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The State of Real Estate

Claire Franceschetti

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There's a reason the Market Feels Hot...The Numbers Show that It Is!!! 

The number of sales and the average selling price reported by Greater Toronto REALTORS were both up during the first 14 days of June 2011. Sales through the first two weeks of June amounted to 4,787 – up 16 per cent over the same period in 2010. The average selling price for these transactions, at $477,853, was up nine per cent.

Why such a jump in price? The spring has always been the busiest time in the resale market, but the results for May and the first two weeks of June represented a marked improvement over last year. Low mortgage rates have kept affordability in check and buyers have felt confident in paying for a home over the long term. 

Further, the number of new listings on the Toronto MLS between June 1 and June 14th was down 8% compared to June 2010. That means that listings have been in short supply this year, while a lot of people have been looking to buy.

The result has been more competition between buyers, sometimes even creating multiple offer situations which creates upward pressure on prices. Jason Mercer, TREB’s Senior Manager of Market Analysis predicts strong price growth which will prompt more home owners to list as we move toward 2012.

High End Market Very Healthy!

by Claire Franceschetti

What's happening in the High-End market these days?  Great things according to the numbers!

 Improved financial standing among high net worth individuals is the major factor driving strong sales activity at the top end of Canadian housing markets, according to RE/MAX stats.

RE/MAX Ontario-Atlantic Canada and RE/MAX of Western Canada examined 12 major centres from coast-to-coast and found that luxury sales have surged in close to two-thirds of housing markets between January 1 and April 30 of this year, compared to the same period in 2010.  Leading in terms of percentage increases over the four-month period were Greater Vancouver (118 per cent)—where foreign investment has also played a major role—Ottawa (59 per cent), Calgary (51 per cent), Halifax-Dartmouth (27 per cent), Winnipeg (24 per cent), Hamilton-Burlington (13 per cent) and Greater Toronto (nine per cent).  Six of the seven major cities—with the exception of Calgary—are poised to set new records in top-end activity by year-end.  Several are just short of peak levels reported in 2010, such as Victoria, Regina, and London-St. Thomas.   

“Three key factors—serious equity gains, stock market recovery, and improved economic performance—have been behind the push for luxury housing product across the country,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “The combination also continues to bolster the bottom line of high net worth individuals both nationally and globally.  The impact of that wealth is being seen in the demand for all things luxury—from homes to cars, collectibles and fine wines.”

“The strength of the upper-end segment continues to defy expectations,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada.  “That demand remains largely domestic speaks to the solid underpinnings of the market, while underscoring the appeal of Canadian real estate on an international stage."

The climbing wealth factor has played a role. The financial status and number of millionaires is rising once again—a fact supported by several recent studies released by notable institutions such as CapGemini/Merril Lynch, Citi Private Bank, Deloitte Centre for Financial Services, and Investor Economics—to name a few.  While estimates vary, the studies concluded that the high net worth population in Canada and/or abroad—and its corresponding fortunes—is trending upward and will experience considerable expansion moving forward.   Despite the impact of the 2008/2009 global financial crisis, most millionaire portfolios/assets have improved or exceed pre-downturn levels.  Of particular interest, residential real estate holdings have increased among high net worth individuals, as they express a clear preference for tangible assets.  This trend is expected to continue, and serve to boost high-end residential real estate in months ahead, as the move to diversify assets continues in 2011. 

As Canada’s millionaire club swells in size, inventory will play an increasing role in future, as the existing upper end housing stock struggles to keep pace with growing demand in central core areas, particularly in Canada’s gateway centres.  Infill, renovation and new construction are helping to some extent—while driving up prices in tandem.  The building activity is also serving to create new prime areas in areas that were once considered high-end peripherals, as well as in suburban communities.

Limited inventory levels in Canada’s largest markets have hampered sales activity to some extent in 2011, given that demand exceeds available supply.  Multiple offers are occurring in both Greater Vancouver and Greater Toronto, as buyers compete for quality product in prime neighbourhoods.

This is good news for owners of high end homes in the GTA.

Give me a call if you'd like to discuss this or any other real estate related issue!

It's a Sizzling Sellers Market!

by Claire Franceschetti

I want to keep you updated with the Greater Toronto Area Real Estate Market. After reviewing the latest sales figures from the Toronto Real Estate Board, it looks like:

THIS MARKET IS SISSLING!!!! INVENTORY NUMBERS ARE VERY LOW!

So far in May 2011 there were already 4,812 sales for the month! At this rate we should hit approx. 10,000 total sales for May. We will meet or exceed the number we hit in May 2010.

