Nouriel Roubini, the New York University economist who gained renown for accurately calling the housing bubble, has purchased a condominium in Manhattan worth $5.5 million, according to a Bloomberg News report.
Public records show Roubini took out a $2.99 million mortgage to buy the condo on East First Street, according to Bloomberg. The apartment is reportedly a 3,700-square-foot triplex penthouse.
Roubini was dubbed "Dr. Doom" because of his many pessimistic forecasts about the global economy. He recently said there is still a risk the U.S. economy could slide back into recession, Bloomberg notes, and last month he said another "disaster" will happen if U.S. house prices fall again and prime mortgage defaults increase.
Does Roubini now think housing prices have bottomed? Bloomberg reached Roubini on his cell phone Friday, but he declined to comment on the condo purchase.
Perhaps the economist has succumbed to "frugal fatigue" -- a term that refers to when consumers, beaten down by the "Great Recession" become tired of fretting about every expense and treat themselves again.
The condo's listing by Halstead Property broker Richard Orenstein certainly makes the home sound alluring.
"Connected by a custom cantilevered steel staircase, each level of this amazing home offers something unique and unforgettable," the listing reads. "On the first floor, you'll find a massive living/dining area bathed in southern light with 11-foot beamed ceilings, exposed brick walls, a wood-burning fireplace, and light from a 50-foot expanse of oversized windows."
By Roland Jones, msnbc.com editor December 18, 2010
Sunday, December 19, 2010
Harmonized Sales Tax
The provincial government's decision to harmonize the provincial and federal sales taxes into the new 12% Harmonized Sales Tax (HST) removed $2 billion in costs to BC businesses and provide point-of-sale rebates on many important goods and services. You can find out more about the government rationale for the HST here.
However, REALTORS® and BCREA are concerned that the HST has increased the cost of buying and selling all property and have a significant impact on the purchase of newly-built homes. The people of BC are particularly affected since this province has some of the highest priced real estate in the country. The HST is an additional tax burden on BC homebuyers, homeowners and landlords.
Increasing Cost of New Homes
For new homes, under the previous system, only 5% GST was charged on new home sales. Under the HST, implemented on July 1, 2010, new homes are subject to the 12% HST.
To offset the increase in costs, the BC Government is offering a partial rebate of the HST for new housing, intending that new homes up to $525,000 should bear no more tax than under the previous PST system. Homes above $525,000 receive a flat rebate of $26,250. New home sales over $525,000 are impacted, as buyers have to pay an additional 7% tax less the $26,250 flat rebate.
On November 18, 2009 the provincial government announced the HST transitional rules on housing which includes a threshold increase from $400,000 to $525,000, moving the threshold to above the median new home price in the province. According to the government news release announcing the transitional rules, the limit was increased due to feedback from consumers and the industry. To read the news release and backgrounder click here.
For more information and to see the Residential Housing New Housing Rebates and Transitional Rules for BC click here.
Increasing Cost of Professional Services like REALTOR® Commissions
The HST also introduced a new tax on most services provided by GST/HST registrants in BC. As such, service-providers like REALTORS®, home inspectors, and appraisers are required by government to collect and remit 12% HST on their fees. Under the previous system, only 5% GST was charged on professional services associated with real estate transactions. Under the new HST system, the taxes charged on those services jumped an additional 7%, adding to nearly all closing costs.
The bottom line is that the HST has increased the cost of buying and selling all property, and it has a much greater impact on the purchase of newly-built homes. Almost 60% of the average family's household income is required to cover home ownership costs. Now that the HST has been implemented, they're paying even more.
Copyright BCREA reprinted with permission
However, REALTORS® and BCREA are concerned that the HST has increased the cost of buying and selling all property and have a significant impact on the purchase of newly-built homes. The people of BC are particularly affected since this province has some of the highest priced real estate in the country. The HST is an additional tax burden on BC homebuyers, homeowners and landlords.
Increasing Cost of New Homes
For new homes, under the previous system, only 5% GST was charged on new home sales. Under the HST, implemented on July 1, 2010, new homes are subject to the 12% HST.
To offset the increase in costs, the BC Government is offering a partial rebate of the HST for new housing, intending that new homes up to $525,000 should bear no more tax than under the previous PST system. Homes above $525,000 receive a flat rebate of $26,250. New home sales over $525,000 are impacted, as buyers have to pay an additional 7% tax less the $26,250 flat rebate.
On November 18, 2009 the provincial government announced the HST transitional rules on housing which includes a threshold increase from $400,000 to $525,000, moving the threshold to above the median new home price in the province. According to the government news release announcing the transitional rules, the limit was increased due to feedback from consumers and the industry. To read the news release and backgrounder click here.
For more information and to see the Residential Housing New Housing Rebates and Transitional Rules for BC click here.
