Durham Region Real Estate Information

This article is a reprint of a recent Re/Max press release. I'm offering a quick analysis just following the article... 

Housing performance expected to accelerate in 2010, as economic stability returns to Canadian markets, says RE/MAX

Fifteen markets to set new records for average price in 2009

In the midst of one of the most tumultuous economic periods in recent history, residential real estate has proven to be a safe harbour, with sales and average price expected to post gains in most major Canadian cities in 2009, according to a report released by RE/MAX.

The RE/MAX Housing Market Outlook for 2010 examined residential real estate trends in 23 markets.  The report found that sales are forecast to recover in almost all major centres by year-end 2009, led by an anticipated 45 per cent increase in Greater Vancouver. Two markets --Ottawa and Quebec City -- are expected to hit historic highs in the number of homes sold.  Average price should post new records in 65 per cent of markets surveyed this year.   As economic performance ramps up across the country, so too will residential real estate.  Eighty-three per cent of markets (19/23) are expecting sales to increase over 2009 levels while housing values are forecast to escalate in 91 per cent (21/23) of Canadian centres in 2010.  The remaining markets will match 2009 levels.

Approximately 465,000 homes are expected to change hands nationally in 2009, a seven per cent increase over one year ago.  Canadian housing values are forecast to close the year at $318,000, up five per cent from $303,594 in 2008. By year-end 2010, the number of homes sold is predicted to climb another two per cent to 475,000 units.  The average price of a home is also expected to experience an uptick, rising two per cent to $325,000 – the highest level in Canadian history.

2009 was, without question, the year of the house.  Real estate not only defied industry and analysts’ predictions in 2009—it’s performance went well beyond the realm of expectation by boosting consumer confidence levels and ultimately kick starting the national economic engine.  While low interest rates were a principle factor driving home buying activity, no one can discount the value that Canadians place in owning a home.

The upswing in residential housing values speaks volumes.  By year-end 2009, average price is expected to increase in 15 of the 23 markets surveyed, led by St. John’s, NF (15 per cent); Quebec City, QC (eight per cent); Regina, SK (seven per cent); Saint John, NB (six per cent); and Winnipeg, MB, Ottawa, ON, and Greater Toronto, ON (five per cent). Other noteworthy developments include shattered price benchmarks in Greater Vancouver at $600,000; Toronto at $400,000; Ottawa at $300,000; and Quebec City and St. John’s at $200,000.   St. John’s will once again lead the country in terms of percentage increase in average price in 2010 with a projected upswing of 11 per cent.  Quebec City and Regina are expected to experience escalation of six per cent, while Calgary, Kelowna, and Victoria are forecast to climb five per cent next year.  Victoria, Kelowna, Edmonton and Calgary – all down marginally in 2009 – are all positioned for growth in 2010.

Some of the greatest percentage gains were reported in Western Canadian markets in 2009– demonstrating the higher the peak, the lower the valley.   That said, the recession barely registered on year-over-year activity in most major centres.  The economic fundamentals in place going forward ideally position the ten provinces, and the sector overall, for further growth.

The major frontrunners in terms of unit sales appreciation in 2010, are all located in Western Canada , including Kelowna with an anticipated upswing of 10 per cent in housing sales; Calgary with an expected increase of eight per cent: and Victoria, which  rounds out the top three with a seven per cent hike forecast for unit sales. 

A number of factors will help prop up activity going forward, including improved economic conditions, continued low interest rates, rising consumer confidence and solid capital spending which will buoy employment.  Inventory will once again assume the wildcard role, with any decline placing upward pressure on prices.  Multiple offers will remain the exception in most markets, more commonplace on quality entry-level product which remains in tight supply. 

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Analysis:

 Forget about 2010 forecasts. The market has been exceptionally strong since June of 2009. Demand continues to be high. Sales year to date are 11% higher than for the same period in 2008.

