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They’re Back!!!

Happy 2019!

So everyone has now completed their first week of normal routines for the new year. The kids are back at school, everyone is back at work, and the traffic has returned to its normal crawl.

We’ve spent the past 6 weeks trying to predict what will come of the real estate market in 2019.

In previous years it’s either been all hope, or all gloom. But what can we really expect for the coming 12 months.

When the market has been like this in the past, which is more traditional, we have seen that most houses begin to be listed around the middle of February, which was the unofficial start of the spring market.

But is this really what will happen for this year?

No, we are not back to the craziness that we experienced before where the market was hot for the entire 365 days of the year. But is there truly a set time that will spark the market for this year?

I’m leaning towards no, and here’s why.

I did my first open houses of the new year over this past weekend. This was at a house that has been on the market for over 2 months already, so no new hype or buzz about this house. I truthfully expected that there would be no traffic through given the current market conditions and the fact that this was not a new listing.

Well, I was quite wrong.

Not only was there a steady flow of traffic, but in engaging with the people coming to see the house, it was pretty clear that they were ready to buy now. Not when the “spring market” begins, but now.

Buyers know that there are opportunities out there to kick off the new year by taking advantage of both the market conditions, and others who are waiting for something to trigger them into buy mode.

So what does this mean?

Well, for the overall market it could mean next to nothing. But, for both buyers and sellers, it means that opportunity is knocking now.

The moral of this story is this. If there are people now flocking out to see houses that have been on the market for a while, could you imagine the interest that could come from a brand new listing? Could it be your house that is listed at a time when people expect little to no action on the market, and you make out like gang busters by jumping the line and finding a buyer ready to make a move quickly on a property?

Contact me to discuss, because the opportunities now may yet be more beneficial for you than if you wait.

Don’t Get Left Out In The Cold

Well, it’s finally here. That cold, white stuff that everyone hates even though we know it’s an annual tradition. SNOW!

There’s always been the conversation that when the snow hits, it’s not only the weather that cools off. Most people think that the real estate market follows the same cooling trend.

And while this may be the case, it is important to realize that while the number of sales and listings may go down during the holidays and colder months, it is a great opportunity to take advantage.

Now you might be wondering how what I’m saying makes sense. How could it be that the market cools off, but there is an opportunity to cash in?

Let’s look at an example that isn’t real estate before I tie it in to my point. The holiday season is coming. There’s that one gift out there that you must have (and it doesn’t matter what that may be). You avoid all shopping experiences for the most part if possible, but this is something you have to go and get in person. You brave the overcrowded mall, and the even more overcrowded parking lot in order to get that one gift. Nothing is going to stop you even though this experience has been less than enjoyable. But at the end of the day, you’ve gotten the gift and that’s all that matters.

Now I’m not saying that a purchase or sale in real estate is a painful experience, but the holiday season and colder months brings out something in people. They are serious about what they are doing.

Now let’s tie this back in to real estate.

Suppose there is a house for sale. People are typically serious about selling when they put their house on the market. But if that house is for sale when there’s piles of snow outside, or rows of lights adorning the neighbourhood, then you know they are serious. Serious sellers are the best kind for potential buyers. It means that these people want to sell, and sell quickly, so if you’re looking, there could be just the right house out there when most people are turning off for a month or so.

Flip it to buyers. Similar to the experience of going to an overcrowded mall, buyers who are shopping at this time of year are as serious as they come. Nobody wants to fight in a crowded parking lot if they don’t have to, and with that determination also comes a huge desire to buy a home. So if you’re actually selling your home during this time, and someone comes to see it, you know they’re serious.

I do open houses year round, and I’ve found many times in the past that the people who come through during the colder months and holiday season turn out to be the most serious people when it comes to potentially making a move in real estate.

So I always tell people, don’t listen to what others may say, if you’re looking to make a move, throw the calendar out the window and take advantage of what others may not be. Get your house listed, or get out shopping. It could just be the perfect time when you least expect it.

If you have any questions about what the holidays could mean for your potential move, reach out to me at any time.

To Renovate or not to renovate…that is the question.

Throughout my years in real estate I’ve seen many many homes. Some have been the type where all you have to do is unpack and live, and others, well, not so much.

In those houses that fall into the not so much category, I’ve encountered the same question, “should I renovate and do some work before I move?”

My answer has been the same in most of those cases, NO!

Now there are some cases in which a house is in such bad shape that nobody would buy it because all they see is a money pit with no end in sight to the amount of work to be done. In those cases my answer is to spend wisely in what is done.

But my personal feeling for most of my clients is typically no.

I’m not talking about putting a fresh coat of paint, or a good steam cleaning of carpets. I’m talking about full blown changes. A new kitchen, new bathrooms, finishing a basement, etc.