Increasing Cost of Professional Services like REALTOR® Commissions
The HST also introduced a new tax on most services provided by GST/HST registrants in BC. As such, service-providers like REALTORS®, home inspectors, and appraisers are required by government to collect and remit 12% HST on their fees. Under the previous system, only 5% GST was charged on professional services associated with real estate transactions. Under the new HST system, the taxes charged on those services jumped an additional 7%, adding to nearly all closing costs.
The bottom line is that the HST has increased the cost of buying and selling all property, and it has a much greater impact on the purchase of newly-built homes. Almost 60% of the average family's household income is required to cover home ownership costs. Now that the HST has been implemented, they're paying even more.
Copyright BCREA reprinted with permission
Resale housing market on solid ground in November
National resale housing activity continues its return to normal levels, having risen in November 2010 for the fourth consecutive month, according to statistics released today by The Canadian Real Estate Association (CREA).
Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards climbed 4.8 per cent in November 2010. Although this is well short of record level activity for the month of November posted a year ago, seasonally adjusted sales now stand 19.5 per cent above levels recorded in July 2010, when it reached this year’s low point.
“Sales activity rose in many local markets but eased in others,” said Georges Pahud, CREA President. “Home buyers and sellers need to recognize that local and national market trends may differ, and for that reason, they would do well to consult their local REALTOR® in order to understand how the housing market is shaping up in their market.”
Seasonally adjusted activity was up from October levels in two-thirds of all local markets, including eight of Canada’s ten most active markets. Month-over-month increases were reported in Calgary (+2.6 per cent), Edmonton (+6.9 per cent), Fraser Valley (+10.5 per cent), London & St. Thomas (+6.5 per cent), Montreal (+8.2 per cent), Ottawa (+4.2 per cent), Toronto (+6.0 per cent), and Greater Vancouver (+11.3 per cent). These markets accounted for more than half of national activity in November.
Actual (not seasonally adjusted) national sales activity in November 2010 was 9.3 per below levels in November 2009.
The persistence of large year-over-year declines from last year’s record levels has been masking the steady improvement in national sales activity since July 2010. A comparison of November sales activity to sales for the same month in previous years suggests that activity is currently running at more normal levels (Exhibit 1).
The number of new residential listings on Canadian MLS® Systems edged down 0.7 per cent on a seasonally adjusted basis in November. New listings remain 14.6 per cent below the peak reached in April 2010.
The national housing market has been firming up since July 2010 due to improving sales activity and a muted rise in new listings, but overall remains balanced. About 60 per cent of local markets in Canada were in balanced market territory in November. Of the remaining 40 per cent, three-quarters of these markets have a sales to new listings ratio consistent with a being classified as a sellers’ market.
“An increase in new listings is likely to return many sellers markets to balanced territory over the coming months,” said Gregory Klump, CREA’s Chief Economist. “With sales activity having returned to better health and a firm floor under prices, sellers who previously shied away from putting their home on the market are expected to list their home in response to improved housing demand in recent months.”
The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand. The seasonally adjusted number of months of inventory stood at 5.8 months at the end of November on a national basis. This is down from 6.1 months in October. The number of months of inventory now stands 1.4 months below the level reached in July 2010, when it stood at this year’s highest level.
The national average price for homes sold in November 2010 was $344,268, up two per cent from November 2009. Nearly two-thirds of local markets recorded a year-over-year increase in average price. In recent months, the national average price has been influenced by rising prices but fewer sales in some of Canada’s priciest markets compared to one year ago.
“Following the chilling lows at the onset of the recent recession and the dizzying heights during the subsequent recovery, the national housing market appears to be returning to some semblance of normalcy,” said Klump. “Changes to mortgage regulations earlier this year were prudent and sufficient, striking the right balance between preventing speculative housing market activity and keeping homeownership affordability within reach for creditworthy home buyers. That’s a good thing, since housing activity helped support Canadian economic growth this year. Rising interest rates and weaker expected job growth are likely to contribute to softer prospects for housing market activity and average price growth next year, reflecting weakening economic growth prospects.”
Copyright CREA reprinted with permission
Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards climbed 4.8 per cent in November 2010. Although this is well short of record level activity for the month of November posted a year ago, seasonally adjusted sales now stand 19.5 per cent above levels recorded in July 2010, when it reached this year’s low point.
“Sales activity rose in many local markets but eased in others,” said Georges Pahud, CREA President. “Home buyers and sellers need to recognize that local and national market trends may differ, and for that reason, they would do well to consult their local REALTOR® in order to understand how the housing market is shaping up in their market.”
Seasonally adjusted activity was up from October levels in two-thirds of all local markets, including eight of Canada’s ten most active markets. Month-over-month increases were reported in Calgary (+2.6 per cent), Edmonton (+6.9 per cent), Fraser Valley (+10.5 per cent), London & St. Thomas (+6.5 per cent), Montreal (+8.2 per cent), Ottawa (+4.2 per cent), Toronto (+6.0 per cent), and Greater Vancouver (+11.3 per cent). These markets accounted for more than half of national activity in November.
