Real Estate in Toronto

The importance of property pricing

2007-05-07T13:10:00.000-07:00

A very interesting real estate sale happened last week in Toronto, illustrating the importance of pricing property within reasonable limits.

A renovated home on a rather busy street in east part of Toronto was listed in mid-April for almost $450,000. This was not a reasonable price, and, typically for today's real estate reality, Realtors were reluctant to show and buyers were reluctant to come up with an offer.

After two weeks of no action, the seller, on his Realtor's advice, agreed to a price reduction. This is normal, and should be expected in such situation. What was extraordinary, though, was the amount by which the price was reduced. That amount was $150,000, or one-third of the asking price. It turned out to have been a brilliant move on their part.

They held-up offers for a week, and, in the end, sold the house, with multiple offers, for $95,000 over the asking price. It is just left for us to wonder whether a more realistic original listing price would have produced a better selling price - possibly not.

I have observed this year very aggressive real estate listing prices, resulting in multiple bids and selling prices well over asking. In prime Riverdale, for instance, the average sale-to-list price ratio in April was 105%. Out of the 32 homes reported sold, 22 were sold above asking, and the highest sale-to-list price ratio was 145%. The remaining homes were sold at an average 96.6% of asking. It took, on average, 12 days to sell a home, and it would have taken less were it not for holding back offers.

Experts to review new building projects in Toronto

2007-05-01T15:31:00.000-07:00

New pilot project in Toronto will have a 12-member panel of experts review new real estate developments in the city. In an effort to make Toronto more visually attractive, the panel will provide advice to the city planners. The advice will focus on the height, location and materials proposed for the building being evaluated.

If the expert's advice proves successful, such design-review panel might be established on a permanent basis in Toronto. Vancouver already uses such group of experts in approval process for new construction.

Termites

2007-04-28T10:59:00.000-07:00

Termites are most common wood-destroying pests. They need moisture to survive, and live in underground colonies with networks of tunnels connecting them to food and water. Such colonies can reach up to hundreds of feet. The colony members consist of workers, soldiers and reproductive members. The majority of colony members are workers, which are sterile, and which gather food and water, build and repair tunnels and shelter tubes above ground, feed and groom other members of the colony and care for eggs and young.

Termite damage is not easy to observe. They feed inside the wood, along its softer parts. They don't create wood particles, and don't reduce wood to powder. The excavations within wood are often packed with soil. Badlky damaged wood may sound hollow when tapped, and to detect lesser damage one can use a screwdriver or a knife looking for hollowed areas.

Termites are present in large parts of Toronto, and spread rapidly. Termite infestation may be detected by the sudden appearance of winged termites (swarmers), or by the presence of mud tubes and wood damage. Swarmers (male and female) are approximately 6 to 7 mm long, winged, and vary in colour from black to yellow-brown.

Termites need to protect their bodies from a drying effects of air. To be able to move in exposed areas, they build shelter tubes out of mud and water. Shelter tubes are usually 6 mm to 2.5 cm wide. Presence of such tubes in cracks between boards is a sign of termite infestation. To establish whether it is an active colony, shelter tubes should be broken or removed, and then monitored to determine whether they are repaired or new ones constructed.

Spring is termite-breeding season. Although they spend most of their lives in the soil, at this time of year the males and females grow wings, swarm, and mate, establishing new colonies. Swarming is very brief, usually lasting less than an hour. Swarmers quickly shed their wings. A sign that the swarming has occurred is a presence of thousands of half-inch long wings in cobwebs, on window sills, or on the basement or patio floor. The presence of winged termites or their shed wings inside a home should warn the owner of termite infestation.

A natural home owner's reaction would be one of panic. When such evidence of termites' presence is discovered inside the house or near its foundation, that may signal a problem. Termites, however, damage wood very slowly, so there is time to interview termite control companies, get estimates, and only then make a decision on the company and treatment that should be used.

