No down payment? No problem!

Everyone "knows" you absolutely have to have a down payment now because 100% mortgages are not available anymore, right?  Wrong!

While banks can no longer offer 100% mortgages because of restrictions on the mortgage insurance program, credit unions can.  The key difference is that banks are federally regulated while credit unions are provincially regulated, and this affects what the federally-regulated mortgage insurers can and can't do for each.  This small difference allows credit unions to use a cashback mortgage to give buyers the full purchase price at the time of closing, while banks can not.

A cashback mortgage for the full price is where the registered mortgage is 95% and then the credit union loans you the 5% down payment. There are terms in the mortgage requiring repayment of this loan if you sell of course, and the interest rate may be a bit higher -- but with where interest rates are today, the rate on a cashback is still better than the best rate was when I bought my house.

Unfortunately, the credit unions do expect their regulation to be changed and there is no definite timeframe on it, but for now these cashback mortgages as 100% financing are still available.

If you don't want to keep paying rent and have been thinking about buying a new house but don't have a down payment, get in touch with me and let's talk.  I would be happy to put you in touch with a mortgage professional who can help you explore this option.

Selling real estate and personal safety

Thinking about selling your own house?  Ever thought about how you're going to ensure personal safety?  Probably not, but personal safety is an often overlooked concern in the real estate market.

Every day you're going to get calls from people who want to have a look at the house, and if you're selling on you're own, it will have to be you.  You don't know who these people are, but you'll be meeting with them and taking them into your home out of the public eye, putting yourself into a potentially more dangerous situation then you might realize.

It's not like something bad happens every day, but because we are regularly meeting complete strangers in non-public settings, personal safety is enough of a concern in this business that the real estate associations have member guides specifically for personal safety.  Many real estate professionals have strict policies in place for personal safety, such as insisting on meeting new buyers at their office before showing them any properties.

For-sale-by-owner companies might prefer you to believe that this is just self-interested fear-mongering.  But you better consider some of the personal risks as well as the strictly monetary side of things.  Don't take my word for it, though, look at some real stories that have happened.

There is the recent kidnapping and killing of Beverly Carter that has left her family and community devastated; Lindsay Buziak's still-unsolved murder; and the brutal slaying of Devinder Kumar that traumatized police involved with the case.  And although it is not real estate related, we have a local example of tragic results from the private selling process with the Tim Bosma case.  All he did was advertise g a truck for sale on Kijiji (something many private real estate sellers might do as well!), and his life was ended by complete strangers.

If you'd like to talk more about personal safety in the real estate business, or any other aspect of the home-selling process, give me a call or email and let's have a chat.

New Monthly Record Set

(October 3 – Hamilton, Ontario)  The REALTORS^® Association of Hamilton-Burlington (RAHB) reported 1286 property sales processed through the RAHB Multiple Listing Service^® (MLS^®) system in September.  This represents a seven per cent increase in sales compared to September of last year.   

There were 2017 properties listed in September, an increase of 2.3 per cent over the same month last year.  End-of-month listing inventory was 10.3 per cent lower than last year at the same time.

“Sales were the highest we’ve seen for the month of September, ever,” said RAHB President Tim Mattioli. “The strong market seen through the summer is continuing into the fall.”

Seasonally adjusted* sales of residential properties were less than one per cent higher than the same month last year, with the average sale price up 5.3 per cent for the month.  Seasonally adjusted numbers of new listings were 1.7 per cent lower than the same month last year.

Seasonally adjusted data for residential properties for the month of September, 2014:

Seasonally Adjusted                                        Percentage change compared to

Residential Only        Sep/14         Aug/14       Jul/14         Jun/14           May/14         Sep/13

New Listings	1624	-1.1%	-2.4%	-5.6%	-5.0%	-1.7%
Sales	1234	0.7%	-2.3%	0.2%	0.4%	0.3%
Average Sale Price	$411,579	1.5%	0.5%	2.7%	4.9%	5.3%

Actual overall residential sales were 6.7 per cent higher than the previous year at the same time.  Residential freehold sales were four per cent higher than last year while sales in the condominium market saw an increase of 19.9 per cent. 

“The condominium market in particular saw a big jump in sales,” said Mattioli.  “With new listings at about the same level as last year and sales being almost 20 per cent higher than last year, there were considerably fewer condo listings in inventory at the end of the month.”

