CMHC declares dividend of $1.175B payable to the Government of Canada

OTTAWA, Nov. 28, 2018 /CNW/ - The Board of Directors for Canada Mortgage and Housing Corporation (CMHC) has approved a dividend of $1.175 billion to its shareholder, the Government of Canada. The dividend is payable by February 28, 2019.

For the first time, CMHC's dividend includes $175 million from its securitization business. CMHC has now declared $4.175 billion in dividends so far this year.

CMHC manages its mortgage insurance and securitization activities on a commercial basis. The premiums and fees collected from these activities cover all related expenses while generating a reasonable return for its shareholder, the Government of Canada.

The dividend balances returning excess capital to the Government, while retaining sufficient capital to protect against housing market risks. Our dividend framework is informed by our risk appetite, stress testing and scenarios analysis. We intend to continue to return excess capital to the Government while establishing a dividend that allows us to maintain capital in line with our long-term capital needs.

CMHC's intention is to continue declaring dividends on a quarterly basis, subject to approval by our Board of Directors.

RAHB REALTORS® Release October Statistics

The REALTORS® Association of Hamilton-Burlington (RAHB) reported 1,035 sales of residential properties located within the RAHB market area were processed through the Multiple Listing Service® (MLS®) System in October, 2018. This is a 13.1 per cent decrease from the same month last year. Year to date, sales are 17.7 per cent lower than last year at this same time.

The sales-to-new-listings ratio, which can point to whether a market is in favour of sellers (above 60 per cent) or buyers (below 40 per cent) was 60.1 per cent. This is higher than last month and on the cusp of returning to a seller’s market. For comparison, in October 2017 the ratio was 65.5 per cent.

“The single family market in the overall RAHB area remains in a balanced position, with a good inventory of homes for those looking for a detached property,” says RAHB CEO George O’Neill.

The number of sales for single family properties within the entire RAHB market fell compared to the same month last year, while the average sale price increased by 5.9 per cent. Townhouse sales activity was also down from 2017, while the average townhouse sale price remained virtually the same. Apartment-style property sales were down from last year; however, average sale price was up by 11.6 per cent compared to October of 2017.

When the major areas within RAHB’s market are isolated, Hamilton, Burlington and Haldimand County all saw an increase in overall average sale price, while Niagara North experienced a decrease in overall average price. There was also an increase in average sale price for all property styles in each of the four RAHB market areas, except for Niagara North detached homes, Burlington townhouses and Hamilton apartment-style properties.

“Across the entire RAHB market area, the average price, number of days on market, and other factors differed when looking at housing style,” says O’Neill. “To ensure you have all the information you need to make an informed decision when buying or selling, always consult with a local REALTOR®.”

Guest blog: Kitchen Design with Bridget Brummel

Sample kitchen design by Bridget

This week, we welcome guest blog contributor Bridget Brummel from Hampton Kitchens to give us some thoughts on kitchen design for renovation.

1. Take your time and research everything. This will likely be the biggest, most expensive renovation project in your lifetime, so you want to make sure you will happy with the end result. If you need a contractor, make sure they are reliable and qualified. Get references. Research building material such as flooring, windows, countertops and even cabinetry. Cabinetry for example varies tremendously from company to company but all serve their purpose in the right location.

2. Explore your options and do more than one design. What if you took a wall down? What if you took your breakfast nook out to extend the kitchen? These are two of the most popular changes my clients are doing to their home to modernize the space of their older homes. These days, the kitchen tends to be the heart of the home. It’s where family and friends gather, socialize, and are entertained by their host. As a result a lot of people are extending and/or opening up their kitchen to be bigger and open to the rest of the house. Definitely explore your options. If you are having difficulty ask for advice from your kitchen designer. You might be surprised how a simple change can completely transform the space.

3. Don't get caught up in trends. Unless you can afford to redo your kitchen every ten years or so, avoid trends. You will be sick of it after a few years and will need to start all over again. Antique White for example, has been our best-selling colour in kitchens for a good ten+ years now. Why, because white never goes out of style. You can add accessories with the colour of the day, and accessories are a lot more affordable to update then a whole kitchen.

