Some Canadian Real Estate Factoids . . . .

• In the first half of 2008, $56-billion of new mortgages in Canada (more than half of new mortgages) had 40-year amortizations. Two U.S.-based mortgage insurance companies, Genworth Financial and American International Group, are reportedly asking the Canadian federal government to raise existing government guarantees of private mortgage insurance to 100% from 90%. The federal government guarantees 100% of the mortgages insured by Canada Mortgage and Housing Corp.
   
• The TD Canada Trust Homeowner Confidence poll reports that 92% of Canadian homeowners are staying put and not considering selling their homes. Of those surveyed, 53% are going ahead with planned renovations or plan to do even more home improvements.
   
• According to the Toronto Real Estate Board, the median price of all condos sold in November, 2008, fell to $226,000 from $241,000 in November, 2007. Sales dropped to 906 from 1,837 a year earlier. In December, 2008, the number of condo suites listed for sale increased to 4,637 units from 4,366 in December, 2007. The average number of days it took to sell a unit in 2008 climbed to 43 from 33 a year earlier.
   
• According to Cushman & Wakefield LePage, the industrial vacancy rate in Canada was an estimated 5.8% at the end of 2008, much lower than the doubledigit vacancy rates in many American cities. Vacancy rates increased 0.7% in small markets and climbed even less in major markets like Toronto, Montreal and Vancouver last year. The national industrial vacancy rate is expected to rise 0.7% in 2009.
   
•  According to the Toronto Real Estate Board, sales of existing homes in Toronto fell 45% in December, 2008, from December, 2007. The average price dropped to $361,415 from $394,931 a year earlier. According to Canada Mortgage and Housing Corp., housing starts in Toronto rose 27% in December from a year ago. Total housing starts reached a record level in 2008, boosted by a 137%
  jump in condo starts, while low-rise starts fell.
   
• According to RealNet Canada Inc., the downtown core submarket in Toronto had sales of 143 condo units in November, making it the second-hottest area for condo sales in the GTA. The average price in the downtown core submarket is $745 per square foot, fourth highest among all GTA submarkets.
   
• According to the British Columbia Real Estate Association, existing home sales in the province fell by one-third to 68,923 units in 2008 from 2007. The average home price increased 3.5% to $454,599 for 2008. Prices dropped 11% from a peak of $483,291 in March to $429,210 at the end of the year. In
  December, 2008, sales were down 49% from a year earlier and the average price declined 6%.
   
• ......

  A major real estate firm, in a separate report, blamed the depressed level of consumer confidence, along with the slide into recession, for a slump in home sales and prices in the final quarter of 2008.

  "The combination of a global economy in recession and shrinking employment figures did much to dampen consumer confidence, diminish home sales and cause house prices to drop," Royal LePage Real Estate Services said in releasing details of its latest house-price survey.

  The average price of a detached bungalow dipped by 4.8 per cent from a year earlier to $319,640, standard condominiums fell 5.2 per cent to $233,230, and the standard two-storey home declined 6.3 per cent to $376,140.

  However, price trends varied dramatically across regional real estate markets, it said, noting that Regina and St. John's, N.L., posted double-digit gains, while the larger cities that have seen the greatest increase in prices this decade, including Toronto, Edmonton, Calgary and Vancouver, recorded declining house prices.

  But the real estate giant also released survey results suggesting the market could get a lift from the fiscal stimulus in the budget.

  Nearly half of Canadians — 49 per cent — agree that the economic stimulus in the budget will have a positive impact on Canada's real estate market, it said.

  "Political actions taking place south of the border are also likely to buoy the country's economic conditions," it said, citing another survey finding that 82 per cent of Canadians agree that the inauguration of U.S. President Barack Obama will have a positive impact on consumer confidence here.

  The news out of the U.S. on Monday, that home sales unexpectedly rose 6.5 per cent last month, raised hopes that the deep housing market depression there, which triggered the global recession, may be easing.

