovery.
Three cheers! US housing starts rose 22% in February, the first monthly increase since June, 2008. In a market hungry for good news, this was well-received, fuelling hopes that the industry where the global recession began is finally bottoming out. Is this leading sector on the mend?
Without question, the last 30 months have been quite a ride for US housing. Starts of new dwelling units tumbled in mid-2006, falling from 2 million units to the 1.5 million-unit level in just 5 months. At this point, it seemed that the market might stabilize. However, following a 9 month hiatus, activity dropped again, hitting the 1 million level. Following a small jump last June, markets went into freefall, bottoming out in January at a paltry 480,000 units. It is from this base that February starts surged, hitting a higher-than-expected 580,000 units. Hardly cause for a party.
You can’t blame the builders. They are simply following sales activity, which is similarly pathetic. Sales of new and existing homes have declined consistently for over three years, hitting a new low in January that is 44% below the mid-2005 peak. Prices also tell the tale. The median price of a new home fell to $200,000 in January, fully erasing the gains realized in the bubble years. Existing home prices have fallen further, notching just $170,000 in January.
Compounding the current weakness is the level of inventories. New construction may be low, but the number of units up for sale – many of them foreclosures – remains high. There is currently just under 10 months’ supply of new and existing homes on the market, well over double the “stable market” level. Put another way, there are now roughly 5.7 million excess units on the marketplace. That is down from the 7.9 million-unit peak last April, but at the current rate of work-down, the market will be well into 2010 before conditions are more balanced.
How did the excess get so high in the first place? Simply put, building levels were far higher than basic demographic requirements. The level of household formation in the US suggests that a sustainable pace of construction would be somewhere between 1.5-1.6 million units per year. The marketplace was generally in balance until 2002, when easy credit terms and a strong economy boosted sales, igniting prices and setting off a building frenzy. From 2003 through mid-2006, housing starts averaged a stunning 2 million units annually.
The good news in today’s numbers is that the huge excess is being worked off. Building activity is now well below fundamental requirements, and although levels are appallingly low, it stands that the lower the level of activity, the quicker markets will rebalance. Deep price discounting, evident in all sub-markets, should spark an even speedier return to balanced conditions. Also, recent substantial interest rate cuts and other stimulus measures will soon filter through to homebuyers. A key obstacle is the job market. Recent monthly job losses in the 600,000+ range weigh against restored balance in housing markets, and we can only hope that layoffs will abate soon.
The bottom line? It is still far too early to celebrate a turnaround in the US housing market. But we can take solace in the fact that the market has responded quickly, and is clearing. The sooner, the better, given housing’s role as a key bellwether of US, and by extension global, recovery.
Wednesday, March 11, 2009
Housing Market Getting Better
Confidence appears to be seeping back into the housing market, with young Canadians the most optimistic that now is a good time to buy, according to the Royal Bank of Canada's annual homeownership survey.
Thirty-year-old David Morris, who owns a condominium in downtown Vancouver, is among those actively planning to purchase a home. He's looking to sell his condo and trade up to a house in Vancouver's trendy Kitsilano or North Shore districts – a move that would have been out of his reach in the overheated real estate market of recent years. Falling prices, low interest rates – and the fact that he is getting married at the end of this year – have factored into Mr. Morris' decision to buy.
“We have made the decision to move forward. It's not a situation where we're going to force it, but if we can find the right house for the right price, we have made the decision to get serious about it,” said Mr. Morris, a commercial real estate broker.
“From a buyer's perspective, it's encouraging …Now is a good time to come in and find a home that you love, that isn't going to break the bank.”
In a survey of 2,026 Canadian consumers, conducted in the second week of January, the Royal Bank found that 65 per cent of respondents believe it is a buyers' market now.
Of those surveyed, 9 per cent said it is “very likely” they will purchase a home or condominium in 2009 or 2010, and another 18 per cent rated the prospect of purchasing a new home as “somewhat” likely.
