Saturday 27 June 2015

Is now a good time for Hamilton "empty nesters" to downsize?

Like I said last week, [it's a good time to flip real estate] - if you've got it, the demand is there.  Well, the same decreased listing inventory and increased demand that yields good results on a flip also makes it a good for anyone looking to sell a personal home as well.  And this up market may be a particularly good time for "empty nesters" or others looking to downsize in Hamilton.

The general theory is that if you are moving down, you are farther ahead because the value increase on your more expensive house will be more than the increase in value on the lower priced home you are going to move to.  For example, if you currently live in a $400,000 and it is up 10% from last year, then your increase in value is $40,000.  If you're going to buy a $250,000 house that is also up 10%, then it is only up $25,000.  You're $15,000 ahead of the game.

Obviously, it is not going to be quite that simple in real life because the market varies by area and housing style. So if you're also looking to sell in a low-demand area and buy in a higher-demand area, then that may cancel out any net cash benefits.  But it may still make it easier to buy into the high-demand area than it would be otherwise.

If you're thinking of moving and would like to explore options, give me a call or email and we'll have a free no-obligation discussion.  I'd also be happy to give you a price evaluation for your current house so we can compare figures based on some sample properties you might be interested in.

Friday 26 June 2015

To SPIS or not to SPIS.. that is the question.

And you're probably thinking, "uh, what exactly does SPIS mean?"  

SPIS stands for Seller Property Information Statement, which is a standard form available through the Ontario Real Estate Assocation (OREA).  Basically, it's a long list of questions about a property being offered for sale, ranging from ownership and title questions to structural and physical questions about the building. The purpose of the form is to make sure all material facts are disclosed so that buyers are making an informed decision.

Unfortunately it is a bit of a controversial form.  Some lawyers, like Mark Weisleder, think it is a useful form that keeps everything on the level by covering a wide range of information on the property. But others, like Bob Aaron, feel it is too long, unclear, and technical, leaving too much room for misunderstanding and error by sellers. His feeling is that the only people the SPIS is good for are litigation lawyers. 

Some real estate companies still use them regularly. Others have a no-SPIS-unless-absolutely-necessary policy.  (even if you don't do one, a buyer may ask for one in an offer and if it is a firm requirement from them then the decision ultimately falls to the seller)  Personally, I tend not to use them and advise sellers against them unless necessary - buyers should be expected to do their own home inspection anyways.  But of course if there is one available for a property a buyer client is purchasing, I will certainly ask for it.

One alternative use is simply as a guideline for discussion with your  listing agent when you are first putting the property up for sale.  Even if you are not going to give the SPIS to any buyers, it does help you to cover a lot of important points and can highlight issues that need disclosure or further investigation by your agent.

The only caution if you do have a SPIS-guided discussion with your agent but do not intend the form to be given to buyers is to make sure this is clearly indicated on the form.  If not, the agent is legally supposed to tell buyers the form exists and make it available on request, according to Section 20 of the Code of Ethics (Ontario Regulation 580/05) for the Real Estate and Business Brokers Act, 2002, which states: 

20. If a broker or salesperson has a seller as a client and knows that the seller has completed a written statement that is intended to provide information to buyers about the real estate that is available for acquisition, the broker or salesperson shall, unless the seller directs otherwise,
(a) disclose the existence of the statement to every buyer who expresses an interest in the real estate; and 
(b) on request, make the statement available to a buyer at the earliest practicable opportunity after the request is made.

So it is fine to use the form, you just have to make sure it is clear if you intend it for your listing agent's reference only and do not want it to be given to buyers.  If a buyer brings an offer requesting one, you can still make the decision then.  

As always, make sure you are working with a good real estate professional and have a good discussion about the form if they present it.

Wednesday 24 June 2015

Is now a good time to flip real estate in Hamilton?

Someone asked me the other day if now is a good time to 'fix and flip' real estate in Hamilton.  I guess the answer is 'yes' inasmuch as it is a good time to sell with such a strong sellers' market.

But this is assuming you have property to sell.  The more problematic side of things is finding the property to fix up and flip.  With a lower-than-normal inventory and a strong demand, the marketplace is less favourable on the buying side.  It can be quite difficult to find a suitable property at the price required to make a decent profit on resale.  Even the so-called "fixer-uppers" are often selling quickly and with bidding wars if they are priced right.

Having said that, if you are willing and ready to be patient, keep an eye on the market, and watch for properties that are not selling immediately so you can make an offer and negotiate favourable terms and price, the demand is certainly there for tasefully renovated properties.

Give me a call or drop an email if you'd like to discuss investing in real estate in more detail.