Sexy sells in any market. The nicer a product, the more people will be interested in purchasing it. But more than sexy is price. Especially in the real estate market.

The reason for my answer here is simple, why use your money for someone else. If you are simply renovating or doing the work in order to help sell your property you are better off keeping that money and using it towards your next purchase and adjusting your selling price to match what you are offering.

People would be surprised to know that when a house needs work, it is not immediately deemed a pariah on the market. If you find a house in an area you want, with the features that you want, are you going to walk away from it because it needs work? Most often not.

But how to you balance your wish list with the amount of work needed to make it perfect? Simple, price.

If the price matches what is offered, then it is a good opportunity. Think of it this way. If you think a new kitchen will make your house more attractive, how much extra will you make off the sale? In most cases it ends up being a wash. You can invest let’s say $50,000 on that new kitchen, making it stand out. But at the end of the day, you might make an extra $50,000 on the sale, meaning you’ve just put your cash in to something that sees no financial benefit.

Yes, the nicer a house looks can dramatically alter the amount of time it takes to sell it, but are you ever going to get to enjoy that beautiful new kitchen you just made? Usually not.

Meanwhile, instead of putting that $50,000 into a house you’re planning on selling and moving from, use that money to expand your purchasing budget. That money could make a huge difference in the quality and level of house you are able to purchase and end up landing you the home of your dreams instead.

So what’s the moral of the story here?

Renovations are nice, and they can turn houses from good to great, but at what benefit to you and your plans. Best thing to do, bring in an experienced professional that can tell you if you’re spending your money wisely when making changes to your house before selling it. It’s the same as getting a financial advisor to help you invest wisely. The same principles apply here.

If you have questions about what you should or shouldn’t do in order to help sell your home in the smartest way possible feel free to reach out to me at any time.

Are We There Yet?

Alright, just one week to go until the municipal election, and for me, it can’t come soon enough.

I will be the first to admit that I am not as involved or as interested in the municipal levels of government as I probably should be, but I’m going to get on my soap box and share a few things that make me feel like I can’t wait for this election to be over.

The first thing is the signs. While I have nothing against the rainbows of colours that are found on every street corner and every piece of empty land, the amount of clutter is just amazing. Even if I wanted to vote for someone in this election, there are 62 signs representing 62 candidates all in one spot. Like there’s actually that many positions available that there needs to be that many candidates.

My other favourite is when you get a stretch of land that isn’t owned or occupied by residential homes. I feel like some people take this as an invitation to put out as many of their own signs as they can. I’m not going to lie here, in one city block, one candidate had literally 26 signs all along one side of the street. It’s as if I didn’t get the message the first time, that by the 26th I would only be thinking in my brain about voting for you.

The other interesting thing about this election, especially in the area where I live is what the campaign platforms seem to be.

A few weeks ago I discussed how the major construction on streets like Bathurst can affect your real estate values. However, I didn’t even think that this would be such a major thing leading to a municipal election.

I have found a number of candidates who are abandoning their grass roots platforms (spending, projects, accountability) to focus on a solely emotional plea to their potential constituents. “Elect me and I will solve the traffic chaos in your neighbourhoods”.

Hey, that sounds amazing! I can hardly wait. I don’t know what else you might stand for, or what else you could want to accomplish in your time in government if elected, but if you can get my commute back to normal, you’ve got my vote!

Is it really that simple? Is it going to be instantaneous? Like am I going to wake up the day after the election and find that all lanes are re-opened on all the major arteries that I take? Is it going to be a normal commute for me to get around again? I hardly think so.

It took lots of time to get these projects rolling, and with the amount of money invested in them, you can bet that they will take just as long, if not longer, to put an end to them.

I for one can’t wait to see the end of this municipal election cycle. Not because I want to see who wins, but to see an end to the clutter and rhetoric that have overwhelmed me for the past number of weeks.

Feel free to share your thoughts on the municipal election. I’m happy to share my soap box.

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The Saddest Side Of Real Estate – Pt. 2

So last week I talked about the latest condominium project cancellation in less than a year. I looked at the fallout from such a cancellation and what people might do when moving forward. But developments over the past week beg me to continue this conversation.

Let me start with a hypothetical scenario.

Let’s say you went to a store to buy something (it doesn’t really matter what for the sake of this example. You had saved your money to buy this one item that you had been wanting for a long time, and needless to say it was quite expensive. You get the item which gives you great excitement. However, very quickly afterwards that item breaks and you have no recourse with which to replace it or get your money back. You find out afterwards that this was not a one-off situation. Others who had shopped at the same store and bought similar items experienced the same problem. All of the other customers also had the same issue with not being able to get a refund or exchange.

What do you do?

Would you choose to shop at that store again, or avoid it out of fear of history repeating itself?