There are choices of treatments to rid the house of termites. In 'barrier' treatment, chemicals are injected into the ground around the perimeter, to prevent termites from getting into the house. Another treatment uses poisons which are not noticed by termites. When the insects walk over the chemical, it gets on their bodies, and is spread within the colony by grooming. In some cases a bait stations are placed in the soil around the house. These stations contain pieces of wood. The stations are checked monthly, and if termite activity is found, the bait is replaced with poison. Again, the poison is acting slowly, and termites share it with the rest of the colony. Whole colony is usually destroyed within a couple of months.

It is advisable to employ a company that will provide follow-up and guarantees more treatments if the original treatment fails to rid the house of pests. One of the best known termite-control companies in Toronto is Aetna. Their phone number is 416-469-4111.

How to Increase Affordability

2007-03-26T08:22:00.000-07:00

In the current real estate market it is becoming very difficult for the first time home buyers to qualify for a mortgage necessary for their purchase. Mortgage brokers deal with the affordability issue on a daily basis, and they provide the following advice:

Revisit your current debts. When applying for a mortgage, a lender will look at you total debt service (TDS) ratio, or how much of your total income is going towards various types of debts, including car loans, credit cards, and other consumer loans. An Invis Mortgage Consultant can advise on restructuring your current debt (for example, by increasing the amortization and lowering payments on your car loan), to ensure that your TDS ratio is acceptable to prospective lenders.

Increase the size of your down payment. A common way to come up with more cash for a down payment is to make use of the federal Home Buyers' Plan which allows qualifying purchasers to withdraw up to $20,000 each from their registered retirement savings plans (RRSPs) to buy or build a qualifying home without incurring tax penalties. An Invis Mortgage Consultant has full details on the ins and outs of this program.

Look into a longer amortization. Mortgages with 30- or 35-year amortizations feature lower monthly payments than the same size mortgage with a traditional 25-year amortization. While longer amortizations do entail more in interest costs, there are additional strategies to further reduce the amortization and interest costs over the life of the mortgage, such as making lump sum payments down the road or increasing monthly payments (say, after receiving a salary increase).

An Invis Mortgage Consultant can offer valuable advice throughout the financing process on ways to boost affordability.

Courtesy of Jim Rawson of Invis, 416-972-6336 ex. 30

Financing Home Renovations

2007-03-12T13:04:00.000-07:00

Did you know that the first three months of the year are the busiest time for planning home renovations? If your spring renovation plans involve larger projects, it can pay to refinance your mortgage, which allows you to get the very best borrowing rates by using the equity in your home. A mortgage refinance will allow you to spread your payments over a longer period of time than with a line of credit.

You should be able to borrow up to 75% of your home’s value with a conventional mortgage, or up to 95% with an insured mortgage. You may also be able to consolidate a range of higher interest borrowings (credit cards and car payments, for example) at the time of your mortgage refinancing.

An Invis Mortgage Consultant can look carefully at your financing needs and advise on how best to secure additional mortgage funding. If you take the time now to establish a clear idea of the improvements to your home and how you will pay for them, you could be putting those plans into action by the time warmer weather finally arrives. Ideally, a well-planned renovation can boost both your enjoyment of your home and its equity.

Courtesy of Jim Rawson of Invis, 416-972-6336 ex. 30

February Real Estate Sales Strong

2007-03-06T13:09:00.000-08:00

Resale housing activity in the month of February was slightly higher than a year ago, Toronto Real Estate Board President Dorothy Mason announced today. A total of 6,772 transactions took place in the month, as compared to 6,756 in February 2006.

"Sales activity has been strong to begin the year," Mrs. Mason said. "Results from the first two months show that so far 2007 is five per cent ahead of last year’s pace."

"The important thing is that we are seeing strong results on a consistent basis, which speaks volumes about the stability of the market," Mrs. Mason added. "As we head into the most active part of the year, it's an excellent time to get into the market for the first time or make a switch to a different home."