What is the key to getting the highest price? The answers to this question continue to elude many home-sellers. With continued low interest rates, strong immigration to the Durham Region and stable house prices the current and upcoming periods will remain among the best opportunities for the first time homebuyer, move-up buyers and investors in real estate.

In the first two weeks of November, Greater Toronto

REALTORS

® reported 3,666 sales – up 84 per cent compared to the first two weeks of November 2008. The average price for these transactions was up 10 per cent year-over-year to $415,066.

Increased interest in ownership housing has been widespread throughout the GTA and across all housing types,” said Toronto Real Estate Board President Tom Lebour.

“However, it is important to point out that we are now making comparisons to the fall of 2008 when we experienced a marked decline in sales and average price”

Year-to-date sales, at 78,233 are up 11 per cent compared to 2008. Average price, at $393,180, is up by three per cent. “Sales and average price in the GTA this winter will be well above levels reported throughout the fourth quarter of 2008 and the first quarter of 2009," according to Jason Mercer, TREB's Senior Manager of Market Analysis.

It's anticipated continued low interest rates will keep demand high through the first half of 2010. The implementation of the HST Tax is expected to add approximately $1,500.00 to the cost of purchasing the average resale home, to take effect July, 2010.

As you've probably noticed, some bank owned homes are real values, while others are less so.

It's commonly assumed that bank-owned homes are a real steal and one should run out blindly and buy it, but that's not always the case.  Although it's true that banks are motivated to get these homes off their books, they treat each transaction like a business and do their best to minimize their losses. 

Additionally, under the Canadian Bank Act the Lender is obligated to attempt to get fair market value for the property.

When considering buying a bank-owned home, you need to be as prudent as you would be in any big purchase.  Be sure to check comparable homes for sale and make sure you are getting a good buy, taking any costs to remediate into consideration.

We run comparable reports for our buyers before they make an offer, whether it's a typical sale or a distress sale.

I was scouring listings and ran across this one. With interest rates so low I just recently purchased an investment property (my first) so I'm always on the look out. As I read through the fact sheet on this property the numbers looked so good I just had to investigate further.

This property is a Cash Cow. If you can make 100 or 200 dollars positive cash flow per month after principal, interest and taxes...that's considered good on an investment property. I ran a number of scenarios on this property and arrived at a positive monthly cash flow range of an unbelievable $890.00 p/month to $1,277 p/month.

Not only does it provide positive cash flow, it provides a monthly income!

Here's a partial run-down:

The main level apt. is rented at $1,350 monthly. The basement is rented at $950 per month. Total monthly income = $2,300.00

Let's assume you paid full list price of $220,000 rounded (which you wouldn't) and put 5% down. With CMHC insurance fees added in you would be financing  $215,000 on the purchase assuming you bought it a full list price. I make conservative assumptions because this builds in a safety net to your calculations.

Assuming a 5 year mortgage at 4.09% amortized over 25 years your monthly payments with property taxes comes to $1,409, leaving a net profit monthly of $891.00.

At a variable interest rate of 2.85% (and you can do better than this with good credit) with a 35 year amortization the monthly payments with property taxes comes to $1,074, leaving a net profit monthly of $1,226.

Or...you could live in the basement and continue to rent the main floor. You would be living for FREE while someone else pays your mortgage!

I'm surprised this one's still on the market and if I hadn't just purchased a rental I would be making an offer myself.

If you prefer Whitby, a semi-detached unit was just listed at 234,900. It also contains two apartments however it has a legal retrofit certificate.This is worth alot of money as all the conversion costs have already been done to make this both legal and fire safe. Again, the double income makes this a cash cow as well.

If you're thinking of an real estate as an investment just give me a call. We're always on the lookout for good value properties.

August Mid-Month Resale Market Stats for Toronto and Durham Region, Ontario

In the first two weeks of August, the Greater Toronto Realtors reported a 27% increase in sales compared to the first two weeks of August 2008 for a total of 3,832 sales.

The average price for these transactions was up 3% over the same period last year.