Tuesday 23 June 2015

RECO's four tips for a hassle-free move

Earlier this spring, the Real Estate Council of Ontario (RECO) has published a few tips to help you make your move a smoother transition that might come in handy now:

 After months of house hunting, you’ve purchased a great home that you’re excited to move into. But, there’s still the big to-do of planning the actual move.

If hiring a moving company is part of your plan, consider these tips from Consumer Protection Ontario, a consumer awareness program from the government of Ontario and partners like RECO.

1. Ask the right questions. 

Here are a few questions to ask when determining if they’re the right company for the job:
    • Do they have liability insurance? While many companies have insurance, their plans often do not cover things that you have packed yourself.
    • Will they do an in-person assessment before providing an estimate? You may want to steer clear of a company that says they don’t need to look at your belongings before coming up with a quote.
    • Who is responsible for damage or loss? Be sure that the information provided is included in your written contract, if you decide to go with that company.
    • Will the moving company store your belongings at a facility for any amount of time? If so, be sure to visit the facility. Be wary if the company refuses to show you its storage space.
    • Ask for references and check them!

2.  Shop around. 

Before selecting a mover, get at least three written estimates from different companies. Once you select a mover, make sure the estimate is part of your contract. This way, the mover cannot charge you more than 10 per cent above the estimated cost unless you agree to a new service or price or sign a change to your contract. This is the law under Ontario’s Consumer Protection Act (CPA).

3. Get it in writing.

All moving contracts worth more than $50 must be in writing. Under the CPA, your contract must include:
    • The mover’s name, address and contact information
    • A description of the service(s) and their prices
    • The total cost that you will have to pay, additional charges that may apply and taxes
    • Start and end dates for the service
    • The terms of payment (e.g., will you pay by credit, cash or cheque)

4. Prepare for moving day. 

Once the big day rolls around, consider being on-site to supervise the pick-up and delivery of your belongings. Also, you may want to move valuable items (e.g., jewelry) and personal documents yourself. Once your belongings arrive at your new home, consider making a note of any missing or damaged items on your contract or inventory list before the movers leave. Finally, keep in mind that a mover cannot hold your items or furnishings to demand extra payment. That’s an unfair practice under the CPA and it’s an offense to do so.

Thursday 11 June 2015

Half of home buyers in Ontario will be first-timers: RBC poll

TORONTO, June 11, 2015- Residents in Ontario believe in the value of housing with 85 per cent identifying a house or a condominium as a good investment, according to the 22nd Annual RBC Home Ownership Poll. However, when it comes to timing the market, the province appears to be evenly split. Half of respondents (50 per cent) in Ontario believe that it makes sense to buy a home now while the other half say it is best to wait until next year. Despite the differences, purchase intent remains steady as one-in-four (25 per cent) Ontarians plan to buy a home within the next two years, compared with 24 per cent a year ago.

Among Canadians likely to buy a home within the next two years, four-in-10 (44 per cent) say they will be first-time buyers, up from 40 per cent in 2014. In Ontario, 49 per cent of prospective homebuyers in the next two years will be entering the market for the first time.

"Ontarians may have a mixed view on when to buy, but confidence in the long-term value of owning a home and purchase intent has remained strong," said Trisha Fineza Forbes, senior manager, Home Equity Financing, RBC. "The survey results emphasize the importance of speaking to a mortgage specialist for personalized advice on the best path towards homeownership, especially for first time home buyers entering the market."

Highlights from Ontario:
  • Consumer sentiment about the state of the market:
    • 38 per cent say the housing market is balanced (national: 37 per cent)
    • 36 per cent say it's a seller's market (national: 28 per cent)
    • 26 per cent of respondents say it is a buyer's market (national: 36 per cent)
  • Thinking about housing prices at this time next year:
    • 45 per cent of Ontarians say house prices will be higher (national: 39 per cent)
    • 39 per cent expect house prices to remain about the same next year (national: 40 per cent)
    • 16 per cent expect house prices to be lower (national: 21 per cent)
About the 22nd Annual Home Ownership Poll
RBC conducts consumer surveys as one way to provide insight to Canadians about the marketplace in which they live. These are some of the findings of the RBC's 22nd Annual Home Ownership poll conducted by Ipsos Reid from February 3 to February 14, 2015. The annual online survey tracks Canadians attitudes and behaviours around home buying and home ownership. The results are based on a sample where quota sampling and weighting are employed to balance demographics and ensure that the sample's composition reflects that of the actual Canadian population according to Census data. Quota samples with weighting from the Ipsos online panel provide results that are intended to approximate a probability sample. The precision of Ipsos online polls is measured using a credibility interval. In this case, with a sample of 2,000 Canadian adults, the poll is accurate to within ± 2 percentage points had all Canadian adults been polled. The margin of error will be larger within regions and for other sub-groupings of the survey population. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error. 