The reason I ask this is that after the cancellation of the Icona condominium project in Vaughan, the Gupta Group who were the developers of the project have now submitted a new plan to the City of Vaughan for their approval. This project would see a massive makeover of the northwest corner of Yonge and Steeles. Complete with York Region’s tallest condo tower and two smaller towers, greatly changing the landscape of the area.

Focus first on the proposal itself. You could purchase a condominium unit with everything you need at your doorstep, without having to go as far west as highway 400 or further. You would have ease of access to the downtown core with great transit links, not to mention shopping and restaurants right there as well. And with a monster tower you could have some breathtaking views of the city from this far north.

But flip the coin now. What do you do? Do you pounce on the opportunity to get in on the biggest development in the area since the World on Yonge was completed? Or do you stay away out of fear of history repeating itself given that this developer just cancelled their last major project?

And what of the big question in all of this, is there now a consumer confidence issue that may erode some of the desire to buy pre-construction units no matter where they are in the city as we have now seen cancellations taking the headlines?

I for one would be very hesitant to rush into this new project that is being proposed. We may never know the full reason behind the Icona cancellation, it could have been financial issues, could have been that this developer saw a better opportunity with this new location and wanted to focus on that, it could be any number of things. But if a client called me up about this, I would advise them to think twice about it.

If there’s one thing that I tried to illustrate in my hypothetical example it is that a service’s reputation is worth its weight in gold and everything else valuable. The second that reputation is tarnished, it can have long lasting negative implications.

If you would like more information on this new proposal, I would be happy to share it with you, along with a word of caution.

The Saddest Side Of Real Estate

So last week we learned about the second condominium project in less than a year that has been cancelled before completion. While it makes for pretty sensational news headlines, the fallout of this situation is quite dramatic.

Many new construction projects run into issues that the general public doesn’t even hear about, and they don’t always happen to condominiums. When purchasing new construction, the builder will always include the provision to be able to delay a project. There is typically a specific number of times the builder can do this before the purchasers can cancel their agreement and get their money back without penalty. These sorts of delays are because of any number of factors, i.e. weather delays, construction delays, labour issues, etc.

But where the true shock and awe comes is when major projects are cancelled. In essence, the builder has given up on the project and is willing to give everyone their money back. But what happens next.

For the builder, most of the time it is truly a blow to their reputation. Major developers in the GTA are recognizable brands and buyers will typically gravitate to them because they know they are reliable and provide a good product. Once that reputation is tarnished, even slightly, it can affect all future projects and the response the public would have towards them. In some cases, class action law suits have been filed against developers to recoup things such as interest lost on deposit money being held by the builder, or emotional distress.

But we shouldn’t really feel sad for the builders, as it is the buyers who are the ones who suffer the most. Yes, they will get their money back that they have put into the project, but really, what good does that do them. Think of it in these terms. You sign an agreement to purchase a pre-construction property with an expected delivery of 2-3 years from now. You continue to make your deposits as agreed to in the contract, but a year later the project is cancelled. Where the biggest problem comes is that while you’ve gotten all of your money back, that same unit you had saved up to purchase at a specific price has now gone up in price by 15%. What do you do now?

As we have seen, the two most recent project cancellations have occurred in the 905 and not in the downtown core. The reason for this is because it is more investors purchasing units in the city where it is more end users purchasing in the suburbs. This is the reason why these cancellations are hurting more. Instead of an investor who would most likely take the money and re-invest it into another unit in another project, we are finding that it is the younger generation who are trying to get on to the property ladder who are suffering here. They have saved and saved and saved and poured all that money into their first big purchase, only to have the door slammed in their face and sent looking for somewhere else to live. This is what makes these situations so sad. We have a lack of affordable housing available to us, and when developers cancel these projects it only hurts more. Trust me, they aren’t cancelling projects where they are selling multi-million dollar homes, they are cancelling projects with many affordable condominium units.

So what can be done? Well, in my opinion unfortunately not much. While the government could step in with fines and penalties for the developers and create new rules that might mitigate these situations, they really can’t control everything. You can’t control the weather, the developer’s financial situation, the price of materials, or labour conditions. If a developer has a legitimate reason to cancel a project, how can you point the finger at them.

What we as consumers have to do is make sure we do our due diligence when purchasing. The same as we take our time and look at everything when purchasing resale property, the same steps have to be taken when purchasing new construction as well.

My heart goes out to everyone who lost because of this latest cancellation, and I truly hope that we don’t see this again for a very very very long time.

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Can Roadwork Really Hurt The Value Of Your Property?

So there’s been the long standing joke in this city that there are two seasons, winter and road work.

Unfortunately the joke isn’t so far from the truth, except for when road work season lasts all year.

I was having an interesting conversation this past weekend with a few people about long term road work and what it could mean to property values and a potential buyers’ interest in a property.

The question was simple, can long term road work affect the value of someone’s property?

