July 13, 2010
Building permits fell sharply last month, surprising and confusing real estate analysts. The experts had predicted approximately 2% slowing in start-up construction; instead, new permits fell nearly 11%. The decline followed two months of steady, strong gains.
Led by a sharp reduction in the number of permits for single-family homes, the value of residential construction fell to just under $4 billion(cad) for the month.
This is a very volatile series, and I think the drop in residential permits was a bit of a surprise.
Robert Kavcic, economist at the Bank of Montreal
In some circles, the decline in residential intentions triggered a rash of bearish forecasts, because the trend developed in spite of government initiatives to spur construction of affordable new housing. When the government announced last year that it would exempt low-cost new homes from HST and would sponsor generous first-time buyer incentives, officials claimed they meant to stimulate new housing construction in provinces where over-heated markets had put housing beyond the reach of average working families. Apparently, the initiatives’ effect has diminished as working families’ incomes fail to keep pace with increases in housing costs.
Overall, the market looks reasonably healthy, but we will need more stimuli to sustain residential construction. In the absence of that stimulus, the most important segment of the construction industry will struggle mightily.
Trystan Forbes, senior analyst [Source: Patterson Forbes Market Watch]
Commercial permits fell most precipitously—a shocking 35.2% from the previous month. Statistics Canada reported lower construction intentions were distributed evenly among all kinds of commercial and industrial properties–office buildings, recreational facilities, hotels and warehouses.
Offsetting losses in the other sectors, the industrial sector continued its series of strong gains, rising nearly 42%. Total industrial construction rose to $644 million(cad), and marked its fifth straight monthly increase.
Permits rose in the industrial sector, however, up 47.1 per cent to $644-million, the fifth monthly increase in a row mostly because of utility buildings in Ontario and manufacturing buildings in Quebec. Industrial construction intentions rose in eight provinces. [Source: The Globe and Mail]
June 25, 2010
For many people, it is an idea too scary to contemplate. For others, it’s reality. Being in your 50s and having no meaningful savings is certainly a frightening and serious situation, but by no means is it hopeless. People are living longer and in better health than ever before and it is never really too late to start making positive moves.
Fix ‘er Up
First, figure out how you got to be 50 and broke and how you can prevent that from continuing. In some cases, it could have been crippling medical or legal costs that were all but impossible to prevent. In other cases, it may have been major investment losses incurred in the stock market or a result of tying a large amount of money into corporate options and stock that are now worth much less.
Excessive generosity (like paying for college and weddings) may also have depleted the coffers, or low savings may be a product of excessive spending. Some people never think to pay themselves first (in the form of savings) and instead focus on having a new car every few years, top-of-the-line electronics, season tickets to professional sports and so on.
If the cause was out of your control, simply shift your focus to rebuilding your savings and do not dwell on it. But if the cause was controllable or avoidable, make sure to keep the lessons in mind. Sharp stock market losses may indicate you take on too much risk or do not diversify enough, while excessive spending suggests the need for stronger prioritization and discipline.
Change Your Plans
If you find that you have under-saved by the time you are 50, you have to change your plans to cope with this reality. For most people, the 50s are the peak earning years, and it is important to make the most of this. Forget about transitioning to part-time work or taking early retirement, and focus instead on making the most you can of these high-earning years.
You should give serious thought to working past normal retirement age. Even just a couple extra years of work may pay for double those years in retirement. In Canada, labour laws do not specify a retirement age for employees, although some laws or policies do set age limits for people working in certain occupations, according to Human Resources and Skills Development Canada. But there are rules concerning when you can start receiving any Canada Pension and start tapping into RRSP funds, but that does not mean you cannot continue to work if you are healthy enough.
Folks who need to build up their savings quickly should also consider a second job. Of course this is not a fun proposition, but the name of the game here is catching up. More experienced workers may find that their experience gives them opportunities to work as consultants (beware of competing with your day job, though!), while others may find that simply working a few hours a week in retail gives them some very welcome extra money.
There is another advantage in getting a second job – insurance. Although it is not legal, it is not unknown for companies to try to squeeze out older (and more expensive) workers and having a second job in place could soften the blow if this happens to you.
Finally, plans that involve significant luxury purchases (a second house, a boat, an RV), expensive vacations or large gifts to relatives should be put on the back burner, if not cut out entirely. Remember, we are talking here about making sure that you have enough money to live comfortably for the 20, 30, or maybe 40 years of your retirement; surely postponing a major purchase is worth that extra comfort.
