Outlook On Canadian Housing Market

I have some exciting news to share. Brennan Valenzuela from RateHub and I will be swaping blog posts once a month! His posts will be featured here and mine will be featred on RateHub's blog. For those of you who don't know what RateHub is all about, I'll fill you in. It's an easy to use platform where they compare banks and broker rates as well as present mortgage information in a simple to understand way.

Take it away Brennan...........

The Canadian housing market is on edge. Open a newspaper. Click through a blog. Listen to a podcast. The amount of content debating a possible Canadian housing crash is as feverish to TMZ buzzing about Lady Gaga’s latest meat dress. So, why is everyone so concerned? Because a Canadian housing collapse would likely take the economy with it, as evidenced by the US sub-prime mortgage crisis that spurred the financial crash of 2008.

How safe is Canada’s housing market and are we doomed to repeat the same fate?

Ratehub has examined the data and fine print to determine the likeliness a US-style housing burst could occur in Canada. There are qualities of the 2007 US housing market that are present in our current Canadian housing market which should be a concern, however, Ratehub feels the Canadian housing market will cool, not crash due to some very fundamental differences between the two nations.

The similarities: Why we should be worried

Sky-rocketing residential home prices are the most obvious shared similarity between the two markets. During the peak of the US housing bubble, it required 473% of the median household income to purchase a median priced home (approx. $225,000). Currently, the average Canadian home price is $369,677 for a multiple of six times the Canadian family after-tax income of $60,000.

An ultra-low mortgage rate environment also helped fuel the US housing bubble by making it cheap for consumers to borrow money. During the early 2000s, highly favoured 30-year fixed rate mortgages reached record lows in the US. Current mortgage rates in Canada are also at historic lows. For example, 10-year fixed rates are available at an unprecedented rate of 3.79%.

The biggest red flag, which has caused Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney to express concern, is Canada’s rising level of household debt. Today, the average Canadian owes $1.56 for every $1.00 they make – a ratio the US hit during the height of their crash.

The differences: What helps shield us

Canadians are internationally known as conservative people. We’re polite. We say ‘thank you’ and ‘excuse me’. Canada maintains strict mortgage underwriting standards. A stated income mortgage is one where the borrower cannot verify their income through traditional methods. Without ‘hard-proof’ of income, stated income mortgages pose a serious risk to lenders. During the US housing bubble, almost half of subprime mortgages were made up of stated income mortgages as lenders began reducing the qualifications for proof of income. Back in the Great White North, stated income mortgages make up less than 5% of all mortgages.

Subprime mortgages accounted for one in every five mortgages in the market during the US housing crash. US lenders became riskier with their lending practices to increase their bottom line.
One of the most well-known consequences of the US housing bubble was home owners ‘walking away’ from their home because they could no longer afford their mortgage. In Canada, lenders can pursue defaulting borrowers for the full amount.

Finally, mortgage-backed securitization is not as prevalent in Canada as it was during the US mortgage crisis. Our lenders must keep 70% of the mortgages they originate on their balance sheets while only 30% are securitized (sold to investors). Lenders in the US securitized 60% of the mortgages they originated, or double the Canadian equivalent.

What will happen to the Canadian housing market?

The market is poised for a correction, but a soft correction. Although Canada shares many similarities with the housing market that fell apart 5 years ago in the US, there are some notable differences that shield us from the same fate. Canada maintains stricter mortgage practices including borrower qualifications and mortgage products that don’t rely on teaser rates and no-money down.

The following article was written by Brennan Valenzuela for Ratehub.ca, a mortgage rate comparison website that is dedicated to helping and educating first-time home buyers.

For more information make sure to follow Rate Hub on Twitter and like them on Facebook. Thanks Brennan and see you next month!

Why Should You Stage?

Christina is back from The Staging Group to do her next blog post in our staging series, take it away.....

Hello Again,

In my last blog I addressed the question of "What is staging anyway?" As a brief re-cap I have added a few points below:

• Staging is not just de-cluttering, de-personalizing and re-decorating. Staging is your #1 marketing tool when selling your home.
• We help determine the target market, evaluate your property "from the buyers' eyes" and analyze where to invest in the property to provide you the highest return on investment.
• Develop a plan specific to you, your timeline, budget and goals in order to get your property ready to stage
• Staging or showcasing transforms a home into a "model suite" using techniques such as space optimization, lighting, accessories and art to highlight focal points, optimize the traffic flow and help buyers become emotionally connected.