In Toronto's west end Bloor West Village neighbourhood TREB reported 13 sales in February, averaging $586,654 (101.1% of asking). Only five of them, however, sold above asking price (106.8% on average) - the remaining eight sold below asking, at 97.5%. The average time on the market was 19 days, and the homes that sold below asking averaged 19 days - only a few days longer.

February 2006 saw 26 sales in Bloor West Village, with the average selling price of $665,132 (101.5% of asking).

In central Toronto's Davisville neighbourhood 19 sales of freehold properties were reported, with an average sale price of $737,885 (103.84% of asking). The average time on the market was only 11 days, and it would even be less without the pre-set date for the offers. Twelve of the sales were above asking price, and the remaining seven still averaged 97.6% of asking and 16 days of market exposure.

In February 2006 14 homes were sold, averaging $618,337 (102.9% of asking), after only 8 days of market exposure.

22 residences were sold in prime Riverdale, averaging $582,121 (107% of asking) and 11 days market exposure. After discounting the only three that sold below asking, the average percent of asking price rises to 109%. It does seem to me that the listing prices might be deliberately low in this neighbourhood, to encourage multiple bids. The highest 'over asking' selling (117%) was my favourite listing on Bain. It wasn't a large house, but it was really trendy and had a great ambiance. The property that took the most time to sell was sold only after 52 days. That property was listed just before Christmas, on December 22, which, I am sure, did not help.

In February 2006 the same number of homes was sold (22), with the average price of $503,050, 102.6% of asking, and 13 days, on average, of market exposure.

In North Toronto only six sales took place, averaging $881,667 (107.7% of asking) and 11 days of market exposure. Only one sold below asking (99%). 10 residences were sold in February 2006, averaging $832,975 (107.6%). Four of these were sold below asking.

Bank of Canada Maintains Key Interest Rate

2007-03-06T12:32:00.000-08:00

The Bank of Canada's strategy of keeping short-term interest rates steady continued with its announcement today that it would leave its key policy rate unchanged. This is the Bank's sixth consecutive decision since May 2006 to leave this rate constant.

In its announcement the Bank commented that it deems the risks to its previous inflation projections to be roughly balanced, with the main downside risk continuing to be "that growth in the U.S. economy could be lower than expected," and the main upside risk continuing to be "that household spending in Canada could be stronger than expected, largely because of borrowing against increased home equity."

This decision means that the prime lending rate offered by most lending institutions in Canada will stay put, as will rates on variable mortgages. The Bank’s decision today does not affect the rates for new fixed mortgages, the pricing of which is determined by trading in the Canadian bond markets.

If you would like to discuss how current trends in mortgage rates impact the best mortgage strategy for you, contact an Invis Mortgage Consultant. He or she can obtain a mortgage pre-approval if you're wanting to buy a home – with a "rate hold" of up to 120 days, you will know how much you can afford. Another starting point is the www.invis.ca website, where you will find a number of calculators that allow mortgage holders and prospective home buyers to examine different financing scenarios in more detail.

Courtesy of Jim Rawson of Invis, 416-972-6336 ex. 30

End of February in Toronto neighbourhoods

2007-02-28T12:12:00.000-08:00

It is the last day of February, and, stock market crash and RRSP season aside, it is interesting to see how are homes selling in various Toronto neighbourhoods. I compared sales in January and February.

Starting from the west end:

The Kingsway had 5 sales in January, with average price $1,196,800 (98.2% of asking), and 8 sales in February, averaging $929,500 (101.6% of asking).
Bloor West Village: 17 sales in January, $528,607 average (106.8% asking), and 12 sales in February, $590,375 average (101% asking).
High Park: 12 sales in January at $592,342 average (105.3 of asking), 17 sales in February at $594,441 average (98.4% asking).
Roncesvalles Village: 5 sales in January at $511,400 (103.6% asking), 6 sales in February at $475,542 average (102.3% asking).
Riverdale had 16 sales in January at $521,269 average (102.1% asking), 21 sales in February at $579,841 average (106.7 asking).
Prime Beaches had 11 sales in January at $624,064 average (102.2 asking), and 18 sales in February at $601,983 average (103.9% asking).
In Scarborough, Guildwood Village had 3 sales in January at $367,850 (98.7 asking), and 7 sales in February at $422,286 (96.7 asking).
Looking north, North Toronto had 4 sales in January, averaging $765,625 (97.2% asking), and 6 sales in February at $881,667 average (107.7% asking).

