Real Estate Flashback!

The 2010 Top 10 Real Estate Trends Report is now out and discusses many current trends and predictions in the real estate market. Here are some quotes below for a little flashback to remind you how far the real estate market has come in the past 60 years and some predictions that were made in past years. It’s really interesting to see how far we are in 2010…

“The prices of houses seem to have reached a plateau, and there is reasonable expectancy that prices will decline.” –Time Magazine, 1947

“Houses cost so much for the mass market. Today’s average price is around $8,000- out of reach for two-thirds of all buyers.” –Science Digest, 1948

“The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs about $28,000.” –Business Week, 1969

“You might well be suspicious of ‘common wisdom’ that tells you, ‘Don’t wait, buy now… Continuing inflation will force home prices and rents higher and higher.’ “ –NEA Journal, 1970

“The medium price of a home today is approaching $50,000 …Housing experts predict price rises in the future won’t be that great.” –Nations Business, 1977

“The era of easy profits in real estate may be drawing to a close.” –Money Magazine, 1981

“The golden-age of risk-free run-ups in home prices is gone.” –Money Magazine, 1985

“Most economists agree… (a home) will become little more than a roof and a tax deduction, certainly not the lucrative investment it was through much of the 1980s.” –Money Magazine, 1986

“Financial planners agree that houses will continue to be a poor investment. “ –Kiplinger’s Personal Financial Magazine, 1993

“A home is where the bad investment is.” –San Francisco Examiner, 1996

Here is a little something to take away from this. As with all predictions, especially economic ones; there are many different and conflicting opinions. The experts, while agreeing on some basic facts are still uncertain about the potential impact of a number of major issues. It is hard to pick sides because nobody can ever be sure about future events.

If you have any questions feel free to call or email me.

Your Real Estate Professional,

Mary-Anne

Source: Swanepoel Trends Report 2010

Will Selling Your Home Privately Save You Money???

It's a question many homeowners often ask themselves: could I save myself thousands of dollars by bypassing the real estate agent and selling my home myself? After all, the Internet has made private home sales much more accessible with numerous For Sale By Owner websites that allow sellers to market their homes to a wide audience without the use of an agent. How hard can it be?

An interesting article in the Financial Post this week takes a look at the pros and cons of the private sale. A bit of math shows that a 5% commission paid to an agent on the average home price of $331,171 would save you a whopping $16,558. Or would it? As with most things, nothing is ever that black and white.

Whether or not a private home sale actually puts more cash in the vendor's pocket is a tough call. The seller might save by not having to pay a 5% commission, but others argue that an agent brings greater exposure, more competition and therefore a better chance you will be offered a higher price for your home. And then there's the time and effort put in on behalf of the seller, often eating up weekends and disrupting office hours. So deciding on whether a private sale is for you really comes down to how much time you have to research the market, talk to buyers and how confident you are in your ability to negotiate the sale.

The article makes a few interesting points:

• Private home sales are generally more successful in a hot real estate market
  


• Many private sellers often end up paying a commission to buyers' agents, usually about 2.5%
  


• Buyers usually expect a discount on private sales because they know the seller is saving on commission
  


• Private sellers do not have the same safety net that is in place through the official system if something is to go wrong with the sale
  
  Source: Wallet Pop Canada

Ottawa Housing Market Soars Into Spring!

Looks like spring is off to a fabulous start Ottawa!

Members of the Ottawa Real Estate Board sold 1,499 residential properties in March through the Board’s Multiple Listing Service® system compared with 1,161 in March 2009, an increase of 29.1 per cent.

Of those sales, 327 were in the condominium property class, while 1,172 were in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked etc.) which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

“The spring market kicked off early and strong this year, possibly boosted by the unseasonably warm weather and absence of snow in March,” said Board President Pierre de Varennes. “Inventory is still lower than at this time in 2009, but has begun to increase slightly in recent months,” he added.

The average sale price of residential properties, including condominiums, sold in March in the Ottawa area was $329,767, an increase of 15 per cent over March 2009. The average sale price for a condominium-class property was $240,409, an increase of 15.1 per cent over March 2009. The average sale price of a residential-class property was $354,698, an increase of 15.1 per cent over March 2009. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.

This is an amazing start for the 2010 Spring/Summer market. Sales will continue to grow in the next few months!

NOW is the time to buy or sell..

Your Real Estate Professional,

Mary-Anne

Source: The Ottawa Real Estate Board

Make the Most of Green Upgrades

As energy conservation becomes more of a concern for both government and consumers, REALTORS can better serve their clients by knowing more about heating system upgrades and government grant programs for them.

Clients who are interested in upgrading their heating systems can take advantage of the Ontario Home Energy Savings Program and the federal ecoEnergy Retrofit program which provide grants for retrofitting their homes. Homeowners can receive up to a combined maximum of $10,000 from both the provincial and federal government in grant money.

Only homes that have undergone a residential energy efficiency audit by an energy advisor certified by Natural Resources Canada will be eligible for grants under the ecoEnergy Retrofit program. So what’s involved?

Check for Leaks and Drafts: To qualify for federal grants and provincial rebates, homeowners must complete two home energy assessments: one pre-renovation and one post-renovation. Only renovations that begin after the initial assessment qualify. Renovations need to be completed by the earlier of either 18 months of receiving the pre-retrofit evaluation report or by March 31, 2011.