Actual (not seasonally adjusted) national sales activity in November 2010 was 9.3 per below levels in November 2009.
The persistence of large year-over-year declines from last year’s record levels has been masking the steady improvement in national sales activity since July 2010. A comparison of November sales activity to sales for the same month in previous years suggests that activity is currently running at more normal levels (Exhibit 1).
The number of new residential listings on Canadian MLS® Systems edged down 0.7 per cent on a seasonally adjusted basis in November. New listings remain 14.6 per cent below the peak reached in April 2010.
The national housing market has been firming up since July 2010 due to improving sales activity and a muted rise in new listings, but overall remains balanced. About 60 per cent of local markets in Canada were in balanced market territory in November. Of the remaining 40 per cent, three-quarters of these markets have a sales to new listings ratio consistent with a being classified as a sellers’ market.
“An increase in new listings is likely to return many sellers markets to balanced territory over the coming months,” said Gregory Klump, CREA’s Chief Economist. “With sales activity having returned to better health and a firm floor under prices, sellers who previously shied away from putting their home on the market are expected to list their home in response to improved housing demand in recent months.”
The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand. The seasonally adjusted number of months of inventory stood at 5.8 months at the end of November on a national basis. This is down from 6.1 months in October. The number of months of inventory now stands 1.4 months below the level reached in July 2010, when it stood at this year’s highest level.
The national average price for homes sold in November 2010 was $344,268, up two per cent from November 2009. Nearly two-thirds of local markets recorded a year-over-year increase in average price. In recent months, the national average price has been influenced by rising prices but fewer sales in some of Canada’s priciest markets compared to one year ago.
“Following the chilling lows at the onset of the recent recession and the dizzying heights during the subsequent recovery, the national housing market appears to be returning to some semblance of normalcy,” said Klump. “Changes to mortgage regulations earlier this year were prudent and sufficient, striking the right balance between preventing speculative housing market activity and keeping homeownership affordability within reach for creditworthy home buyers. That’s a good thing, since housing activity helped support Canadian economic growth this year. Rising interest rates and weaker expected job growth are likely to contribute to softer prospects for housing market activity and average price growth next year, reflecting weakening economic growth prospects.”
Copyright CREA reprinted with permission
Housing Market Recovers from Summer Doldrums
The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province climbed 20 per cent in November from October 2010, on a seasonally adjusted basis. Compared to November of last year, MLS® residential unit sales were down 21 per cent to 5,647 units. The average MLS® residential price rose 9 per cent to $523,394 in November compared to the same month last year.
“Improved economic conditions and low mortgage interest rates have contributed to a 46 per cent increase in home sales since July,” said Cameron Muir, BCREA Chief Economist. Employment in BC eclipsed the July 2008 record by 2,600 jobs last month, while the unemployment rate dipped to 6.9 per cent, the lowest recorded since January 2009.
“The inventory of homes for sale has trended lower since last spring, improving market conditions in many areas of the province,” added Muir. Vancouver and Victoria climbed back into balanced market conditions in last month.
Year-to-date, BC residential sales dollar volume declined 4 per cent $35.5 billion, compared to the same period last year. Residential unit sales declined 11 per cent to 70,382 year-to-date, while the average MLS® residential price climbed 9 per cent to $504,042 over the same period.
Copyright BCREA reprinted with permission
“Improved economic conditions and low mortgage interest rates have contributed to a 46 per cent increase in home sales since July,” said Cameron Muir, BCREA Chief Economist. Employment in BC eclipsed the July 2008 record by 2,600 jobs last month, while the unemployment rate dipped to 6.9 per cent, the lowest recorded since January 2009.
“The inventory of homes for sale has trended lower since last spring, improving market conditions in many areas of the province,” added Muir. Vancouver and Victoria climbed back into balanced market conditions in last month.
Year-to-date, BC residential sales dollar volume declined 4 per cent $35.5 billion, compared to the same period last year. Residential unit sales declined 11 per cent to 70,382 year-to-date, while the average MLS® residential price climbed 9 per cent to $504,042 over the same period.
Copyright BCREA reprinted with permission
The best time to sell a home in 2011
One of the questions that we frequently get asked is, "When is the best time to sell our house?" In fact what those people are really asking is, "How do we get the maximum value for our property?" It is not really about the time of the year.
However, weather and holidays do play an important factor in selling your home. Almost no one goes house hunting around Christmas, and few give up their summer vacations.
Late spring and summer are usually thought of as the best times to put a home on the market because buyer demand builds steadily through spring. Sales then peak during the warmest months when the nice weather and beautiful flowers make it a great time to show your home.
