Continuing Saga of the Canadian market

There’s been a lot of talk about real estate in the news in recent months. We’ve heard about declining housing starts, falling existing home sales, double-digit price depreciation, subprime fallout and foreclosures – in the United States. Fortunately, we live in Canada. And Canadian real estate markets are far-better positioned than their American counterparts for a good number of reasons.

1. Subprime mortgages represent less than five per cent of our market nationally.

2. Foreclosures occur in about one quarter of one per cent of mortgage transactions in this country.

3. Canadians have more equity in their homes.

4. We have less debt than our neighbours south of the border.

5. Speculation has played little or no role in existing home sales in Ontario.

6. The fundamentals of our economy are relatively solid. Of the G8 countries, only Canada is expected to show growth in 2008 and 2009.

7. The Canadian banking system is one of the best in the world, relying more on old-fashioned lending than innovative financial products geared toward profit.

8. The Canadian job market is stronger than the US, adding more than 200,000 jobs so far this year.

9. Interest rates remain favourable.

10. Housing values in Ontario major centres did not experience serious, double-digit price appreciation year-after-year for an extended period. Our markets were characterized by stable, healthy growth.

11. Immigration continues to play a key role in housing markets. Between 2001 and 2006, more than 1.1 million immigrants came to this country, with about half settling in the province of Ontario. Immigrants tend to purchase a home within the first five years of living in Canada.

Real estate is cyclical. There will be peaks and valleys. The more restrained the peak, the more modest the valley.

There is no question that market conditions have moderated from 2007’s record pace. More listings, softer housing values, longer days on market – but most centres are relatively solid. While some buyers and sellers will adopt a wait-and-see attitude, there are those that will continue to venture forward.

Sellers will need to be realistic in setting a selling price. Listing a property at fair-market value will ensure that it will sell in a reasonable amount of time. This is not the time to test the market. Those that are truly interested in selling their properties know that over-priced homes risk stagnation. Buyers in today’s market will need to be careful not to overextend themselves. They should know exactly what they can afford. Pre-approval for a mortgage loan is ideal because it lets buyers know exactly how much they can spend on their new home.

Looking forward, we anticipate a continuation of stable market activity, minus the urgency in past. Gone are the multiple offers that left both buyers and sellers dissatisfied. The increase in the number of homes listed for sale are a definite advantage for purchasers who now have the luxury of time in making one of the most important decisions of a lifetime. For sellers, the time to trade-up has never been better.

Canadians are great believers in homeownership – a fact underscored by the close to 70 per cent who own homes in this country. History has proven time and time again that real estate is a solid, long-term investment that appreciates at a rate of about five per cent annually. You can’t live in your mutual fund, and after the last month in the financial markets, quite frankly, we’re not sure you’d want to.

Re/Max recreational property report

Wasaga Beach

Starting price for a three-bedroom, winterized recreational
property on a standard-sized waterfront lot: $550,000

Although demand for recreational properties in Wasaga Beach
remains constant, adverse weather conditions earlier this year
hampered sales activity. Th e number of homes sold is down
from level’s reported one year ago, while the average sale price
is up seven per cent to $253,000. Starting price for a typical,
three-bedroom, winterized, recreational/cottage beachfront
property on a 50 ft. lot now hovers at $550,000 while similar
home on the river will sell for $350,000. Baby boomers are the
most active demographic in the market. Empty-nesters are buying
recreational properties before they retire and using them on
weekends and holidays in the interim. Retirees are cashing out
of city homes and opting for waterfront or golf course homes
or new homes in subdivisions like Zancor, Baywood, Fernbrook
and Pine Valley Homes in Wasaga Beach. For purchasers seeking
aff ordability, condominiums or newer modular home parks,
starting at $115,000 plus, represent good value for the dollar.
Homes on back lots and residential areas away from the beach
are also popular, starting at $250,000, with many listings currently
available for sale. Beachfront cottages tend to command
top dollar, although listings are in short supply. New development
continues to advance the beach year-over-year and attract
even more purchasers to the area.

Lake Couchiching,
Lake Simcoe

Orillia,
Starting price for a three-bedroom, winterized recreational
property on a standard-sized waterfront lot: $425,000

Steady demand for recreational properties in recent months
has served to somewhat offset the impact of severe weather
conditions in Orillia earlier in the year. Sales are down 34 per
cent from levels reported one year ago, while average price has
appreciated six per cent over last year. New development in
terms of condominium construction continues unabated, with
high-rise projects such as Panoramic Point on Lake Couchiching,

Elgin Bay Club and Sophie’s Landing—a ranch-style gated
community on Lake Simcoe—attracting a growing number
of retirees to the area. More traditional recreational product
is sought-after by purchasers in their 40s who are looking for
little cottages on larger lakes or renovation projects on smaller
lakes and rivers. The starting price for a three-bedroom, winterized
recreational property on a 50 ft. waterfront lot is $425,000
to $450,000, while a non-winterized home on the same water
frontage will start at $375,000 to $400,000. A good selection
of product is currently listed for sale and multiple off ers are a
rare occurrence in today’s market. Th e influx of new listings
is expected to hold price appreciation in check this year.
Th e upper-end of the market is very active, but prices are starting
to stabilize. Th e most expensive recreational property sale so
far this year was a $2.2 million 7,000 sq. ft. home with 633 ft.
of waterfrontage on Bass Lake. Th e priciest is located on Lake
Simcoe, a 4,100 sq. ft. stone home listed at $2.3 million.