Now that we are all up to speed on how many different elements are involved with staging, let's address the question of "Why should I stage my house?" Here are a few things to consider:

Why Do I Need A Stager?

Homes that have not been staged take 67% more time to sell then homes that have been staged. Staged homes sell for more money then non-staged homes. Buyers are looking for a move in ready home NOT projects and to do lists.
Staged homes look better in MLS pictures and therefore draw a larger group of potential buyers to view the home.

Can't Buyers Use Their Imagination?

Some buyers can't or don't want to use their imagination. some people find it difficult to see beyond what's in front of them and see the potential that a property has to offer. Staging shows them exactly what the benefits are of a property and allows them to develop an emotional connection.

I Love My Decor, Why Change It?

The way you have decorated your home works well for the way you live. However, this may not work for selling your home. Staging takes away the personal elements of the home's decor and allows the buyers to see their belongings in the space and really see themselves living there.

Can't I Do It Myself?

You have an emotional, vested interest in your home and your belongings. A professional home stager can walk through your property and quickly make suggestions that are completely objective and that will give you the best return on investment.

In summary....staging works! Numerous studies have been conducted by organizations such as Home Gain and The Maritz Research Group, that have proven staged properties sell faster and for more money then properties that have not been staged.

My next blog post will address the questions, "I have decided to stage my house. Now what?" along with "How do I live in my house after it has been staged?"

Thanks for reading!

Christina Thurston

Thanks again Christina for a very informative post, can't wait to read your next one!

For more information about what The Staging Group can do for you, please visit them at http://www.thestaginggroup.ca/ or email Christina at christina@thestaginggroup.ca You can also follow The Staging Group on Twitter @thestaginggroup and like them on Facebook.

What are your thoughts on staging? Would you ever using a staging company to sell your home?

Client Testimonial

This past Friday, one of my favourite first time buyers closed on their new home. I was so excited to share this experience with them as it's a couple that I know from high school and they are also getting married this summer and starting their new life as newlyweds in downtown Toronto. Seeing the smiles on their face and how happy they were, totally reminded me why I love real estate so much. Finding a home for someone to grow their lives in and make new memories and start new families, couldn't make me any happier. Those kinds of moments don't happen so often, so when they do, you have to cherish them.

We rang in their closing date with some bubbly I brought them......



And then they gave me this.......



Thanks again guys, I wish you tons of happy memories in your new home!

Monthly Newsletter: May

I'm feeling a bit repetitive, but the Toronto real estate market is still climbing to new heights with no slowing down in the near or distant future as proven by the April 2012 numbers. 10,350 transactions were reported through the Toronto MLS which is 18% higher then April 2011, you read it right, that's not a typo. The big winner here, which I'm sure will come as no shock considering there's offer deadlines, left, right and center, single detached homes. This category saw transactions up by 22% when compared to a year ago with semi detached homes coming in at 15%. I think the single detached home wins by a long shot. Clearly there is still a ton of demand and just not enough inventory to satisfy the appetite of the eager buyer. The not so surprising media doom and gloom is back, I guess ratings are low these days, but that's not stopping people. I'm not trying to say that Toronto or even Canada is immune to a cooling market, but there's no "bubble" waiting to burst with an apocalyptic outcome.

Our immigration is at an all time, rates are low and generation Y is either ready to upgrade or buy their first property. Not to mention our banks are strong too. Bloomberg came out with a report this week, talking about the world's 10 strongest banks and guess which country had 4 banks on that list, you guessed it, Canada. No other country dominated the list like Canada. Rounding out the top 20 are 3 banks from the US and 4 European banks. Canada's banks are tops, we should be proud and not scared.

 Here's the list of our 4:

• CIBC #3
• Toronto-Dominion Bank #4
• National Bank of Canada #5
• Royal Bank of Canada #6

Now that's impressive, wouldn't you say? My bank made the list, did yours?

So now that we got that out of the way, let's get more in depth with our numbers:

• Average selling price in the GTA......$517,556, up 8.5% when compared to April 2011
• Average selling price in the 416 area...$568,436, up almost 8% when compared to the same time last year
• Condo market showed a steady price growth at 4% from last year

Moral of the story, keep your debts in line, look towards the future and plan for it now, financially and don't over leverage yourself. Best advice I can give!

Here are some more details on the Toronto real estate market for April 2012 and the outlook for the remainder of 2012.


Have a great May!