Families with school aged children are less likely to move during the school year and summer is an ideal time.
August brings a lag in sales, as people go away on vacation and start to think about the new school year. Sales surge briefly in the fall before dropping in winter as buyers and sellers focus on the holidays. However, by January, buyers are out again and sales steadily increase into spring.
Of course, selling in the hot season isn’t the whole story. You should pay attention to your local housing market and try to list during a seller’s market, when there will be more competition among buyers for your home – which could mean a better price, a quicker closing and fewer conditions on the offer. Your real estate agent will be able to tell you what the local housing market is like.
On the other hand, if it is a buyers' market, you may be in a strong position to purchase a new home, especially if you have accumulated large equity in your current property.
Another key factor to consider is the economy. Are interest rates higher or lower in comparison to your current mortgage? If they are higher, you may want to stick with your current home, as your new mortgage payments could be uncomfortable. If rates are lower, you might be able to trade up to a more expensive home without a significant increase in your monthly mortgage obligation.
Some sellers may have no choice but to sell at a slow time of year. Job relocation and the need to free up assets are facts of life that can deprive families of the luxury of waiting until the spring bloom to put their homes on the market. But there are ways to improve your chances of a sale if you have to list your home late in the year, like playing up holiday decorations and shovelling walkways to maximize curb appeal. Selling at this point in the cycle isn't always the worst fate.
Try not to sell a house in a quiet market. As a general rule of thumb, you'll want to sell your home within 6-8 weeks from listing, while it's fresh. After this period the listing becomes "old" and buyers start getting suspicious. They tend to assume something is wrong with the property and stay away. When this happens, it could damage your chance of getting the best price.
Trying to time the real estate market is no different than trying to predict the financial markets. One can make broad assessments, however precise predictions would be tantamount to having a crystal ball. If we could all predict the future, we would never have market corrections or crashes.
The truth is, there are people buying real estate every week of the year, and often for personal reasons. The best time to sell is when you are ready.
However, weather and holidays do play an important factor in selling your home. Almost no one goes house hunting around Christmas, and few give up their summer vacations.
Late spring and summer are usually thought of as the best times to put a home on the market because buyer demand builds steadily through spring. Sales then peak during the warmest months when the nice weather and beautiful flowers make it a great time to show your home.
Families with school aged children are less likely to move during the school year and summer is an ideal time.
August brings a lag in sales, as people go away on vacation and start to think about the new school year. Sales surge briefly in the fall before dropping in winter as buyers and sellers focus on the holidays. However, by January, buyers are out again and sales steadily increase into spring.
Of course, selling in the hot season isn’t the whole story. You should pay attention to your local housing market and try to list during a seller’s market, when there will be more competition among buyers for your home – which could mean a better price, a quicker closing and fewer conditions on the offer. Your real estate agent will be able to tell you what the local housing market is like.
On the other hand, if it is a buyers' market, you may be in a strong position to purchase a new home, especially if you have accumulated large equity in your current property.
Another key factor to consider is the economy. Are interest rates higher or lower in comparison to your current mortgage? If they are higher, you may want to stick with your current home, as your new mortgage payments could be uncomfortable. If rates are lower, you might be able to trade up to a more expensive home without a significant increase in your monthly mortgage obligation.
Some sellers may have no choice but to sell at a slow time of year. Job relocation and the need to free up assets are facts of life that can deprive families of the luxury of waiting until the spring bloom to put their homes on the market. But there are ways to improve your chances of a sale if you have to list your home late in the year, like playing up holiday decorations and shovelling walkways to maximize curb appeal. Selling at this point in the cycle isn't always the worst fate.
Try not to sell a house in a quiet market. As a general rule of thumb, you'll want to sell your home within 6-8 weeks from listing, while it's fresh. After this period the listing becomes "old" and buyers start getting suspicious. They tend to assume something is wrong with the property and stay away. When this happens, it could damage your chance of getting the best price.
Trying to time the real estate market is no different than trying to predict the financial markets. One can make broad assessments, however precise predictions would be tantamount to having a crystal ball. If we could all predict the future, we would never have market corrections or crashes.
The truth is, there are people buying real estate every week of the year, and often for personal reasons. The best time to sell is when you are ready.
Upgrades that don’t pay off
Many home owner are probably thinking about making some home upgrades to attract flocks of admiring buyers. While it's certainly a smart move to make a few improvements, don't overdo it. If you spend stacks of cash on remodelling expenses, you'll probably never recoup your investment.
Before you invest tons of money into an elaborate renovation project, consider what the competing properties in your neighbourhood have to offer. While you want your house to stand out from the competition, you shouldn't make unwarranted upgrades that greatly exceed other properties in the area. Not only will you end up losing money, but you may even scare off potential buyers.