Innisfil and Oro

Starting price for a three-bedroom, winterized recreational
property on a standard-sized waterfront lot: $480,000

More balanced recreational property market conditions are
emerging on Lake Simcoe’s western shoreline between Innisfi l
and Oro. Listings are up marginally over last year, although
many have been on the market for quite some time. Fifty-four
properties are currently listed for sale, with 42 per cent of those
priced over $1 million, and only one under $400,000. Aff ordability
is an issue, as the price of a three-bedroom, winterized
recreational property on a 50 ft. waterfront lot just one hour
north of the Greater Toronto Area now starts at between
$480,000 to $520,000. Back lot properties with deeded access
to the water are a more affordable alternative, but many are
snapped-up and used as rentals, or torn down to make way for
larger, year-round lakehomes. Higher prices have forced many
potential buyers to travel further north to areas like Huntsville
where recreational property prices are more reasonable. Th e top
end of the market is steady, with demand greatest for prop
erties with 200 ft. of shoreline or more. Aging baby boomers are
the behind the push for recreational properties in the area, with
most buying with retirement in mind. Sports celebrities have
also contributed to the overall health of the upper-end. Th e most
expensive property on the market is located in Shanty Bay with
a sticker price of $11.4 million. Teardowns continue unabated,
with new construction and renovation evident along the shoreline.

Why Real Estate agents must ask for personal I.D. The times, they are changing.

The Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, collects, analyzes and discloses financial information and intelligence on suspected money laundering and terrorist financing activities. It was created as part of a Canadian government initiative to fight money laundering and terrorist financing, both domestically and internationally. Businesses and industries who must report to FINTRAC are required to know their clients and asking for ID is one way to do that.

Can I see some ID please?
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) requires financial institutions and others covered by the legislation to identify customers who conduct financial transactions such as: depositing funds, purchasing a life insurance policy or buying a money order.
The Act also requires them to keep records and identify their clients.
Why do I have to show ID now when I've been a customer here all my life?
The business you are dealing with is required by law to ask you for ID. By providing this information when requested, you will ensure that financial institutions and others can meet their legal obligation, and support the fight against money laundering and terrorist financing.

Money laundering
Money laundering is the process used to disguise the source of money or assets derived from criminal activity. This illegal activity can include drug trafficking, smuggling, fraud, extortion and corruption. Criminals must launder the profits and proceeds from these crimes to be able to enjoy them.
The scope of criminal proceeds is significant; the International Monetary Fund (IMF) estimated that some $500 billion (U.S.) is laundered worldwide each year.
Money laundering occurs worldwide, and the techniques used are numerous and can be very sophisticated. Technological advances in e-commerce, the global diversification of financial markets and new financial products provide further opportunities to launder money and obscure the trail leading back to the underlying crime.

Terrorist financing
Terrorist financing operates somewhat differently from money laundering but no less insidiously. While terrorist groups do generate funds from criminal activities such as drug trafficking and arms smuggling, they also frequently obtain revenue through legal means. Supporters of terrorist causes may, for example, raise funds from their local communities by hosting events or membership drives. In addition, some charity or relief organizations may unwittingly become the conduit through which donors contribute funds that may eventually be used to commit a terrorist act. The funds are then routed to the recipient terrorist organizations through both informal networks and the formal financial system.
Terrorist activities constitute threats to our country's safety and security. An effective response involves, among other things, efforts to detect and curtail the flow of money needed to finance such activities.

What type of ID do I have to provide?
Under the PCMLTFA, you are required to provide valid identification such as a birth certificate, a drivers license, or similar type of document.

What other information may I be asked to provide?
There are other requirements that might prompt the business you are dealing with to ask you for more information about the transaction you are conducting. For instance, you may be asked whether you are acting on behalf of a third party while conducting your transaction.

Where can I get more information?
To find out more about the PCMLTFA, FINTRAC, and the fight against money laundering and terrorist financing, visit FINTRAC's Web site at: www.fintrac-canafe.gc.ca or call toll-free: 1-866-346-8722

Barrie Market Conditions May 2008

Conditions remain favourable for first-time buyers active in Barrie this year. Price growth has started to level out, allowing purchasers time to catch their breath, make decisions, and save a down payment. Approximately 20 per cent of all sales year-to-date have taken place under the city’s average price of $257,000. Housing remains quite affordable, and with detached homes starting from the low $200,000s, many first-time buyers—particularly those coming from Toronto and outside centres—are spending more than average price. With a good selection of inventory now available, few buyers need to make major compromises to realize homeownership. Although multiple offers are still a factor, they’re limited to well-priced quality homes.

