theOakvilleBuzz.com. Real People | Real Events | Real Estate

Hilary Shantz

Like What You're Reading? Submit Your Email to be Notified of New Articles

Really Simple Syndication

Categories

• Beautiful Bronte Village (1)
• Blogs, Blogging and the Blogosphere (4)
• Books I Read (3)
• Burlington Beat (5)
• Client Stories and Testimonials (9)
• Downtown Oakville (5)
• Fifty-five plus (9)
• First Time Buyers (13)
• Food for Soul and Spirit (12)
• Green Trends (8)
• Halton Real Estate (11)
• Historical Oakville (8)
• Home Maintenance (4)
• Investing in Real Estate (11)
• Latest Real Estate Market News & Stats (7)
• Lighten Up (19)
• Mortgages, Economics, Finance (14)
• North Oakville Development (3)
• Oakville Events (13)
• Oakville Real Estate News (33)
• Oakville Town Planning & Development (9)
• Places to Eat (2)
• Real Estate News (20)
• South East Oakville (6)
• Things to Do in Oakville (6)
• Why Move to Oakville? (13)

Archives

• April 2008
• March 2008
• February 2008
• January 2008
• December 2007
• November 2007
• October 2007
• September 2007
• August 2007

Canadian | RE | Alliance

• Saskatoon's Team Fisher Blog
• Mississauga Real Estate Blog
• Edmonton Real Estate Blog
• Collingwood/Bluemountain Blog
• St. John's Real Estate Blog
• Toronto Real Estate Blog
• Move Smartly Blog
• Vancouver Real Estate Blog

The Buzz Link Partners

 
 

Real Estate Blogs Directory

Today Bank of Canada Governor Cut Key Interest Rate by 1/2%

March 4th, 2008 Categories: First Time Buyers, Investing in Real Estate, Latest Real Estate Market News & Stats, Mortgages, Economics, Finance, Oakville Real Estate News

He said he would and he did.

Today, Mark Carney, the new Governor for the Bank of Canada announced an interest rate cut of 1/2% bringing the key rate to 3.5%.

He also indicated that further cuts will be needed to deal with a U.S. economy that is experiencing a deeper and more prolonged slowdown than previously projected.

First quarter stats show that Canada’s economy is already experiencing some of the spillover effect of subprime woes in the U.S.

The next meeting is scheduled for April 22nd, at which time there may be further cuts.

Meanwhile, also today, Australia’s central bank raised interest rates to a 12-year high in its fight to contain inflationary pressures in a booming economy fueled by Chinese hunger for resources

The increase in Australia was the second in two months and the 12th since 2002. It bucks the trend among other major central banks, which cut rates as the U.S. subprime meltdown hurt global growth.

“This adjustment was made in order to contain and reduce inflation over the medium term,” Glenn Stevens, governor of the Reserve Bank of Australia, said in a statement after raising the cash rate target 25 basis points to 7.25 percent.

NOTE FROM HILARY:  NEED HELP DECIDING ON FINANCING OPTIONS?  I’d be happy to explain things. 

Share This

Authored by Hilary | Discussion: No Comments »

“How exactly does bridge financing work?” asks Claire from Oakville

March 3rd, 2008 Categories: First Time Buyers, Investing in Real Estate, Mortgages, Economics, Finance, Oakville Real Estate News

I was showing homes a few days ago to a nice lady named Claire who asked me a question: “How exactly does a bridge work?”  She had been a senior bank employee and wanted to know how the numbers worked. 

First let me explain why bridge financing may be necessary.

Imagine you’re looking for your next home, and walk into the place of your dreams. The space is tailor-made, the location is perfect, even the price is right. Just one problem: the owner of your dream home has to close the deal within the month, and you can’t sell your current home that quickly. How can you come up with the money to buy the new place, while carrying the old one?

Bridge financing could be your best way to seal the deal. This type of financing is a hefty short-term loan that bridges you over the period when you own and are paying for two homes.

To obtain bridge financing, you have to present your financial institution with two firm offers – one for your current house and one for your next home. You obtain a new mortgage on the new home and carry the two mortgages during the overlap period, before the sale of your current home closes.

Once that happens, you use the proceeds of the sale to pay off the bridge loan, plus interest and costs. Alternatively, you can arrange to repay the bridge loan in six months to a year. This may be useful if you need to save a bit to pay off the bridge in full.

Trouble is, the costs of bridge financing can really add up:

• interest on this type of short-term loan is relatively high, usually the prime rate plus two to five percent.
  Set-up fees can be hundreds of dollars
• worst-case scenario: the deal for your old home falls apart at the last minute. If that home is collateral for the bridge loan, the bank could seize it

The bottom line is you should only consider a bridge loan if you can afford the interest charges and can pay it off in full as soon as possible. With this type of financing, every single extra day can cost you hundreds or even thousands of dollars.