“Additionally, almost half indicate it makes sense to buy a home now versus waiting until next year.”
Young adults and renters are most likely to spark an upsurge in home sales, Royal Bank said in releasing its survey results.
“In the under-35 group, 48 per cent said they plan to buy, which is up sharply from 36 per cent last year. Renters also appear to be saying they are tired of paying someone else's mortgage payment, with 38 per cent planning to become homeowners in the next two years.”
Although this optimism is not reflected in the most recent sales statistics – the volume of sales in the Toronto area, for instance, was down 47 per cent year-over-year in January – Royal Bank predicts that lower prices will lure a growing percentage of Canadians back into the housing market in the next two years.
Toronto real estate agent Geon van der Wyst noted that consumers do not always follow through on their intentions – although it is encouraging that more Canadians appear to be thinking about buying homes.
“Intention is the step prior to making an educated decision… and I'm sure a lot of those people with intentions will move forward with purchases, it's just a matter of finding the right time,” Mr. van der Wyst said.
Karen Leggett, the Royal Bank's head of home equity financing, said low mortgage rates “and favourable housing prices are influencing home purchase intentions this year and may be the reason why more Canadians are poised to purchase over the next two years.”
Ms. Leggett said the poll, conducted for the Royal Bank by Ipsos Reid, found that the vast majority of Canadians believe that the purchase of a home is a good investment. “The current economic environment does not appear to have dampened Canadians' overall confidence in the housing market,” she said.
Mr. van der Wyst said there are good deals to be had, from the buyers' standpoint.
However, he added, many prospective buyers – particularly first-time buyers – are still uncertain about the best time to plunge into the market.
“We tend to hand-hold these first time-buyers, nervous first-time buyers, especially around here where they know the prices are starting to dip – and who knows where they will continue to dip before the recovery starts?”
Mr. van der Wyst said that, especially in the current economic environment, he screens prospective buyers carefully before taking them to look at properties. He noted that the banks are also “pretty stringent” in qualifying consumers for mortgages.
“Interest rates are at historic lows and borrowing money is very, very affordable. If you have steady employment and you have some financial responsibility along with a good interest rate, now is a really, really good time to purchase a property,” said Mr. van der Wyst, an agent with Royal LePage.
“At this time, employment stability is very important. It would be really unfortunate to see someone lose their job just as they were about to close on a property,” he said.
A number of leading Canadian economists have observed that Canada's rising unemployment rate has eroded consumer confidence, and other recent housing forecasts have been less upbeat than the Royal Bank survey.
Canada Mortgage and Housing Corp. projects that, in spite of falling prices, the volume of existing home sales is expected to drop by 14.6 per cent in 2009, and then rise by 9.3 per cent in 2010.
Average home prices are forecast to fall 5.2 per cent to $287,900 in 2009. Next year, prices are expected to remain flat, according to the federal housing agency's forecast. Ms. Leggett said Royal Bank is not forecasting “a huge housing rebound, by any stretch,” but there are reasons for cautious optimism that the market will start to recover later this year and next year.
Following the overheated market and bidding wars of the past few years, housing is once again becoming more affordable and there are good buying opportunities for consumers “who have good solid certitude around their job prospects and have the financial picture to be able to get into the market,” Ms. Leggett said.
“Buying intentions are one thing. Whether they translate into actual purchases, obviously time will tell,” she said. “But, anecdotally, we are hearing that there is heightened activity …and interest in the marketplace overall.”
Thirty-year-old David Morris, who owns a condominium in downtown Vancouver, is among those actively planning to purchase a home. He's looking to sell his condo and trade up to a house in Vancouver's trendy Kitsilano or North Shore districts – a move that would have been out of his reach in the overheated real estate market of recent years. Falling prices, low interest rates – and the fact that he is getting married at the end of this year – have factored into Mr. Morris' decision to buy.
“We have made the decision to move forward. It's not a situation where we're going to force it, but if we can find the right house for the right price, we have made the decision to get serious about it,” said Mr. Morris, a commercial real estate broker.