Play Catch Up
The first step in catching up to your savings goal is to put a tight squeeze on your budget. You don’t have to resume the college kid diet of coffee and Ramen noodles, but if you find yourself with no savings and a habit for scotch or cigarettes, it might be a good time to really consider quitting and putting that money towards building your savings.
Another important step is to max out your opportunities to participate in RRSPs and the newer tax-free savings accounts (TFSAs). If your company offers RRSP matching, be sure to adjust your budget to contribute the maximum amount. Even without that match, though, there is no reason not to contribute as much as you can afford. If your company does not offer a retirement plan, you can set up your own and contribute to it on a monthly basis. Also, remember that even if you haven’t contributed the maximum to your RRSP in the past, you never lose your contribution room so now is a good time to try to max it out.
Do not make the mistake of ignoring regular brokerage accounts as well. It is true that a regular brokerage account does not offer the tax benefits of an RRSP, but so what? If you are contributing everything you can to retirement accounts and you still have money left over, you should by all means open such an account and look at it as part of your comprehensive retirement plan. You will have to pay taxes on dividends and capital gains (unless you choose a TFSA), but you can contribute as much as you like, whenever you like, and you do not have to take any sort of mandatory distribution.
Do Not Fret – But Do Not Delay
If you find that your plans somehow went awry and you are looking at meagre savings for a retirement coming in 15 or 20 years, don’t beat yourself up about it. There is still plenty of time for you to make strong positive steps and build a nest egg. It is important to get moving quickly, though, so do not put off the process any longer. Take an inventory of the financial decisions you have made in the past, the goals you need to achieve, and the resources available to you. With some hard work, discipline, and creative thinking, no situation is so bad that it cannot be fixed with some time and attention.
June 18, 2010
WHETHER YOU’RE A FIRST-TIME BUYER OR AN OLD PRO AT THE REAL ESTATE GAME, BUYING A HOME CAN BE A DAUNTING PROCESS. IT’S AN EMOTIONAL TIME FILLED WITH DIFFICULT CHOICES—AND EACH DECISION YOU MAKE HAS MONEY RIDING ON IT. YOU CAN EITHER CHOOSE TO MAKE IT A LOT OF FUN AND EVEN EASY, OR GO ABOUT IT THE HARD WAY.
Finding the right home to meet your family’s needs is hard enough. But knowing how to avoid paying too much for that home once you’ve found it is another job entirely.
In today’s complex, fast-paced market, you can’t afford to learn these lessons through trial and error. The tips contained in this blog will go a long way toward making you a savvy buyer. These tips have been gathered and put together from over a decade of selling. Gathered from the best school in the business, doing it.
1.Know what you’re shopping for before you start.
2.Shop for a mortgage before you shop for a home.
3.Pick a winning Realtor to help you.
4.Make sure your Realtor knows what you are looking for.
5.It’s a cliche, but… location, location, location.
6.Use your agent to narrow the prospect list.
7.Show a little interest in everything you see.
8.Shop with your head, not your heart.
9.Don’t ignore red flags when evaluating a home’s pluses and
minuses.
10.Hire a professional home inspector.
A Typical Inspection Looks At
• Foundation (slab, crawl-space, basement, etc.)
• Electrical, heating and plumbing systems
• Floors, walls and ceilings
• Attic
• Roof
• Siding and trim
• Porches, patios and decks
• Garage
• Property drainage
11.Not all fixer uppers are good buys.
12.Choose a home with an eye toward future needs.
13.Once you’re ready to buy, move quickly.
14.Ask your agent for a comparative analysis.
15.Learn as much as you can about the seller’s situation.
16.Keep your own situation to yourself.
17.Use time to your advantage.
18. Don’t be afraid to negotiate.
19. Stay out of bidding wars!
20. Make sure you get disclosure of all know defects.
24. Know your hidden costs (land transfer, lawyer etc.)
ARMED WITH THIS KNOWLEDGE, YOU STAND A MUCH BETTER CHANCE OF AVOIDING OVERPAYING FOR YOUR HOME.
As you can imagine, there is no learning curve that forgives mistakes made during the home-buying process. If I had to choose only one tip from the several I just listed, it would be this: Get yourself a good Realtor—someone whose sole interest in the deal is to watch out for your interests. If you take this advice, the rest will follow. A truly sharp agent will make sure that you follow all of the other suggestions shown above.