Having said that, if it is for a few days or you can afford it easily, it is a convenient way to deal with closings that don’t match up exactly.

I attended a mortgage financing seminar recently where the speaker gave the following example:

Hope this helps to clarify things.  Best bet is to talk to your REALTOR, bank or mortgage broker before you go out househunting if you think you may want to utilize bridge financing.

CALL HILARY AT 905–599–3311 TO GO LOOKING FOR THAT DREAM HOME! 

Share This

Authored by Hilary | Discussion: No Comments »

“How do I claim the new land transfer tax rebate for first-time buyers?” says Dan from Mississauga

March 3rd, 2008 Categories: First Time Buyers, Mortgages, Economics, Finance, Oakville Real Estate News

I received a call this evening from a gentleman named Dan from Mississauga who had just purchased his first home, a resale. 

Dan called me as he had read my post on the new rebate and had been surprised that his lawyer did not know about it.  He was wanting to know how to go about claiming it.

LET’S REVIEW THE SITUATION:

1)  December 13, 2007, the Ontario government announced a proposed amendment to extend the Land Transfer Tax Refund Program for First-Time Homebuyers to include purchases of resale homes, to a maximum refund of $2000.

2)  But the proposed amendment has not yet been passed by the Legislature and needs to receive Royal Assent to become law.  It is my understanding that this is a “formality” and that it will likely be passed. 

WHAT DO DO BEFORE THE LAW IS PASSED?

1)  Pay the land transfer tax upon registration

2)  Download the form - Ontario Land Transfer Tax Refund Affidavit for First-Time Purchasers of Eligible Homes (Resale)

3) Submit a copy of the registered instrument on which land transfer tax was paid (in the case of electronic registration, include a copy of the docket summary which relates to the transaction along with a copy of the statement of adjustments)

4) Submit a copy of the agreement of purchase and sale (only those agreements of purchase and sale entered into after December 13, 2007 may qualify)

5)  Although eligible first-time buyers of resale homes may apply for the refund once the transaction has closed and the tax has been paid, the ministry would retain the refund requests for processing and would issue refunds after the proposed amendments become law.

6)  Certain conditions apply:

• The purchaser must be at least 18 years of age.
• Application for the refund must be made within 18 months after the date of the conveyance or disposition.
• The purchaser must occupy the home as his or her principal residence within 9 months of the date of closing.
• The purchaser cannot have owned a home or had any ownership interest in a home, anywhere in the world.
• A spouse of the purchaser cannot have owned a home or had any ownership interest in a home, anywhere in the world while he or she was the purchaser’s spouse

For more information consult the Ministry of Revenue website, click here or call:

Tel.: 905 433-6361
Fax: 905 433-5770
1 800 263-7776

Submissions should be mailed to:

Ministry of Revenue
Land Taxes Section
33 King Street West
PO Box 625
Oshawa ON  L1H 8H9

Dan, hope that helps!  Having an extra $2,000 back is nice when buying that first home. To keep abreast of real estate news subscribe now to the Oakville Buzz!

Share This

Authored by Hilary | Discussion: No Comments »

Another Healthy Year Ahead For Canadian Real Estate Say Speakers at Scotiabank Forum

March 1st, 2008 Categories: First Time Buyers, Halton Real Estate, Investing in Real Estate, Latest Real Estate Market News & Stats, Mortgages, Economics, Finance

Scotiabank held a Canadian Real Estate Outlook and Trends Forum 2008 on February 26 last week.  Here are quotes from some of the speakers:

“Our expectations are that balanced conditions will prevail throughout 2008, which will mark a return to a more ‘normal’ environment than the highly skewed sellers market that we have experienced over the better part of this decade.

A stumbling American economy will impact us, slowing growth here at home, yet the solid foundation that supports the contemporary Canadian economy should prevent the housing market here from retracting. 

New flexible financial products, affordable interest rates and increasing choice in the condominium market across Canada, will continue to attract first-time buyers to real estate - even in high-priced markets. We can also expect to see a broadening buyer pool, as emerging high growth market segments such as single female buyers are anticipated to take advantage of the favourable market conditions.” –  Phil Soper, President and CEO Royal LePage

“The Canadian economy is likely to maintain moderate growth momentum this year and next, with the strength of the development boom in the resource-rich regions of the country providing a much needed offset to the increasing drag on our manufacturing centres from the intensifying U.S. slowdown and persistently strong currency.  – Aron Gampel, Vice-President and Deputy Chief Economist, Scotiabank

From a supply perspective, most Canadian markets are still in sellers’ territory, in which prices would be expected to rise faster than inflation.  Yet, some of the hottest markets in recent years, including Edmonton, have become much better balanced due to a flood of new listings. Based on a combination of job growth, housing supply and affordability, among this year’s potential outperformers are Saskatoon, Regina and Winnipeg in the West, Sudbury, Hamilton and Quebec City in Central Canada, and St. John’s to the East. – Adrienne Warren, Senior Economist, Scotiabank

Hilary’s Note: 

The unseasonably cold and snowy weather conditions in Southern Ontario have certainly put a damper on buyers wanting to brave frigid conditions to go house-hunting, while many sellers are waiting for a bit of a thaw before listing.  Any day now we will see more of those FOR SALE and SOLD signs going up!  