4. Think resale.  Plan on selling your home? A new kitchen usually adds value to your home, but not always. Avoid anything too modern or traditional in style. This can completely turn off some buyers if it is not their style. Which means they would need to gut your new kitchen to suit their own style. Try something transitional or contemporary to suit the style of a greater audience.

5. Update systems.  How old is your house? If it’s getting up there now is your chance update at the basic level. Change the electrical, rip down the plaster walls and re-insulate, move vents/windows/walls to suit your lifestyle. Once those new cabinets are up, it will be very difficult to change anything without causing damage.

6. Bulkheads – take them down! Most bulkheads have nothing in them. They are simply there to fill up the space between the cabinet and ceiling. I would say only 1 out of 5 kitchen has something like plumbing in their bulkhead, and this is usually in one small area. Find out! This does involve knocking a hole in the bulkhead and looking around, but man will your kitchen look so much more amazing going to the ceiling. Not to mention the extra storage you will get. If you do find something in your bulkhead, don’t despair. A lot of companies can create a nook in their uppers cabinets to hide anything at the top. But not all companies will do this, so ask and do your research on the company that is quoting you.

7. Pick what you love. This is ultimately your space, and your money. Make sure you love everything before committing. Things cannot easily change once contracts are signed.

Guest blog by
Bridget Brummel 
Design and Sales
Hampton Kitchens
Email: bbrummel@hamptonkitchens.ca
Phone: 905-388-7293 ext 257

Market Snapshot: September 16-22, 2018

Local MLS® Sales Data

All Hamilton Real Estate Districts Combined*

Total Sales: 169
Average Price: $516,733
Median Price: $480,000
Avg Days On Market: 34

The market remains pretty stable with a small improvement in sales volume, average price, and time-on-market, but with no major spikes. 

Note that average price can vary by district and property type. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown

** Not intended to solicit clients currently under contract.

Market Snapshot: September 9-15, 2018

Local MLS® Sales Data

All Hamilton Real Estate Districts Combined*

Total Sales: 159
Average Price: $503,635
Median Price: $489,900
Avg Days On Market: 34

With holidays and back-to-school out of the way, the most significant change this week is in the sales volume bouncing back after a hard dip the week before.  Average price, median price, and time-on-market continue to hover around the same points, suggesting a relatively stable market.

Note that average price can vary by district and property type. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown

** Not intended to solicit clients currently under contract.

Market Snapshot: September 2-8, 2018

Local MLS® Sales Data

All Hamilton Real Estate Districts Combined*

Total Sales: 98
Average Price: $508,979
Median Price: $465,000
Avg Days On Market: 36

This week saw no significant changes in time-on-market or prices, but volume dropped significantly.  Again, the back-to-school season can easily impact the market as everyone is quite busy in other ways.

Note that average price can vary by district and property type. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown

** Not intended to solicit clients currently under contract.

Market Snapshot: August 26-September 1, 2018

Local MLS® Sales Data

All Hamilton Real Estate Districts Combined*

Total Sales: 144
Average Price: $503,691
Median Price: $446,750
Avg Days On Market: 38

Sales volume and sale prices both took a bit of a dip this week, but that is not unusual with the beginning of the school year occupying people's time and thoughts.

Average time to a sale also slipped a little, approaching the historical norm of 40-45 days.

Note that average price can vary by district and property type. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown

** Not intended to solicit clients currently under contract.

"How much did the seller pay when they bought?"

Sometimes, while working with buyer clients, they will ask what the seller paid for the property. I have access to this information and will happily look it up for them. But how important is it, really?

When I do look it up, I make sure the buyer understands that the information is fairly limited in its value. What is significantly more important is what the property is worth today, so working as a buyer’s agent, I will look at sales in the area to determine a proper current value range. Without even considering any improvements the seller may have made, whether they paid too much when they bought or got a great deal is not relevant to what the property is worth now.

To illustrate, using an example from an unrelated field, you certainly wouldn’t offer someone the original 1980 price they paid for a Wayne Gretzky rookie card – it is obvious that is not the current value in the marketplace. The card is worth what it is worth today.