  "Though unlikely to mark the bottom of the housing downturn, the report at least suggests the market is not spiraling downwards in response to mounting job losses and tightening credit standards," said BMO Capital Markets economist Sal Guatieri. "An upward trend in home sales that gobbles up supply and stabilizes prices would be an important signpost of economic recovery, but that is likely still some ways off."

  There was also an unexpected year-end increase in the index of U.S. leading economic indicators, which tends to signal the short-term direction of the economy.

  However, analysts noted that the increase in the U.S. index was narrowly based, largely reflecting a surge in money in the U.S. economy, and that the trend in the index continues to signal recession.

  In Canada, the reports of an improvement in the mood of consumers came amid a continuing flow of announcements of the levels of spending stimulus that will be in the budget, with Infrastructure Minister John Baird saying the government will spend $7 billion over two years on new infrastructure, bringing total promised new spending to more than $13 billion.

  "This is clearly having some impact on consumer confidence as nearly half of all Canadians believe the steps the government is taking to stimulate the economy . . . will positively impact the country's real estate market," said Phil Soper, president and chief executive of Royal LePage Real Estate Services. ....... (Vancouver Sun)
   

• In the Milton area, we are seeing buyers starting to buy after delaying decisions for the past 5 to 6 months. Part of this is, I think, they have decided that the 'sky is falling' reporting of mainstream media has not proven true. Another factor is the incredible interest rates available, and a third factor is the excellent deals available on homes today. Buyers realize that they cannot time the bottom of the market, and don't want to be left thinking and waiting when the market does turn back up.

Remodeling Hints for a Tough Real Estate Market

(ARA)  – If you’re selling your home, you’re not just competing against the house down the street anymore. You’re mixing it up with desperate new-home builders with pockets deeper than yours, banks willing to sell foreclosed homes at a loss, and buyers who know that sellers are at a disadvantage. You definitely need an edge.

Remodeling remains one of the best ways to set your home ahead of the competition. Upgrades to outdoor areas that expand the living space and add curb appeal can help sell your home faster and for a better price. Homeowners seeking to improve their living spaces are not making the traditionally popular – yet costly – upgrades to kitchens and baths.  Instead, they are adding to the curb appeal with outdoor structures or landscaping if they are planning to sell.    

But did you know that using high-quality materials throughout your home can also improve value and salability? Homeowners need to make the whole package appealing, which means it has to be long-lasting, low-maintenance and visually attractive.  

“Cheaper materials may save money at the outset of a renovation project, but in the long run they reduce the potential value of a home,” says Richard White, an architect who specializes in custom homes.

In fact, in homes that increased in value by at least 100 percent, owners spent 2.5 times more on improvements than in homes where the value increased by less than 50 percent, according to a study by Harvard University’s Joint Center for Housing Studies.

White offers the following insight into using high-quality materials to enhance the value of your home:

Choose timeless, not trendy. Often, trendy building materials can’t compete with traditionally popular ones for staying power and durability. Choosing traditionally popular materials for your renovation can help ensure your house is appealing to a wide range of buyers through years of evolving fads.

“People trust building materials they know,” White says. “If I grew up in a home with Western red cedar siding, I know the qualities of the wood and what it will do for my home.”

Long a traditional favorite, Western red cedar has a number of qualities that make it a preferred, quality material for decking, siding, and the increasingly popular outdoor living spaces that can enhance a home’s value, White says. Natural preservatives in the wood make it very durable for outdoor uses, even in more severe climates, according to Web site realcedar.org. Its texture and coloration give it a rich, natural beauty that enhances interiors as well, in features such as interior paneling, vaulted ceilings, trim and boxed-in beams.

One trend worth tapping, however, is the movement towards more eco-friendly homes. Many buyers are looking for homes that incorporate recycled materials or new ones drawn from renewable sources, energy-efficient design and a minimal carbon footprint. When choosing products for your remodeling project, consider the steps the product took to reach your home.