Read also:

Canadian Real Estate Market: A Decade in Review 1997–2007

Bank of Canada Governor Confirms Canadian Interest Rates to Be Cut

Share This

Authored by Hilary | Discussion: No Comments »

Was Real Estate a Good Investment 10 Years Ago? You Betcha!/A Review of the Last Decade in Canadian Real Estate

February 29th, 2008 Categories: Investing in Real Estate, Mortgages, Economics, Finance, Real Estate News

ReMax recently published a 26 page review of the last decade in Canadian real estate.

If you are interested in specific cities and regions and what’s been going on, this report provides a good synopsis, shows the statistics and the factors that have been influencing change in local areas.

Not too technical for the layperson to follow.   

The accompanying press release issued by ReMax revealed some facts that you may find interesting:

1.  What factors influenced the growth?

“Never before have we seen such a continuous run up in Canadian real estate. Clearly, strength in all markets has been directly linked to solid growth in local, provincial and national economies. Low interest rates, job security, and consumer confidence have all served to further bolster home-buying activity across the nation.”

“Pent-up demand, population growth, tight inventory levels, and the longest economic expansion since World War II collectively fueled one of the best decades on record for residential real estate in Canada.”

 

2.  How much did prices rise nationally over the decade and annually?

Nationally, average price almost doubled in the 10-year period, rising from $154,606 in 1997 to $307,265 in 2007, for a 7.1 per cent annually compounded rate of return.

(How’s that for a good return on investment?, says Boris)

 

3.  Which city had the highest price increase?

Edmonton, Alberta, which saw a 203 per cent upswing in housing values - or an 11.7 per cent increase annually - with average price rising from $111,587 a decade ago to $338,636 in 2007.

Calgary ranked second second in terms of price appreciation at 189 per cent, Kelowna at 179 per cent, Saskatoon at 137 per cent, Winnipeg at 118 per cent, Victoria at 114 per cent and Greater Vancouver at 99 per cent.

 

3.  Which province had the highest increase in unit sales?  

 Prince Edward Island, with the number of homes sold up 119 per cent in the 10-year period.

 

4.  What about the impact of foreign buyers?

“Immigration and in-migration have played a serious role in jumpstarting residential housing markets, particularly in British Columbia, Alberta, and to some extent, Saskatchewan over the past decade.

At first, there was an influx of American buyers, especially in Canada’s coastal regions and recreational hot spots, as our southern neighbours took advantage of the almighty US greenback.  Then the European and Middle Eastern purchasers flooded the market, buying up real estate considered ‘cheap’ by international standards. In recent years, there have been a growing number of purchasers from Mainland China. From a global perspective, there’s no question that Canadian real estate brings good value to the table.”

HILARY’S TWO CENTS:

One of the things that these solid stats reveal to me is the strength of the Canadian economy on which the Canadian real estate market is predicated.  Since Canadian home prices when compared to global prices are still relatively low, Canadian real estate continues to be a good buy for foreigners.

The challenges being faced in the U.S. economy will impact our national housing market such that the housing price appreciation we have seen in the past decade will be moderated.  However, at the risk of stating the obvious, (Economics 101) I believe we will continue to see price appreciation especially in areas where demand for housing continues to be strong and there is a limit to supply.  This includes GTA, Oakville, Burlington.

 

Share This

Authored by Hilary | Discussion: No Comments »

Help with Estimating Home Improvement Costs and Payback on Investment

February 22nd, 2008 Categories: First Time Buyers, Home Maintenance, Investing in Real Estate, Mortgages, Economics, Finance, Oakville Real Estate News

Here are two very common questions that homeowners or homebuyers ask me.  I wanted to share some websites that have useful information to address these questions:

1)   “I am buying a home.  How much will it cost to fix/add/renovate X?”

Carson Dunlop just released their 2008 estimate of home improvement costs.  This is a useful tool when you are looking at a home to buy and want to estimate how much it will cost to repair, improve or renovate something. 

Carson Dunlop updates these costs yearly so they provide a useful gauge of current costs, for everything from installing a new furnace, fixing a roof or adding a fireplace.

Click here to access this guide from the Carson Dunlop website, print out and carry with you when house-shopping.

2)  “Will I get my money back if I renovate my kitchen/bathroom/or put in a pool?” 