June 11, 2010
I guess a question like this has different answers depending on who you speak to.
Some agents are running non-stop, it seems, 12 months a year. Others have peaks and valleys depending on the calendar. Personally I feel that there are some mitigating factors why some homebuyers/sellers are active at certain periods for sure. Those who want their children in their new neighbourhood after June but before the new school year in September..Makes sense. There are those who want to buy and/or move in late fall to be in that special home before the Christmas (yes I said Christmas) Holiday..Also makes sense.
But don’t you sometimes wonder if we as Sales Representatives fall into this way of thinking because that is the way things always seem to work? What about those agents that are run off their feet in July, or December? What makes them different? The answer to that is one thing…they ignore the peak and valley mentality and make business. It can be done. We as the professionals are here to help the market move along, not flow with the ebbs and tides. The changes in the current economic climate have many of us being salespeople again, not just advertising ordertakers…and that is a good thing. Don’t let the market slow you down unless that’s what you want.
There is always a cute house or great property or interesting commercial and/or business opportunity to be presented. Be the one to do it, 12 months a year! I have been out cold calling on cold Northern Ontario mornings, knocking..talking, hanging door ads and you know what…people notice. Not to bad to get a cozy little condo listing on a dreary February morning on a freash air walk.
Let’s strive to outlive the economic upheavals, FSBO’s, and other negative aspects of what we do for a living and create a vibrant year ’round client education that you can buy or sell anytime. Somebody is always out there with a reason, a want or a need. It’s our job to find them.
Tony Crawford
June 3, 2010
June 1, 2010
Canada’s resale home market will move towards balanced conditions over the next two years as MLS sales ease and inventory levels increase, says Canada Mortgage and Housing Corp.’s (CMHC) second quarter Housing Market Outlook, Canada Edition.
In late 2009 and early 2010, sales activity included some pent-up demand from early 2009, the federal agency says. Once this demand is exhausted, and as mortgage rates gradually rise, the pace of activity in the resale market will ease. As a result, existing home sales will be in the range of 484,000 to 513,300 units in 2010, and then move slightly lower in 2011 to be in the range of 443,500 to 504,900 units, says CMHC.
With an improved balance between demand and supply, the average MLS price is expected to stabilize through the end of 2010 and then rise modestly in 2011, it says.
Housing starts rebounded in the second half of 2009 and early 2010 and will stabilize over the next two years, CMHC is forecasting. Following a total of 149,081 units in 2009, housing starts are expected to be in the range of 166,900 to 199,600 units in 2010. In 2011, housing starts will be in the range of 148,600 to 208,800 units, says CMHC.
“Canadian housing markets have recovered from the low levels posted in early 2009,” says Bob Dugan, chief economist for CMHC. “Moving forward, housing starts will moderate as activity becomes more in-line with long term demographic fundamentals.” He says new measures for government-backed mortgage insurance that took effect on April 19 will continue to support the long-term stability the market.
Quoted in REM
May 26, 2010
Remember, it’s not wrong to try to sell your own home….
We also need to remember that a lion’s share of FSBO’s eventually turn to a professional Realtor, so marketing to them along with friendship and patience can have its rewards for all.
I was recently was involved in a transaction where our client (buyer) was wishing to purchase a condominium with the FSBO willing to participate in a selling side commission structure, although at a lower rate than we would normally wish to work for. We provided representation for our buyer and customer service to the seller with all parties being satisfied with the transaction. This is where the BUT comes in…
Any transaction changes due to timelines, inspection etc. we made sure to fully handle through the sellers lawyer and not direct.
It would have been easy to keep visiting the seller for initials, signatures, etc. but the decision was made that since the seller decided to not be represented by a Realtor but by themself, for their protection and our clients this would be the best way to operate.
The FSBO’s final lawyer bill was somewhat higher I’m sure but again, we were not representing this seller and saving money sometimes comes with a cost.
We need to protect a very exciting but sometimes misunderstood profession.
Tony Crawford
May 21, 2010
Homebuyers have more choice heading into the busy spring buying season, with new supply in Canada’s resale housing market setting a record for the month of March. While resale housing demand remains strong, rising numbers of new listings are resulting in a more balanced national resale housing market.
According to statistics released by The Canadian Real Estate Association (CREA), some 97,663 residential properties were listed for sale on the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards in March 2010. This is an increase of 20 per cent from the previous March record set in 2008. A total of 233,402 new listings have come on stream since the beginning of the year, more than in any other first quarter period on record.