Curb appeal projects can be as simple as sprucing up the landscaping with a Western red cedar arbor, trellises, or adding a wood fence to increase privacy; or they can take the form of a pergola or even a gazebo or deck to expand the outdoor living space.  From the smallest project to the grandest, Western red cedar’s versatility can add beauty to the outside of a home

Synthetic materials such as vinyl and plastic are manufactured with nonrenewable materials. Minerals making up cement, stucco and metal are mined from the earth and not replaced.

Woods such as pine, fir, and Western red cedar are renewable resources, grown and harvested sustainably. The environmental costs of wood production are also much less than mineral or synthetic materials. Production of concrete requires 70 percent more energy than wood building products and releases 67 percent more pollution into the air.

”Wood has a lower environmental impact throughout its life cycle than other building materials” says Paul Mackie of the Western Red Cedar Lumber Association.

Even if you have no immediate plans to sell, and are remodeling to improve your enjoyment of your home, remember that someday you may want – or need – to compete for buyers in a tight market. The right remodeling enhancements, done with the right high-quality materials, can help any home become more attractive to buyers and sustain its value through conditions such as the current market.

Courtesy of ARAcontent

Winter Wake Up for Your Basement

(ARA) – A few years ago you finished your basement. You put in all the hard work to make it a perfect retreat and lounge. But you haven’t done a thing with it since. So often, people finish their basements and then forget about any upkeep.

Though the basement is often viewed as a rugged recreational room, it still deserves the same decorative and functional attention as the rest of the home; and the winter months provide the perfect opportunity to tackle some of those projects.

These simple tips will help renew and rejuvenate your basement by making it more usable, durable and inviting for your family and friends. Plus, each project is affordable and won’t require excessive work to accomplish. Most can be completed in one weekend, or a few evenings after work.

Paint in the Winter? Yes, You Can
One of the best ways to make your basement look brand new is to repaint. A fresh coat of paint will re-energize the room and provide a whole new feel. And, with newer paints having very low VOC (volatile organic compound) content, it’s safe to paint even with the windows closed.

Additionally, many of today’s low-VOC paints, like Pratt & Lambert’s RedSeal Porcelain, are also extremely durable, which is essential in a basement. This green-certified latex interior paint is actually scrubbable. Tiny porcelain beads in the paint don’t allow stains to penetrate the wall surface, making it simple to clean up. So whether your 2-year-old splashes his grape juice on the wall, or a Sunday football game ends in a celebration of flung nacho cheese, wall cleanup will be quick and easy.

Light it Up, or Down
Basement lighting can be tricky. Trying to balance the volume of light emitted from fixtures ranging from a single pull-chain bulb to fully-integrated recessed canister lights is no easy task. Simple dimmer switches are one of the easiest ways to make sure you can balance a basement lighting scheme at any point in the day.

Dimmer switches allow for a multitude of lighting options, whether you have a windowless basement that is completely lit by artificial lighting, or even if you have a fully finished walk-out basement with large windows and sliding glass doors. Dimmers can be purchased at any hardware store and are quickly and easily installed even by novice electricians and homeowners.

What’s Under Foot
Generally, because basement flooring is set on top of concrete slabs, most people opt for heavily padded carpet so they won’t feel the rigidity and hardness of the slab. The problem, however, is basement carpeting can become very dirty, worn and outdated rather quickly. The good news is that even if you already have carpet installed, you can update the flooring to a more modern, sophisticated pattern relatively simply and inexpensively.

Tarkett’s FiberFloor resilient flooring offers what homeowners desire most in their basements: resistance to water and moisture, scratches, scuffs, stains and indentations. And, it’s easy to clean – a basement must. Resilient sheet flooring offers an attractive option for a high-end appearance with the latest styles and patterns in a wide array of colors, designs and textures. Plus, after tearing up the existing carpet, all you need to do is roll out the sub-floor padding and then lay the floor.

The Good Kind of Mold-ing
Decorative architectural elements such as baseboards and crown molding can add dramatic effects to a basement, but many homeowners are concerned that using these molding pieces will shrink the appearance of the room.  Though it is true that most basements have lower ceilings than the rest of the home, some simple, thin, crown molding creates a very polished look in a basement.