Well, if you aren’t looking at moving then the simple answer is no. As with all construction jobs they will eventually come to an end, so if you’re in your home for the long term, then it’s not going to hurt you in the least bit.

But, if you are thinking about making a move, and there is some large scale, long term road construction going on where you live, it could have a negative impact, but not necessarily when it comes to price.

Take for example the long term road work on Bathurst Street. For anyone that lives near to it, or uses Bathurst as a main part of their daily commute, then this construction is front and centre in their minds. And if it is in their minds, then you can bet that potential buyers out there are thinking the same thing. And when it comes to the Bathurst Street work, they project it to continue for another couple of years, on top of the length of time it’s taken already.

There are buyers out there who work south and have looked at potentially buying a home where the commute could be compromised by the construction. However now, those same buyers are opting for different areas that aren’t affected and where the commute would be more manageable.

So this begs the question, if I was thinking of selling now, how can I still attract those buyers knowing that there is still a long timeframe where their commute could be affected?

The first thing that you need to do is find a realtor who knows not only what is going on with the work that could affect your property, but also who knows the area. An agent with this kind of knowledge could shed light on different amenities in the area that the buyers didn’t know about, or could also provide information on various route options (i.e. back streets, other arteries) that might help potential buyers see past the current affects in favour of future values. It’s also important that you know what is going on with the work so that you can inform potential buyers as to when the work is expected to be completed so that they have a timeframe in mind when buying the property.

Some construction jobs do take longer than anticipated, so part of it is a guessing game when it comes to completion, but in order to help people overcome the stigma of the work, you have to have the answers to all of their potential questions and even to the ones they haven’t even thought of yet.

If you have any questions about how construction can affect your property’s value, or how other stigmas could affect them, please feel free to reach out to me at any time.

Lights, Lights, and More Lights

So recently in the neighbourhood that I live in we’ve had some unsightly residents move in…stop lights.

Now, before I stand on my soap box and rant, it was learned not long prior to the installation of these lights that this was always the case. Whenever an area is about to be built there is a plan of subdivision that is submitted to the town for their review and approval. Now, there can be variances made to these over the years, but the original one for this area included these new stop lights.

I chuckle as the neighbourhood has been lived in for almost 10 years now, and people are creatures of habit. I remember when they installed a stop sign on one street to calm traffic as it was getting faster. I lost count with how many people rolled through that sign in the first month, it was pretty crazy.

But now we’re faced with a whole new animal. Now, it must be noted that from a safety point of view, and the fact that this neighbourhood is full of young families, these stop lights can only be a benefit to the many kids who ride their bikes or walk to school on a daily basis.

However, what they are doing with these lights is kind of overkill. What has happened is they have put 3 sets of stop lights within about 300 metres of each other. That’s not just going to slow traffic, it’s going to absolutely choke it off.

Don’t get me wrong, I am always in favour of things that can be done to keep children safe and make sure the area that I live does not turn into a drag strip, but the execution of this plan seems like it will have the opposite affect.

Because these lights are so tightly bunched together, people will find other ways around to avoid these lights. It’s like a child doing a maze, when they get to a point where they can’t go any further and what do they do, they find another way.

The execution of this plan is going to mean that currently quieter streets that might encounter a few cars during rush hours cutting through will now become regular detours. What was once a busier main street will not force drivers off it due to the choke off and on to the streets where hockey games are being played, bikes are being ridden, and life is typically much quieter.

While I support initiatives and plans that work to help keep our neighbourhood safer, the one being implemented where I live will only work against what they are trying to accomplish for the residents of the area.

If you have any questions about these sorts of plans and how they could affect your neighbourhood, feel free to reach out to me at any time.

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Ramifications Of A Redeveloped Promenade

So last week I shared the first plans for the redevelopment of the Promenade Mall’s site. This would give a major facelift to what was a Thornhill landmark and dramatically reshape the area.

Currently, the mall has seen the loss of it’s anchor tenant in Sears, it’s anchor restaurant in The Pickle Barrel, and some recently empty store locations. To say the least, the mall is almost a shell of its former glory. On the site now there are also 6 condominium buildings and a small strip mall style collection of stores and restaurants in the corner.

The new development plans are major, and could seriously change the feel of the area. Now, what has been proposed is simply phase 1, and I can only imagine what further phases might include, but this first step is dramatic.

For the retail side, it’s proposed that there would be over 15,000 square feet of retail expansion to the mall, along with a facelift to the current structure. When you consider that the mall in its current state is one of the largest in the area, one can only imagine how this new development could affect things. But the biggest challenge here would be finding tenants to occupy this new expansion. There are already vacancies in the current mall, and with the transition of Hillcrest Mall not to far away attracting some newer and higher scale tenants, the competition could be fierce to occupy the expansion.