“From a buyer's perspective, it's encouraging …Now is a good time to come in and find a home that you love, that isn't going to break the bank.”
In a survey of 2,026 Canadian consumers, conducted in the second week of January, the Royal Bank found that 65 per cent of respondents believe it is a buyers' market now.
Of those surveyed, 9 per cent said it is “very likely” they will purchase a home or condominium in 2009 or 2010, and another 18 per cent rated the prospect of purchasing a new home as “somewhat” likely.
“Additionally, almost half indicate it makes sense to buy a home now versus waiting until next year.”
Young adults and renters are most likely to spark an upsurge in home sales, Royal Bank said in releasing its survey results.
“In the under-35 group, 48 per cent said they plan to buy, which is up sharply from 36 per cent last year. Renters also appear to be saying they are tired of paying someone else's mortgage payment, with 38 per cent planning to become homeowners in the next two years.”
Although this optimism is not reflected in the most recent sales statistics – the volume of sales in the Toronto area, for instance, was down 47 per cent year-over-year in January – Royal Bank predicts that lower prices will lure a growing percentage of Canadians back into the housing market in the next two years.
Toronto real estate agent Geon van der Wyst noted that consumers do not always follow through on their intentions – although it is encouraging that more Canadians appear to be thinking about buying homes.
“Intention is the step prior to making an educated decision… and I'm sure a lot of those people with intentions will move forward with purchases, it's just a matter of finding the right time,” Mr. van der Wyst said.
Karen Leggett, the Royal Bank's head of home equity financing, said low mortgage rates “and favourable housing prices are influencing home purchase intentions this year and may be the reason why more Canadians are poised to purchase over the next two years.”
Ms. Leggett said the poll, conducted for the Royal Bank by Ipsos Reid, found that the vast majority of Canadians believe that the purchase of a home is a good investment. “The current economic environment does not appear to have dampened Canadians' overall confidence in the housing market,” she said.
Mr. van der Wyst said there are good deals to be had, from the buyers' standpoint.
However, he added, many prospective buyers – particularly first-time buyers – are still uncertain about the best time to plunge into the market.
“We tend to hand-hold these first time-buyers, nervous first-time buyers, especially around here where they know the prices are starting to dip – and who knows where they will continue to dip before the recovery starts?”
Mr. van der Wyst said that, especially in the current economic environment, he screens prospective buyers carefully before taking them to look at properties. He noted that the banks are also “pretty stringent” in qualifying consumers for mortgages.
“Interest rates are at historic lows and borrowing money is very, very affordable. If you have steady employment and you have some financial responsibility along with a good interest rate, now is a really, really good time to purchase a property,” said Mr. van der Wyst, an agent with Royal LePage.
“At this time, employment stability is very important. It would be really unfortunate to see someone lose their job just as they were about to close on a property,” he said.
A number of leading Canadian economists have observed that Canada's rising unemployment rate has eroded consumer confidence, and other recent housing forecasts have been less upbeat than the Royal Bank survey.
Canada Mortgage and Housing Corp. projects that, in spite of falling prices, the volume of existing home sales is expected to drop by 14.6 per cent in 2009, and then rise by 9.3 per cent in 2010.
Average home prices are forecast to fall 5.2 per cent to $287,900 in 2009. Next year, prices are expected to remain flat, according to the federal housing agency's forecast. Ms. Leggett said Royal Bank is not forecasting “a huge housing rebound, by any stretch,” but there are reasons for cautious optimism that the market will start to recover later this year and next year.
Following the overheated market and bidding wars of the past few years, housing is once again becoming more affordable and there are good buying opportunities for consumers “who have good solid certitude around their job prospects and have the financial picture to be able to get into the market,” Ms. Leggett said.
“Buying intentions are one thing. Whether they translate into actual purchases, obviously time will tell,” she said. “But, anecdotally, we are hearing that there is heightened activity …and interest in the marketplace overall.”
