Ajax Pickering Real Estate Blog

Archive for October, 2007

Unwavering Demand Supports Rising Canadian House Prices in Third Quarter

Canada’s real estate market remained on solid ground during the third quarter as high consumer confidence, strong employment rates and stable interest rates led to robust buyer demand prompting average real estate prices to rise in all major markets, year-over-year, according to a House Price Survey report released today.

Of the housing types surveyed, the highest average price appreciation occurred in standard condominiums, which rose to $241,818 (+15.7%), followed by standard two-storey properties, which rose to $407,613 (+13.4%), and detached bungalows, which increased to $340,941 (+14.3%), year-over-year.

“Much like the Canadian dollar, the Canadian real estate market is charting its own course, quite independent from the United States and its currency and housing climate. The strength of the Canadian dollar, and the fact that the country is adjusting well to its value, will continue to keep interest rates at their existing low-to-moderate levels, boding well for buyers looking to enter the real estate market. From coast-to-coast, the country’s rich commodity markets have had tremendous impact on local economies, and there is no indication that this will change anytime soon.”

A wave of interest in Canada’s natural resources including oil, gold, uranium and wheat swept across the country, and introduced some new cities in central and eastern Canada to the trend of significant real estate price appreciations in the third quarter.

Trumping Alberta’s two largest cities, Saskatoon’s housing market experienced the highest price appreciations in all housing types examined. Vancouver, Calgary, Edmonton, Regina and Toronto also experienced double-digit average price gains.

Added Soper: “Despite the rising real estate prices across the country, recent Statscan reports cite that the home ownership rate stands at its highest on record. With the combination of the cost of borrowing money remaining relatively low, the availability of longer mortgage amortization periods, and the fact that Canada’s population continues to grow, it is no surprise that more and more people are entering the real estate market.”

Of note is the increasing trend of home ownership in Montreal, a city where renting historically trumps owning. While Quebec reports the lowest rate of home ownership in the country, the number of people buying real estate is growing; a trend likely driven by first time buyers who, in contrast to entry buyers a decade ago, see more value in owning their own house.

While the energy rich west has reported unwavering high consumer confidence and high employment rates for the past several years, central and eastern Canada are now rising alongside their western counterparts as their local commodity industries receive increased attention.

The oil sector remained a bright spot for Alberta and continued to fuel buyer demand; however, the rate of price appreciation and the intensity of the real estate market scaled back from where it was 14 months ago.

Both Saskatoon and Regina experienced a surge in demand, as levels of in-migration were high during the third quarter. Many native Saskatchewan residents returned to the province from the west, seeking more affordable housing and better work life balance.

In Central Canada, Toronto’s real estate market continued to set records throughout the summer, and is poised for continued activity and rising average house prices as the city continues to attract both buyers relocating to the city centre from the suburbs, and newcomers to the country.

In Atlantic Canada, the past few months have seen both Saint John and St. John’s become the ‘Calgarys’ of the east, as several energy-related projects in New Brunswick and Newfoundland gain attention. While Halifax is not directly related to the oil industry, the city is experiencing a spill-over effect as many executives are moving to the area to be in close proximity to the oil projects.

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Contact the Jeffrey Team for more information – 416-388-1960

Globe and Mail

Perhaps the only thing more certain than sunrise lately has been that Canadian real estate prices keep going up, up, up. The average price of a resale home jumped more than 11% last month compared with August of 2006. Prices of new homes were up almost 8% in July. With the prospect of hefty increases in value, it’s little wonder that many Canadians are flocking to financial institutions, borrowing money, bidding up home prices and perhaps buying beyond their means. It could be a recipe for trouble.

So it is reassuring that Bank of Canada Governor David Dodge is paying close attention to this trend. “One worries about the structure of the mortgage market, that we may be actually aiding, facilitating a rise in the price of real estate that is really not warranted,” he told journalists in Vancouver this week. While he expects real estate prices to escalate in areas of fast economic growth, he said, he is deeply concerned about real estate prices outside those areas, some of which are rising twice as fast as the inflation rate. “We’ll worry about that, and we’ll continue to worry about that.”

Buyers have been crowding into the real estate market in near-record numbers. New home prices were up 15.7% on an annual basis in Winnipeg last July, and 6.8% in Halifax. Although the number of monthly sales of resale homes declined slightly last month, the Canadian Real Estate Association expects the resale market will remain strong for the rest of the year. Financial institutions are dangling good mortgage rates with long-term repayment plans. Even the once-staid Canada Mortgage and Housing Corporation drew Mr. Dodge’s criticism last year with its astonishing offer to insure interest-only mortgages.