A handy tool for estimating payback on home improvement is a renovator calculator provided by AIC, the Appraisal Institute of Canada. 

The Appraisal Institute of Canada has developed RENOVA, an interactive web-based guide to the value of home improvements. RENOVA is designed to give consumers a better idea of the return on investment they can expect for a variety of home improvements. It does this by providing a payback value range derived from the cost of the improvement expressed in dollars.

For example, a homeowner might indicate that he or she is considering spending $10,000 on remodeling the kitchen. The calculator will then provide a payback amount of between x and y dollars for that particular renovation. Homeowners can choose from among the 20 most popular renovation improvements, identified by a survey of AIC members.

LOOKING TO SELL THIS SPRING?  Now’s the time to consult a REALTOR, call Hilary at 905–599–3311 for expert guidance and advice about the home-selling process.

Like this post?  Read also:

Ten Ways to Keep Heating Costs Down this Winter

Share This

Authored by Hilary | Discussion: No Comments »

Bank of Canada Governor Confirms Canadian Interest Rates to be Cut in Coming Months

February 19th, 2008 Categories: Investing in Real Estate, Latest Real Estate Market News & Stats, Mortgages, Economics, Finance

Bank of Canada Governor Mark Carney signaled over the weekend in Tokyo, where he was attending a meeting of finance ministers and central bankers from the Group of Seven nations, that bank policy makers will cut interest rates in coming months as slowing export growth threatens Canada’s economy.

The next interest-rate decisions are scheduled for March 4 and April 22.

For more details on this see Bloomberg News Article on Declining Canadian interest rates.

Like this post?  See also recent posts by Hilary

Getting a Mortgage Today? Fixed or Variable Rate?

Canadian Interest Rates Anticipated to go down further/No Cause for Alarm for Canadian Home Prices

Remember changes in the marketplace often spell OPPORTUNITY, but lack of information can make people fearful.

Planning a Move? Contact Hilary now for a no-obligation consultation on Current Financing Options and what’s going on in your local market. 

 

Share This

Authored by Hilary | Discussion: 2 Comments »

Oakville and Milton Home Sales and Price Changes for January 2008

February 19th, 2008 Categories: Halton Real Estate, Investing in Real Estate, Latest Real Estate Market News & Stats, Mortgages, Economics, Finance

Oakville	2007	2008	% Change
No. of Residential Sales	217	194	-11%
Average Sale Price	$419,533	$541,935	29%
Median Sale Price	$362,500	$415,000	14%

 

Milton	2007	2008	% Change
No. of Residential Sales	92	74	-20%
Average Sale Price	$315,094	$335,493	6%
Median Sale Price	$300,000	$320,000	6%

Average and median prices are continuing to rise, while number of sales declined in January 2008 versus last year.  Inclement weather in 2008 versus a milder 2007 as well a consumer concerns over the impact of U.S. market on Canada have moderated the number of homes listed and sold for the start of the year.

Stay tuned to The Oakville Buzz for monthly stats on home prices and sales volume. Source: Oakville Milton and District Real Estate Board

 

 

Share This

Authored by Hilary | Discussion: 1 Comment »

First Time Buyers: Want to Withdraw RRSP Funds to Buy a House?

February 6th, 2008 Categories: First Time Buyers, Halton Real Estate, Mortgages, Economics, Finance, Oakville Real Estate News

Question:  “Can I use my RRSP’s to buy a house?”

First Time Buyers often ask if they can use some of their RRSP money in the home purchase.

First let me say, now is a  a wonderful time for first time buyers to purchase their first home. 

Some recent posts on The Buzz discuss various factors iimpacting this decision including new Land Transfer Tax Rebate for first time buyers, an environment of declining interest rates, and a more balanced real estate market in the GTA/Halton area, versus the seller’s market of the last 7 years, all of which bode well for FTB in Ontario. 

(See also a recent post on solid economic fundamentals in Canada, despite challenges in the U.S.)

The question of RRSP money being applied to home purchase has been asked me enough times to warrant mention here. 

There are two categories of people who are eligible to withdraw RRSP funds (without tax penalty) for home purchase:

1)  First Time Buyers

2)  People with disabilities or relatives of people with disabilities who are helping them purchase

Some Pointers for RRSP withdrawal:

1)  Must be a resident of Canada

2)  Must occupy the home as principle residence

3)  Have up to 30 days after closing to withdraw funds from your RRSP

2)  Don’t need to use all the funds towards the down payment (money can be used for closing costs, home renos etc)

3)  Allowed a maximum withdrawal of $20,000 per qualified home buyer

4)  Have 15 years to repay RRSP, without tax implication

5) Revenue Canada helps keep accounting straight by providing a statement on the annual Notice of Assessment outlining repayment requirements.

More details on this can be found here on the Revenue Canada website.