Thursday, February 5, 2009
RE/MAX Hallmark expands into Richmond Hill and Oak Ridges, Strengthening Their Connection to York Region: Here We Grow Again
Toronto, ON (February 5, 2009) – The acquisition of two new offices in Richmond Hill and Oak Ridges has allowed RE/MAX Hallmark to expand its presence north of Steeles Ave. into York Region.
RE/MAX Executive Realty offices located at 8 Weldrick Rd. W. in Richmond Hill and 13321 Yonge St. in Oak Ridges will operate under the RE/MAX Hallmark banner, effective immediately. The move brings the number of RE/MAX Hallmark offices to eight and the total number of sales associates to more than 500, making the company one of the largest in the RE/MAX Ontario-Atlantic Canada franchise network.
“Our market share had been steadily increasing in Richmond Hill and the surrounding areas, so when the opportunity to acquire both offices was presented, we acted quickly,” says Ken McLachlan, Broker-Owner, RE/MAX Hallmark Realty. “Our company ranked in the top ten real estate companies in Richmond Hill without a visible presence in the community.
The new offices increase RE/MAX Hallmark visibility in Richmond Hill and provide the company’s sales associates working at other Hallmark locations with a stronger connection to their real estate clientele in the northern part of the Greater Toronto Area.
“RE/MAX Hallmark has experienced tremendous success in the Toronto marketplace in large part due to the guidance and leadership of veteran brokers Ken McLachlan and Debra Bain,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “Both Ken and Debra continue to set the standard for excellence in the real estate industry. There’s no question that the two new offices will flourish under their direction.”
Celebrating their 28th year with RE/MAX, the RE/MAX Hallmark team operates in the GTA and includes over 500 agents, brokers and administrative staff. Specializing in residential and commercial real estate, RE/MAX Hallmark helps thousands of individuals, families and businesses each year with their real estate needs.
RE/MAX Hallmark is the Top Contributor in the world to the Children’s Miracle Network (CMN). Each year, agents donate to their local network hospital a portion of their commissions earned when a home is bought or sold. RE/MAX Hallmark is also a leader in in-house training and is a member of the Chairman’s Leadership Advisory Board of RE/MAX International (CLAC) - an association of 75 of the leading RE/MAX broker owners worldwide. Visit the RE/MAX Hallmark website at www.TorontoHomesAndCondos.com
RE/MAX Executive Realty offices located at 8 Weldrick Rd. W. in Richmond Hill and 13321 Yonge St. in Oak Ridges will operate under the RE/MAX Hallmark banner, effective immediately. The move brings the number of RE/MAX Hallmark offices to eight and the total number of sales associates to more than 500, making the company one of the largest in the RE/MAX Ontario-Atlantic Canada franchise network.
“Our market share had been steadily increasing in Richmond Hill and the surrounding areas, so when the opportunity to acquire both offices was presented, we acted quickly,” says Ken McLachlan, Broker-Owner, RE/MAX Hallmark Realty. “Our company ranked in the top ten real estate companies in Richmond Hill without a visible presence in the community.
The new offices increase RE/MAX Hallmark visibility in Richmond Hill and provide the company’s sales associates working at other Hallmark locations with a stronger connection to their real estate clientele in the northern part of the Greater Toronto Area.
“RE/MAX Hallmark has experienced tremendous success in the Toronto marketplace in large part due to the guidance and leadership of veteran brokers Ken McLachlan and Debra Bain,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “Both Ken and Debra continue to set the standard for excellence in the real estate industry. There’s no question that the two new offices will flourish under their direction.”
Celebrating their 28th year with RE/MAX, the RE/MAX Hallmark team operates in the GTA and includes over 500 agents, brokers and administrative staff. Specializing in residential and commercial real estate, RE/MAX Hallmark helps thousands of individuals, families and businesses each year with their real estate needs.
