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Toronto's new home sales drop 69%
New home sales slump continues in January
With just 599 new homes and condominiums sold across the Greater Toronto Area in January, 2009, the sharp downward trend exhibited during the last quarter of 2008 has continued into the New Year. New home sales were down 69 per cent in January compared with the same month the previous year. A review of the records reveals that January sales have only been less than 599 units once (in 1992 - 513 units) since the database was established in 1981.
"The very slow start to the New Year did not come as a surprise given the obvious trend-line and the macro-economic forces at play," said BILD President and CEO Stephen Dupuis, "but that doesn't mean we're not concerned about it.
"During January, buyers had yet to see the U.S. and Canadian responses to the global economic crisis. The spring housing market will be unfolding in the context of the new Obama administration in the U.S. and the massive fiscal stimulus packages unleashed on either side of the border and time will tell how homebuyers respond to these developments," Dupuis added.
Mr. Dupuis expressed cautious optimism that the federal stimulus package combined with further enticements expected in the pending provincial budget together with the boost from 50-year low interest rates will have a positive impact on the market so long as the measures are not undermined by contradictory government policies that would increase the cost of doing business.
Dupuis cited the provincial government's recent imposition of mandatory WSIB coverage as an example of an ill-timed initiative and warned that harmonization of the GST and PST would devastate the already moribund housing sector. "There's no point in putting the gas pedal to the metal from a stimulus standpoint while braking equally hard with the other foot, but that's what harmonization amounts to," he said.
As an example of a more enlightened approach, Dupuis complimented Toronto Mayor David Miller and City Council on their decision to hold off any development charges increases for two years or more depending on the health of the industry. "The truth is that we need rollbacks in development charges, but the City of Toronto nevertheless deserves credit for deferring the increases to protect and promote jobs and investment in the City," Dupuis concluded.
February 27, 2009 | Permalink | Comments (4) | TrackBack
Housing starts continue steep decline
Scotiabank says Canadian residential activity may further moderate in 2009, with housing starts expected to fall 27 percent, amid a general weakening in the domestic economic conditions. "Housing starts are forecast to fall to around 155,000 units — below longer-term replacement demand — with declines across all provinces and in both multi-family and single-family segments," analyst Adrienne Warren said in a note to clients in Toronto. The analyst also expects average prices to drop further by 10 percent.
Canadian housing starts totaled 211,056 units in 2008, down about 8 percent from an average of almost 230,000 units from 2004 to 2007, Warren said. While home sales and construction in Canada seem sure to fall further in 2009, the outlook for renovations is somewhat mixed, the analyst said.
Ottawa's recently announced renovation tax credit for households has the potential to provide a significant boost to the industry in 2009, Warren said. The measure provides a 15 percent refundable tax credit on eligible renovation expenditures between $1,000 and $10,000, completed prior to February 2010, the analyst said.
"Many homeowners will undoubtedly take advantage of this year's price discount," Warren added.
February 26, 2009 in Canadian Market Forecast | Permalink | Comments (2) | TrackBack
Energy efficiency law hits homesellers
Mandatory energy audits on home sales wrong, Toronto's
real estate agents say.
In the wake of a new municipal land-transfer tax and unmoored by a sinking economy, Toronto real estate agents are bracing for a new storm on the legislative horizon: Mandatory energy audits for home sales.
Ontario Minister of Energy and Infrastructure George Smitherman's proposed Green Energy Act, which was introduced to the Ontario legislature Monday, contains loosely defined "mandatory conservation and energy efficiency practices" that would cost home sellers about $300.
But with homes lingering on a stagnating market, and average sale prices dropping throughout the GTA, even the distant possibility of one more fee or one more bureaucratic obstacle, leaves real estate agents feeling seasick.
"It's not so much the dollars that it costs you to do the audit, I think you have to think long-term in terms of how will that impact your property value, what will that do to the market in terms of potential bottlenecks," said Von Palmer, spokesman for the Toronto Real Estate Board. "So the devil's always in the details and I think that's where we need to be careful."
See full story in the Toronto Globe and Mail »
February 25, 2009 in Selling Toronto Real Estate | Permalink | Comments (3) | TrackBack
U.S. home prices continue decline
American single family home prices ended 2008 with record declines, continuing that trend for a second straight year, according to a leading index released today. Standard & Poors/Case-Shiller U.S. national home price index fell 18% in the fourth quarter of 2008 compared to the same period a year ago, the largest decline in the index's 21-year history.
