WHAT’S HAPPENING?  March 2011

By Gitta Levi, Broker, Century 21 Heritage Group  Ltd.

Still confused about what’s happening in today’s  Real Estate Market?  Some properties and some areas of the GTA (Greater Toronto Area) are getting multiple offers, selling for over the asking price.  In general, the homes are in neighbourhoods that have traditionally sold that way, ie the Beaches, Bloor West,  Leaside, as examples.  Besides that, do we know which homes will be lucky enough to get over the asking price? Here are some factors to consider:

Is your home “Buyer” ready?  Decluttered, freshly painted, personal items removed , shabby furniture and furnishings removed and replaced by a few “good” pieces, front door and entrance made inviting with a fresh coat of paint and fresh flowers.

Have you done your homework?  Mortgage details available: Is there a penalty fee for an early discharge? is the mortgage portable to the property that you’ll be buying? How much more will your Lender give you so that you can buy-up, and What will that cost you per month?

What has sold in your area this year?  Ask your Realtor to provide you with area sales: details of those properties and why they got their sale price,  how long did they take to sell, as well as market activity for your neighbourhood.  Listen very CAREFULLY, and UNEMOTIONALLY!  The closer your asking price is to the last comparable sales, the more likely you are to net  the most from your house sale.

You cannot underprice a house!  If you listen carefully to your Trusted Professional Realtor, look at facts that they provide to you, and then logically set a price, the Market of current Buyers will set the price, ie. the more interest there is from Buyers setting forth offers, the more likely you are to get your price, or even over-asking price.

Nothing is more important than the Realtor you choose!  A true Professional Realtor  will market  your home for offers, and then negotiate the offer(s) to your best advantage.  CHOOSE WISELY!

For more information on what a true Professional Realtor can do for you, contact Gitta Levi, Broker, Century 21 Heritage Group Ltd, directly at 416-587-8222, or email gitta@gittalevi.com.

No wonder today's Real Estate Buyers and Sellers in the GTA are confused! Every day there is another article on mortgage rules changes, and how this will effect the prices of homes, condominiums and townhouses in the GTA. These are the same "Guru's" that told us that there was a "condominium bubble" in the GTA, not too long ago.  Surprise, surprise--last year (2010) condominium sales accounted for 55% of all real estate transactions in the GTA!

This morning, (Wed. Feb. 9th, 2011), the Globe and Mail's Report on Business ran a small article in their "Business Ticker" section, entitled "Housing Decline seen less severe for 2011", by Steve Ladurantaye. The author said that "the Canadian Real Estate Association has raised its sales forecast for the rest of the year, calling for a smaller decline than it had originally expected, as low interest rates keeps buyers in the market." He went on to say that "the association now expects sales to fall by 1.6% in 2011, compared to its November call for a drop of almost 9%.  Prices are also expected to do better than forecast,with a gain of 1.3% instead of a slight decline." Chief Economist, George Klump, was quoted as saying "the announcement of the new changes to mortgage rules will likely bring forward some sales into the frost quarter that would otherwise have occured later in the year."

What does that mean for you, the GTA Real Estate Buyer or Seller?

Buyers--Mortgage rates are still very low, which relates to affordability when buying your first home, condominium or townhouse in the GTA. Right now, there is very little "product" on the market, so do your homework first, before you start your search, to see what you can comfortably afford, and then contact me and let me know what areas you wish to concentrate on in your home search.

Sellers--multiple offers are still out there!  Make sure that you are realistic in your asking price, and that your home is "staged", clean, and inviting for potential Buyers coming through.  I can help you with all that, as part of the service that I provide.

If you've been thinking of a real estate move, now is the time. Contact Gitta Levi of Century 21 Heritage directly at 416-587-8222, or email gitta@gittalevi.com. 

I recently attended a group discussion at the Toronto Real Estate Board, headed by Jason Mercer, TREB's Senior Manager of Market Analysis, entitled "The Market According to Mercer".  None of us have a crystal ball, including the economists, bankers and real estate agents, but what Jason Mercer had us consider is past history, affordability, prices, sales, resales and the new home and rental markets.
Based on statistics from the Toronto Real Estate Board and Statistics Canada, some  interesting facts emerged.

Is the current real price level of a home in the GTA cause for concern?  The issue is not the level of real price now, but rather how high it was two decades ago.  The real estate market peaked in 1988, with the average home price around $400,000, the same as 2010.  Income on the other hand has increased from the 1988 level of of approx. $50,000 per household to approx. $100,000 combined family income in 2010.  When comparing price to income, buying a home in today's market is actually more affordable.  Mortgage rates are as low as they were in 1951, with interest payments and % of disposable income dedicated to mortgage interest less of a burden in 2010 then they were in 1990, and relatively flat from 1996, with a small spike in 2007. When the bank qualifies a home purchaser for a mortgage, they consider the GDS (Gross Debt Service), i.e. the cost of carrying a mortgage including principle and interest, plus some utilities. This amount should not exceed 32% of your gross income.  When we look at  real estate history , prices from 1986 to 1995 with, with a small spike in 2007, a mortgage on the average priced home was not affordable.(This is one of the reasons that we saw so many "power of sale" listings during that same period).

Another very important factor to consider is the Canadian economy--it continues to grow, albeit very slowly.  In the Bank of Canada Business Outlook Survery of Autumn 2010, when business owners were asked about sales volume expected increases over the next 12 months, 55% of them expected greater sales volume with another 20% expecting about the same growth that they had experienced in 2010.