Accenting the crown molding with color-matched baseboards easily turns the basement from a modest recreational area to a coveted destination area for your family and guests.

Each of these basement remodeling options is easily accomplished, no matter how cold it might be outside. The basement is most often a multi-use room, and these simple projects will certainly improve the room’s usability, quality and appearance.

For more information about Pratt & Lambert’s RedSeal Porcelain visit www.prattandlambert.com.  For more information about Tarkett flooring, visit www.tarkett.com.

Courtesy of ARAcontent

Garden Superstars for Spring 2009

(ARA) - From picture-perfect roses to containers that are works of art, spring 2009 promises wonderful color and exciting new products for garden lovers everywhere.

“People want shrubs and plants that look great, are easy to grow, are good for the environment and perform well in their gardens,” says Susan McCoy, garden writer and trend spotter. “That’s just what the new products this spring promise to deliver.”

McCoy reveals a few of her favorite garden superstars for spring 2009 to help scratch that itch to get out in the garden after a long winter.

Let the Sun Shine  

McCoy loves “Sunny Knock Out," the newest addition to the Knock Out Family of Roses (www.TheKnockOutRose.com). It lives up to the Knock Out reputation for blooming continuously with little to no effort, and is naturally resistant to rust, mildew, blackspot, Japanese beetles and rose midge, making it easy to avoid harsh chemicals. It is bright yellow, the latest trendy color, and has a mild, sweet fragrance. From Canada to the Gulf states, you can expect the same profusion of sunny blooms on this compact shrub that grows up to 4.5 feet tall, making it perfect to mix in flower beds, for mass plantings or as a specimen plant.

Tropicals Sizzle in Your Garden

Add lots of color right up until fall’s first frost with the new Sun Parasol Crimson mandevilla. This easy tropical from Costa Farms (www.SunParasol.net) has huge crimson red, bell-shaped velvety blooms that cover the 12- to 15-foot vines, making it perfect for hanging baskets, containers, climbing up a trellis or in a landscape. Available in “Pretty” and “Giant” sizes, Sun Parasol Crimson comes in a 10-inch hanging basket or a 6-inch pot with or without a trellis. Either way, the saucer-sized blooms will add some tropical zest to your garden landscape, decks, patios and apartment balconies. Plant these beauties in six to eight hours of sun each day.

Pot up Some History  

For instant garden style, McCoy loves the latest “designer” containers and accessories from Campania International (www.CampaniaInternational.com).  The 2009 Chicago Collection reflects the city’s prairie style and art deco traditions with clean lines and minimal design. If you appreciate historical craftsmanship, the 18th century Colonial Williamsburg collection contains an array of garden containers, including cast-stone replicas of urns that blend a refined look with a contemporary feel. From window boxes to birdbaths, their accents will add an elegant touch inside or outside your home.

Grow ‘em Right

Start your containers off right with peat-free, organic potting soil. The Organic Mechanics (www.organicmechanicsoil.com) “Container Blend” is made of 100 percent organic materials from recycled agricultural waste products. With this rich potting mix, you’ll water less but your container plants will flower more and look greener. Plus the nutrient-rich product is reusable, a real cost benefit for gardeners. Perfect for all your containers, hanging baskets and window boxes, it is available this spring in Mid-Atlantic garden centers and Whole Foods stores.

Go Native, Go Local

Be a star in the garden this spring with American Beauties native plants (www.ABNativePlants.com), and the wildlife will thank you for providing food and shelter. Plus you’ll be making a contribution to the National Wildlife Federation Backyard Habitat program. But don’t get these natives confused with roadside “wild” flowers. These shrubs, trees, vines, grasses and perennials were hand-picked for their beauty, and their minimal need for fertilizer, water and pest control. The newest is “Iron Butterfly” Vernonia lettermannii, from Dr. Alan Armitage. This brilliant purple ironweed attracts butterflies in a wide range of soils and conditions.

