Buying in a Sellers’ Market

So, you want to buy a house or condo in today’s sellers’ market?  With interest rates at record lows, and set to stay low for the next few years, the number of active buyers is going to stay high for some time.  In fact, I believe that a number of factors are setting the stage for an extremely busy real estate market in Toronto for 2012 and 2013: ongoing, if modest, economic growth (and yes, blips will appear); a slowly improving job market; those low rates; and – perhaps most importantly – receding fears of a major price correction.

Regular readers will know that I have always believed in the Toronto market.  It is completely different from other markets in Canada, so declines in the ‘national average price’ (whatever that is) mean next to nothing here.  Even during the recession, I urged buyers to act quickly to take advantage of the very brief lull.  Since the recovery, I have argued against the ‘bubble theory’.  Now, BMO has issued a report re-framing their minor concerns as a ‘balloon’ that may deflate slightly over time.  While caution is always warranted, I think that ‘head for the hills’ fear is behind us.  That is going to draw more buyers into the market.

For you first-time buyers (and those of you who haven’t done this in a while), there’s lots that you need to know – not just about the market, but about the process.  I provide all of my buyers with a comprehensive, custom Home Buyer Guide.  We’re not talking rocket science here, but almost every purchase or sale has something unique about it.  Knowing the basics will help you to prepare yourself for your experience.  The following is by no means a comprehensive list; rather, it’s sort of a “Top 5″ – or better yet, a “First 5″ things you should know (updated from a previous post):

· Be an educated Buyer. Learn as much as you can about the market before you buy.  I’m happy to take out all of my clients to start looking at houses early on in the process.  If you seriously want to buy, it’s never too soon to start getting educated about market conditions, what your money will get you, neighbourhood characteristics, etc.  On that note, be honest and open with your Realtor®!  I work for you and can best help you if I have a good understanding of your needs.  Once I know what you are looking for, my job is to be the objective guide in the process to ensure your needs and interests are met and protected.  (I.e. I’ll be better able to show you  houses that interest you.)

· Get pre-approved for your mortgage as soon as possible.  This helps you to determine your budget, and locks in today’s best rate for you.  I will help you connect with a mortgage professional if necessary.

· Act quickly!  If you want to see a listing call me right away and book an appointment.  Most well-marketed houses and condos will sell within a week or two, so there most often won’t be time to dilly-dally.

· Accept that it’s a ‘seller’s market’ and act accordingly.  That means be prepared to make an offer on Offer Day (financing lined up, home inspection report in hand).  Chances are there will be competition on most well priced, well prepared listings this year.  We’ll look at comparable sales and determine a reasonable valuation for the house/condo.  The rest is left somewhat to ‘fate’, and will depend upon your desires vis-a-vis other bidders, but if you do your best you have a decent chance of success.  (This is a complicated topic, and we will spend plenty of time talking about it throughout your search.)

· Plan to stay in your home a minimum of two years to ‘break even’, five years to build a decent amount of equity.  This may require sitting down with a partner to plot out a viable plan – just to make sure that the move makes sense.  The bottom line is that you shouldn’t expect to make money in less than two years.

There you have it: five basic principles to get you started on your new home search.  Be sure to re-visit my blog for more tips – and please do contact me if you want more help!  Call me any time.

RE/MAX Hallmark Realty Ltd Announces New Leslieville Office!

RE/MAX Hallmark Realty Ltd is expanding into the heart of Leslieville!  With the recent purchase of 785 Queen St East, Hallmark will be building upon our already significant market presence in one of Toronto’s most interesting and exciting neighbourhoods.  The new office, which is scheduled to open in May, 2012, will serve the growth of the company, Realtors already in the organization and the needs of our many clients in and around the area.

For those of you who have followed my own recent journey away from, and then back to, RE/MAX Hallmark, this will make sense: Hallmark just has so much to offer – both to me and to my clients.  The new office will give us a physical base in Leslieville from which to operate – just as we have had with Hallmark’s many other offices around the city (including Riverdale, Don Mills, Mt Pleasant, College St, etc).  Plus, it will draw more buyers and sellers to the brokerage, adding to the pool of opportunities for all involved.

All in all, this is just another great reason to work with RE/MAX Hallmark.  Call me if you have any questions or comments, and let’s get to work on your real estate goals!

 

Thank you for your support!

Wow!  It has been a busy couple of weeks since I announced my move back to RE/MAX Hallmark.  In that time, I have been absolutely inundated with excited and supportive calls and emails from my clients, colleagues, friends and family.  The message is overwhelming: great move!  Honestly, I thought that a few people would be at least a bit skeptical, but not one person has indicated any doubts (quite the contrary).  All the positive feedback has been great.  I want to thank all of you for your support.  As you know, I am very excited, and it’s really great to see that so many of you are, too!

The reaction at RE/MAX Hallmark has been fantastic, too.  From Broker/Owners Debra Bain and Ken Mclachlan right through the whole organization, it has been a warm ‘welcome home!’  It’s great to be back.  With seven locations around Toronto (plus two more in Cottage Country), RE/MAX Hallmark has a market presence all across the city, which allows me to better represent and serve my clients.  I couldn’t be happier!