What are mortgage deliquency rates like compared to the U.S? If you compare stats from the U.S. Federal  Reserve Board and the Canadian Bankers Association, the differential is staggering! Since 2007 to the present, U.S. rates have steadily risen to above 10%, whereas Canada has remained very close to .05%.

Unemployment is another key factor.  The GTA Unemployment rate, from Statistics Canada (historic) and TREB (forecast) will not decline to "normal" for 2+ years.  We currently stand at approx. 9% with a forecast of 8% (normal) for 2012.

The "Market" is confident that the Bank of Canada will keep inflation in check and interest rates will increase more slowly than originally expected.

So where does Jason Mercer see the Toronto Real Estate Board  average GTA selling price going into 2011 and 2012? The average selling price will have room to grow, but at a much slower pace, with 3% the average growth rate vs. 8% in 2010. New listings in the GTA will grow, but at a moderate pace.  The "Market" will remain balanced, but tight enough to promote price growth.  The new home market, mainly high-rise or condo market has seen good growth and has remained resilient.  71% of the high-rise builders co-operate with TREB members in selling GTA condos (as per RealNet Canada), so your trusted Real Estate Professional can help you with the purchase.  Condos remain affordable housing for end users and great investment properties.  CMHC stats show that there are less vacant units in condo buildings vs. "purpose built" apartment buildings, since, in general, they are newer with more modern finishes and amenities.  Rental rates continue to grow, with 1+1 and 2 bedroom units continuing to be very desirable.

Where do you fit into "the Market"?
*Currently renting? Rental prices continue to rise.  If you have a job, or if you have RRSP savings, or have saved enough for a downpayment, consider buying.  Home ownership is affordable.
*Up-sizing? The gap between your current home to a larger property is shrinking.  Affordability is the key, so this may be the right time for you. Find out what "price differential" you can comfortably afford.
*First-time Buyers? Low mortgage rates and a "balanced" market are key factors to consider. If you qualify for a mortgage, the time is right for you to be buying.
*Investors? Rental rates to continue to rise and there are many new and "nearly new" condo buildings ready for you to purchase.  If you have a downpayment the tenant will be paying most of your mortgage.
*Down sizing? After selling your current home and getting something  smaller or less expensive , you will probably have money left for an investment condo--something to consider.

This may be the right time for a consultation about your real estate future.  Feel free to email Gitta at gitta@gittalevi.com, or call Gitta directly at 416-587-8222.  I'm never too busy to answer your questions or help you decide what would be the best "market" for you.

                      THE REAL WORLD AND YOU!

by Gitta Levi, Broker, Century 21 Heritage Group

                     Rantings of late, from the Competition Bureau  and it's proponents, seemed to have died down for the time being.  At least, the media isn't bombarding us on a daily basis, with talks of computerized services which can take the place of the "normal"  Realtor, and do just as good a job at selling your  home.

Commissions are being challenged. What could your Realtor possibly do for you to warrant the  $$$ they get? You're  right to think that way, if putting a sign on the lawn and downloading your listing to MLS is all you think your professional Realtor does for you! But the reality of the job is very different.

In the REAL world, a professional Realtor spends time reviewing all the activity in your neighbourhood-what's been listed, what's sold, so that they can see the "market trends". The Real Estate market literally changes on a daily basis, and a professional has to be up to date, because they're selling your most valuable asset.  There may be viewings booked to see other properties, open houses to attend, interaction with the realtors whose listings you're competing with, as well as calls to agents who have shown your property for feedback. Once your  agent has all this, then time is spent reporting back to you, the Seller, so that you're not left in a vacuum .

The internet is a very important tool, so your  home has to be prepared for showings, either through a stager, or in my case, myself, so that the most important features of the home will be highlighted. A  professional photographer is hired to "showcase" your  home in photos and virtual tours, which are then downloaded to a variety of websites to ensure maximum exposure for your  real estate. 

The day is filled with calls and emails-prospective buyers from all the marketing efforts, other  agents with questions about the property, financing queries, dealing with "tire kickers" and probing to see if they can really afford your home. And if you have family problems, or financial problems, or just need some "hand holding", your Realtor is there for you, because selling real estate is a personal, "people" service, with no set hours in the day, or weeks in the month.

And if that isn't enough, in the Realtor's "spare time" they attend seminars and courses to improve their professional knowledge and marketing skills, because it's the marketing that gets the offer. 

Offer day-how exciting! Once an offer is "registered" , your professional Realtor goes to work in calling all the Agents who have shown your property, to let them know that there's an offer and see if they can solicit another offer for you-the more , the better. Your  Agent is working for you and wants to get you the best price possible. Even if you only receive one offer, it's the Agent's negotiating skills that help you with the bottom line-what you Net in your pocket, once the sale is completed!

After you have "sold"  the property, there are usually conditions which have to be satisfied, i.e. financing, home inspection or status certificate. Your Agent is the one that is in charge of making sure these conditions are all met, and that all the paperwork is received, liasing with your Solicitor and Bank, as well as making sure that the certified deposit cheque is received. Up until closing date, the Agent is still representing you, and deals with numerous calls , more paperwork, emails, etc.

When everything is complete, your Realtor receives a small percentage of the sale, and you reap the financial benefits of having dealt with a professional. Can a computer service replace all this? I don't think so, because this is, and will remain, a "people" business.

If you   want to reap the benefits of a REAL ESTATE PROFESSIONAL , then  call GITTA LEVI , BROKER,  CENTURY 21 HERITAGE GROUP, at 416-587-8222 (direct line), or 905-764-7111 x 1226 (office), or email me at gitta@gittalevi.com.   I'm never too busy for you!