Find out how similarly priced homes in your neighbourhood measure up, and make improvements based on your specific marketplace.
1. High maintenance upgrades
If your upgrade requires too much upkeep, buyers may view it as more of a nuisance than an asset. A prime example is an in-ground swimming pool, which can cost a small fortune to install and maintain. Real estate agents anywhere, except in exclusive neighbourhoods of warm climates, will tell you that a swimming pool can be more of a negative than a positive on resale.
Buyers with young children often steer clear of homes with pools because of safety concerns. In other words, home buyers are more likely to view your in-ground pool as an inconvenience - not a selling point.
2. Replacing a popular feature
Before you consider making a major home change, such as converting your garage into a game room, take a look around. If every other home in your neighbourhood boasts a two-car garage, you should probably think twice. Do you really want to be the only house in the area with no garage? Most homebuyers would prefer to have a sheltered place to park their car than a room to play ping pong and darts.
3. Unpopular upgrades
Homeowners may, in an attempt to increase the value of a home, make improvements to the property that unintentionally make the home fall outside of the norm for the neighbourhood. While a large, expensive remodel, such as adding a second story with two bedrooms and a full bath, might make the home more appealing, it will not add significantly to the resale value if the house is in the midst of a neighbourhood of small one-story homes.
4. Extensive Landscaping
Homebuyers may appreciate well-maintained or mature landscaping, but don't expect the home value to increase because of it. A beautiful yard may encourage potential buyers to take a closer look at the property, but will probably not add to the selling price. If a buyer is unable or unwilling to put in the effort to maintain a garden, it will quickly become an eyesore, or the new homeowner might need to pay a qualified gardener to take charge. Either way, many buyers view elaborate landscaping as a burden and, as a result, are not likely to consider it when placing value on the home.
5. High-End upgrades
A home that has a beautifully remodelled and modern kitchen with stainless steel appliances and new granite countertop can be viewed as a work in progress if the bathrooms remain functionally obsolete. Therefore, the remodel might not fetch a high return if the rest of the home is not brought up to the same level. High-quality upgrades generally increase the value of high-end homes, but not necessarily mid-range houses where the upgrade may be inconsistent with the rest of the home.
6. Invisible Improvements
Invisible improvements are those costly projects that you know make your house a better place to live in, but that nobody else would notice or likely care about. A new plumbing system or HVAC unit (heating, venting and air conditioning) might be necessary, but don't expect it to recover these costs when it comes time to sell. Many homebuyers simply expect these systems to be in good working order and will not pay extra just because you recently installed a new heater. It may be better to think of these improvements in terms of regular maintenance, and not an investment in your home's value.
Overall, it's good to put some work into your house before you try to sell it, as it can add value and make it more attractive to potential buyers. However, there are some things that will have the buyer running for the door - or will at least not add anything to the house's closing price. Keep these things in mind when you're getting ready to put up that "For Sale" sign.
Before you invest tons of money into an elaborate renovation project, consider what the competing properties in your neighbourhood have to offer. While you want your house to stand out from the competition, you shouldn't make unwarranted upgrades that greatly exceed other properties in the area. Not only will you end up losing money, but you may even scare off potential buyers.
Find out how similarly priced homes in your neighbourhood measure up, and make improvements based on your specific marketplace.
1. High maintenance upgrades
If your upgrade requires too much upkeep, buyers may view it as more of a nuisance than an asset. A prime example is an in-ground swimming pool, which can cost a small fortune to install and maintain. Real estate agents anywhere, except in exclusive neighbourhoods of warm climates, will tell you that a swimming pool can be more of a negative than a positive on resale.
Buyers with young children often steer clear of homes with pools because of safety concerns. In other words, home buyers are more likely to view your in-ground pool as an inconvenience - not a selling point.
2. Replacing a popular feature
Before you consider making a major home change, such as converting your garage into a game room, take a look around. If every other home in your neighbourhood boasts a two-car garage, you should probably think twice. Do you really want to be the only house in the area with no garage? Most homebuyers would prefer to have a sheltered place to park their car than a room to play ping pong and darts.
3. Unpopular upgrades
Homeowners may, in an attempt to increase the value of a home, make improvements to the property that unintentionally make the home fall outside of the norm for the neighbourhood. While a large, expensive remodel, such as adding a second story with two bedrooms and a full bath, might make the home more appealing, it will not add significantly to the resale value if the house is in the midst of a neighbourhood of small one-story homes.
4. Extensive Landscaping
Homebuyers may appreciate well-maintained or mature landscaping, but don't expect the home value to increase because of it. A beautiful yard may encourage potential buyers to take a closer look at the property, but will probably not add to the selling price. If a buyer is unable or unwilling to put in the effort to maintain a garden, it will quickly become an eyesore, or the new homeowner might need to pay a qualified gardener to take charge. Either way, many buyers view elaborate landscaping as a burden and, as a result, are not likely to consider it when placing value on the home.