Tickled Pink  

This first-ever pink blueberry -- “Pink Lemonade” -- is a sweet new introduction from Briggs Nursery (www.BriggsNursery.com), and one of the most exciting new plants McCoy has seen in years. The pink blueberry bush provides delicious fruit rich in antioxidants plus four seasons of color -- white flowers in spring, bright pink fruit in summer, great fall color and finally dusky auburn stems in winter. Growing about five feet around, this ornamental shrub looks great as a hedge border or stand-alone shrub with the added benefit of tasting great in cereal and pies, or to feed the wildlife.

Drowning With Love

Did you know that the No. 1 reason indoor plants die is people love them so much they over water them? That’s why McCoy loves the WaterStik -- a no-brainer watering system that tells you when to water and when not to. Just insert the WaterStik into the container, and it blinks to tell you if it needs more water, needs you to stop watering or anything in between. For this and other state-of-the-art plant irrigation systems, visit: www.Waterstik.com.

Courtesy of ARAcontent

Monday, January 12th, 2009, I spent some time previewing properties. For me, this is a fairly fast process, as I will focus on a fairly narrow price range, which in this case was freehold properties up to $270,000. It took my assistant and I an average of 6 minutes per house, including driving time etc. When I am previewing properties, I'm looking for finishes, upgrades, and value for money. I make a few quick notes on the MLS printout, and then give the property a rating out of 10. I am fairly tough on these properties, as I am looking to find the Best Buys for my clients. I look at the properties from an investor's point of view, so that makes me even more demanding of them.

One thing that was clear to me in this round of inspections is that there are some really great buys to be had in this price range. There are some houses out there with very high-quality finishes that show extremely well, and so I'm left wondering why some are languishing on the market for months.

I've decided that we can partially look to the media for this; all they ever talk about is doom and gloom in the housing market, yet these same homes would have been selling at $295,000 and up to $310,000 just 4 to 6 months ago. They are great buys! But we don't hear about that.

I think another problem is that mortgages are much tougher to get these days. However, a great mortgage broker can certainly get most people into a home. Why are so many people relying on their bank still?

I think another issue is that too many agents have bought into the doom and gloom scenario. Great agents will tell you that the market is always great, because they know that different markets favour different types of buyers and sellers.

So, to borrow from Gary Keller, "there's a reason they call this a Buyer's Market!"

I'll be releasing a new video in the next couple of days, giving exact cost details for a couple of sample properties in this price range, including monthly carrying costs and potential positive cash flow amount. Stay tuned for that.

I originally read this post on ActiveRain, a real estate blog, and immediately contacted the author, Lane Bailey, for permission to 'Canadianize' it and give a link back to his site. I like the ideas in this post. Lane's site is here.

Ok, I have written about it before, but it is time again to talk about why "I bought it for 20% under list" means absolutely NOTHING in the world of real estate.  

This is a common misconception... but still a misconception.  As an agent, I hear buyers (investors or people looking for a family home) talk about how they only want to pay X% of the list price.  Their fear is that if they are paying more than X%, they might be paying too much. 

It doesn't matter.

For some, X=70, for others it is 90.  But... it still doesn't matter. Let me explain...

Imagine if you will that you are in the market for a nice car... to drive.  I happen to be selling this driveway art Jeepster.  It is listed for $45,989.00.  But I'm willing to make a serious deal.  I will sell it to you for half.  So, for $22,994.50 you can own this pretty gem.  It is one of a kind...  And it is 50% off. 

Ok, you decide that maybe you should look around.  Maybe there is another good deal out there.  And then you run across a nice Pontiac G8GT.  It looks nice and everyting, but the dealer is holding firm on their price.  Despite the fact that there are 4 on the lot that look exactly the same, they are convinced that they can get $34,090... which is within "dinner" of the full list price.  

Obviously this is a no brainer, right?  Choice "A" is rare, heavily discounted and cheaper.  Why would anyone spend another $11k+?

Right?

