This week we want to comment on the failure of Urbancorp as a significant condo developer in Toronto and it being forced into Receivership. Some think this is the start of a condo correction. The reality is the opposite. Urbancorp never had a good reputation in the real estate community. Their demise means that there will be even less available condo product, which will only tighten the real estate market. We feel sorry for buyers who have construction problems, and lengthy delays in getting title to their property. The lesson to be learned is obvious. Even in a bull stock market, there are shares that hit lows and companies that go bankrupt. That’s why people use stock brokers. In real estate the same is true. Buyers need to deal with experienced agents who know all the builders and all the projects. When buyers go to a sales centre on their ...
What Can Buyers Learn from the Urbancorp Collapse?
May 24, 2016
Market Report May/June 2016
May 17, 2016
Sales Commentary Record breaking sales continued through April on the Toronto Real Estate Board. Sales topped the 12,000 unit mark and were ahead by 7% over 2015. Condo sales were ahead by 17% but detached and semi-detached sales in Toronto were actually lower by 4% and 11% respectively. TREB’s House Price Index shows that detached housing is higher by 13% over this time last year. By comparison, condos are higher by 6%. We are witnessing multiple offers, not just for low rise, but for condos and leases across the spectrum. Governments are pointing the finger at those supposed foreign buyers for causing unprecedented price increases. The reality is a lack of listings. ‘New’ listings for April were 10% lower than for April of last year and ‘active’ listings in total are 27% lower than this time last year. We keep telling people that the double land transfer tax has discouraged ...
Working with a Realtor: Client V.S. Customer
May 10, 2016
Every time you meet an agent today you have to sign a Working with a Realtor brochure, and then you have to choose whether you want to receive Customer or Client service. Many Buyers choose Customer Service. They want to be a free agent with no commitment to any one Realtor. So what’s the problem? Client and Customer Definitions Client: "A 'client' relationship creates the highest form of obligation for a REALTOR® to a consumer. The brokerage must protect the interests of the client and do what is best for the client. A brokerage must strive for the benefit of the client and must not disclose a client's confidential information to others. The brokerage must also make reasonable efforts to determine any material facts relating to the transaction and would be of interest to the client and must inform the client of those facts." Customer: A buyer or seller may ...
The Competition Bureau Ruling
May 6, 2016
Many of you already know that the Courts found in favour of the Competition Bureau in a limited fashion against TREB. What does the Competition Bureau ruling mean for the public and for Realtors? The simple answer is not much! Let me explain. The Competition Bureau wants TREB to provide sold information to the public through VOWs (virtual office websites). They already exist without sold information and many agents have them. Currently ‘solds’ are reported when a deal goes firm. With the Competition Bureau Order, you will probably find that ‘solds’ will now be reported on the closing date and not when the deal goes firm. So what does sold information do for a Buyer? Nothing. They can only buy what is for sale. And Buyers have had access to these listings for sale for years. So these Buyers will continue to need Realtors to find the right property and to ...
Part-Time Real Estate Agents
May 2, 2016
Part Time Real Estate Agents, they exist in our industry but how do we define them? Most people think that part-time real estate agents are those with a second job. Not me, I judge an agent on their production and time commitments. I expect someone to invest at least 40 hours a week in the business. We have agents who have another job but still spend 40 hours a week on real estate. Then, there are agents who do not have another job but only spend about 20 hours a week on real estate, and they only do a few deals each year. Those are the agents I would call part-time agents.You can tell who they are because they have a spouse who makes a lot of money, they inherited family money, or they retired with a big pension. In most jobs you retire and leave. In real estate ...
Married VS Common Law in Real Estate
April 21, 2016
Everyone thinks that married legal spouses and common law spouses have the same rights. Not so in real estate. If you are married you automatically have rights to the matrimonial home and both spouses have to sign off on any sale. However, common law spouses will not be a party to any real estate sale of the matrimonial home, no signature, nothing. After the fact, the common law spouse can argue in court that they have contributed to the household operation and are entitled to some of the sale proceeds. A better way is for the common law spouse to get their name added to the title of the property at the time of purchase. Much safer, and you avoid any legal fights when the property is sold later. We are not marriage councillors, just realtors, but that is what we explain to all young couples buying their first property ...
Market Report April-May 2016
April 19, 2016
Sales Commentary The spring market is well under way. Sales for March and the First Quarter on the Toronto Real Estate Board were an all-time record. Sales in March were up by 16% over March of 2015. For those wondering if these sales numbers are sustainable, just look back nine years ago to the previous peak and you can see that sales per 100,000 population are LOWER today than in 2007. However we do preach a word of caution. There is some ‘froth’ to this market and it is not related to the condo segment. Instead we would be concerned with the sale of houses in the two million dollar range in the 905 and areas beyond. Many baby boomers are buying, as they have seen prices increase in this segment by hundreds of thousands of dollars in the last few years. Their expectations are to resell in a few ...
Average Price: The Worst Statistic in Real Estate
April 5, 2016
The worst statistic most often quoted in Real Estate is the average sale price. Did you know that the average sale price of an area can change when there are no actual changes in prices of any real estate? This is because the mix of sales always changes over time. For Example, one month you can have one $1,000,000 property sale and nine $100,000 sales, the average price works out to be $190,000. Next month, 10 more sales of similar $100,000 properties will give you an average price of $100,000. The newspapers will report a 47% drop in average prices. If you look at the Toronto Real Estate Board, the average sale price in May is always higher than the average sale price in October, every year! Do you think sale prices fall every year throughout the year? No, it’s just the mix of sales that changes. There are fewer ...
Market Report March-April 2016
March 23, 2016
Sales Commentary The Toronto real estate market continued to outperform what most experts were predicting. TREB sales in February were up by 21% over February of last year. The mild weather certainly played a part. But ask those in the market and they will tell you that more and more buyers want to live downtown and yet available product is limited. It use to be that one sold their property first and then bought. Not today, as people will only list their property for sale when they have purchased first. This has created a log jam of potential buyers with prices rising too fast and with a market that will run well into the summer. The condo market was intended to be the safety value – supposed overbuilding would result in vacancies and falling prices. But condo sales overall are ahead by 26%. Downtown the increase is closer to 40 ...
How Do You Know When the Market Has Peaked?
March 15, 2016
How do you know when the market has peaked? That is the magic question that everyone wants the answer to. A great deal of experts or bears (a person who believes the market will drop) put too much emphasis on historical statistics like Property Price-to-Rent and Price-to-Average Income Ratios. This may shed some insight on the market but will never accurately predict a peak. The reality is that no one ever knows the peak of the market until after we have passed that peak. It’s only then that everyone has great rear view vision. The smart people realize the downturn first and they react first. In order for the Toronto Real Estate Market to take a turn , there has be a fundamental shift in the driving forces of demand (buyers) and supply (sellers) for anything to happen. Currently, even with Toronto’s construction boom, we have barely kept up to ...