RE/MAX Hallmark is the Top Contributor in the world to the Children’s Miracle Network (CMN). Each year, agents donate to their local network hospital a portion of their commissions earned when a home is bought or sold. RE/MAX Hallmark is also a leader in in-house training and is a member of the Chairman’s Leadership Advisory Board of RE/MAX International (CLAC) - an association of 75 of the leading RE/MAX broker owners worldwide. Visit the RE/MAX Hallmark website at www.TorontoHomesAndCondos.com
Monday, February 2, 2009
Mid-Month January GTA Housing Resales at 888
TORONTO, January 19, 2009 – Greater Toronto REALTORS® reported 888 sales during the first half of January compared to 1,776 in the first 15 days of 2008. “According to Statistics Canada the economic situation throughout Canada changed noticeably over the past year with job losses in the fourth quarter of 2008. Toronto is not immune to this, the GTA housing market has been impacted,” according to TREB President Maureen O’Neill.
The average GTA price mid-way through January is $332,495 from $367,574 during the same
period in 2008. The median GTA price was $301,000 compared to 316,000 last year. “While
sales have declined, listings have remained high. GTA home buyers have benefitted from more
choice,” explained Ms. O’Neill. “Historically, increased choice in the marketplace has equated to
a moderation in price growth."
In January 2009, stronger declines in sales and prices were experienced in the City of Toronto.
“Sales for January a year ago may have been elevated by the flurry of transactions completed
before the city’s land transfer tax went into effect,” added Ms. O’Neill.
“The costs of home ownership in the 416 has increased due to the added land transfer tax many
home buyers now face in the City of Toronto. Some households considering the purchase of a
home in the City have either put their decision on hold or looked elsewhere in the GTA.”
The average GTA price mid-way through January is $332,495 from $367,574 during the same
period in 2008. The median GTA price was $301,000 compared to 316,000 last year. “While
sales have declined, listings have remained high. GTA home buyers have benefitted from more
choice,” explained Ms. O’Neill. “Historically, increased choice in the marketplace has equated to
a moderation in price growth."
In January 2009, stronger declines in sales and prices were experienced in the City of Toronto.
“Sales for January a year ago may have been elevated by the flurry of transactions completed
before the city’s land transfer tax went into effect,” added Ms. O’Neill.
“The costs of home ownership in the 416 has increased due to the added land transfer tax many
home buyers now face in the City of Toronto. Some households considering the purchase of a
home in the City have either put their decision on hold or looked elsewhere in the GTA.”
Monday, January 26, 2009
Buy Toronto Real Estate Now!
Ken McLaughlin is the Broker of record and one of the owners of RE/MAX Hallmark Realty Limited Brokerage, the largest residential real estate company in the Toronto Real Estate Board. This is what he has to say about the current market.
This is what I strongly believe. I have been in the business of real estate for close to 30 years and have experienced the ups and downs of our markets. In every down market my business has grown because I was able to dig down and do the work required. I never gave up, was prepared and committed to moving forward.This market is different. I don't see the market staying the way it is for years to come as in past recessions. Previous real estate recessions had elements in it which we do not have. Higher interest rates, higher unemployment and higher inflation to name a few. This market is different. What we have is a stagnant market which will remain this way for perhaps several months in 2009, but will come out of it strong in 2010.
When the market turns around, prices will increase, and mortgage interest rates will increase. This slower market will be short lived.For the first half of 2009 we have an incredible real estate window in front of it. An amazing opportunity to purchase attractively priced properties than in past years, incredibly low mortgage interest rates, an abundance of mortgage money for qualified buyers is right in front of us. Now is the time to buy a property, to move up, to add to our real estate investment portfolios or to begin one.
I have never seen a better time in my 30 years to buy property in Toronto. All of our clients who are able to use equity from their homes should consider buying an investment property of some sort. Clients who purchased properties in the early 2000's and who need a bigger family home should do it now. The real estate opportunities of the next few months are too good to let go by without getting our clients and ourselves involved. The "Window of Opportunity" in our present Toronto Real Estate market should be taken advantage of.Real Estate is always a great investment, and now is the best time in years in buy.