Source: CNW

Monday 8 June 2015

May 2015 Housing Starts in Hamilton CMA

(Source: Canada Mortgage and Housing Corporation)

TORONTO, ONTARIO-- (Marketwired - June 8, 2015) - Housing starts in Hamilton Census Metropolitan Area (CMA) were trending down at 1,339 units in May compared to 1,489 units in April, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six month moving average of the monthly seasonally adjusted annual rates (SAAR)(1) of housing starts.

"The trend in Hamilton CMA total housing starts declined in May 2015, entirely due to fewer multi-unit housing starts. Builders have scaled back activity to manage a relatively high number of unsold multi-unit dwellings, particularly townhouses. Conversely, the trend in single-detached housing starts was up in May compared to the previous month. The limited supply of single-detached homes in established locations in the Greater Toronto Area (GTA) has resulted in higher prices which in turn has encouraged some buyers to move to Hamilton. This migration pattern continued to support single-detached housing construction in Hamilton," said Abdul Kargbo, CMHC's Senior Market Analyst for Hamilton and Brantford CMAs.

CMHC uses the trend measure as a complement to the monthly SAAR of housing starts to account for considerable swings in monthly estimates and obtain a more complete picture of the state of the housing market. In some situations, analysing only SAAR data can be misleading in some markets, as they are largely driven by the multiples segment of the markets which can be quite variable from one month to the next. The multiples segment includes apartments, rows and semi-detached homes.

The standalone monthly SAAR was 2,190 units in May, up from 1,213 units in April, marking two consecutive monthly increases. This month's increase in the SAAR measure of total housing starts reflected a higher number of single-detached housing starts in both the City of Hamilton and the City of Burlington.


As Canada's authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

(1) All starts figures in this release, other than actual starts and the trend estimate, are seasonally adjusted annual rates (SAAR) - that is, monthly figures adjusted to remove normal seasonal variation and multiplied by 12 to reflect annual levels. By removing seasonal ups and downs, seasonal adjustment allows for a comparison from one season to the next and from one month to the next. Reporting monthly figures at annual rates indicates the annual level of starts that would be obtained if the monthly pace was maintained for 12 months. This facilitates comparison of the current pace of activity to annual forecasts as well as to historical annual levels.

Thursday 4 June 2015

Another record month for local real estate sales

The REALTORS® Association of Hamilton-Burlington (RAHB) just reported that May was another new all-time record for sales in the local jurisdiction*, already breaking the new record set in April.

At the same time, listing inventory in RAHB's MLS® database continues to be down 8.9% at the end of the month compared to the same time last year, despite a recent increase in listing activity.

As I said, a few days ago, this keeps the local market in a position that favors sellers and can make things a bit tough for buyers.  Patience, prudence, and maybe a little faith, are going to be important for buyers as they face a fast-paced and competitive market.

To read the full report from RAHB, [click here].

* RAHB's official jurisdiction stretches from Burlington down to Dunnville and area, between the Norfolk and Niagara regions.

Monday 1 June 2015

Buyers, beware under-priced properties seeking heated bidding wars

A combination of strong demand and low listing inventory has made the market a tough place for buyers right now.  But it shouldn't scare you as long as you keep your wits.

While it is not a large percentage of listings, there are getting to be more sellers in Hamilton willing to play the market and list below market value to generate a lot of interest in a short time, often resulting in competing offers - "bidding wars" in the layperson's vernacular.

This can result in a property going for more than even the listing agent is expecting, [like a house that sold on Grant Ave not long ago], listed at $200,000 but selling at $300,000  The listing agent is quoted in the news report as saying he was expecting something more like $230,000!

But even if the sale price does not go above what it should be (ie. fair market value), there is much more likely to be a firm offer if you get several competing offers from different buyers.

I've actually seen a property recently that I had done a price evaluation for and suggested a sale price around $240,000 should be expected.  For whatever reason, they chose to go with another agent and listed at $219,900.  The property sold firm in three days at $241,000.  Pretty much what I had expected.  So while the property sold "20,000 over list price", it's hardly a point to boast on.

While this "sure-thing" sale might be helpful in getting you moving forward with a sure budget on your next purchase, I have mixed feelings on these quick firm sales with no proper home inspection done by the buyer, which I will explain in a separate entry in the next few days.

As a buyer, this makes it even more important to work with a good real estate professional who you trust to give you solid advice on property pricing - in terms of both character and competence. Someone may get worked up in a multi-offer situation and offer more then they should with no conditions... but as I always say, just because someone might that doesn't mean it should be you.

If nothing else, then if you do choose to make an aggressive offer on a property you really like, it should at least be an informed decision.

If you'd like to talk more about the home-buying process and explore the current market in Hamilton, give me a call or email and let's talk.