I expect 2012 to be another busy year in the Toronto real estate market.  (I’ll blog more on that in the coming weeks.)  If you are planning to buy or sell, call me today and let’s start laying the groundwork.

Have a great holiday season!

I’m back at RE/MAX Hallmark Realty Ltd!

A few months ago, the team I was working with broke away from RE/MAX Hallmark Realty to become an independent Brokerage.  They are such great people, and it was an exciting time, so I happily accompanied them.  However, now that the dust has settled I have realized that I can much better represent my clients – both buyers and sellers – with the RE/MAX brand behind us.  Although there are some advantages to working with a highly localized boutique brokerage, I don’t feel that it’s the best way to represent a wide range of people in a city as large and diverse as Toronto.  That’s why I have decided to go ‘home’ to Hallmark!

The RE/MAX brand is world famous, but more importantly it is the king of the market in Toronto.  I’m really looking forward to re-connecting with many of my former colleagues, and to getting plugged back in to one of the biggest (and best!) real estate networks available to buyers and sellers – not just in Toronto, but Canada-wide and, when necessary, world wide.

This time around I’ll be returning to my roots as a solo agent – no more teams for me!  This will give me the independence to cultivate marketing strategies that are right for my sellers, while leaving me with the time and flexibility to better service buyers.  Having seen and experienced the trials and miscommunications of team selling, I’m very relieved to be getting back to dealing directly – and singly – with all of my clients.

If we have done business in the past, I’ll be getting in touch with you over the next while to further discuss the change, and to re-connect with you personally.  If we haven’t yet done business, please don’t hesitate to contact me any time.  I’m here to help!

Toronto Real Estate Market Stayed Strong Through November

The Toronto (i.e. GTA) real estate market had another strong month in November.  Sales volume was up 11% to 7,092 units sold, and new listings for the month were up 14% to 9,786.  However, that latter number masks an over-all decline in the number of active listings (15,551, down from 18,305 last year).  Although the market did provide more supply relative to the same month last year, the general supply challenge remains in place.

Not surprisingly, the average sale price was also up. It is now $480,421, an increase of almost 10 per cent over the average in November 2010 of $437,494.  The ever-rising price of houses in the GTA is a reflection of high demand and attractive interest rates.  I’ll point out that I don’t credit everything to low interest rates; if Toronto wasn’t a great place to live, we wouldn’t have so many eager buyers, no matter how low interest rates went.

Understandably, the question of affordability comes up in conversation from time to time.  Although I don’t usually quote directly from the TREB Market Watch report (which is the key source of my numbers), I found this comment to be particularly relevant, given how often we hear about ‘affordability’:

“Despite strong price growth this year, the housing market remains affordable in the GTA,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.  “The correct method of assessing affordability is to consider the share of the average household’s income that is dedicated to mortgage principal and interest, property taxes and utilities.  Currently, this share remains in line with generally accepted lending guidelines.  Given this positive affordability picture, average price growth is forecast to continue in 2012, albeit at a more moderate pace.”

So, prices are rising, but they remain affordable for the majority of people.  Of course, some people ‘blame’ Realtors for rising prices.  That’s reminiscent of the old ‘shoot the messenger’ folly, but since we are active participants in the market, I suppose that comes with the territory.  Realtors don’t set the market; like water, it finds its own level.  We certainly work to fulfill our obligation to get our sellers the most money possible for their homes; that’s the job.  On the buyers’ side, we work within their budgets, and strive to follow their instructions and find them a great new home.  Again, that’s the job – to sell houses.  Ultimately, a rising market only helps Realtors as long as it remains rational, which I think it still is.

I’ll finish with a reminder that there are properties out there at every price level.  As with everything else, you get what you pay for.  However, if you are willing to make a trade-off regarding location, parking or size, you might be pleasantly surprised at the compromise.  Feel free to get in touch with me at any time to review your options.

Beautiful loft conversion: 201-326 Carlaw Ave, $499,000

This authentic loft conversion is move-in ready.  At approximately 1180 square feet, it features newly laid hardwood floors, granite counters, all new appliances, plenty of windows (unique to the end units) and a roof-top deck!  (Parking is available for purchase separately.)

If you are in the market for a loft, don’t miss this one!  Call me today to book an appointment to see it.

-Simon

October 2011 sales volume up 17.5%

Sales activity in the Toronto real estate market continues to impress.  The number of sales (7,642) increased 17.5% over October 2010 (6,504), which is in part thanks to new listings being up 18.1%.  Overall, however, the increase in sales caused a slight dip (-2.8%) in the number of available listings.  Thanks to supply and demand, it remains a seller’s market.

The healthy sales pace is a reflection of the on-going demand for housing in Toronto, a topic that I have discussed more than once before.  I’ll just take a moment to remind readers that, as usual, sellers need to properly prepare their home for sale (de-clutter, clean, paint as necessary, etc.) and list at a fair price.  A ‘hot’ market does not mean that somebody will over-pay for your house.  For their part, buyers must be prepared with a mortgage pre-approval, a ready deposit (accessible within 24 hours to meet TREB guidelines), and a willingness to move quickly on an attractive property.  There are lots of other buyers out there – they are your competition!