Along with the retail expansion, there’s plans for 4 more towers to be built. Three of them would be condominium apartment units, and one would be a combination of office space and a hotel. That would then bring the total to 10 towers in the area, not including all other new development in the area.

Now, one of the more attractive parts of the condominium proposal is that there would be not only 1 and 2 bedroom options available, but there would be development of some 3 bedroom units as well, which is something that most recent developments don’t have. Of course there is no telling what the pricing would be for these new residential units, but with the growing need for affordable living in the GTA, these units would be a welcome addition.

What I find the most interesting is the part of the proposal for an office/hotel tower. Now there are currently offices on the 3rd floor of the shopping mall which I can only assume would be relocated to this new tower, and with the lack of a true office tower in the area I would think that there would be a demand for this office space. And how about a hotel in the area. There are no hotels nearby, so again this is a part of the proposal that seems to have some serious merit for the viability of the new development.

But, this is just a first proposal, and the timeframe for this actual development is years away from completion, but what does it mean?

Well, if you thought the area was congested already from the newer developments along North Park and Disera, just wait. Things could only get worse with the addition of hundreds of new residential units, a larger redeveloped mall, and the influx of office and hotel suites. Not to mention the visual complexion of the area would be dramatically altered. The area would start to look like Yonge and Sheppard where there is no end to the towers in sight.

I for one think this kind of redevelopment is good, both from a retail experience and from the need for additional residential availability in the area, but only time will tell if this proposal gets the approval, and exactly when all of this redevelopment will begin and be completed.

I’d love to hear your thoughts on this as it could be a dramatic change to the area.

First Isn’t The Worst

So the saying has been around since I was a kid. “First is the worst, second is the best, third is the one with the…”. But in real estate, that just isn’t the case.

I remember back when I was getting my real estate license, one of my instructors always reminded us that the first offer you get is typically your best offer.

Now for a few years that just didn’t apply. The housing market was just too hot that you never typically ended up having just one offer, or having to wait for someone to bring you an offer on your house. Usually your first offer was just one of a number of them and a bidding war would trump all rules in real estate.

But now that the market has “normalized” and people can actually shop and negotiate on properties, the first offer rule seems to be coming back into practice.

Now as sellers, you always want to get the most for your house. And as natural sceptics, we always think to ourselves “if they’re willing to pay this for my house, will the next person be willing to go higher?” and potentially wait to see what happens.

What you find is you always look back and think about that first offer, especially if you don’t end up seeing another one for a while.

In a market where houses can take weeks, if not months to sell, I always encourage people to entertain offers with an open mind. Just because someone offers you something that you may find insulting, you may soon realize that they are simply starting their negotiation at that point and are willing to work with you to come up with a satisfactory offer.

I am not saying that this rule is a certainty, because sometimes there are ridiculous offers that come in as your first that are just that, ridiculous. But, in my years of experience I have found this to be the case more often than not.

I will give you a recent example of how this is true in this market. I had a client who looked at a newly listed property (we saw it the day it hit the market). My client immediately was interested and wanted to put in an offer. After speaking to the listing agent and explaining what the conditions of our offer would be (we were willing to pay over market value for the property at the time) we were told that it wouldn’t work to get the deal done. While my client was disappointed, it was a blessing in disguise for us, and a nightmare for that particular seller. In the next week, 3 similar properties in the same area hit the market, all with similar or lower prices to the property my client liked. Now my client had not only more choice in their decision, but also more negotiating leverage than they would have had when we were first interested in making the offer. So what happened? Thanks to the current market conditions, my client is able to do more due diligence and be patient. That first house is still for sale, and while my client is still interested, they want to see exactly what happens. Now I’m not saying that the house they are interested in won’t sell, or sell for a price similar to what we could offer, but instead of being on the market for weeks, the house could have been sold in a matter of a day and not been vulnerable to the conditions changing with more similar homes coming onto the market.

As you can see, it isn’t always just the price or conditions that can make your first offer the best. Competition can be a killer in this market, and if you can get on the market and sold before others, you end up a winner every time.

If you have any questions about my experience with this, or are curious what your home’s value could be, reach out to me at any time.

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Better Than Regular Investments?

So in recent years there has been a surge in new home construction in the GTA. That covers both single family homes and condominiums. We’ve all heard about the hot condo market, and the demand for rental units, but what does it truly mean? And more importantly, how can it benefit you.

We all look at our home values and compare them to when we first purchased them. In pretty much all cases, we have made money, a sound investment. But if you want to see where the biggest increases are, you need to get in on the ground floor.

In recent years, I know of a number of people who have gone away from conventional investing, i.e. stocks, RRSP’s, and even RESP’s in favour of real estate. Now most people won’t look at spending over $1,000,000 on an investment in a detached home in the suburbs, but there are serious benefits when considering purchasing a pre-construction condo.