So if what the seller paid doesn’t have any relation to current market value, how can it benefit you? Early on in my real estate career, I thought knowing what the seller paid or when they bought could help determine how much “wiggle room” there might be in negotiation. 

I learned pretty quickly, though, that just because someone has owned a property for 30 years or paid significantly less than they are selling for, that doesn’t mean it is mortgage-free or equity-rich. Property owners take out new and second mortgages to help kids, invest in business start-ups, and for a multitude of other reasons. You can only easily verify the likelihood of equity, not the existence of it.

So, again, I go back to my statement above that knowing current value is much more important than knowing what the seller paid. Feel free to include that data in your research, just don’t give it more weight than it deserves.

How long does it take to sell a house?

Naturally, when you put your house up for sale in the open market, there is no guarantee on how long it will take to sell, but typically it shouldn't take longer than about 40 days.  Maybe less, depending on current market conditions for your area.

If you'd like to know what the average is for your neighbourhood, drop me an email and I'd be happy to let you know.

One reason why it is good to know the average time for your area is that you can guage the performance of your listing.  If you've been up longer than the average time with no sale, you might want to consider why.  It could be because your price is too high.

Generally speaking, buyers are going to look at the price, condition, and area.  You can't change the property location of course, so if you can't upgrade condition in any way, then the price has to be in accordance with condition and location.  If you hold out for a higher price than the local market has been delivering, then you might find yourself waiting significantly longer than you should.

Of course, not selling in an average amount of time does not automatically mean that you are over-priced.  Some properties are just more difficult to sell, with a lower number of buyers willing or interested.  One and two bedroom homes or properties with no basement would be a couple examples of property types that can take longer than usual.

As always, make sure you are working with a REALTOR® you trust, both for honesty and competence, and consult with them on an ongoing basis in regards to pricing and property preparation.

Market Snapshot: August 12-18, 2018

Local MLS® Sales Data
 
All Hamilton Real Estate Districts Combined*

Total Sales: 155
Average Price: $530,550
Median Price: $480,000 
Avg Days On Market: 35

Sales volume picked up a little this week, but still far from frothy.  Time on market was a bit slower, closer to the historical norm of 40 days to a sale.  

Prices seem to be continuing to sneak upwards, though, with both average and median sale prices increasing over last week.  The question is whether it will continue into a trend with the return of more typical market cycles and the fall market starting up in September.

Note that average price can vary by district and property type. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown

** Not intended to solicit clients currently under contract.

Market Snapshot: August 5-11, 2018

Local MLS® Sales Data
 
All Hamilton Real Estate Districts Combined*

Total Sales: 110
Average Price: $521,551
Median Price: $459,000 
Avg Days On Market: 29

Sales volume continues to be sluggish as the summer wears on, with average price staying healthily above $500k and the median remaining at a similar gap.  Time on market also continues to hover around the 30 days mark, which is not fast but faster than the historical norm of approximately 40 days.

Note that average price can vary by district and property type. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown

** Not intended to solicit clients currently under contract.

More than 1.4 million boomers across Canada expect to buy a home in the next five years

• 56 per cent of boomers consider their local housing market unaffordable for retirement
• 9 per cent of boomer parents do not expect their kids to move out until after the age of 35; this number is almost three times higher in British Columbia
• 32 per cent of boomers looking to buy in the next five years most likely to purchase a condo

TORONTO, August 8, 2018 – The Royal LePage Boomer Trends Survey, released today, found that 17 per cent of Canadian baby boomers (born between 1946-1964) are planning to purchase a new home in the next five years. This is expected to have a meaningful impact on the housing market, as the group represents 1.4 million[1] potential buyers and sellers. The research, conducted by Leger for Royal LePage, found that more than half (59 per cent) are opting to renovate their current residence rather than buying a new home.

“Don’t count them out yet – baby boomers will impact Canada’s housing market in a big way in the coming years, as another 1.4 million of this large demographic are expected to sell and buy real estate between now and 2023,” said Phil Soper, president and CEO, Royal LePage. “While the wave of older consumers will increase competition for condominium property in particular, there is no single type of home that boomers will be investing in.”