The sharpest declines from the previous year were in Phoenix (down 34%), Las Vegas (down 33%), San Francisco (down 31%), Miami (down 29%) and Los Angeles, which includes Orange County, (down 26%).
Las Vegas, Phoenix, Miami and San Francisco home prices were down more than 40% from their market peaks, which occurred at different times. Los Angeles-area home prices ended 2008 down 37% from their late 2006 peak.
"Most of the nation appears to remain on a downward path, with all of the 20 metro areas reporting annual declines," said David M. Blitzer, chairman of the index committee at Standard & Poors.
February 24, 2009 in World View [of real estate] | Permalink | Comments (2) | TrackBack
Home sellers face $300 'green' audit
Ontatio's clean-energy bill would raise hydro rates and promote alternative power
Ontario residents won't be able to sell their houses or condos without first getting a home energy audit – which now costs about $300 – under the proposed new Green Energy Act. That's one of several measures in the legislation unveiled by Energy Minister George Smitherman to boost incentives for electricity conservation and encourage renewable sources of energy.
Critics fear the energy audits and Smitherman's estimated 1 per cent rise in household electricity bills as a result of the law will pinch pocketbooks as the recession deepens. "It'll be used to beat down the seller of a home," Progressive Conservative MPP and energy critic John Yakabuski warned of the audit, which would put detailed information on a home's energy efficiency into the hands of buyers.
Toronto homeowners are already concerned about the impact the city's new land transfer tax – in addition to the provincial one – is having on sales and prices. Both taxes add up to thousands of dollars even on cheaper houses.
While homeowners will have to get a private contractor to do an energy audit before selling, there will be no requirement to take any action – the measure is simply intended to inform potential buyers what state of energy efficiency a property is in so they can take action if desired.
See full story in the Toronto Star »
February 24, 2009 in Selling Toronto Real Estate | Permalink | Comments (2) | TrackBack
The Price is Righteous
Setting an equitable yet compelling price is key to a successful sale. But its tough. Buyers are usually well informed about recent events in the marketplace. They select homes by comparison shopping and are keenly aware of subtle differences in features and value. In their eyes, your price must be justified in comparison to other available homes.
Obtaining the best return for your property requires competitive pricing from day-one. A home should be priced according to recent market data comparisons.
There are a number of factors that influence the value of your property:
- Prior Sales
- Location
- Condition
- Improvements
- Market Conditions
Competitive Market Analysis
Taking these factors into account, we will prepare a competitive market analysis to reflect the current market value of your property. It includes an examination of your property as well as a study of competitive properties currently on the market and those that have recently sold. This information helps you to properly position your property.
No Realtor can control market value. The selection of a listing agent should be based on their service, fees and reputation, not on their estimate of market value. It is the 'invisible hand' of the market that determines the sale price you will ultimately achieve.
Competitive Pricing vs. Overpricing
First impressions are lasting. A house realistically priced and properly presented from day-one offers the best opportunity for you to sell quickly and obtain the best price.
Qualified buyers and their agents have been looking in your area and waiting for a suitable house at an appropriate price to come on the market. If reasonably priced, it is possible your property will sell quickly to waiting buyers.
Competitively priced properties encourage reasonable offers, pleasant negotiations and a smooth closing.
Overpricing costs in terms of money, disappointment, and missed opportunities. If the price is too high , buyers may not even look at an otherwise attractive property.
An overpriced property can go stale after the important first few weeks when the home is new on the market and getting the most exposure. Then, when the price is adjusted at a later time, the house is often overlooked.
If you were able to arrange a sale for substantially more than comparable properties it may fail to close through difficulty securing an appraisal and mortgage financing.
The Paradox of Price: When the 'price is right' buyers get involved quickly and sellers gain a competitive advantage. Use the paradox of price to your benefit. If you have the will to set a compelling price, the reaction of the marketplace will amaze you.
February 23, 2009 in Selling Toronto Real Estate | Permalink | Comments (2) | TrackBack
Toronto Real Estate Board:
GTA Housing Resales at 2,044 in Mid February
Greater Toronto Realtorsa reported 2,044 sales through the first 14 days of February, compared to 2,775 sales reported during the same period in 2008. “While sales have been lower, the housing sector remains one of the pillars of the GTA economy,” said TREB President Maureen O’Neill. “Each existing home transaction generates, on average, more than $33,000 in spin-off spending on renovations and other housing-related items. This spin-off spending translates into jobs.”