The Governor’s concern about real estate prices is part of a deeper worry. Central banks did not understand the magnitude of the easy money available through sophisticated securities and, as a result, kept interest rates too low. Since the recent meltdown in the U.S. subprime mortgage market, credit has been tightening. But what will happen if homeowners face higher interest rates when they renew their mortgages? What if the number of new buyers shrinks in response to higher rates, especially in markets of lower economic growth? So many people have their futures pinned to the increasing value of their house over time. Mr. Dodge is right to pay close attention to what could be a perilously overpriced real estate marketplace.

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Contact the Jeffrey Team for more information – 416-388-1960

When you’re getting ready to put your property on the market, there are a myriad of things to think about, to prepare and to organize for. Here’s a short list of some of the pitfalls to watch out for!

Pricing Incorrectly

Every seller wants to realize as much money as possible when they sell their home. But a listing price that is too high often gets the seller less than a price that is at market value. If your house is not priced competitively, people looking in your price range will reject your house, and will not see it because it’s priced over their heads. Overpricing usually increases time on the market, and that adds to the carrying cost. Ultimately, many overpriced properties sell below market values.

To help avoid this, we offer our experience and knowledge of the Ajax – Pickering real estate market. We will prepare an accurate market analysis, free of charge, and then will personally consult with you to discuss our findings. With this free consultation, you will learn:

- Whether or not you should select your real estate agent based on selling price.
- The difference between cost and selling price: this affects you if you have invested a lot of money in your home.
- What is meant by Market Value?
- How the Asking Price is set.
- Whether or not it is a good idea to “try it for a while” at a higher than Market Value price.
- Plus many other insider secrets!

Once you learn these principles, you will know how to sell your house for the best price. Not only that, you’ll know how to avoid paying too much for any house you buy for the rest of your life! Just call us (416-388-1960) and ask for us to set up a time for your free personal consultation.

Failing to “Show Case” your home

Buyers look for homes, not houses, and they buy the home in which they would like to live. Owners who fail to make necessary repairs, who don’t spruce up the house inside and out, touch up the paint and landscaping, and keep it clean and neat, chase buyers away as rapidly as Realtors can bring them in.

If you were selling a car, you would wash it, or may even detail it to get the highest possible price. Houses are no different. Take the time to go through our checklist “Getting Your Home Ready to Sell“. Call us (416-388-1960) for advice. Our experience with buyers has taught us what buyers are looking for.

Using the “Hard Sell” during showings

Buying a house is an emotional decision. People like to “try on” a house to see if it is comfortable for them. It’s difficult for them to do that if you follow them around pointing out every improvement that you have made. It may even have the opposite effect you want, by making them feel they are intruding on your private space, or by your mistakenly pointing out something this particular buyer would consider a negative. Resist the temptation to talk the entire time a buyer is there… let them discover things on their own. Try a tasteful sign posted on a door or wall to point out some hidden amenity that they might miss.

Mistaking Lookers for Buyers

“For Sale by Owners” occasionally get more activity than houses listed with an agent. Realtors will only bring qualified buyers, and these may be fewer than if you opened your front door to anyone walking down your street, or calling on your ad. A qualified buyer is one who is ready, willing and able to buy your home. We find that most people who go looking at “For Sale by Owners” are just starting to think about moving. They may be good buyers, but they are several months away from being ready. They don’t want to bother an agent yet, so they call the “For Sale By Owner” ads to get a feel for what is available. Many potential buyers may have a house to sell first, or may need to save money, or may have credit problems. When everything is in place, then they go looking for a Realtor.

Not Knowing Your Rights and Obligations

Real estate law is extensive and complex. The contract for purchase and sale is a legally binding document. An improperly written contract can cause the sale to fall through or cost you thousands for repair, inspections and remedies, for items included or excluded in the offer. You must be certain which repairs and closing costs you are responsible for. You must know whether the property can legally be sold “as is”, and how deed restriction and local zoning will affect the transaction. If there are defects in your title or if you property is in conflict with local restrictions you or your Realtor must remedy them or you might have to pay substantial damages.

Hiring a professional real estate company like Right at Home Realty to represent you can alleviate many of these concerns. We will take the time to discuss possible problems which may occur and will work to remedy those problems with little or no hassle to you.

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Contact the Jeffrey Team for more information – 416-388-1960