“Our research does indicate that smaller cities and recreational areas will attract more investment than major cities,” continued Soper. “This large segment of the population views our big cities as generally unaffordable for retirement purposes.”

The survey found that 44 per cent of respondents across Canada who still have children living at home expect them to move out between the ages of 21 and 25, and 21 per cent expect them to leave between the ages 26 and 30. Eighteen per cent anticipate their children will move out after the age of 30, with 9 per cent expecting them to depart after the age of 35. This percentage nearly triples in British Columbia, where 24 per cent of respondents with children living at home expect their children to move out after the age of 35. According to Royal LePage’s Peak Millennial Survey[2] conducted last year, 14 per cent of Peak Millennials surveyed are living with their parents.

“Our 2017 research into the largest group of first time home buyers in Canada, which we call the Peak Millennials, showed many were roosting in the family nest well beyond the traditional age of exit,” Soper said. “With this work, we have confirmed that boomers are allowing children to reside at home well into adulthood. Yet they won’t stay forever, and when they go, the folks are going condo shopping.”

Currently across Canada, according to the survey, over three quarters (77 per cent) of boomers own a home, nearly one in five (19 per cent) rent, while a very small number (1 per cent) live with family. When zooming in on current dwellings, the largest number (61 per cent) of boomers across Canada live in a detached home, followed by condominiums (21 per cent) and semi-detached/town homes (12 per cent).  Of boomer respondents planning to purchase a home in the next five years, 45 per cent are most likely to purchase a detached home, 32 per cent are most likely to purchase a condominium, while 10 per cent noted strongest interest in a semi-detached/town home and 5 per cent said a recreational property.

Retirement Plans and Perceptions on Housing Affordability

When asked about plans nearing or during retirement, one in five (20 per cent) boomers intend on buying a new property, while 71 per cent do not plan on buying a new home. Respondent sentiments were mixed on the desire to downsize, with less than half (41 per cent) stating that they would seek a smaller dwelling in retirement, while just over half (52 per cent) have no intention of downsizing.

Considering recent home price increases in several Canadian markets, more than half (56 per cent) of boomers polled said they consider the housing market in their city or region to be unaffordable. This number jumps to 78 per cent and 63 per cent of respondents in British Columbia and Ontario, respectively. When asked about their willingness to relocate, over one-third (34 per cent) of respondents nationally stated that they are open to moving to another city or suburb where property prices are more affordable. Of respondents willing to move for improved affordability, 35 per cent would prefer to stay within one hour of their current residence, 30 per cent would be willing to venture further out (one hour or more away), while 20 per cent stated that they are open to living anywhere.

A minority of respondents plan to purchase or reside in a secondary home or live elsewhere for portions of the year. Ten per cent plan to buy a secondary property, while 15 per cent plan to sell their primary residence and move into their currently owned secondary property full-time. Nearing or during retirement, nearly one quarter of boomers nationally plan to live in another city (24 per cent) or country (23 per cent) for at least three months of the year.

Financial Status and Support for Children

Overall, a large segment of the boomer population is on strong financial footing and on a clear path to being mortgage-free, if not already. According to the survey, over three-quarters (77 per cent) of those who own a home have paid off over 50 per cent of their mortgage, and 61 per cent have paid off over 90 per cent. Meanwhile, half (50 per cent) of boomers who own a home have less than 25 per cent of their retirement savings tied to real estate.

If they were to make a property purchase, 54 per cent of respondents stated having a budget of under $450,000, while 25 per cent possess a budget of $450,000 or higher. In the current market landscape, many boomers perceive very little impact from the federal government’s new OSFI measures on their personal circumstances. Half (50 per cent) of respondents do not feel that the new OSFI measures will impact the type of property they can afford. However, one in four (25 per cent) do believe the measures might impact their options, while approximately one in five (21 per cent) said they have caused them to second guess buying a home.