Hold up...  I'm obviously not being serious... and the example is extremely over the top.  But the basic premise still holds true.  List price isn't a measure of actual value.  List price is just a number.  Sure, it is a number that was reached based on the professional advice of a real estate agent, maybe an appraiser and the seller.  Right? 

Sorry, but...

Right now in Milton, ON, about 1 in 8 homes listed ends up selling within the first 4 months, at which point the seller is usually tired of it all and gives up.  That's right, there are EIGHT times as many homes coming on the market as there are getting sold out of the market (in fact, less than 5% of the homes available are sold in any given week).  The rest languish, are withdrawn or expire. Many of them are nice homes.  But here is the problem... they aren't good deals. 

Here are some examples:

• A bank owned property that needed $50,000 worth of work to make it average for the neighborhood... but it was priced about $30,000 below homes that were ready to go. 
• A property from an over-leveraged private seller that was priced $50,000 over the neighborhood comps, because that was what he needed to get in order to retire his debt. 
• A property that the seller is "testing" on the market.  They don't really need to sell, but "if they get their price" they would love to buy another home. 

How many properties like this have we seen?  In the case of the first one, a low-ball might get the property... but for the rest it would be pretty fruitless. 

On the other side of the equation:

• A bank owned property that is priced $30,000 BELOW neighborhood comps... needs NOTHING to be ready to go.  The bank knows that they need to price it astoundingly if they want to get it sold fast. 
• A property that belongs to an estate.  The previous owner had a paid off mortgage, and the heirs want it gone because they "want their money." 

Now, every once in a while these kinds of sellers will price it high because "they want negotiating room"... but it is MUCH more likely that they will price it to grab the buyers attention.  That means there isn't 20% to take out of it. 

The point is simple...

Many of us agents... as well as our clients... get caught up in the idea that there is a percentage off of the list price that can make the property a "good deal".  But, it just isn't the case.  The reality is that there are properties that are cheap... and lousy deals.  there are properties that are not cheap... and are great deals.  There are properties that are bargains at full price, and there are some that would be a rip-off at half price. 

Final example...  There are homes being sold in Detroit and Cleveland for as little as $500.  in some cases these are killer deals and the banks are perfectly willing to lose money just to make them go away.  In other cases they are over-priced.  A relative just looked at one of these homes and what he found was that the $500 property needed $40,000 in reapirs and when he was done he might be able to rent it for enough to cover the mortgage... but selling it would leave him upside-down for at least as long as it takes that market to come back... decent homes are selling for $30,000 on the same block. 

List price isn't directly tied to value, just like the truth isn't directly tied to politicians.

When they say enough, something is bound to turn out to be true.

I'm curious, what gives with the media these days? The latest things I've been reading and hearing are full of more doom and gloom about the real estate market in Southern Ontario.

Well, there's a problem with this!

First off, the media operates on the scare principles, which we are all aware of. Good news doesn't sell, right? I can live with that; it's why I don't pay much attention to anything they have to say about my chosen profession. What really frosts me, though, is the narrow perspective they take on the housing market.

Sure, as a seller right now, it may not be the best time to put your house up for sale if you just want to see how much you can get for it. But houses are still selling, often with multiple offers, if they have been handled by the right professional Realtor in the first place.

And what about the other side of the transaction, the buyer? Surely it must be a good time to be buying right now? Well, I sort of get the impression that the media thinks you should wait. Maybe prices will go down a couple of thousand dollars more. Well, maybe they will, but maybe they'll go up a few thousand dollars too.

And what about the investor market? As mortgage qualifications get more and more strict, more and more people are having to turn to renting. This has had a strong influence on rents, and has also created lots of interest from first-time investors. Why leave equity sitting in the bank when a tenant will pay your mortgage for you?

Nope, I'm sorry, Mr. Media, conversations with agents clear across the GTA have me convinced that this is an excellent real estate market, no doubt about it.

If you're interested in investing in real estate, whether first-timer or seasoned investor, visit http://MREISeminar.ca and find out when our next Millionaire Real Estate Investor Seminar is.