5. High-End upgrades
A home that has a beautifully remodelled and modern kitchen with stainless steel appliances and new granite countertop can be viewed as a work in progress if the bathrooms remain functionally obsolete. Therefore, the remodel might not fetch a high return if the rest of the home is not brought up to the same level. High-quality upgrades generally increase the value of high-end homes, but not necessarily mid-range houses where the upgrade may be inconsistent with the rest of the home.
6. Invisible Improvements
Invisible improvements are those costly projects that you know make your house a better place to live in, but that nobody else would notice or likely care about. A new plumbing system or HVAC unit (heating, venting and air conditioning) might be necessary, but don't expect it to recover these costs when it comes time to sell. Many homebuyers simply expect these systems to be in good working order and will not pay extra just because you recently installed a new heater. It may be better to think of these improvements in terms of regular maintenance, and not an investment in your home's value.
Overall, it's good to put some work into your house before you try to sell it, as it can add value and make it more attractive to potential buyers. However, there are some things that will have the buyer running for the door - or will at least not add anything to the house's closing price. Keep these things in mind when you're getting ready to put up that "For Sale" sign.
Housing market in Canada lands safely
By John Morrissy, Financial Post December 10, 2010
There was no bubble and there will be no bust in Canada's housing market, a TD Economics report said Thursday.
The market has instead "landed safely," said economist Pascal Gauthier. He said 2010 "was not what bubbles are made of. Similarly, under our forecast interest-rate profile, the next two years will not be what crashes are made of."
Statistics Canada reported Thursday new home prices edged up in October for the third straight month, due to increases in Toronto and Vancouver. The federal agency's New Housing Price Index rose 0.1 per cent during, following a 0.2 per cent increase in September.
The market's stellar recovery through 2009 had many worried it had become overheated as first-time buyers rushed to capitalize on rock-bottom mortgage rates, and sales and prices soared.
But the race to get in before borrowing costs rose front-loaded the market, and sales eased into 2010. Listings also retreated, keeping the market in check and preventing a steep price drop, Gauthier said.
By the second half of this year, sales have begun to rebound, as mortgage rates eased. The bank now expects those low rates and higher sales to carry into 2011, and it has revised up its annual sales forecast by eight per cent to 420,000 units.
The 2011 outlook is pretty much in line with a forecast earlier this week from realtor Re/Max, which said it expects sales next year of 441,000 units, and for average prices to rise three per cent to $350,000 by year-end. TD expects average prices to drop slightly in 2011 to $336,000 from $338,400 in 2010.
© Copyright (c) The Province
There was no bubble and there will be no bust in Canada's housing market, a TD Economics report said Thursday.
The market has instead "landed safely," said economist Pascal Gauthier. He said 2010 "was not what bubbles are made of. Similarly, under our forecast interest-rate profile, the next two years will not be what crashes are made of."
Statistics Canada reported Thursday new home prices edged up in October for the third straight month, due to increases in Toronto and Vancouver. The federal agency's New Housing Price Index rose 0.1 per cent during, following a 0.2 per cent increase in September.
The market's stellar recovery through 2009 had many worried it had become overheated as first-time buyers rushed to capitalize on rock-bottom mortgage rates, and sales and prices soared.
But the race to get in before borrowing costs rose front-loaded the market, and sales eased into 2010. Listings also retreated, keeping the market in check and preventing a steep price drop, Gauthier said.
By the second half of this year, sales have begun to rebound, as mortgage rates eased. The bank now expects those low rates and higher sales to carry into 2011, and it has revised up its annual sales forecast by eight per cent to 420,000 units.
The 2011 outlook is pretty much in line with a forecast earlier this week from realtor Re/Max, which said it expects sales next year of 441,000 units, and for average prices to rise three per cent to $350,000 by year-end. TD expects average prices to drop slightly in 2011 to $336,000 from $338,400 in 2010.
© Copyright (c) The Province
Buying a Home in the off season
If you ’ve been thinking about buying a new home but don’t think that the cooler months make for an ideal time, you may actually benefit from changing your perspective. Though spring and summer are typically the most active real estate buying and selling seasons, house hunting in winter has its own benefits. Knowing what they are and how to use them to your advantage can put you on the path to homeownership sooner rather than later.
One of the best reasons to buy a house in winter is that there is less competition out there. Because many people believe that buying a home in cooler months is a bad idea, they stay home waiting for spring to come instead of house hunting. After all, moving at this time can be inconvenient and messy if you have to deal with inclement weather. Additionally, families will be less likely to move in the months of September through June if their children are in school.
It’s the perfect time to start looking for a home during months when there are fewer house hunters. With fewer buyers in the market, homes move more slowly and sellers are more willing to negotiate on their asking price. They often need to move from the property in the near future, and you can use that to your advantage to get a favourable deal on a house that may otherwise be out of your price range during the peak selling seasons.