“Negotiations still favour sellers during the home buying process in a number of major Canadian housing markets,” said CREA President Georges Pahud. “The rise in new listings means that buyers may shop around more before making an offer.”
Demand remains very strong, but has edged lower compared to the record levels posted at the end of 2009. Seasonally adjusted national home sales totalled 130,072 units in the first three months of 2010. This represents the fourth highest quarterly level on record, down 3.4 per cent from the quarterly peak in the fourth quarter of last year. Sales activity in Ontario, Quebec, and Newfoundland & Labrador rose to new records in the first quarter. Higher activity in these provinces was offset by a decline in activity in British Columbia (-17.8 per cent) and Alberta (-9.7 per cent).
Actual (not seasonally adjusted) sales numbered 111,110 units in the first quarter of 2010. This is the third highest level ever for the first quarter period.
A total of 43,621 homes traded hands through Boards’ MLS® Systems on a seasonally adjusted basis in March 2010. This is an increase of 1.4 per cent from February, as further gains in Toronto more than offset a decline in activity in Vancouver. Seasonally adjusted sales scaled new heights in Toronto and Ottawa in March.
Unadjusted national sales activity numbered 49,256 units in March. This marks the second highest level on record for the month of March. On a year-over-year basis, sales were up 40.8 per cent, smaller than those of the previous five months. Since a year will soon have elapsed following the recessionary decline and subsequent rebound for the Canadian resale market, year-over-year comparisons are expected to continue shrinking in the months ahead.
The national average price of homes sold via Canadian MLS® Systems in March was $340,920. This is the second highest national average price on record, just $300 below the peak reached last October. Compared to March 2009, the national average home price was up 17.6 per cent. As with sales activity, the increase was smaller than those recorded over the past five months, and year-over-year gains are expected to become further subdued as the year progresses.
The price trend is similar but less dramatic for the national weighted average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It climbed 16 per cent on a year-over-year basis in March 2010.
The residential average price in Canada’s major markets climbed 19 per cent year-over-year to $373,835 in March. As with the national counterpart, the price trend is similar but less dramatic for the major market weighted average price, which rose 17 per cent from levels reported in March 2009.
There were 214,312 homes listed for sale on Boards’ MLS® Systems in Canada at the end of March 2010, a decline of nine per cent compared to the elevated levels of one year ago. This is the smallest year-over-year decline in active listings since June 2009.
The actual (not seasonally adjusted) number of months of inventory in March 2010 stood at 4.4 months. While well below where it stood one year ago (6.7 months), and down slightly from March 2008 (five months), months of inventory are higher compared to March from 2004 through 2007. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.
On a seasonally adjusted basis, months of inventory stood at 4.6 months in March. This was little changed from February, but stands above levels reported in the previous four months.
“The erosion of housing affordability is crimping activity in some of Canada’s priciest markets in the lower mainland of British Columbia,” said CREA Chief Economist Gregory Klump. “Higher mortgage interest rates and the rise in new listings may also soon reduce some of the urgency to purchase in Toronto. Sales activity in British Columbia and Ontario is expected to ease over the second half of 2010 once the HST comes into effect, pulling national activity lower. Rising supply and lower activity will take the steam out of the pricing environment following upbeat home sales this spring.”
Source: Canadian Real Estate Association (3/2010)
May 11, 2010
Sales of existing homes in Canada dipped for a second straight month in February, but remained high on a year-over-year basis, as the market may be moving into more balanced conditions, data showed on Monday.
The Canadian Real Estate Association (CREA) said a total of 42,799 homes changed hands last month, down 1.5 percent from January, as a large gain in sales in Toronto were offset by declines in Vancouver and other British Columbia housing markets.
The real estate group said the Winter Olympics, which were held in the host city of Vancouver and nearby areas, may have played a factor in lower sales in the province last month.
Unit sales in British Columbia were down 13.3 percent in February from January, compared with a 3.3 percent advance in Ontario.
Across Canada, sales rose 44 percent from the same month last year, a smaller gain in national activity from the previous three months. This was in line with economists’ views that year-over-year comparisons are likely to shrink in coming months because the recovery of the housing market started in February 2009.
“Housing markets are becoming more balanced,” said Gregory Klump,” CREA’s chief economist.
After a relatively short spell of low consumer confidence during the global financial crisis, Canadian homebuyers were quickly back in the market and have made the housing sector one of the cornerstones of the domestic economic recovery. The pace of the rebound has encouraged debate about a housing bubble.