This is what I strongly believe. I have been in the business of real estate for close to 30 years and have experienced the ups and downs of our markets. In every down market my business has grown because I was able to dig down and do the work required. I never gave up, was prepared and committed to moving forward.This market is different. I don't see the market staying the way it is for years to come as in past recessions. Previous real estate recessions had elements in it which we do not have. Higher interest rates, higher unemployment and higher inflation to name a few. This market is different. What we have is a stagnant market which will remain this way for perhaps several months in 2009, but will come out of it strong in 2010.
When the market turns around, prices will increase, and mortgage interest rates will increase. This slower market will be short lived.For the first half of 2009 we have an incredible real estate window in front of it. An amazing opportunity to purchase attractively priced properties than in past years, incredibly low mortgage interest rates, an abundance of mortgage money for qualified buyers is right in front of us. Now is the time to buy a property, to move up, to add to our real estate investment portfolios or to begin one.
I have never seen a better time in my 30 years to buy property in Toronto. All of our clients who are able to use equity from their homes should consider buying an investment property of some sort. Clients who purchased properties in the early 2000's and who need a bigger family home should do it now. The real estate opportunities of the next few months are too good to let go by without getting our clients and ourselves involved. The "Window of Opportunity" in our present Toronto Real Estate market should be taken advantage of.Real Estate is always a great investment, and now is the best time in years in buy.
Friday, January 23, 2009
Ice Melts In January!
What's that you say you see...sold signs? How can there be sold signs out there, everything is terrible in the world.
Well, despite the best (or worst) efforts of the 'doom and gloom' media, the sky hasn't fallen. Smart investors know how well real estate has performed as a long term investment and they see this time as a great time to buy! Prices are low, inventory is high and personal mortgages are still easy to get for qualified homebuyers (the way it's always been). Have you looked at interest rates lately?
How much did you pay in rent last year? The last five? Your principle residence is still one of your best tax shelters since any profit you realize on its sale is free of any capital gains taxes!
Remember...
'You Can't Live in a Mutual Fund!'
Well, despite the best (or worst) efforts of the 'doom and gloom' media, the sky hasn't fallen. Smart investors know how well real estate has performed as a long term investment and they see this time as a great time to buy! Prices are low, inventory is high and personal mortgages are still easy to get for qualified homebuyers (the way it's always been). Have you looked at interest rates lately?
How much did you pay in rent last year? The last five? Your principle residence is still one of your best tax shelters since any profit you realize on its sale is free of any capital gains taxes!
Remember...
'You Can't Live in a Mutual Fund!'
Monday, January 12, 2009
Land Transfer Tax has punishing effect on house sales, prices: C.D. Howe Institute
Toronto's Land Transfer Tax (LTT) has had punishing effects on the Toronto housing market, reducing transactions and lowering average prices, according to a study released in December by the C.D. Howe Institute.
In Sand in the Gears: Evaluating the Effects of Toronto's Land Transfer Tax, authors Benjamin Dachis, Gilles Duranton and Matthew A. Turner find that the LTT caused a 16 per cent decline in the number of single-family homes sold after January 2008 and a 1.5 per cent reduction in house values.
They calculate the LTT will cause a reduction in household mobility – at least 3,500 families annually in the municipality of Toronto will stay in houses from which they would have otherwise moved - and an average reduction in selling price of about $6,400 per house.
For the study, click http://www.cdhowe.org/pdf/commentary_277.pdf
In Sand in the Gears: Evaluating the Effects of Toronto's Land Transfer Tax, authors Benjamin Dachis, Gilles Duranton and Matthew A. Turner find that the LTT caused a 16 per cent decline in the number of single-family homes sold after January 2008 and a 1.5 per cent reduction in house values.
They calculate the LTT will cause a reduction in household mobility – at least 3,500 families annually in the municipality of Toronto will stay in houses from which they would have otherwise moved - and an average reduction in selling price of about $6,400 per house.