IF YOU ARE A FIRST TIME BUYER, CONTACT HILARY 905–599–3311 FOR STEP-BY- STEP GUIDANCE, from financing, to market conditions to moving advice!

Share This

Authored by Hilary | Discussion: No Comments »

How Do I Get Into Real Estate Investing?

February 2nd, 2008 Categories: Investing in Real Estate, Mortgages, Economics, Finance, Oakville Real Estate News, Real Estate News

Have you always wanted to get into investing in real estate?

Most people agree that it is a smart thing to do.

With volatility in the stock market and low returns on fixed income products like GIC’s, clients often ask about how to get into buying an income property or vacation property.  The opportunity to build passive income through real estate investing is attractive to most people.  Also with longevity increasing, those of us planning for retirement often wonder if our retirement income will be sufficient to meet our needs for the long haul.

I have the idea to put together some seminars here in the Halton area that answer the need for pertinent and practical information on real estate investing.

Having worked in the seminar and conference business for a number of years in a prior life, I know that people only attend if there is a “need to know” not a “ nice to know” subject being covered. 

I would appreciate some FEEDBACK that would help me to gauge interest in this subject from clients and the community as well as which specific topics might be useful to cover.  I would bring in experts to speak on these areas. These seminars would be a value-added service I provide for clients, either free or for a very nominal fee.

TELL ME WHAT YOU THINK:

Some thoughts I have for topics:

1)  Introduction to Real Estate Investing:  The Nuts and Bolts

2)  Demystefying the Investing Process

3)  Investing in Vacation Property (Speaker from Blue Mountain/Collingwood Area, Cottage Property in Muskoka, Kawarthas)

4)  Investing in Kitchener/Waterloo area

5)  Buying Property in the U. S.  (Florida, North Carolina, Arizona)

6)  Buying Property outside North America

7)  Financing Investment Properties (New rules and how to qualify)

8)  Purchasing student rentals 

9)  Working with a Property Manager (Property manager speaker)

I would appreciate your suggestions for other topics or comments on those above.

LET’S HEAR FROM YOU!

If you want to connect with some of my contacts who are specialists in investing, give me a call! 

 

Share This

Authored by Hilary | Discussion: No Comments »

Getting a Mortgage Today? Fixed or Variable Rate?

January 31st, 2008 Categories: First Time Buyers, Mortgages, Economics, Finance

 

The simple answer to this question is to go variable as more rate cuts by the Bank of Canada are anticipated in the next few months. (See my article last week explaining this.)   Remember you can always lock in at a later date.

 

Just in case you’re new to all this stuff:

 

The discount rate is the interest rate that a bank is charged to borrow short-term funds directly from the central bank (Bank of Canada).

 

The prime rate is the interest rate that commercial banks charge their most credit-worthy customers.

 

Banks in the past would set their variable mortgage rate at 0.9% – 1.0% off prime.  Not today.  They are narrowing the discount so as to improve their profit margin on variable products.

 

I read an article in the Financial Post on the weekend which you might find interesting (reprinted below). 

 

BORIS’ READER’S DIGEST VERSION of Financial Post article:

 

1) The banks are not obligated to lower prime just because the B of C rate has fallen, although most likely they will.

 

2) With rates falling, the banks will recoup some of their losses by reducing the discount off prime that  they give to borrowers.

 

Mortgage: To fix or to float?

Banks expected to get stingier with discounts

Gary Marr, Financial Post  Published: Saturday, January 26, 2008

Would you borrow money from someone if they could change the rate of interest whenever they wanted to?

About 20% of Canadians signing up for new mortgages have been doing just that. One out of every five new mortgages is now a variable rate product tied to prime. Prime is dictated by your bank.

As rates tumbled during this housing cycle, consumers worried about locking into long-term mortgages. The fear of being shut out of the latest rate cut from the Bank of Canada had consumers looking to products with floating interest rates.

Generally, when the central bank cuts rates, your interest rate comes down. But as the global credit crisis has widened, one big question is whether the banks will continue to lower prime with every cut from the country’s central bank.

So far, the answer is a clear yes. The major banks went along with a 25 basis cut from the Bank of Canada this past week and lowered their prime lending rate for customers from 6% to 5.75%.

“The word on the street has been that maybe they wouldn’t drop,” says Don Lawby, chief executive of Century 21 Canada Ltd.

Whether the banks continue to pass on Bank of Canada cuts probably will not change demand for variable rate products, he predicts. One of the reasons he does not think consumers should or will panic is that they always have the option of locking in their rate on a variable rate product.

Most variable rate products sold by the banks include an option that allows you to fix your rate for the remaining term of your mortgage–albeit at a slightly higher rate than you might normally achieve if you did not have a mortgage contract.