A typical energy audit consists of a walk-through to assess the home’s insulation, heating and cooling systems and other energy uses. The home’s ventilation, leaks and drafts are then identified using a “blower door” depressurization test. An evaluation report is produced and the advisor provides an EnerGuide rating label for the home. The energy advisor will submit the file to NRCan, who will then transfer the file to Ontario to process the audit grant cheque.
Once the audit is completed, the homeowner can choose which (or all) of the recommendations he or she wishes to implement. On completing the renovations, the homeowner should contact the energy advisor to perform the post-retrofit evaluation, and then submit the grant application. The homeowner should receive a grant cheque within 90 days of the post-retrofit evaluation.

All renovations, whether completely by the homeowner or a contractor, should be documented with receipts, photos and product literature to ensure full credit is received. After participating and completing the program, homeowners can register for another eligibility period in the program and continue with additional renovations.

Only energy advisors certified by NRCan and employed by licensed service organizations can conduct energy audits under both programs. Licensed organization can be found on the NRCan website at www.nrcan-rncan.gc.ca

Grants Available: For a list of grants available check www.nrcan.gc.ca

Aside from the rebates (up to a maximum of $10,000), the actual savings from participating in the program depend on the home’s condition and the type of upgrades chosen. Participants typically reduce their energy use by up to 30 percent. This translates into a savings of $450 on a $1500 annual heating bill.

If you ever have any questions feel free to email me at mgillespie@kwottawa.ca

Your Real Estate Professional,
Mary-Anne

Source: Ontario Real Estate College

Important 2010 HST Deadlines!

The implementation of the Harmonized Sales Tax is looming and how it will affect homebuyers depends on specific dates.

After July 1, 2010, consumers begin paying the HST, a 13% blended tax comprising 5% GST and 8% PST on the majority of goods and services throughout Ontario.

Here is a brief summary of key facts and dates relating to home purchases:
For homebuyers of resale homes, there is no HST on the purchase price, however there will be new HST on many services required, like real estate commissions, legal fees, home inspections and so on, which have suggested will increase the average costs to purchase and sell by more than $2000 per transaction.

For buyers of newly constructed homes where homebuyers take occupancy or ownership of new residences (including condominiums) before July 1, 2010, HST does not apply.

For contracts entered into after June 18,2009 and before July 1, 2010, and occupancy and ownership occur after June 30, 2010, HST does apply.

For contracts entered into before June 19,2009, where homebuyers both close and occupy new residences (including condominiums) before or after June 30, 2010, the HST will not apply.
There is an enhanced rebate program for HST on new homes. Purchasers entitled to the GST portion of the rebate will now be entitled to a PST rebate as well.

Effectively, the PST portion of the rebate is 75% of the provincial portion of the HST on purchases up to $400,000 to a maximum of $24,000, which is the same as saying the tax increase of 8% is reduced by 6% to 2%. So on the first $400,000 there is a 2% increase ($8000) and every additional $100,000 in purchase price will see an additional non-refundable $8000 of tax.

Homebuyers should make sure the HST and the rebate will be handled by their builder in the same way as the GST rebate was previously.

Please note, however, the homebuyer may be eligible for a PST Transitional Housing Rebate when construction is started before July 1, 2010 but closing takes place later.

The PST Transitional rebate is a short-term program intended to help purchasers recover the cost of PST embedded in the purchase price. The amount of the rebate depends on how complete the home is at July 1. Buyers should make sure their builders will help them apply for the transitional rebate.

Please also note that for some mysterious reason, the PST Transitional Housing Rebate does not apply to new condominium units.

If you have any questions feel free to email me at mgillespie@kwottawa.ca

Your Real Estate Professional,

Mary-Anne

Source: Riopelle Grenier

Breaking News Release- Canadian Government Takes Action to Strengthen Housing Financing

The Honourable Jim Flaherty, Minister of Finance, today announced a number of measured steps to support the long-term stability of Canada's housing market and continue to encourage home ownership for Canadians.


"Canada's housing market is healthy, stable and supported by our country's solid economic fundamentals," said Minister Flaherty. "However, a key lesson of the global financial crisis is that early policy action can help prevent negative trends from developing."


The Government will therefore adjust the rules for government-backed insured mortgages as follows:
Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.


Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.


Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.


"There's no clear evidence of a housing bubble, but we're taking proactive, prudent and cautious steps today to help prevent one. Our Government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it," said Minister Flaherty. "If some lenders aren't willing to act themselves, we will act. These measures demonstrate the Government is committed to taking action when necessary to support the long-term stability of a sector that is so vital to our economy and the financial well-being of Canadian families."

These adjustments to the mortgage insurance guarantee framework are intended to come into force on April 19, 2010.

Source: Mortgage Brokers Ottawa

Mandatory Home Energy Audits

Just a little update!

Members should be aware that regulations for mandatory home energy audits have not yet been created and there is currently no schedule for implementation of that section of the Green Energy Act. The pertinent regulations may be drafted in the upcoming session of Provincial Parliament. Members will recall that a waiver clause was inserted in the legislation, thanks to lobbying efforts by the Ontario Real Estate Association and our own Government Relations Committee, which will allow a buyer to waive, in writing, his or her right to an energy audit. The Board will keep an eye on this issue and advise members when the regulations are created and an implementation date is set.

Mary-Anne


Source: The Ottawa Real Estate Board