But with rising supply — new listings rose for a fifth straight month, up 2.4 percent — it could take the steam out of the housing markets as the year progresses, said Klump.
Ultralow interest rates could further prompt home resales this spring before the arrival of new mortgage rules in April and changes to provincial sales tax regimes in British Columbia and Ontario, before cooling in the second half of the year.
“We should see the Canadian housing market move slowly back into a balanced-market position as higher mortgage rates and prices begin to temper demand,” said Millan Mulraine, economics strategist at TD Securities.
CREA said the national average home price in February rose 18.2 percent from a year earlier to C$335,655 ($329,074).
By Ka Yan Ng
May 3, 2010
National Summary
With rising activity in Toronto offset by lower activity in Vancouver, the number of homes sold through the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards edged lower in February. In recent months, national sales activity has slowed while new listings continue to rise, resulting in a more balanced national resale housing market.
According to statistics released by The Canadian Real Estate Association (CREA), seasonally adjusted national home sales totalled 42,799 units in February 2010, edging down 1.5 per cent from January. Activity declined mostly in Vancouver, but this was offset by an equally large gain in Toronto. Sales were also down in a number of other British Columbia housing markets. Since there were no significant gains in sales activity elsewhere in Canada, the national figure for sales activity was pulled slightly lower.
“The Olympic Winter Games may have impacted February sales activity in British Columbia, so activity for the province in March will be closely watched,” said CREA President Dale Ripplinger. “Activity is expected to remain elevated in Ontario and British Columbia over the first half of the year, with buyers looking to beat the introduction of the HST and expected interest rate hikes.”
Across the country, actual (not seasonally adjusted) residential sales activity numbered 36,275 units in February, up 44 per cent from the same month last year. New records for February activity were set in Ontario and Quebec. The year-over-year gain in national activity was smaller than those of the previous three months. Since a year will soon have elapsed following the recessionary decline and subsequent rebound for the Canadian resale market, year-over-year comparisons are expected to continue shrinking.
The average price of all homes sold through Boards’ MLS® Systems in February 2010 was $335,655, up 18.2 per cent from one year ago. As with sales activity, this gain was smaller than in the past four months, and year-overyear gains are expected to become further subdued going forward.
The price trend is similar but less dramatic for the national weighted average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. It climbed 15.6 per cent on a year-over-year basis in February 2010.
The residential average price in Canada’s major markets was up 18.7 per cent year-over-year in February. As with the national counterpart, the price trend is similar but less dramatic for the major market weighted average price, which rose 14.7 per cent from levels reported in February 2009.
The seasonally adjusted number of new listings on Boards’ MLS® Systems across Canada climbed another 2.4 per cent on a month-over-month basis in February to reach 73,849 units, the highest level since October 2008. Five consecutive monthly increases have lifted new listings 16.3 per cent above where they stood last September, when they had fallen to the lowest level since late 2005. As with sales activity, new listings in February 2010 were up most in Ontario and down most in British Columbia. The actual (not seasonally adjusted) number of new residential listings was 71,197 in February, up 10.8 per cent from one year ago.
Strong resale housing demand continues to draw down inventories, but supply is shrinking at a decreasing rate because of slightly softer sales activity and an increase in new listings in recent months. There were 188,334 homes listed for sale on Boards’ MLS® Systems in Canada at the end of February 2010, a decline of 15.4 per cent compared to levels one year ago. This is the smallest year-over-year decline in active listings since last August.
The actual (not seasonally adjusted) number of months of inventory in February 2010 stood at 5.2 months. This is well below where it stood one year ago (8.8 months), but on par with February 2008 and slightly higher than it was in the month of February in the years 2004 through 2007. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.
On a seasonally adjusted basis, months of inventory rose nationally for the third consecutive month. There were 4.7 months of inventory in February 2010; up slightly from 4.5 months from the previous month, and 4.3 months in December 2009.
“Housing markets are becoming more balanced,” said CREA Chief Economist Gregory Klump. “There are still a number of major markets where sales negotiations favour the seller due to a shortage of inventory, but supply has begun rising. Further expected supply increases will continue to take the steam out of housing markets as the year progresses.”
The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 96,000 REALTORS® working through more than 100 real estate Boards and Associations. Further information can be found at www.crea.ca.
Source: Canadian Real Estate Association (3/2010)