The average price of freehold properties showed an increase of 4.8 per cent compared to the same month last year; the average sale price in the condominium market increased 17 per cent when compared to the same period last year.

The average sale price is based on the total dollar volume of all properties sold in the RAHB market area.  Average sale price information can be useful in establishing long term trends, but should not be used as an indicator that specific properties have increased or decreased in value.

The average days on the market decreased from 44 to 38 days in the freehold market and increased from 42 to 44 days in the condominium market when compared to the same month last year.

Year to date, listings are 1.9 per cent higher than the same January-to-September period a year ago.  Sales are 6.4 per cent higher and the average sale price is 5.5 per cent higher for the period.

The numbers for the month of September, 2014 compared to September, 2013:

All Property Types                                    2013                      2014                 % Change 

Listings	1972	2017	2.3%
Sales	1202	1286	7.0%
Average Sale Price	$391,621	$418,408	6.8%
End of Month Listing Inventory	4212	3780	-10.3%

Residential Only

Listings	1816	1881	3.6%
Sales	1150	1227	6.7%
Median Sale Price	$328,500	$350,000	6.5%
Average Sale Price	$390,388	$411,699	5.5%
Average Days on Market	44	39
End of Month Listing Inventory	3402	3062	-10.0%

Freehold Only

Listings	1499	1560	4.1%
Sales	954	992	4.0%
Median Sale Price	$362,750	$372,450	2.7%
Average Sale Price	$417,070	$437,026	4.8%
Average Days on Market	44	38
End of Month Listing Inventory	2773	2575	-7.1%

Condominium Only

Listings	317	321	1.3%
Sales	196	235	19.9%
Median Sale Price	$248,250	$276,000	11.2%
Average Sale Price	$260,522	$304,787	17.0%
Average Days on Market	42	44
End of Month Listing Inventory	629	487	-22.6%

Commercial Only

Listings	156	136	-12.8%
Sales	52	59	13.5%

Every community in RAHB’s market area has its own localized residential market.  Please refer to the accompanying chart for residential market activity in select areas in RAHB’s jurisdiction.

*Seasonal adjustment removes normal seasonal variations, enabling analysis of monthly changes and fundamental trends in the data. 

Established in 1921, the REALTORS® Association of Hamilton-Burlington (RAHB) represents more than 2,700 real estate brokers and sales representatives from Hamilton, Burlington and outlying areas. Members of the association may use the REALTOR^® trademark, which identifies them as real estate professionals who subscribe to a strict code of ethics. The association operates the local Multiple Listing Service^® (MLS^®) and provides ongoing professional education courses for its members. In addition, RAHB is an active participant in the Home Ownership Affordability Partnership (HOAP) and holds an annual auction in support of local charities. Advertisements of local MLS® property listings and information about the services provided by a REALTOR®  can be found at www.REALTOR.ca.  More information about RAHB is available at www.rahb.ca

Blowing bubbles

Many of us remember blowing bubbles as children (or more recently with our own children). It's a fun activity with no lasting results, inspiring contests to see who can blow the biggest bubble.

I would like to thank the Financial Post for comparing this childhood activity to the writings of authors looking to cash in on consumer fear in an article examining the phenomenon of  books predicting a real estate market crash.

In a very similar fashion, the authors seem to compete for who can make the scariest predictions and sell the most books off of the resulting "ohmygosh" moment they get for it.   But so far, these doomsayers have been a flash in the pan every time.

Folks like this have been calling for a imminent market crash since 2007.  They have been wrong.  And wrong.  And wrong again.  They'll keep going until a downturn that would be common in any kind of marketplace comes and they can point and say "aha!".

The really sad thing is that fear can drive an open market, so when that normal cyclical downturn comes, it maybe exaggerated because people will start to think these economic prophets are right.

Don't buy the hype.  Ignore them.  Or at least take it all with a grain of salt.  Make wise investments if you're an investor, focusing on cashflow.  When it comes to personal home ownership, you have to live somewhere, so don't worry excessively about what the market is going to do to short term values - in the long term there is no reason to think they will not recover.  Just work with a buyers' agent that will give you solid advice and an informed opinion on current market value.

And remember: in the end, as long as you have a roof over your head, you're doing better than a lot of people so why fret unnecessarily?