“The issue will always be, ‘is the rate I can negotiate for one, two, three or five years better than my current variable rate or not?’ That’s the decision the consumer is going to make. If consumers think rates are going up, they lock in,” says Mr. Lawby.

But the truth is, floating rate mortgages have been rising for months but it has been happening in such a subtle way few people have noticed. A year ago, a consumer could borrow money at 90 basis points off prime. Anybody with that type of deal is now paying 4.85% interest based on the latest cut.

Unfortunately, if you are borrowing today, credit availability has tightened. As the banks’ costs have increased, their profits have narrowed. To deal with the shortfall they cut the discount offered to 50 basis points off prime.

Essentially, they have balked at the Bank of Canada rate cut by cutting the discount. That same variable rate mortgage today will be at 5.25% interest.

Given the shrinking discount and the uncertainty of the banks going along with future rate cuts, does it make sense to continue to have a floating interest rate on your mortgage?

Moshe Milvesky, a professor at York University’s Schulich School of Business, wrote the now widely disseminated study on whether it made sense to lock in your mortgage rate. In the study which looked at decades of interest data, he found consumers did better 88% of the time with a floating rate mortgage.

“It’s the other direction that worries me. If the Bank of Canada lowers rates and they raise prime or the banks arbitrarily raise prime … that’s more worrisome because of unpredictably,” says Mr. Milvesky.

He predicts the banks will probably just get stingier with the discounts they offer rather than not passing along Bank of Canada rate cuts. They can knock the discount down to 10 basis points and few people will get upset, says Mr. Milvesky.

Ultimately, he does not see a sudden rush to fixed rate mortgages but it will open the eyes of consumers. “It makes them aware of the fact that it is the bank that controls their interest rate, not the Bank of Canada,” says Mr. Milvesky.

Share This

Authored by Hilary | Discussion: 3 Comments »

U.S. Home Prices Increase in Some States, Fall in Others

January 27th, 2008 Categories: Investing in Real Estate, Latest Real Estate Market News & Stats, Mortgages, Economics, Finance, Real Estate News

I came across an article from Inman Real Estate News this morning which has some interesting information for Canadians trying to figure out what’s going on south of the border.

A few observations:

1.  Year over year, November 2007 vs. 2006, prices rose in 31 states, and fell in others.

2.  States that experienced larger declines were Florida, Nevada, Arizona, California where prices had risen astronomically during the housing boom.

3.  The chart below gives a quick overview of price increases and decreases in some major cities in the U.S.

4.  Canadian Investors:  Many clients have indicated they want to purchase in the U.S. in the markets where prices are declining, for investment purposes.  This chart gives a good summary of valuable data. 

Statistical area	12-month change Nov. 2007
Honolulu, Hawaii	17.10%
Salt Lake City, Utah	10.53%
San Antonio, Texas	7.48%
Austin-Round Rock, Texas	7.47%
Raleigh-Cary, N.C.	4.62%
Houston-Sugar Land-Baytown, Texas	4.16%
Dallas-Fort Worth-Arlington, Texas	3.53%
Charlotte-Gastonia-Concord, N.C.-S.C.	2.62%
Portland-Vancouver-Beaverton, Ore.-Wash.	2.01%
Seattle-Tacoma-Bellevue, Wash.	1.23%
New York-White Plains-Wayne, N.Y.-N.J.	-0.51%
Detroit-Warren-Livonia, Mich.	-0.79%
Philadelphia, Pa.	-1.00%
Chicago-Naperville-Joliet, Ill.-Ind.-Wis.	-1.63%
San Francisco-San Mateo-Redwood City, Calif.	-2.06%
Atlanta-Sandy Springs-Marietta, Ga.	-2.59%
New York-Northern New Jersey-Long Island, N.Y.-N.J.-Pa.	-3.30%
Denver-Aurora, Colo.	-3.30%
Minneapolis-St. Paul-Bloomington, Minn.-Wis.	-3.93%
St. Louis, Mo.-Ill.	-4.54%
Boston-Quincy, Mass.	-5.11%
Miami-Miami Beach-Kendall, Fla.	-7.23%
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va.	-7.77%
Cleveland-Elyria-Mentor, Ohio	-8.72%
Tampa-St. Petersburg-Clearwater, Fla.	-9.19%
Phoenix-Mesa-Scottsdale, Ariz.	-11.42%
Orlando-Kissimmee, Fla.	-11.49%
Miami-Fort Lauderdale-Miami Beach, Fla.	-12.11%
Oakland-Fremont-Hayward, Calif.	-12.89%
Las Vegas-Paradise, Nev.	-12.96%
Los Angeles-Long Beach-Santa Ana, Calif.	-13.16%
San Diego-Carlsbad-San Marcos, Calif.	-13.16%
Riverside-San Bernardino-Ontario, Calif.	-16.82%

Click here for full article http://www.inman.com/inmanstories.aspx?ID=65908, and source of statistical data.