Your friend in real estate,


***Statistics via TREB***
***Image via SCRENews***

Flooring Update

Today or should I say tonight as I write this post on a Friday night, I have a treat, I'll be doing 2 blog posts, yay, I know you're super excited right now.  I spent the day running around taking care of some last minute details for my home renovation as well as buying tiles for my front foyer so there was no time for blogging. Also this evening I met up with my favourite first time buyers to help them celebrate their closing today with a little bubbly, more details on Monday. So in conclusion, instead of just doing 1 post in the limited time I had today, I decided to do 2!

Anyway, back to the front foyer, my entire first and second floor  have brand new hardwood installed, but I thought tiles might be appropriate for the front foyer as it's the only spot on the main floor that's enclosed and I personally don't want people to step on my beautiful hardwood with wet or snowy shoes. So my mission today was to find some tiles for this area. My challenge was trying to figure out whether I should buy tiles that match as close as possible to the hardwood floor colour, as they will sit side by side or go with something a little lighter and in a similar colour to the floor. After calling around for some much needed advice and spending way too much time at the Home Hardware with my giant sample of hardwood, I made a decision.

Here it is....let me know what you think!

I think it's a perfect combination as the hardwood is a mix of a grey/brown colour and the tiles are a medium grey with flecks of brown, couldn't have been more perfect. Oh and by the way $2.25/sq ft and I only needed 20 sq ft, you do the math.

Now on to post number 2!

Cool Homes: Industrial Loft

I came across this very unique loft and I just had to feature it. I totally prefer living in a house rather then a building, but if I had to settle, it would definitely have to be a loft and preferably this one! It boosts 4090 sq ft of open space from lounging and kitchen areas to even the mater bedroom washroom, but don't worry, the toilet is tucked away. This industrial loft is located in Kiev, Ukraine and is designed by 2B Group. The designers were constantly challenged with this project to prove that, "concrete could be warm, wood could be smooth and metal could be soft." I think they succeeded because all I see when I look at this beauty is bold style statements. Do you feel the same way?








Yes, that's a bathroom in there, how cool?


Open concept washroom in the master bedroom















Kid's Zone








Vertical plant wall which runs from living-dining space down to the lower floor containing the lounge-home office space


Secondary living area which leads to the master bedroom


Huge rooftop terrace, yes please!


Is that a hot tub I see in the corner?


If you have a cool space or uniquely decorated place that you would like me to feature, make sure to contact me!
***Images via Home-Designing***

REBARCampTO-morning session

Today is a fun filled day of learning and sharing at REBARCampTO. Here are some of my highlights from the morning sessions I attended. Please excuse the accuracy of the information as I was jotting down notes super fast while tons of information was thrown at me.

IPad Apps:

-PDF expert, allows you to take existing PDF files and highlight text, add comments, underline, strike, and has fillable fields, you can have your clients sign listing agreements, buyer rep agreements, etc only form not allowed is the agreement of purchase and sale, this contract must have an actual pen signature, no digital

-Prezi, presentation software which you create on your computer first and then forward to your IPad

-Mighty Meeting allows you to upload power presentations to your IPad

-Tour Narrator, great to use during a home tour and allows you to take audio notes during the tour, it then converts your audio in to a PDF file which you can email to your clients

-IDream Agent, allows you to take notes and pictures, organize them and share on Facebook and Twitter

-Great CRM softwares, Ixact and Zoho

-Jugnoo, social software like Hootsuite

-Tout, allows you to take 15 second video clips, also available on the IPhone and again great for home tours

-IJot, allows you to send video emails

-Quicklytics, fast way to check your Google Analytics

-Need to keep young kids entertained during a showing? Use Greeneggsandham

-Cam Scanner or Genius Scanner, scans 8 1/2x11, converts into PDF and allows you to scan multiple pages, it's also available on Blackberrys and Andriods as well as IPhones

Tips:

-do a "just moved" video for your clients, visit your client on their closing day and offer to take a video of their house so that they can share it with their friends and family, at the end of the video get a testimonial, remember they will email this to all their friends and family and post it on Facebook, great exposure for you!

-When meeting with clients for the first time, ask them what their expectations are of you as a Realtor, at the end of their transaction ask your clients if you met all the expectations you discussed at the beginning, great way to keep track how you're doing and servicing your clients

Remember it's about passion, personality and provision (quote from someone at the seminar)

Hope this helps! Stay tuned for notes from the afternoon session!

Aleksandra!