Lenders also usually have fewer loans to process and less paperwork to deal with in the off-season. With lenders less hassled, you can expect a smoother mortgage approval process.
Touring a home during the winter allows you to see things that you may not have been exposed to if you had come in the summer months. For instance, drafts may be a sign that windows need replacing or that there are air leaks that may need to be sealed. If the house feels warm without the thermostat being set too high, it may be an indication that the home has good insulation.
If you decide to brave the cold and hunt for a home during winter, there are a few things you should keep in mind. First, don’t feel like you’re going to inconvenience someone by viewing their home during the holidays, evenings or weekends. Sellers want to sell just as much as buyers want to buy. Also, don’t be overcome by holiday decorations, which can make a house look cramped or have the opposite effect of making the house more emotionally appealing than it otherwise would be.
Just like any holiday shopping sale, knowledgeable shoppers know where to find great opportunities. The same holds true for real estate. There are still homes for sale in winter and bargains to be found, so don’t let the seasons rule your search for a home.
Regardless of when you decide to buy or sell, answers to your questions are just a phone call or e-mail away!
One of the best reasons to buy a house in winter is that there is less competition out there. Because many people believe that buying a home in cooler months is a bad idea, they stay home waiting for spring to come instead of house hunting. After all, moving at this time can be inconvenient and messy if you have to deal with inclement weather. Additionally, families will be less likely to move in the months of September through June if their children are in school.
It’s the perfect time to start looking for a home during months when there are fewer house hunters. With fewer buyers in the market, homes move more slowly and sellers are more willing to negotiate on their asking price. They often need to move from the property in the near future, and you can use that to your advantage to get a favourable deal on a house that may otherwise be out of your price range during the peak selling seasons.
Lenders also usually have fewer loans to process and less paperwork to deal with in the off-season. With lenders less hassled, you can expect a smoother mortgage approval process.
Touring a home during the winter allows you to see things that you may not have been exposed to if you had come in the summer months. For instance, drafts may be a sign that windows need replacing or that there are air leaks that may need to be sealed. If the house feels warm without the thermostat being set too high, it may be an indication that the home has good insulation.
If you decide to brave the cold and hunt for a home during winter, there are a few things you should keep in mind. First, don’t feel like you’re going to inconvenience someone by viewing their home during the holidays, evenings or weekends. Sellers want to sell just as much as buyers want to buy. Also, don’t be overcome by holiday decorations, which can make a house look cramped or have the opposite effect of making the house more emotionally appealing than it otherwise would be.
Just like any holiday shopping sale, knowledgeable shoppers know where to find great opportunities. The same holds true for real estate. There are still homes for sale in winter and bargains to be found, so don’t let the seasons rule your search for a home.
Regardless of when you decide to buy or sell, answers to your questions are just a phone call or e-mail away!
Top 10 Home Staging Ideas
For many hom¬eowners, the concept of profes¬sional home staging is shedding new light on how to promote a home in their real estate marketplace. If you’re thinking of selling your home, deciding on the best ways to organize your property before the “For Sale” sign is erected can help sell your home. Following are some tips that may help you sell your home faster and at a higher price.
1. Make an impression. Prospective buyers make up their minds about your house even before they get out of the car. To ensure they have the right idea, clean up your yard, get rid of unsightly weeds, and sweep/shovel your driveway and porches. Get out the rags and cleanser and spend 30 minutes scouring your front door, porch, railings and steps. Then tuck away all your recycling cans and bins at the back of the house or in a corner of the garage.
2. De-clutter. A common phrase used to describe the importance of de-cluttering is: Clutter eats equity. So purge your closets, empty cupboards and box up small appliances. You may even want to rent a storage locker to keep items you simply cannot part with, while throwing out items you’ve collected over the years that you don’t want to take with you to your next home. This will also save you time during your big move. Ensure you pay close attention to your countertops and coffee tables as well.
3. Impersonal works. You want buyers to imagine themselves living in your home, so stash anything connected to your family or personal interests. Hide your son’s hockey trophies, store family photos and remove all traces of day-to-day life. This also included removing personal effects from the bathrooms.
4. Keep it fresh. There’s nothing worse than stepping into a house that smells of smoke, dampness or pet odours. The easy solution is to keep your windows open for 10 minutes a day. This strategy works better than deodorizers since a lot of people have allergies to artificial room fresheners. The oldest trick of all? Leave chocolate chip cookies baking in the oven. Yes, it’s hokey, but the smell does do wonders to help buyers bond with your home.