With apartment-style condominiums still evolving in Barrie and geared more to the boomer segment or childless professionals, most young purchasers are opting for detached homes with an eye toward raising a family. Buyers seeking lower sticker prices or less maintenance are purchasing town homes, priced from $189,000. Those attracted to the apartment lifestyle, however, can buy a one-bedroom unit—with a view of the water— from $189,000. More affordable condominium town homes are available closer to Hwy. 27, near Timberwalk, priced in the $150,000s. The South End of the city has been especially popular with the GTA commuters, due to it’s close proximity to the new GO station. The lowest sold prices in Barrie to date includes a detached home located in a transition area within the downtown core (with mixed commercial), priced at $157,000, and a one-bedroom condo unit, located near Hwy. 27, priced at approximately $124,000. Overall, first-time buyer activity in Barrie remains brisk.

Buyer intentions are strong and consumer confidence is high. Purchasers appear to be more aware of the value of resale homes.

Levies and premiums on new construction continue to rise. In-migration will remain a strong factor propping up demand in the area, and that is expected to continue well into 2008 and beyond.

Spring Market has Arrived

Pat and I are announcing the official arrival of the spring real estate market. It has been a crazy week for us. Working with both buyers and selling our own listings. We worked every day last week and sold 6 homes. There is a new vitality in buyer activity. Could be the weather which in our area is starting to show definite signs of spring. Or it could be pent up buying emotions. Whatever it is we're ready. Are you ???

As a seller it's still important to be priced correctly for the market. Because we work with a lot of buyers as well as home owners we see the transaction from both sides. As a seller you want to get the best price possible. And it's our responsibility to get all the equity out of your home that we possibly can. However as a seller you must keep in mind that buyers are seeing a lot of homes before they put in an offer. What does that mean? It means they are well educated as to the market price. So as a seller if you are over priced you end up always being the bridesmaid never the bride.

So how do you get the most dollars when you sell? Pricing strategy. Price your home as close to the market value as possible. In fact if you have the nerve price it right at market value or a few hundred dollars below. Why would you price it just below? Most home owners feel they need to price 5,000 TO $10,000 above market because "the buyer always comes in below asking" NOT ALWAYS TRUE! By pricing right on or below you will create incredible interest in your property. The plan is to have two or more offers presented to you at the same time. There by creating competition for your home. That is how you get full value or even extra $$$ above your homes market value.

Well if you have questions, we're always available and the information is free.

The Best Present Ever

February 28th 2007 is a very special day for Pat and myself. That's the day our very first grandchild was born. Our daughter Shane and son-in-law Todd gave us the best present ever. Victoria was born at 3.05 pm weighed in at 7 lb 10 oz and is very, very healthy. The picture is Victoria at 3 days old. She's beautiful. Shane and Todd are doing great. Poppa Colin and Nana Pat are loving the idea of having a grandchild to spoil. However we don't really feel old enough to be a Poppa and Nana.

Canada not linked to U.S. market troubles

The melt down of the U.S. real estate market has left many home buyers wondering if and how it may affect the housing market in Canada. Market analysts say the problems in the U.S. will have little impact on the Canadian market.

According to a recent house price survey report, Canada's resale housing market remained on solid ground during the 3rd. quarter, as high consumer confidence, strong employment rates and stable interest rates led to robust buyer demand and a rise in house prices. " Much like the Canadian dollar, the Canadian housing market is charting it's own course, quite independently from the United States and it's currency and housing market.

The strength of the Canadian dollar and the fact that the country is adjusting well to it's value, will continue to keep interest rates at low to moderate levels. Boding well for buyers looking to enter the market.

In Barrie 2007 was an exceptional year for residential sales. 2008 looks to be a very healthy market as well. With about a 3% to 4% increase predicted in prices. The addition of the GO Train connecting Barrie to Toronto should increase the desirability of buyers from the GTA looking for affordable housing.

All in all we expect 2008 to be another strong year in residential sales.

Our first entry

Welcome to Pat and Colin's real estate blog. Well, I'm sitting here at the keyboard thinking, now what. Very quickly I have discovered what writers block is all about. It's very exciting for Pat and I to enter into the world of blogging. Trust me these posts will get a lot better.

The one thing that has surprised me is how easy it was to get the blog up and running. I can't say enough about blogger.com. For anyone reading this and I hope there is someone out there that has stumbled upon our blog, If you have thought of blogging and have something to say, give it a try.

Future posts will have considerable real estate content and some personal observations, so please come back and check us out. Colin