REDISCOVER REAL ESTATE

BUYERS: HITTING THE SNOOZE BUTTON TOO OFTEN?

Whether you are an active first-time home buyer or a seasoned investor, you've probably noticed that house prices have skyrocketed, especially in the last couple of weeks as we push into the fall market!

It seems like many first-time home buyers have had to give up their dream of buying a single family home and are being pushed into the condo market. Many are now focusing on multiple family homes or have moved outside of their preferred area and even to the suburbs to make it affordable to own, but for those buyers for whom living downtown is the only option, a good sized condo seems to be the next resolution.

My recently sold listing (a mid-sized condo-loft in King West Village) was a good indicator. My seller and I were amazed with the level of traction and showings we had not to mention how busy we were on offer night. When a market is moving as quickly as the Toronto real estate market with house prices going up as rapidly, buyers have to be more diligent with their house search and become more sensitive to the passing of time because each month that goes by will see houses costing tens of thousands of dollars more.

Here's a list of a few short-sighted mistakes some buyers make that could lessen your chances of buying in this fast-rising market:

BUYERS WAITING FOR THE MARKET TO CRASH: 
Two words:  SUPPLY & DEMAND.  It's the simplest rule of market economics and it applies to Toronto's real estate market. The population keeps growing, and people have to live somewhere. There's little room to build more single-family houses to increase the supply. The demand from families who want to live in the city will remain high.  The number of new listings on the market continues to be outstripped by the number of buyers.

As for Toronto's condo market, it's a myth that it's oversupplied: the inventory of unsold condos is shrinking, and with first-time buyers nearly priced-out of the house market, the demand for condos will continue to increase. Usually when the market's slowing down and prices fall, you can see signs of that well ahead of time. When you look at the momentum in Toronto's market, it's not going in that direction. I just don’t see the market falling at all this fall and in 2017 for that matter.

BUYERS WHO WANT TO BUY ONLY THROUGH A LISTING AGENT:
These are the deal seekers! The buyers are looking for a selling agent that will either give them a commission kickback or priority over other buyers. In this market, that won’t happen! In the end, the listing agent is working for the SELLER, not the buyer. You may eventually find an agent who will do this for you but this strategy will certainly prolong the search and could potentially get you in trouble.

A critical downside is that you don't have an agent focused on finding a property for YOU. The onus is on YOU to find these properties and make contact with the listing agent. In this market, by the time you notice the property for sale and contact the listing agent, it could potentially have sold. If this happens for months, you will eventually be paying much more for your house or condo. This is called: chasing the market.

BUYERS WHO INSIST ON USING A FRIEND OR RELATIVE:
Through all my years of experience I have learned that sometimes, friends or relatives can be over-protective and allow you to miss opportunities.

Furthermore, I have found that some don't take control of the situation because they don't want to hurt your feelings for fear that it may affect your relationship.

BUYERS WHO WORK PART-TIME OR OUTSIDE THE AREA:
Without a doubt, ANY agent who works part-time or is unfamiliar with the area you are looking in will not be current, cannot act in a timely way and will not help you find the right house as quickly as possible in this fast-paced market. In an upward rising market, this strategy will only prolong your purchase costing you much more in the end.

BUYERS WHO ARE TOO PICKY:
Many buyers probably have a lot of items on their wish list but, unless they have unlimited funds, they may have to compromise on some. These compromises might include accepting outdated decor, foregoing that extra bathroom or even making repairs to the home yourself. Of course, there’s always the option of continuing to rent while accumulating enough to be able to afford everything on your list or you can put off buying that bigger house. However bear in mind that if you decide to hold off and the market continues to go up, you may find yourself behind the proverbial eight ball because you will have to pay that much more for your house or condo down the road. Being too picky can end up costing you a great deal of money.

BUYERS WHO LOW BALL OR HAVE TOO MANY CONDITIONS:
If you’re not the only offer on the table and find yourself in a multiple offer situation (bidding war), keep your offer clean. Buyers who insist on putting in conditions or making a low offer when there are other offers on the table just won’t have a chance. When there are many buyers interested in the same house, it will likely sell for a price that is much higher than the list price and without conditions. The buyer who is prepared to pay will up their ante every time their agent tells them there is another registered offer on the property so why would you instruct your agent to present an offer on your behalf when the chance of you procuring this house is very slim, at best? The result of this is higher bench mark prices in an area you wish to buy in and it delays YOUR purchase in a fast-rising market, setting you up to pay more tomorrow.

If you're a frustrated buyer who can relate, connect with me. I’ll help you go through all your options while avoiding these pitfalls along the way. STOP hitting the snooze button because the longer you take to buy, the more it will cost you in the end.

Looking to buy, sell or refinance? Know your options. I can help! Direct line: 416-219-6662

Canadian housing bubble ripe for popping?

The “toxic” housing bubble that has been developing in Canada’s most in-demand cities is ready to pop, according to a finance mogul who has been hailed as the “Canadian Warren Buffett”.

In an annual missive to shareholders, Fairfax Financial Holdings Ltd. founder and CEO Prem Watsa said that the current situation in the Canadian real estate sector has eerily similarities to the condition of the U.S. economy prior to the subprime mortgage crisis that devastated the American finance system nearly a decade ago.
 
“Canadians have accessed their increasing real estate wealth through lines of credit easily available from the banks,” Watsa wrote in the letter, as quoted by Gaurav S. Iyer in his analysis for Profit Confidential.
 
“Sound familiar? This is exactly what happened in the United States before the financial crisis in 2008/2009,” Watsa noted, adding that the current rash of Canadian home owners overvaluing their wealth would lead to significant delinquencies (due to over-borrowing) later down the line.
 