This trend is so widespread that even university towns like London, Waterloo, and Kingston have begun to market their pre-construction projects to realtors and the general public in the GTA knowing that there are investors out there.

Even with the ups and downs of a traditional real estate market, there is money to be made in buying before it’s built. Yes, you will have to “feed” the project for a year or two through planned deposits, but by the time you get the keys, you’re ahead of the game.

Now, these investments can serve you in a number of different ways.

First, as a straight investment you can carry the project to completion and sell it for whatever profit may be there upon closing. Gains can be modest, but there are gains to be had given the amount of cash you’ve invested into the deposits and how long it takes to complete (some buildings can take years to finish).

Second, you purchase the unit as a long term investment. Once you get the keys you immediately look to rent out the unit. You can get a tenant in there that essentially pays your expenses (condo fees, mortgage, taxes) so all that is happening is you continue to build equity on someone else’s dime. This is most prevalent when purchasing a unit in the downtown core or somewhere directly on a subway line that would allow for easy commuting throughout the city.

A third option (which is also where the out of town investment comes) is that you actually purchase the unit for your kids. You might have aspirations as to which post-secondary institution they might attend and invest in that city. Obviously the unit would be completed long before they need it, but you can rent it out in the meantime. Then, when it comes time for them to go off to university, you’ve got not only a place for them to stay, but a sound investment that they can use to jump start the next phase of their lives. A lot of university town investment projects come complete with rental management, so essentially you don’t have to do a thing and collect your rent on a monthly basis.

The beauty of investing from the start with condos is that you can get some nice perks from the builder, but also get into a unit for a fraction of the cost of a resale unit. But it is important to look at not only what your ongoing investment would be in the unit as it is being completed, but also if your goal is to rent it out, what the potential rental income might be when you get the keys to insure that you can carry the unit with the amount of rent you can collect.

It’s not a truly conventional investment, but it is something that more and more people are considering as a way to invest in not only their future, but also their kids’ future.

If you’re curious about how this could work for you, or have questions on the long term benefits of purchasing pre-construction real estate, please feel free to contact me at any time.

What Is Really Happening With The Market?

So as I’ve said in previous posts, I enjoy reading about real estate from a variety of sources. In some cases it is about facts and figures related to the market, sometimes it’s about market trends, and sometimes it’s just fluffy stuff like decorating trends or cool houses.

As I peruse through the different media outlets I find that the different takes on what is actually happening are fascinating. Here are some examples of headlines related to the housing market in Canada from today alone:

“Toronto’s 17% surge leads Canada’s biggest gain in home sales this year.”

“June home sales down 10.7% from a year ago, CREA reports.”

“Canada’s home sales touch 5-year low.”

So should we be optimistic, or should we be concerned.

Now if you look at Canada as a whole, different regions have different things that affect it. For example, real estate in Calgary hit a major boom when oil prices were skyrocketing. Everyone in Alberta was making a killing and were spending big on their houses. Now with oil coming way down in price, the real estate market there is depressed, which hurts overall numbers.

On the flip side, Toronto and Vancouver continue to be some of the highest demand real estate markets in North America. While prices in both of those markets took a big hit, they are both rebounding. Vancouver has had longer than Toronto to rebound, but it has, coming back almost as strong as it was prior to their market shift. Toronto has shown signs of growth and is trending in the same direction.

So let’s get back to the headlines. Do you believe the optimism, or do you believe the doom and gloom. Well, they are both right in their own way but can drive the perspective on the real estate market in different directions.

If you only picked one media outlet to follow, maybe you hear the optimism and feel like now is the time to make a move. You see the light at the end of the tunnel and you want to get there before everything explodes.

Or maybe you read about how home sales are down so dramatically and you feel like it’s time to start socking away your cash in your mattress as your single biggest investment continues to lose money. It’s these sorts of headlines that can drive markets down because public opinion truly affects the real estate market like no other.

Or maybe you read both and are completely confused by the message. Is the market good or bad? What should we do?

Well my answer is simple, ask questions. The media is there to provide information that will be intriguing to their readership and get you to buy their papers. But a professional can truly disseminate what the information they are providing means to you. The best part about questions and answers is that they are free. You can learn about the market, what it means for your house, and what options you may have should you choose to do something. I’ve always lived by the idea that if you don’t ask, you don’t get, and this is no different.

I follow the real estate market and the media and would be more than happy to take some time if you have any questions to help you understand anything you might be curious about.

Good News For The Market...But...

So over the weekend I posted some great news about the real estate market in the GTA. Housing prices have gone up year over year by 2% which is amazingly positive considering where we were just a year ago.

However, as the title of this blog suggests, there is a big but involved here.

