Durham Region Real Estate Information

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!

I read this article and couldn't help commenting on it's absurdity...

Canada resale home prices fall in April: survey

TORONTO (Reuters) - Repeat sale prices for Canadian homes fell for a fifth straight month in April, dropping 6.7% from the same month a year earlier, a report on Wednesday showed.

The Teranet-National Bank National Composite House Price Index, which measures the rate of change of prices for single-family homes in six metropolitan areas, also showed prices were down 8.9% nationally from the peak hit in August last year.

"On the whole, the report offers a sobering assessment on the state of the Canadian housing market as it suggests that the correction in home prices has continues unabated, and is in fact accelerating," sad Millan Mulrain, economics strategist at TD Securities, in a note.

Mulraine points out, however, that the Teranet-National data is at odds with some other statistics such as the Canadian Real Estate Association's latest figures.

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I shouldn't get upset with media reporting since the experts change their story on a weekly basis and are, in fact, commenting on what is already past. It's non-news yet some of the statements are astounding.

Mr. Mulraine actually stated that the "truth" lies somewhere in the middle of what this Teranet report and the Canadian Real Estate Association reports say however, that fact was nowhere to be found in the Rueters snippet.

Here's some street meat:

Since the beginning of the year my real estate sales team has been involved in 11 multiple offer situations with buyers competing to buy well priced homes at extremely low interest rates.

May statistics, produced from actual sales in the communities I am quoting show that Brooklin, Ontario for instance, posted a 5% increase in average resale price between the period May 2008 and May 2009. Sales in number of units sold increased a whopping 54.5% in that same period. The number of Sales to New Listings Was An Unheard of 77.27% in May vs. 18.52% in December. Doom and gloom??

In Oshawa, one of the hardest hit manufacturing cities in Canada, this same period between May 08 and May 09 produced an increase in resale price of 1.7%. The Average resale price was up 10% from November of 2008.

Just last week The Toronto Real Estate Board reported a 19% increase in the resale homes in the first two weeks of June in the GTA (number of units sold) over the same period last year.

So how, then, does the above report substantiate their statement that the correction in housing prices in Canada continues "unabated" and in fact, is accelerating?

This type of reporting and statistical analysis by people who fail to do their homework properly is completely irresponsible. The economist (that's the first red flag) is reporting a conclusion from a single report that, at best, admits it's at odds with established industry standards. So why report it?

I have no argument with the bleeding obvious: yes, home prices have softened (a good thing), the manufacturing sector has been hard hit and on and on. We know all the stories by now.

At the same time, while unemployment remains high, the number of people working is still well above 90%, interest rates are at all time lows, the first time buyers market and move up buyers markets are so good that it's now getting tough to find inventory in some communities (just ask some of my clients who continue to wait for the right home to come onto the market), housing affordability is the best it's been in a decade and there is growing consensus the worst is over.

I do not see housing price corrections continuing unabated at an accelerating pace. In fact, I was urging buyers to buy back in January through March. That was the best time period to negotiate price. That part is over.

Yes, homes need to be priced well at that means 5% to 6% off last years price, but when those homes are priced right and show well there is often competition for them.

That's the reality from where I sit...but I'm not an economist.

GTA  and Durham Region May Resale Housing Sales Higher Than Last Year

The May resale numbers showed an increase of 2% over May of 2008 to 9,589 units sold, the first annual increase since December 2007.

The average resale price also increased to $395,609, which is down less than 1% compared to the same month last year. Home sales have increased strongly relative to new listings which has helped to boost home prices.

It's easier to see where we've been than where we're going. In looking back we definitely saw a "bottom" in December, January and February.

Unemployment remains high, the manufacturing and auto sector are still be pillaged and there will be on going concerns with regard to deficits and interest rates increasing to finance those deficits, both in Canada and the U.S.

But, for the time being...it's a great time to buy a home. Low interest rates, affordable housing, government incentives. If you're thinking of taking advantage of this superior home buying environment, lock in a pre-approval NOW to secure the peace of mind that you're getting the very best interest rate possible.

The graph below shows two interesting trends. Days on market, how long it's taking on average to sell a home, has dropped dramatically from a peak in January indicating increased buyer activity. Sales to Active Listing ratios have steadily trended higher meaning that sales activity has increased faster than the number of new listings coming onto the market.