FOR MORE INFORMATION ON REAL ESTATE TRENDS AND INVESTING IN REAL ESTATE, call Hilary at 905-599–3311 or hshantz@gmail.com

  

Share This

Authored by Hilary | Discussion: No Comments »

Canadian Interest Rates Anticipated to Go Down Further/No Cause for Alarm for Canadian Home Prices

January 24th, 2008 Categories: First Time Buyers, Latest Real Estate Market News & Stats, Mortgages, Economics, Finance, Real Estate News

Canadian Interest Rates To Fall Further

As world stock markets roil and the spotlight turns on U.S. Fed Chairman Bernanke to follow up Tuesday’s sharp 75 basis point rate cut with another cut next week, Canadians are wondering what will happen to interest rates here at home.

Last week I was hearing rumors that even if the Bank of Canada were to cut rates, some or all of the major Canadian banks might break precedent and not follow suit.  However the relatively more conservative 1/4 point cut in rates this week by the Bank of Canada did result in all major banks reducing their rates accordingly, impacting mortgage rates.

The Bank of Canada has communicated that they are prepared to cut rates further.  A communique I read today from the Toronto Dominion Bank Financial Group said we can anticipate a further 50 basis point (1/2%) rate reduction on March 4^th with the potential of another 25 basis point cut on April 22nd.

This is good news for homebuyers. 

Canadian Home Prices:  No Cause for Alarm

The TD communique also indicated that despite tighter credit conditions, strength in domestic demand is expected to remain supported by continued income growth associated with increases in commodity prices since October, which has led to further gains in our terms of trade. 

With respect to Canadian home prices, and the rationale for their 50 basis point prediction I quote from today’s TD report:

Home prices remain on the upswing in most major urban centers, and there is little concern that the Canadian housing market will start to mirror the slump in the U.S. In fact, we believe national home prices will rise at a rate of 5-7% in 2008, compared to a U.S. market that will likely absorb losses of around 5% or more. However, we believe that by the next meeting (i.e March 4th), data on the U.S. economy will provide a smoking gun, showing clear signs of a sharp economic slowdown. Given that inflationary pressures remain well in hand, a 50 basis point cut would provide much-needed insurance against the degree to which a U.S. economic downturn would lap onto Canadian shores.

Certainly, inflation will not provide a barrier to a more aggressive Bank of Canada. The central bank has indicated that increased competitive pressures in the retail sector and the one percentage point GST cut at the start of the year will cause both core and total CPI inflation to fall below 1.5% by the middle of this year before returning to their 2% target by the end of 2009.

Looking to buy or sell?  Call Hilary at 905–599–3311 or click here to contact Hilary for more market information.

Share This

Authored by Hilary | Discussion: No Comments »

Canadian Real Estate Forecast for 2008

December 19th, 2007 Categories: Latest Real Estate Market News & Stats, Mortgages, Economics, Finance, Real Estate News

Oakville Real Estate, Burlington Real Estate, Halton Real Estate, Canadian Real Estate

I am reprinting the Royal LePage Market Survey Forecast for 2008, released this week by Phil Soper, President of Royal LePage.

It is a good summary of the main economic factors that are influencing the Canadian residential housing market.  Note the chart showing price increase broken down by city, from 2006 to 2007, and the forecast for 2008.

In Oakville, Burlington, and the Greater Toronto Area, prices rose on average 6.6% from 2006 to 2007.  This was less than the Canadian average which was 10.7%.  For Canada and GTA Royal LePage is predicting 3.5% increase in house prices for 2008.  I read recently that ReMax is predicting a 5% increase for the Greater Toronto Area.  Royal LePage is traditionally quite conservative in its predictions.

Following is the report:

Solid economic fundamentals should allow Canada’s residential real estate market to chart its own course and maintain its buoyancy throughout 2008

TORONTO, December 17, 2007 – After experiencing an exceptional year characterized by strong average house price appreciation and record breaking unit sales, the momentum from 2007 is anticipated to carry over and position Canada’s real estate market for steady, yet moderate growth in 2008, according to the Royal LePage 2008 Market Survey Forecast released today. 

Nationally, average house prices are forecast to rise by 3.5 per cent to $317,288 in 2008, while transactions are projected to fall slightly from this year’s record high unit sales to 500,927 (–4.0 %) unit sales in 2008.  Despite the year-over-year reduction in unit sales, the number of homes trading hands in 2008 is expected to remain higher than in all years prior to 2007.

“Canada’s housing market in 2008 should continue to thrive on a balanced diet of strong economic fundamentals, including high levels of employment, resilient consumer confidence, modest levels of inflation and the relatively low cost of borrowing money,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services.  “Canada is currently enjoying one of the longest housing market expansions in history; however, as we move into 2008 it is anticipated that slowly eroding affordability will cause demand to ease, allowing the market to move toward balanced conditions, with lower levels of price appreciation, and fewer homes trading hands.”