We have to remember that prices took a serious nose dive heading into last summer. We went from having every new sale be a record breaker to more and more for sale signs staying up and becoming part of our neighbourhood scenery.

So while a 2% increase is something nice to hang our hats on, and something encouraging for the future, it really doesn’t address what this news can mean.

I feel hat any time positive news about real estate filers through the social networks of society, people immediately assume that everything is going back to the way it was and prices are just going to shoot up in an instant.

When I first got into real estate, one of my instructors explained that the housing market is like a sine wave. There are ups and downs, but it is a wave, and not a spike. Conditions that were imposed by outside forces last year caused the wave to spike in the wrong direction. Prices plummeted, people were struggling to close deals that they thought were iron clad, and consumer confidence in the industry fell.

In order for us to get back to a peak in the market will take time, just like the building of a wave. While we see 2% today, it might be in small increments like this for the foreseeable future, and while positive, may twist the minds of people who were thinking about making a move in real estate.

Where my word of caution comes is that the market is still way way down from where we were at the beginning of 2017. We can’t get our heads in a place where we think that our homes are worth what they were at the peak of the market. Not even close.

Think of it in these terms. If your house, which is an average house, in an average neighbourhood saw a 12-15% price drop as a result of the moves made by the government and the mortgage sector, then a 2% increase year over year amounts to not even a 20% rebound on the price of your house.

I am not trying to say not to make a move now, because if you’re buying and selling in the same market then it is irrelevant where the market is. What I am saying is to not get your hopes up with this news. It is good, but we have a long long way to go to get back to where we were before. Just keep riding the wave and everything will turn out fine.

If you’re curious as to what this news may have done for the price of your home, please reach out to me, I would love to give you a comprehensive evaluation of your home.

What Is FOMO???

So one of the things that I do in order to keep up with all the latest news and trends is that I read as much as I can about real estate. Sometimes it’s about facts and figures, and sometimes its about interesting homes for sale and the stories behind them.

Every once in a while there is something that I read that catches my attention because I didn’t know it before or it’s something catchy.

Like FOMO.

So what is FOMO you ask. It’s obviously an acronym that stands for Fear Of Missing Out.

Now, when I first started reading about it, I felt like this article was a year behind as the market has cooled significantly in the last 12-14 months. But as I read on I found that it was as prevalent today as it was when things were at their craziest.

While there is more inventory on the market, and there are less transactions I was asking myself do people actually still feel this way. But the numbers don’t lie.

In a poll done of recent home buyers in Toronto and Vancouver, 55 percent of those buyers said that they went into a bidding war for their eventual purchases. Further to that, almost 48 percent of those people admitted to going over their budget in order to get those houses.

But wait, this is 2018, where buyers have all the power and control over this market, isn’t it?

Believe it or not this fear of missing out is still gripping buyers in the toughest housing markets in the country. I would be curious to know the percentage of people polled that purchased condos versus freehold houses. I know the markets in Toronto and Vancouver when it comes to condos are still ridiculously hot whereas freehold purchases are not.

It’s interesting because as I read this article I was thinking about two dramatically different clients who I’ve worked with recently.

The first were buyers in search of a freehold detached house. They waited patiently, with no fear, for the market to cool down from what it was last year, and were able to not only take their time, but be as deliberate as they wanted to in their home search. When they bought, it was with no competition and with everything put into their offer that they wanted and still were able to make a deal for their dream house.

Second were buyers for a condo. They had the ability to be patient, but given their desired area to live in, and the nature of the market for units in that area, they fully experienced FOMO. They rushed to see everything that came out as it came out, and had a blank offer at the ready at all times in order to not miss out on that one perfect unit.

So FOMO is a real thing, but as I said earlier, I would qualify what I read by saying that I am curious to know how many of the people polled for the article were like my second buyer example, and how many were the first example.

If you’re curious if you’ve come down with a case of FOMO, or just want to talk real estate, reach out to me at any time.

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It’s Official...We’re Stalled...

So for the past year we’ve been hearing and living through a number of measures taken by the government to slow down what was a skyrocketing real estate market.

Now I agree, the market got way too hot for it’s own good, but have the measures taken just gone too far?

There is a cause and effect to everything. By implementing a foreign buyers tax, the number of foreign buyers went down. By implementing an occupancy tax, the number of vacant homes went down.

But what’s hurt the most is the new mortgage rules. By making it harder to get affordable money for your home has made the market go down. And not just go down, but virtually tank.

While buyers can enjoy more inventory on the market, their affordability has diminished so significantly that we have seen luxury homes become exactly that, a luxury item. It wasn’t so long ago where buyers would dole out multi-millions of dollars for homes. Now those same homes take much longer to sell, or don’t even sell at prices that almost seem like pennies on the dollar.

But the inventory isn’t even so amazing. A lot of it is product that has been on the market for a longer period of time, and is sitting due to unrealistic sellers who are still trapped in 2017.