For the study, click http://www.cdhowe.org/pdf/commentary_277.pdf
Saturday, January 10, 2009
Thought for 2009, Is the Sky Falling?
If the cup of coffee you were drinking on Tuesday morning didn't wake you up, the headline on the front page of the Globe and Mail most surely did.
The headlines screamed "Housing sales hit 20-year low as real estate slump widens" followed by huge sub-head noting an 11 per cent decline in prices and a 44 per cent drop in Ontario housing sales in large RED print, based on the December 15th press release issued by the Canadian Real Estate Association.
The only problem with the article is that it is incorrect. In the third paragraph, the author writes "Between May and November, the average price of an existing home in Canada fell by 11 per cent, matching the drop in 1990 that coincided with the onset of a painful recession. Housing prices would go on to fall about 20 per cent and it would be another decade before they managed to make new highs."
Unfortunately for the Globe, there was no 20 per cent drop. According to the Canadian Real Estate Association, the Canadian average price actually rose approximately 15 per cent from 1990 to 2000. There were three moderate dips in housing values in the decade – 1990 (3.4 per cent), 1995 (4.6 per cent), and 1998 (1.5 per cent). Average price in Canada has climbed consistently since 1998. It's also important to note that the decline in national housing values have typically been modest and have bounced back almost immediately. Finally there are no two consecutive years of falling prices.
While the national housing picture has been a picture of stability, average housing values in Ontario have seen slightly more volatility over the past 27 years. There have been six decreases in average price noted – with five of the six occurring between 1990 and 1996. Prices fell 17 per cent during that time frame, after climbing a phenomenal 70 per cent between 1986 to 1989 ($107,158 to $182,186). Residential average price has been on an upward trajectory since 1996 – the longest uninterrupted period of growth since 1980.
Based on our comments, the Globe and Mail has printed a correction in this morning‘s newspaper, page A2
So now that the folks at the Globe have been straightened out, we shift our focus to the challenges today’s economic realities are bringing to the housing market. Truth be told, there is not a sector - not even gold - that has not been hard hit by economic turmoil in recent months. Real estate has held up remarkably well, in light of current market realities. We need to see some economic stability - and a recovery in consumer confidence levels - before we can expect housing markets to rebound. Job security will be key.
Inventory will also play an important role. If inventory levels subside, we could see stability return to housing values. To illustrate, new listings fell seven per cent in the Greater Toronto Area in November. If this trend continues, and existing inventory is absorbed, housing values may remain relatively stable in the year ahead.
I'd like to conclude today's communication with the story of a hot dog vendor in Chicago who sold the very best hot dogs by the side of the road. His business was booming, people loved his hot dogs, and his business steadily increases month after month. The man loved his business and believed in the need to provide great food at a great price.
This man was so busy advertising and selling his hot dogs and making lots of money, that he didn't even have time to read the newspaper or listen to the radio. Consequently, he never heard a word about a predicted recession or the need to cut back to save for the potential economic slowdown. As long as he continued to offer his delicious hot dogs, his customers bought them. He kept selling, and they kept buying.
Then one day his college educated son told him that an economic recession was surely coming. His son told him that people wouldn't have enough money to buy his hot dogs. The successful hot dog vendor believed this, so on his son’s advice, he cut back on his advertising. Additionally, he started ordering less supplies and product, because after all, people would be cutting back soon.
He even went so far as to take down many of the billboards that lead to his roadside stand. And sure enough, people stopped coming to him. People stopped buying his hot dogs, and he eventually went broke.
Then he thought to himself. "How smart my son is in predicting this."
Don't be influenced by what you read in the newspapers or hear on your television. It's true that market conditions have changed, but human nature has not. Real estate is one of the largest investments people will make in their lifetime. It's also one of the safest. If you bought a home in 1980 worth $67,000, that property is valued at over $300,000 today – an increase of 350 per cent and the profit is capital gains exempt. It's no wonder that Canada has one of the highest homeownership rates in the world, at close to 70 per cent.