Despite the apparent resilience of the Toronto market, I still hear people say that they want to wait for a recession before they buy.  It’s worth noting that, although a very small number of folks made great buys during the last dip (as I encouraged my buyers to do), not many people can pull that off.  TREB statistics for the GTA show that in the year before the recession (2006-2007) the average sale price increased by about 6.9%.  Recession fears hit Canada in early-mid 2008, and by late-2008 the real estate market was hitting its funk.  Nonetheless, from 2007 to 2008 the average price managed a 0.8% increase.  Then, as the recovery took hold in early 2009 we saw a year-over-year increase of 4.2%, which stretched to a 9% increase 2009-2010.  So far this  year, we are around that +8% range.

As I noted at the time, aside from a brief (maybe 4 to 6 months) period in very late 2008 through about early spring 2009, there wasn’t much of a buying opportunity in the Toronto real estate market.  If we are going to see another recession (fears seem to ebb and flow from one day to the next) it’s not going to be as bad as the relatively modest one Canada experienced a couple of years ago.  While I’m sure some smart and lucky folks will pull off a great buy or two, I really don’t believe that many folks will be able to time their purchase to precisely the right moment.  That’s why I say (as I did recently via my Twitter account): Don’t wait to buy real estate.  Buy real estate and wait.

Probably the best way to buy real estate is to get out there and start looking for a good fit.  When you find it, buy it.  No tricks, no games, no luck, just smart buying.  Call or email me when you are ready to get active in the Toronto real estate market!

New Listing – 164 Neville Park Blvd now SOLD!!

This beautiful three storey home sits on one of the Beach’s nicest streets – a rare cul-de-sac.  Backing on to a reverse ravine, this home oozes character and charm.  Gleaming hardwood floors, beautiful wood trim, a fireplace and coffered ceilings contribute to that ‘Beach’ feeling.  With 4+1 bedrooms, a family room, a walk-out to the back deck and parking, this home offers size and flexibility for any family.  Call me to book an appointment to see it before it sells!

Mid-October Market Update

The Toronto Real Estate market continues to cook along.  The pace of sales (i.e. volume) was up 25% in September, which is a reflection of a healthy pool of buyers with confidence in the Toronto market.  Supported by only a 15% increase in the number of listings, tight supply remains a challenge.  As a result, the year-over-year prices increase almost hit +10%.

Today’s announcement by the Bank of Canada that it will likely leave the Prime Rate at 1% for the next few quarters paves the way for continued steady growth.  Despite global financial and economic turmoil, Canada continues to experience moderate GDP growth, wage increases and consistently improving real estate values.  Toronto, being the unique place that it is, can be counted on to show solid returns on your real estate investments.

I’ll also comment on the decision last week by the Board of the Toronto Community Housing Corporation to sell up to 700 single-family houses, of which about 70 are currently vacant.  (Having represented them on the sale of five of their vacant properties over the last few months, I feel informed enough to have an opinion.)  The vacant houses that I have seen are in terrible states of disrepair.  Selling them not only generates serious money, it also removes negative assets – i.e. they are costing money, not generating money.  I expect that at the end of the day the net benefit to the TCH will be a lot higher than currently projected.

I can also say with plenty of confidence that the folks at TCH are dedicated to improving the health of the Corporation, thus the quality of life of their tenants (all of whom will get help from TCH to find alternative housing, within the system if necessary).  It’s win-win for all involved.

From a strictly real estate perspective, the arrival on the market of those 70 vacant houses will be greeted with great excitement.  I often work with buyers looking for a fixer-upper; such houses are not as common as one might think.  That’s a partial explanation for why we got multiple offers on all 5 houses that we sold!  (Other parts would be location, plus the healthy state of the market in general.)  The houses currently occupied may find investors, or the tenants may be given the opportunity to move.  Either way, the impact on the market will be positive.

Also, the new owners will have to spend hundreds of thousands of dollars to improve each of those houses.  The spin-off economic activity, adding up to millions of dollars, will be significant.  Think also of the benefit to the streets and neighbourhoods where these basically abandoned houses sit!  Again, win-win.

I don’t know when the next batch of houses (likely some on Crawford St in the West End) will hit the market, and I don’t know which Brokerage will represent TCH, but stay tuned to find out more!  Always feel free to get in touch with me to talk about real estate!

138 Maclean Ave – SOLD!!

This gorgeous Tudor style home is a classic Beach type.  Renovated with four bedrooms and two bathrooms, this house is freshly painted with re-finished hardwood floors.  The house is just steps from Queen St E, and less than a five minute walk from the beach and boardwalk.  Located in the Williamson Rd and and Glen Ames school districts, 138 Maclean Ave is also just a few minutes from parks, shops, restaurants and the TTC.

If you are in the market for a great 4 bedroom home in the Beach, call me today to book a private viewing!