But has the government gone too far?

Home sales and inventory are dramatically down according to every research number provided. But here’s the catch, that hasn’t meant that more people can start moving into nicer places if they choose to rent.

Toronto has now become the second most expensive rental market in the country, only trailing Vancouver. This has made the GTA an ugly place to try and find a home.

So here’s the situation, you can’t afford to buy a home due to the fact that your affordability has gone dramatically down thanks to the new mortgage rules, and you can’t afford to rent a place because rents are through the roof.

So what do you do?

A very sobering and good question. While we can all shake our heads at the government perhaps going too far, my best recommendation is this, reach out to myself to help you understand what your options may be in this market. It might mean some compromises, but there is definitely a home out there for you right now if you’re looking.

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Which Size Matters?

So this week I’m actually going to look at something that happened in my own neighbourhood that perplexes me, but leaves a great opportunity to share your opinion.

I’m going to give you a scenario with two dramatically different houses. Each house has their own upside. But the question to be asked here is which size matters? Do you prefer lot size, or house size? At the end I will tell you what each one sold for and the result may be a little shocking.

House #1 – A 3700 square foot house with 5 bedrooms, completely finished, walkout basement, sitting on a 45 x 90 foot lot on a good street in the neighbourhood with a good location.

House #2 – A 2400 square foot townhouse with 3 bedrooms, completely finished basement, 2 car garage, sitting on a 72 x 120 foot lot on the end of a court backing and siding onto green space.

So the question to be posed to the public is which size matters more to you in the end. Would you go for the bigger lot, or the bigger house if price was no object?

I know some people would immediately jump at the lot size because of the potential ability to put in a swimming pool if they so choose. But others who might be growing their family will say that they need the 5 bedrooms. I know it isn’t always a matter of preference, but of need, but for now, throw all conditions out the window and make a choice.

Okay, so you’ve made your choice, let’s see what the market says about your choice. One thing to note, these houses sold in the past week within days of one another.

House #1 took over a month to sell. After being listed at various prices, it eventually sold for $1,470,000. Relatively speaking a good value for a home that size in the neighbourhood I live.

House #2 sold in multiple offers in less than a week. After being listed low to generate multiple offers, it sold for $1,345,000. While I may be shocked at that price for a townhouse, the lot size is an anomaly in this neighbourhood.

So two dramatically different houses in the same area, one with lot size, the other with house size, yet virtually sell for almost the same price. This just goes to show that there is no right or wrong answer when it comes to which size you prefer, as long as it is the right house.

One more point to this story. To give you an idea of where our market has come in the past year, house #2 sold 13 months earlier for $370,000 more than what it sold for this week. A drop of 22% year over year.

I’d love to hear your opinion on this case, or even on what has happened to our market in the past year. Feel free to reach out to me at any time.

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And The Winner Is...

So over the past number of weeks I’ve been talking and sharing both my opinion and the opinions of others about the provincial election. Well, now we know who wins.

In a not-so-surprising result, the Conservatives won a majority government. And not a slight majority, but a clear majority. Add to this an official opposition which has never been the opposition, and a party not only leaving power, but becoming powerless with the loss of their official party status, and we could be looking at sweeping changes coming to life in our province over the next number of years.

Only one problem, we still don’t really know what the incoming premier and government have planned for us.

We’ve heard lots of random promises, but a fulsome platform has yet to be unveiled, or at least shared with the people of this province. Have you ever heard of an entire group of people electing a party not even knowing what they’re planning, let alone giving them majority control of the government.

Now that being said, the pieces that have come out all sound like they could be beneficial to the residents of Ontario, and in turn, beneficial to the real estate market.

Should the incoming government be able to deliver on sweeping tax cuts, that could put more money into the hands of the public, which could create more affordability in homes.

There’s also been talk on the part of the Conservatives about potentially opening up parts of the greenbelt. As I’ve said before, I see this as a win-win for all the parties involved. The government would get a much needed infusion of cash from the builders who will line up to purchase the land, and the consumers will benefit from a rush of new inventory available in the housing market.

One other side of things that I’ve been looking at relates to the cutting of hydro rates. As a province, we pay the second highest amount for electricity in North America, and that’s only behind Hawaii (which is an island). But if the incoming government can make the sweeping cuts to hydro rates as promised, could this make condos more attractive. A lot of condos currently include hydro as part of their monthly maintenance fees, so would there not be a cause and effect that a drop in hydro rates could also relate to a drop in maintenance fees? And would that make condo living more attractive to people as the monthly cost could as a result of these cuts?

Only time will tell what this new government’s affect on the housing market will be, but in my opinion, there is reason for a lot more optimism with the incoming government than there would have been if either of the other parties had been elected.

I welcome your thoughts on what the future might hold for the province.

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