No matter what the investment community will tell you, you can't live in your mutual fund.
Wishing you all a happy and healthy holiday season
The headlines screamed "Housing sales hit 20-year low as real estate slump widens" followed by huge sub-head noting an 11 per cent decline in prices and a 44 per cent drop in Ontario housing sales in large RED print, based on the December 15th press release issued by the Canadian Real Estate Association.
The only problem with the article is that it is incorrect. In the third paragraph, the author writes "Between May and November, the average price of an existing home in Canada fell by 11 per cent, matching the drop in 1990 that coincided with the onset of a painful recession. Housing prices would go on to fall about 20 per cent and it would be another decade before they managed to make new highs."
Unfortunately for the Globe, there was no 20 per cent drop. According to the Canadian Real Estate Association, the Canadian average price actually rose approximately 15 per cent from 1990 to 2000. There were three moderate dips in housing values in the decade – 1990 (3.4 per cent), 1995 (4.6 per cent), and 1998 (1.5 per cent). Average price in Canada has climbed consistently since 1998. It's also important to note that the decline in national housing values have typically been modest and have bounced back almost immediately. Finally there are no two consecutive years of falling prices.
While the national housing picture has been a picture of stability, average housing values in Ontario have seen slightly more volatility over the past 27 years. There have been six decreases in average price noted – with five of the six occurring between 1990 and 1996. Prices fell 17 per cent during that time frame, after climbing a phenomenal 70 per cent between 1986 to 1989 ($107,158 to $182,186). Residential average price has been on an upward trajectory since 1996 – the longest uninterrupted period of growth since 1980.
Based on our comments, the Globe and Mail has printed a correction in this morning‘s newspaper, page A2
So now that the folks at the Globe have been straightened out, we shift our focus to the challenges today’s economic realities are bringing to the housing market. Truth be told, there is not a sector - not even gold - that has not been hard hit by economic turmoil in recent months. Real estate has held up remarkably well, in light of current market realities. We need to see some economic stability - and a recovery in consumer confidence levels - before we can expect housing markets to rebound. Job security will be key.
Inventory will also play an important role. If inventory levels subside, we could see stability return to housing values. To illustrate, new listings fell seven per cent in the Greater Toronto Area in November. If this trend continues, and existing inventory is absorbed, housing values may remain relatively stable in the year ahead.
I'd like to conclude today's communication with the story of a hot dog vendor in Chicago who sold the very best hot dogs by the side of the road. His business was booming, people loved his hot dogs, and his business steadily increases month after month. The man loved his business and believed in the need to provide great food at a great price.
This man was so busy advertising and selling his hot dogs and making lots of money, that he didn't even have time to read the newspaper or listen to the radio. Consequently, he never heard a word about a predicted recession or the need to cut back to save for the potential economic slowdown. As long as he continued to offer his delicious hot dogs, his customers bought them. He kept selling, and they kept buying.
Then one day his college educated son told him that an economic recession was surely coming. His son told him that people wouldn't have enough money to buy his hot dogs. The successful hot dog vendor believed this, so on his son’s advice, he cut back on his advertising. Additionally, he started ordering less supplies and product, because after all, people would be cutting back soon.
He even went so far as to take down many of the billboards that lead to his roadside stand. And sure enough, people stopped coming to him. People stopped buying his hot dogs, and he eventually went broke.
Then he thought to himself. "How smart my son is in predicting this."
Don't be influenced by what you read in the newspapers or hear on your television. It's true that market conditions have changed, but human nature has not. Real estate is one of the largest investments people will make in their lifetime. It's also one of the safest. If you bought a home in 1980 worth $67,000, that property is valued at over $300,000 today – an increase of 350 per cent and the profit is capital gains exempt. It's no wonder that Canada has one of the highest homeownership rates in the world, at close to 70 per cent.
No matter what the investment community will tell you, you can't live in your mutual fund.
Wishing you all a happy and healthy holiday season
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