It is still a common practice in busy Toronto neighbourhoods to list properties low (often substantially below market value) to generate bidding wars and quick, firm sale.

Office space rental market

2007-02-22T07:44:00.000-08:00

After seven years of distinct advantages for office tenants, commercial vacancy rates have come down, and the landlords gained an upper hand when it comes to re-negotiating the lease.

It is expected that the landlords will significantly raise their renewal rates, attempting to recover, if only in part, their perceived losses during the 'tenants' market' during most of the last decade. It will be most difficult for those who will be renewing their leases. Landlords know that it is a hassle to locate new premises for business, negotiate a new lease, and move.

When facing upcoming lease renewal, commercial tenants should do some research and come prepared. Analyze their needs, check, if possible, on the situation in the landlord's portfolio, and hire a professional to do negotiations. Using the research and the professional advise tenants may be able to figure out what is the lowest renewal rate below which the landlord would be willing to lose the tenant.

Such research should be done well in advance of the coming renewal, well before they have to give the landlord their notice. Depending on the size of required space, it might be advisable to start such research and planning even three years in advance.

The cycle in office space vacancies has been approximately 10 years, experts say, and the rents can vary substantially. It would be wise to negotiate a lease that would expire during a high vacancy period.

Roncesvalles Village real estate sales

2007-02-21T12:37:00.000-08:00

Five homes are presently available for sale in Roncesvalles Village, ranging in price from $364,000 to$649,900. The lowest priced is a semi-detached home which has already been available for a total of 685 days over the last couple of years. It needs renovations and has poor street appeal. All of these properties are divided into units, ranging from 2 to 6.

Roncesvalles Village is very popular, and property prices reflect that. Last year average prices and percent of asking price are shown below.

This January average price for freehold homes in Roncesvalles Village was $511,400, with a sale-to-list price ratio of 103.6%. Hopefully with the arrival of spring we will see more homes becoming available in this attractive neighbourhood.

What is happening in real estate sales

2007-02-20T10:52:00.000-08:00

Real estate activity is keeping pace with 2006 sales, Toronto Real Estate Board reports, with February's sales close to last year numbers, and the average property price up by 3% from the same time last year.

Looking at some neighbourhoods, the following is what I found. First, the number of new freehold listings:

In Bloor West Village 23 residences were listed in January and 17 so far in February. In comparison, in the same periods last year, 17 homes were listed in January and 23 in February.
In High Park 27 homes were listed in January and 14 in February 2007, while in 2006 24 were listed in January and 20 in February.
In Roncesvalles Village 10 homes were listed in January and only 3 in February. In 2006 9 were listed in January and 6 in February.
In Swansea 3 properties were listed in January and 17 in February of this year, while last year 10 were listed in January and 6 in February.
In The Kingsway 12 houses were listed in January and 8 in February, compared to 7 listed in January 2006 and 11 in February 2006.
In Riverdale 27 homes became available in January and 20 new listings were posted in February, while last year 20 properties were listed in January and 24 in February.
In Rosedale 5 residences were listed in January and 14 in February, compared to 13 in January and 12 in February of last year.

Out of all these neighbourhoods only two reported more sales this year than in the same period last year. Bloor West Village reported 28 freehold sales this year, while in the same period of 2006 only 26 homes were sold. Riverdale had 29 sales so far in 2007, and only 24 between 1 January and 19 February 2006.

All the other above mentioned neighbourhoods had less sales reported this year, with the biggest difference in Swansea - 7 this year vs. 16 last. Roncesvalles shows 10 in 2007 and 11 in 2006, High Park - 25 this year vs. 26 last, The Kingsway had 8 sales compared to 12 last year, and Rosedale had 8, while in the same time frame last year 11 solds were reported there.

