Real Estate Information Archive

Seller's Market...Balanced Market...Buyer's Market??? The Toronto Real Estate Board reports the market is slowly shifting towards "balance" after several years of favouring sellers.

Hogwash! With inventory up 28% over June of 2007 and sales off 15% from the same period, we are in a Buyer's Market, just to be real about it. Seller's must compete ever so aggressively for a buyer that is fewer in numbers. That said, good homes that are priced right still sell, usually fairly quickly.

Resale prices are running 3% to 4% higher than last year and the total volume of sales in Durham Region for June was 967 units, still the 4th best June on record. When comparing resale numbers to June of 2007 keep in mind that 2007 was a record breaking year and it would be practically impossible to maintain that pace year after year.

In Metro Toronto sales are down 18% from June of 2007 and across the 905 sales are also down approximately 18%.

Advise: If you need to sell, price it right and present it right. If you need to Buy, do your homework on price and negotiate hard.

If you are doing neither, enjoy the summer!

The Real Estate market, like many other sectors such as manufacturing and exports, has taken it's share of bumps and bruises this year, yet over the past 30 days we have sold 3 homes over the listing price with multiple offers. They were:

Whitby - $9.000.00 over asking price

Toronto - $52,000.00 over asking price

Orono - $3,100.00 over asking price

That's how goofy real estate can be!

Real Estate values and demand are a very, localized affair. As a listing agent one gauges the local market, price range of the property, condition of the property and most importantly, the amount of competition for similar homes nearby. It's ironic that with negative news stories constantly on the tube, some Home Sellers are having very good experiences with the sale of their homes!

What separates a bad experience from a good one, in my opinion? Proper pricing, knowing your product and knowing the competition. Pricing is the most important factor in a successful home sale.

One thing I love about real estate is that everyone is absolutely interested in what the market is doing, both when it's up and/or down. I appreciate the fact housing stats are of such interest. Often, however, the stats and media clips don't tell the whole story and you can often get conflicting opinions...ask 10 people and get 10 different answers!

Are sales down so far this year? Yes! But...2007 was a record breaking year and we would be hard put to maintain that pace, so I find the short media clips often don't express the full perspective.

In our 905 Region, sales in May were down by 9% but up 4% from 2006! That's not exactly a market crash. Also important to note, the average price was up 7% from the same time-frame in May, 2007.

Some areas actually experienced an increase in activity, driven by supply and demand. And yes, we have had a couple multiple offer situations recently, even in the higher end homes. We do have increased inventory...up 11% compared to a year ago. From my perspective, this is a good thing. It results in more choice for home buyers and has a postivive effect on the quality of available listings. In this balanced market, home-sellers have to be very concious of their asking price. The appraisal skill sets of the Realtor are extremely important to the potential Seller.

And one last statistic...my team had a 46% increase in booked business as of the end of the first quarter this year over the same period last year. We thank you all!

POWER OF SALE:

Most consumers think "Power of Sale" means a cheap sale, under market value. Real Estate agents use the term to attract business to their web sites, offering extensive lists of power of sale properties and the buyer's eyes light up with quick, get rich visions.

The fact is, the Bank Act in Canada mandates the Banks must get "fair market value" for any homes that are repossessed. They cannot simply sell the house for what is owing on it. With most power of sale properties, there is very little equity to begin with, the result of 100% to 105% financing in many cases.

In addition, these homes are often in need of repair, which adds to the purchase price. Typically, the bank lists the home through a real estate agent at market value. The home will sit for 30 to 50 days before the first price reduction. This reduction usually causes some activity and the home may sell. If not, it sits for another month at least before the next reduction. By following this strategy, the Bank ensures that it cannot be held liable for failing to try and get the mortgagor fair market value for the home. It's a bit of a dance.

Even if you buy the home after the 1st or 2nd price reduction, the property usually needs repairs. This would bring your investment back up to "market value"...hardly a "deal" if you plan to re-sell it and pay real estate commissions and legal fees.

Don't forget, when looking for deals on the multiple listing service you are actually searching the retail market for good buys. This is much easier said than done and is not the best way to find bargains. However, I don't think a real estate agent would ever tell you that! We get a lot of "leads" from folks looking for these type of purchases.

To be fair, you can occasionally find a power of sale property that makes sense from a financial perspective, but it's not as easy as you may think.

I'd love to hear your comments on this topic.