“The City of Toronto needs to do its part to encourage homeownership by reducing the tax burden on existing and potential home owners,” said TREB President Maureen O’Neill. “To this end, Greater Toronto Realtors are calling on the City to roll back the municipal land transfer tax. We presented our views to the City’s Budget Committee yesterday.” The average home price in the GTA was $364,748 compared to $385,735 in mid-month February last year.
“It is interesting to note that while the average price was down, the annual rate of price decline slowed compared to the previous four months,” according to Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis. “If this trend continues into the spring, it could point towards average home prices leveling off between $360,000 and $370,000.”
February 19, 2009 in Toronto Real Estate Update | Permalink | Comments (6) | TrackBack
Market conditions impact commissions
Whether they've had to take a cut in their real estate commission percentage rate with the sale of a foreclosed home or saw a decrease in commission dollars per sale due to plummeting prices, many brokers throughout Florida have seen their income drop precipitously with weakened market conditions.
"People are trying to close sales any way they can," said Ellie Trahan, a broker with Golden Rule Real Estate in Ocala. "One of the first things that gets cut is the commission."
With a 25 percent drop in sales activity and an 18 percent drop in the median sales price of single-family homes from 2007 to 2008, Ocala has been one of the hardest-hit areas of the state, according to data released by the Florida Association of Realtors.
To brokers, that means not only a drop in the number of sales they are able to close, but also a drop in the overall level of commissions due to declining home prices. "If you're not making any sales, then 6 percent of nothing is nothing," lamented Trahan.
See full article on Inman News website »
February 19, 2009 in Save on Comission Fees | Permalink | Comments (3) | TrackBack
TREB speaks out on Toronto budget
More than 80 people, including representatives from several special interest groups showed up at City Hall on Wednesday to give a five-minute deputation to the budget committee, as consultations on Toronto's 2009 operation budget began.
The controversy over the proposed budget kicked off with the Toronto Real Estate Board asking councillors to take back the land transfer tax that was introduced in the last budget.
Toronto homeowners now have to pay a Toronto land transfer tax on top of the provincial land transfer tax.
When that is coupled with the proposed four per cent property tax increase, homeowners are paying a hefty price during a struggling economy, the TREB said.
"We warned City Hall that this is a bad tax, it's unfair and it will hurt the economy," said TREB lobyist Von Palmer.
February 18, 2009 in Toronto Real Estate Taxes | Permalink | Comments (2) | TrackBack
Confidence eroding housing market
Real estate prices in Canada predicted to fall back to 2000 levels
Property sales in Canada this year are expected to drop back to 2000 levels before rebounding in 2010, according to a new report from the Canadian Real Estate Association. The Ottawa-based group, which represents 100 boards across the country, issued a new forecast for 2009 and predicted sales would fall to 360,900. That would be a 16.9% decline from 2008. Sales last year fell 17.1% from 2007.
'We are caught in a cycle where consumer confidence has been eroded because of job losses and consumer confidence is an essential ingredient for housing sales activity,' said Calvin Lindberg, president of CREA.
His group is forecasting a rebound by 2010 and forecasts sales to jump to 9.9%, with most of the growth coming in the second half of that year. British Columbia and Alberta are expected to have the strongest rebounds in 2010.
Prices are also forecast to fall this year before rebounding slightly in 2010. CREA said the average price of home sold in Canada will be $279,400 this year, an 8% decline from last year. In 2008, the average sale price in Canada dropped 0.7%.
The increase in prices is forecast to be modest next year. CREA says the average sale price of home next year will be $282,400, a 1.1% increase from 2009.
'Increasingly cautious homebuyers and mortgage lenders mean that active listings will take longer to sell in 2009 compared to previous years,' said Gregory Klump, chief economist with CREA.
The downturn in the real estate market in Canada is behind the investigation of a number of property brokers. The Real Estate Council of Ontario is currently examining the financial dealings of three real estate brokers in Toronto and the operation of their deposit accounts.
'The slowdown in Toronto's real estate market may have played some part in these freeze orders. Over the past few years the margins in the real estate brokerage business have been under pressure as new business models emerged that charge agents much lower fees than traditional brokerages,' said one expert.
'Brokerages with high overhead costs and thin margins may not be well positioned to handle a slowdown in the real estate market. Real estate sales are down by roughly 50% over the past four months which means that revenue for most brokerages is probably down by the same amount,' he added.
February 18, 2009 in Canadian Real Estate Market | Permalink | Comments (9) | TrackBack