It is too early to properly interpret this information. I will be watching these statistics and reporting them either in this Blog or on one of my real estate websites.

Kitchen counters

2007-02-19T06:31:00.000-08:00

kitchen renovation granite quartz Corian concrete Toronto

It is a well known fact that beautiful kitchen contributes a great deal to a successful sale. Practicing real estate in Toronto one cannot help noticing more and more high quality kitchen renovations. I seems that even in their rushed lives some Torontonians really enjoy cooking.

One of the very important parts of a kitchen renovation is the countertop. This surface gets daily abuse from spills and hot items placed on it, and it should be durable, easy to clean, and beautiful.

Most of the time, the counter of choice is granite. Granite is an excellent material - it is hard, will not scratch, can - to a point - withstand heat, and it comes in a wide variety of colours to complement the cabinetry and flooring. It is important to know that there are different levels of quality of granite, and it does not only depend on its thickness. Of course thickness is important, because the thinner the slab, the weaker it is. Since granite is one of the most expensive countertop options, if you decide to go this route do get a good quality.

Granite, like marble and slate, is sealed when manufactured, and should be periodically re-sealed to maintain its beauty. Although granite is much harder than marble, but - even properly sealed - will stain if, say, red wine or strong tea spilled on it will not be wiped up right away.

Quartz countertops don't need to be sealed or re-polished. This natural stone is twice as strong as granite. It is also resistant to staining from fruit juices, wine, coffee, tea, food colouring and even felt-tip markers.

Corian Solid Surface countertops are man-made in a wide variety of colours and come in matte/satin, semi-gloss and high gloss finishes. The material is identical right through, therefore scratches can be polished off the surface. Darker colours tend to require more attention to maintain a uniform finish.

Fairly new is a surfacing material made by DuPont using natural quartz. It is durable, scratch-resistant and non-porous, and does not require sealants or waxes. It is produced in a variety of colours, and comes with a 10-year limited warranty.

Another man-made material is Ceasarstone. It has all the properties of natural stone, but is fifteen times harder, and five times stronger than granite.

Another recently popular choice is concrete. Concrete countertops are unique, because they are designed and made for each homeowner, can give warmth and colour not available in natural stone or Corian, and can be finished to a smooth, glass-like surface which acquires a patina over the years. Like concrete flooring in ever-popular lofts, they are a good choice for a modern kitchen.

Stainless steel countertops, most often used in restaurants, and probably the most hygienic and easy to care for. They give the kitchen this 'chef lives here' look, and go very well with stainless steel appliances. They are comparatively expensive, in line with good granite.

The most popular, due to their low cost, are laminate countertops. They are easily scratched or burned, but being inexpensive can be changed every few years.

Interesting market

2007-02-18T18:21:00.001-08:00

home sales Riverdale High Park Swansea Roncesvalles Village

Home sales have been very strong in January - it was the second best January in the history of Toronto Real Estate Board. Winter finally arrived in Toronto in February, and it is interesting to see how are home sales in different Toronto neighbourhoods.

Prime Riverdale is very busy, with 11 sales reported since the beginning of the month. The average listing-to-sale price ratio was 105.1%, with only three sales below asking, at an average of 95.3%.

In contrast, High Park had 9 sales reported, but the listing-to-sale price ratio was 98.8%, with only one property selling above asking at 106%.

Swansea had only four sales so far this month, two of them above asking at 101% and 119%, and two below, at 98% each. The average was 104%.

Roncesvalles Village reported 5 sales with an average of 103%. This average is due to one only sale at 120% above asking, the other four sold below asking.

Bloor West Village had 8 sales, with an average of 99.1% of asking. Only two homes sold above asking, at an average of 105%.

Lytton Park reported 6 sales at 109% of asking on average, with only two properties selling below asking (at 93.5%).

Bayview Village had only three sales so far this month, all of them below asking at an average of 97.7%.