Here’s where it gets really interesting. Currently there are only 18,430 homes for sale on the Toronto Real Estate Board, compared to 25,414 at the end of May 2010. That’s about a 35% drop! What does that mean? Well, in many areas it’s getting even more frustrating for buyers and prices are still climbing.

The question I get asked most often is, “What do you think will happen this year?” We made it through a federal election and the wheels didn’t fall off the economy. This market had been going straight up for over 10 years now. When will it stop? Doesn’t look like it will be this year! There are 3 main conditions that will cause our market to remain strong while other areas seem to stagger.

  1. Our inventory levels are very low and should remain low. We won’t have a huge influx of new listings or see anything close to other areas around the world as far as “distressed properties” coming on the market. Buyers won’t be able to sit back to pick and choose.
  2. Mortgage interest rates are very low and should remain low for quite some time. Although we may see marginal increases over the next while, home ownership will remain very affordable.
  3. Our economy is very strong and seems to be improving. Canada is a shining star in the world economy. 

The key to taking advantage of current market conditions is working with the right realtor. When you hear of anyone who may want to buy or sell, please contact me at the office. I promise you that I will take care of them, do a great job and provide them with the best customer service. If you would like any more information, I’m here to help.

Claire

What to Know When Buying a Condo

by Claire Franceschetti

What to Know When Buying a Condo

I always advise my clients that when you buy a Condominium you are actually buying two things:

  1. Your individual unit, and
  2. share in the condominium corporation that owns and maintains the land and all of the common elements such as elevators, outside grounds, security, parking etc.

That's why it's just as important that your condominium corporation is in as good condition as your individual unit.

To find out the "financial health" of the corporation, it is crucial to request a 'Status Certificate' as part of your offer. This is a standard condition that I include in the Offer for the purchases of all condominium units. As a buyer, your lawyer will review these documents prior to finalizing any purchase.

When looking at condominiums, you must also consider the building itself. The choice of the building can shape your 'lifestyle'. The 'building lifestyle' is determined by three factors:

  1. Building Amenities (i.e. pool, gym, 24 hour concierge etc)
  2. Location (i.e. accessibility to public transit, distance from arterial roads)
  3. Mix of Owners (i.e. ratio of owners:renters, average age of occupants)

Condo Maintenance Fees

You may wonder why maintenance fees differ so much between buildings?

In general operating costs for condos are typically quite similar. However, there are 3 main factors that explain the variance:

  1. Some buildings include all utilities while other buildings include only partical utilities, while others have direct, individual billing to owners.
  2. Each building pays for different amenities such as 24 hr. concierge services, underground parking facilities, indoor and outdoor swimming pools, roof top patios etc. These amenities increase overall building maintenance fees.
  3. Each corporation is required to create and save a reserve fund from the monthly maintenance fee to pay for major future repairs. The building's Status Certificate is an audited annual report which will clearly indicate to your lawyer if the condo corporation is in good financial standing. (See below for more details.)

What are the advantages of buying a condominium?

There are many great advantages to buying a condo:

  1. Condo ownership is a great way to enter the real estate market, and become a property owner. In some circumstances, they provide an economical way for first time home buyers achieve their dream of home ownership.
  2. Condo ownership offers the independence of home ownership without the hardship of maintaining a freehold property. This is an ideal setup for those who are downsizing from larger homes, and wanting more personal freedom.
  3. Different condo buildings offer Lifestyle’ perks, that might be unattainable in a freehold home situation.
  4. For Canadian Snowbirds, jet-setters and avid travelers condo represent an worry-free ownership alternative when spending extended periods away from their property.

Status Certificate


When purchasing a resale condominium unit, your offer should be conditional on having your lawyer receive and review a Status Certificate and the accompanying documents. This Status Certificate is the resale equivalent of a disclosure statement.  It discloses whether the seller of the unit you are buying is current in the payment of common expenses as well as a picture of the condominium corporation's financial affairs. Your lawyer will review all the related materials to ensure that both the condominium unit and the condominium corporation are suitable for you.

This document typically costs $100 inclusive of GST, and must be provided within 10 days a request. 

For more information about buying a condominium, please give Claire a call at 416-918-6325. 

Should I Buy a Home Now?

by Claire Franceschetti

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

Displaying blog entries 91-95 of 95

Contact Information

Photo of Claire Franceschetti Real Estate
Claire Franceschetti
Right At Home Realty Inc.
190 Marycroft Ave.
Vaughan ON L4L5Y2
Direct: 416-918-6325
Office: 416-391-3232
Fax: Fax: 416-987-8001