With the most affordable major market homes in Canada, residents of Regina and Winnipeg are forecast to drive the greatest increases in house prices in 2008, as job opportunities and in-migration continue to soar in each city.  While Calgary and Edmonton will continue to boast healthy economies and high levels of home sale activity, the excessively fast run-up of home values in 2006 and the first half of 2007 priced people out of the market, causing inventory levels to rise late in the year.  Alberta home price increases will be much more moderate in 2008 as the regional market continues to adjust to the new house value reality.

With the country’s highest home prices, Vancouver’s steadfast market will continue to expand on the back of a strong provincial economy.  As the city readies itself for the 2010 Olympic Games, there will be an abundance of new jobs created.

Ontario and Quebec markets are anticipated to maintain their relative strength and vibrancy throughout next year, weathering stormy financial markets and adjusting well to the high value of the Canadian dollar. The services based industries that have become the backbone of the Toronto and Montreal economies have tolerated the rise of Canada’s dollar to parity very well, despite increasingly price competitive offering from overseas markets.  

In Atlantic Canada, a slight depletion of inventory coupled with high immigration levels will see the housing market growing at a strong and steady pace – Halifax is expected to have higher than national average growth in 2008.

The frenzied pace of price inflation that has characterized the real estate market over the past two years in the resource rich west were unsustainable and should ease substantially in 2008.  In Central Canada, price increases peaked in late 2005, and have been moderating since.

From coast-to-coast, the homebuyer demographic is anticipated to swell with first-time purchasers, as many flock to take advantage of recently reduced lending rates, longer amortization periods and the resultant manageable mortgage payments.

Added Soper:  “The year ahead presents opportunities for those people who have shied away from the frenetic real estate market of the past few years, with its bidding wars and unconditional offers; while prices should continue to rise, they are expected to do so at a more reasonable pace. Canada’s economy is strong, and the desire for home ownership remains a vibrant and attainable goal – real estate remains a solid long term investment.”

2008 Market Survey Forecast

Market	08/07%	2008 Forecast	2007 Projected	2007 / 2006	2006	2005
Halifax	6.9%	$233,000	$218,000	7.3%	$203,178	$189,196
Montreal	3.5%	$238,000	$230,000	6.6%	$215,659	$203,720
Ottawa	4.2%	$285,000	$273,500	6.2%	$257,481	$248,358
Toronto	3.5%	$388,500	$375,500	6.6%	$352,388	$336,176
Winnipeg	11.4%	$190,000	$170,500	12.2%	$151,983	$134,028
Regina	15.4%	$188,600	$163,500	24.0%	$131,851	$123,600
Calgary	4.0%	$429,000	$412,500	19.0%	$346,675	$250,832
Edmonton	1.0%	$341,000	$337,500	34.5%	$250,915	$193,934
Vancouver	4.0%	$587,500	$565,000	10.8%	$509,876	$425,745
CANADA	3.5%	$317,228	$306,500	10.7%	$276,974	$249,201

Highlight of 2008 Trends

Strength of the Canadian Dollar
The position of the Canadian dollar hovering at parity will continue to bolster the country’s high consumer confidence, and is anticipated to translate into continued growth in consumer spending.  The negative impact of the high dollar on the country’s manufacturing sector for export trade will be mostly felt in Southern Ontario and Quebec; however, both regions are demonstrating considerable resiliency, with a concerted effort by both governments and industry underway to improve productivity and improve international competitiveness.

U.S. Economy
In sharp contrast to the weakening U.S. economy and deteriorating housing market, Canada’s economy and housing market continues to demonstrate staying power.  Canadian mortgage products are markedly different from those offered in the U.S., and the sub-prime market makes up a significantly smaller portion of the overall Canadian mortgage market.  It is unlikely that the residential real estate industry in Canada will have to endure the kind of sharp correction underway south of the border.

Employment 
Employment rates across the country are expected to continue at the current very high levels, driven by the robust energy and general natural resource sectors specifically, and a very healthy services economy in general.  In the year ahead, job market growth is anticipated to continue, especially in Regina, Winnipeg and Halifax.

The move by the Bank of Canada to reduce its overnight target-lending rate by a quarter of a percent in December 2007 will bode well for first-time buyers planning to enter the market in 2008.  The relatively low current interest rates, and the possibility that rates could fall even lower in response to moderating inflation and lower rates in the U.S., will continue to attract new buyers to the housing market.

Call Hilary and Her Home-Sellling Team for assistance in buying or selling in Oakville, Burlington, Mississauga, Milton or Georgetown.

Share This

Authored by Hilary | Discussion: 6 Comments »