The latest numbers bear our Watsa’s observations: Average home prices in Vancouver are 11 times higher than the average household income, while Toronto residential properties sell for 10 times that average.
 
More optimistic industry players would be wise not to simply dismiss as a Watsa garden-variety doomsayer, as the renowned executive has a record of proven forecasts—including the junk bond collapse, the Chinese real estate bubble, and the current slowdown in Western nations—to  back up his predictions of a meltdown in the near future.

Source: Canadian Real Estate Wealth

Thought this market was done? Think again...

Investors may have written off this busy housing market, but new data suggests those who put their money in it will likely earn major profits.

The Toronto condo market – which many argue has been over-built – recorded a drop in inventory and an increase in demand in the first quarter of this year.

According to Urbanation’s Q1 market results, a total of 5,615 condo units were sold in the GTA during the first quarter, up 32% year-over-year and just shy of the first quarter record of 5,680 set in 2012.

“The inventory shortage experienced for low-rise housing has spread into the high-rise segment," Shaun Hildebrand,
Urbanation’s Senior Vice President. "More and more buyers priced out of the single-family home market are looking for alternatives in the condo market, providing a clear opportunity for new development.”
 
Increased demand and a supply shortage forced unsold inventory to drop 16% year-over-year to 15,587 units. The decrease was even more pronounced in the city of Toronto, which saw its unsold inventory fall by 22%.

Supply also tightened, with 86% of units in development being sold; pre-construction projects were 70% sold; recently completed buildings were 96% sold.

There was also good news for investors looking to sell.

Resale activity increased by 21% year-over-year and total listings declined by 5%.

“In a sign that price pressures are starting to build, projects under construction increased their asking prices for unsold units by 8% from last year to $618 psf, including a 14% jump in the former City of Toronto,” Urbanation said in a release.

Source: Canadian Real Estate Wealth

Looking to buy, sell or refinance? Know your options. I can help! Direct line: 416-219-6662

 

Record home sales for the GTA in April!

In the Greater Toronto Area last month 12,085 homes changed hands, the highest number of transactions recorded through the Toronto Real Estate Board’s multiple listing service in the month of April.

The sales represent a 7.4 per cent increase over the level of activity recorded during the same month in 2015, and gains were spread out across a variety of housing types.

“Demand remained strong for all types of ownership housing,” says Mark McLean, TREB’s president, in a statement.

Sales of detached homes were up 7.2 per cent compared to last April, while townhouse sales rose 3.1 per cent and condo transactions surged 15 per cent.

Semi-detached sales inched 2.1 per cent lower, but they were pulled down by a 10.8 per cent drop in activity in the 416.

Throughout the rest of the GTA, where available housing inventory is more abundant, semi-detached transactions ticked up 2.8 per cent.

In April, the average selling price of a home was $739,082, up 16.2 per cent from 12 months earlier, when it was $636,094.

Jason Mercer, TREB’s market analysis director, expects prices to continue to climb this season.

“As we move into the busiest time of the year, in terms of sales volume, strong competition between buyers will continue to push home prices higher,” says Mercer in a statement.

The average price of a detached home in Toronto proper last month was $1,257,958, which is 18.9 per cent higher than it was one year ago.

In the rest of the GTA, a detached home ran buyers $881,413 on average last month.

Toronto condo apartments cost an average of $436,545 in April, up 7 per cent from the same time in 2015. Over that same period in the rest of the GTA, the price climbed 7.8 per cent to $343,439.

There were 6,155 new Toronto listings added to TREB’s MLS in April, down from the 7,144 added during that period last year.

Meantime, the rest of the GTA saw 10,097 properties listed, shy of the 10,894 added to the MLS last April.

A greater supply of listings would certainly be welcome, but we would need to see a number of consecutive months in which listings growth outpaced sales growth before market conditions become more balanced.

Looking to buy, sell or refinance? Know your options. I can help! Direct line: 416-219-6662

 

MARKET UPDATE FOR THE WEEK ENDING APRIL 22ND, 2016

We hate to add fuel to the flame of an already sizzling real estate market in Toronto, but if you aren`t keeping score on what`s been happening you are missing out on some very valuable information. For the last few years we`ve been keeping better track of the Toronto market than Sportsnet keeps track of Josh Donaldson`s batting average. But averages don`t tell the whole story...that`s where we come in. Giving you the lowdown based on the experiences of over 260 agents working in the 416!

Last week we reported that the number of new listings took a rather substantial dive. Well, this week listings are back up across the city by over 45% to 260 and are more in line with the previous few weeks. This is still well off the pace of last year`s 330 new listings. Not only is there a difference in the number of new listings but the makeup of those listings has changed dramatically too. Consider that we are recording a third fewer new listings in the entry level price range ($400k-$700k) while the number of $3m+ price range homes has increased by more than 25%. Sales have remained strong, lending further proof to the ongoing inventory issues. 75% of all homes sold in the 416 sold at or above the list price. Last year at this time we recorded a nearly identical number of sales yet with more choice there were fewer multiple offers, which aided in keeping the number of sold at or above the asking price to a more reasonable 68%.

Just 16% more suites came on line last week compared to a week earlier bringing availability levels to 637 units. While slightly off last year`s number of 707, the important statistic we are following is the number of sales. Last year we saw 260 sales with nearly 30% being sold at or above the list price. This year we have reached two new records; 318 units sold of which 35.8% sold at or above the list price. 

Looking to buy, sell or refinance? Know your options. I can help! Direct line: 416-219-6662