5. Declare war on grime. Cleanliness helps put a buyer’s mind at ease since it suggests that you’ve probably taken good care of your residence in other ways as well. So clean everything: walls, door handles, light fixtures and pantry cupboards. And don’t forget to dust your furnace room and furnace, since this makes your furnace look newer. Power washing windows, walkways, eaves troughs and pathways can also do wonders for your home’s exterior.
6. Hire a handyman. If you don’t have the time or expertise to deal with the aesthetics of your home, consider hiring a professional. Dripping faucets, cracked tiles and mouldy caulking around the bathtub can knock thousands of dollars off the price of your home.
7. Colour it up. Your single best investment may be a fresh coat of paint in key areas of your home. Try painting your front door and placing some urns containing seasonal arrangements on your front step or just inside the entryway. Remember that small touches can make a house seem cared for and important.
8. Reduce furniture. An easy way to create a sense of space is to get rid of some furniture. Moving a sofa and end tables into storage can give a small room some much-needed breathing space. If your furniture dates from the Mulroney era, consider packing it away and renting or borrowing some modern, stylish furniture or a couple of well-chosen pieces of wall art. Keep your rooms clean and simple like a hotel room or the showroom for a new house.
9. Lighten up. The brighter and sunnier a space, the easier it is to sell. If you don’t have the time or energy to clean all of your windows – inside and out – it may be a wise investment to hire a professional window-cleaning company. Thoroughly clean the shades on your light fixtures, change light bulbs and add floor lamps if an area seems dim. Finally, when it comes time to show your home, make sure all the lights are on, especially in hallways.
10. Add a touch of humanity. A couple of planters containing seasonal arrangements on your front porch, a vase of flowers on your dining room table, or even a simple rose in a vase can warm up a room. Candles can also do wonders in lighting and warming a room.
1. Make an impression. Prospective buyers make up their minds about your house even before they get out of the car. To ensure they have the right idea, clean up your yard, get rid of unsightly weeds, and sweep/shovel your driveway and porches. Get out the rags and cleanser and spend 30 minutes scouring your front door, porch, railings and steps. Then tuck away all your recycling cans and bins at the back of the house or in a corner of the garage.
2. De-clutter. A common phrase used to describe the importance of de-cluttering is: Clutter eats equity. So purge your closets, empty cupboards and box up small appliances. You may even want to rent a storage locker to keep items you simply cannot part with, while throwing out items you’ve collected over the years that you don’t want to take with you to your next home. This will also save you time during your big move. Ensure you pay close attention to your countertops and coffee tables as well.
3. Impersonal works. You want buyers to imagine themselves living in your home, so stash anything connected to your family or personal interests. Hide your son’s hockey trophies, store family photos and remove all traces of day-to-day life. This also included removing personal effects from the bathrooms.
4. Keep it fresh. There’s nothing worse than stepping into a house that smells of smoke, dampness or pet odours. The easy solution is to keep your windows open for 10 minutes a day. This strategy works better than deodorizers since a lot of people have allergies to artificial room fresheners. The oldest trick of all? Leave chocolate chip cookies baking in the oven. Yes, it’s hokey, but the smell does do wonders to help buyers bond with your home.
5. Declare war on grime. Cleanliness helps put a buyer’s mind at ease since it suggests that you’ve probably taken good care of your residence in other ways as well. So clean everything: walls, door handles, light fixtures and pantry cupboards. And don’t forget to dust your furnace room and furnace, since this makes your furnace look newer. Power washing windows, walkways, eaves troughs and pathways can also do wonders for your home’s exterior.
6. Hire a handyman. If you don’t have the time or expertise to deal with the aesthetics of your home, consider hiring a professional. Dripping faucets, cracked tiles and mouldy caulking around the bathtub can knock thousands of dollars off the price of your home.
7. Colour it up. Your single best investment may be a fresh coat of paint in key areas of your home. Try painting your front door and placing some urns containing seasonal arrangements on your front step or just inside the entryway. Remember that small touches can make a house seem cared for and important.
8. Reduce furniture. An easy way to create a sense of space is to get rid of some furniture. Moving a sofa and end tables into storage can give a small room some much-needed breathing space. If your furniture dates from the Mulroney era, consider packing it away and renting or borrowing some modern, stylish furniture or a couple of well-chosen pieces of wall art. Keep your rooms clean and simple like a hotel room or the showroom for a new house.
9. Lighten up. The brighter and sunnier a space, the easier it is to sell. If you don’t have the time or energy to clean all of your windows – inside and out – it may be a wise investment to hire a professional window-cleaning company. Thoroughly clean the shades on your light fixtures, change light bulbs and add floor lamps if an area seems dim. Finally, when it comes time to show your home, make sure all the lights are on, especially in hallways.
10. Add a touch of humanity. A couple of planters containing seasonal arrangements on your front porch, a vase of flowers on your dining room table, or even a simple rose in a vase can warm up a room. Candles can also do wonders in lighting and warming a room.
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