Year to date sales for 2009 are up very slightly from 2008 while the average price is down by less than 1/2%.

Clearly, low interest rates and reasonable home prices are having a very, positive effect on the housing market in Canada.

A Hard Day At The Office in Durham Regions Real Estate Market

Here's what a hard day at the Office looks like. I ordered a red, white and blue balloon from my favourite dollar store but when I wen to pick them up for this Open House, there white one was missing. My friend was out of stock and the only white one he had said "Just Married" on it. Those who know my business know that almost half of our sales involve marital split-ups so I didn't think that would have been a good idea.

Anyway, we carried on with primary colours and had a busy Open House. Actually, even though this chews up a Sunday, we enjoy meeting all the folks who come out to our Open Houses. Some weekends we've run 3 or 4 at a time. With the up and down economy, Open Houses have been doing very well...almost making a come-back as a great way to meet people and answer questions.

And we don't forget the TimBits, either!

"Dear Keith,
 
Some time ago you were kind enough to provide me with some information for an appeal of the property assessment of our house. Mpac had valued our house at $368,000 as of January 1, 2008 although we bought it for $325,000 only 7 months before. I am happy to let you know we have just heard that they have revised their assessment to $335,000.
 
Thank you very much for your help with this.
 
Best wishes,

W.B.

 Hey -

You've got to watch those people! The above email came in this past weekend and it was so gratifying to hear a good news story from one of my past clients. It's also nice to know that we can help with real estate-related issues, not just buying and selling homes.

It proves the point that you've got to pay attention to these assessments or you could be paying the taxman way more than you should...or they deserve. Another client of mine received a substantial reduction in his tax assessment...over $100,000.

The MPAC website has made it very easy for you to compare properties in your neighbourhood if you spend the time to take advantage of it.

Now, if we could just keep the mill rate down!

GTA Resale Housing Market Posts Best June on Record

July 6, 2009 -- In June 2009, Greater Toronto REALTORS® reported a record 10,955 sales, up 27 per cent from June 2008. The seasonally adjusted annual rate of sales in June was 100,700.¹

“The record result in June is testament to the fundamentally sound housing market in the GTA,” said TREB President Tom Lebour. “An increasing number of households have been confident in purchasing a home in the region’s affordable and diverse resale housing market.”

The average price for June transactions was $403,972 – up by two per cent compared to the same month last year.

“The re-emergence of seller’s market conditions has exerted upward pressure on home prices,” explained Jason Mercer, TREB’s Senior Manager of Market Analysis. “Look for sales to remain high relative to listings in the second half of the year. This will keep home prices growing.”

¹Seasonally adjusting TREB MLS® data removes recurring seasonal trends observed each year. For example, MLS® sales are highest in late spring each year and lowest in the winter months. Removing the recurring seasonality, allows for the analysis of a meaningful trend reflecting actual changes in market conditions. By multiplying the monthly seasonally-adjusted figure by 12, creating an annual rate, we can compare how the current month relates to historical annual figures.

Median Price

In June the median price was $345,000, from the $335,250 recorded during June of 2008.

Clearly, the first half of the year heavily favoured home buyers. Demand for homes has increased due to low interest rates and some price softening in the first half of 2009. With less inventory, the market is now leaning more towards Sellers. If inventory continues at current levels and economic fundamentals remain the same or even improve, pressure on prices will gradually increase. While some buyers were waiting for prices to continue their descent, that opportunity may now have passed. Seasonally, July and August have always been some of the best months to purchase a home, from a negotiating point of view and many homes are priced very reasonably. It's still a great time to buy.

What a great day for charity with the Re/Max Yard Sale For The Cure. On May 30th over 40 Re/Max offices (including ours) raised over $90,000 in

just one day in support of breast cancer research and treatment!

Way to go!  We're staying in shape (sort of) for our 5km Run For The Cure in

the Fall in Oshawa and I just might be asking for a small donation!