Many boomers are willing to help their children with real estate purchases, with 47 per cent affirming that they would subsidize their child’s home acquisition to some degree. If asked for assistance by their child, 41 per cent would give less than 25 per cent of the home’s total value, while 5 per cent would give 25 per cent of the home purchase price, or higher.

“Baby boomers are the most affluent generation in Canadian history, yet the journey has not been without challenge and adversity. Through several difficult economic recessions, the equity in their homes has proven to be wealth bedrock. This is a generation that deeply values home ownership and very much wants their children to have the same opportunity,” concluded Soper.

Ontario

With the rapid appreciation of home prices in the province, boomers in Ontario are the most likely to consider downsizing as they approach retirement. Almost half (49 per cent) of all respondents said they plan to move into a smaller home as they near or enter their golden years, the highest rate in among all regions surveyed. Four-fifths (80 per cent) of boomers in the province currently own their home, and 20 per cent plan to buy a new property within the next five years.

As boomers in Ontario plan their retirement, they are also the most likely to consider changing cities as they look for a home they can afford. Forty per cent of respondents stated that they are willing to move to a new city or suburb where homes are more affordable, the highest rate in the country. Thirty-two per cent of those willing to move would consider moving more than an hour away from their current city.

While most boomers in Ontario would prefer to remain in a detached home when downsizing, many are open to condominium living. Forty-six per cent of respondents said they would consider a condominium for their next home purchase.

“Boomers in Ontario are looking to reduce expenses as they approach retirement,” said Caroline Baile, broker, Royal LePage Your Community Realty. “By downsizing to a condo or moving to a more affordable city, boomers are able to tap into the equity in their homes and have more certainty about their costs. They are looking to transition into a lifestyle that gives them more freedom to pursue other activities without having to deal with time-consuming upkeep and unexpected repairs.”

Half (50 per cent) of boomers in the region said they would be willing to give money to their children to help them purchase a home. Of those that are willing to help their children with a down payment, 44 per cent of respondents would be willing to contribute up to 25 per cent of the total value of the home.

Methodology 

An online survey of 1000 Canadian Boomers, between the ages of 54-72 was completed between July 12 and July 17, 2018, using Leger’s online panel. A probability sample of the same size would yield a margin of error of +/-3.0%, 19 times out of 20. To gain additional insight into regional market and demographic dynamics, interviews were conducted with Royal LePage real estate professionals in featured provinces.

About Royal LePage 

Serving Canadians since 1913, Royal LePage is the country’s leading provider of services to real estate brokerages, with a network of close to 18,000 real estate professionals in more than 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women’s and children’s shelters and educational programs aimed at ending domestic violence. Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE. For more information visit: www.royallepage.ca.

Is the real estate market half full or half empty?

We're all familiar with the cliche psychological "test" for optimism vs pessimism, where a cup of liquid is placed in front of you, with the liquid around the halfway mark, and then you answer the question: is it half full or half empty?

While this little test may or may not be effective, especially when it's so well known that people can adjust their response, it does illustrate that the same situation can often be interpreted in two very different ways. You see this a lot with news media and headlines about the real estate market.

The other day, CREA released nationwide real estate market statistics.  Based on exactly the same release of information, some news sources present it as good news and others as 'bad'.  For examples, Better Dwelling focuses on the year-over-year gain in prices and suggests a dismal situation with prices making ["the smallest advance since 2009"].  Meanwhile the Financial Post focuses on [Toronto's 17% surge since the spring] and the Canadian Real Estate Magazine perceives this as [a possible turning point for the market] to rally.

It always amazes how much the news can be influenced by the perspective or opinion of the person writing it.  Still, I'm not saying not to read the news or not to trust them.. just to use a little critical thinking, examine more than one news source, and maybe learn to look at the source stats yourself.

Market Snapshot: July 1-7, 2018

Local MLS® Sales Data
 
All Hamilton Real Estate Districts Combined*

Total Sales: 130 
Average Price: $506,417 
Median Price: $479,950 
Avg Days On Market: 27

Sales volume saw a drop this week, which is probably unsurprising with a holiday weekend and the start of summer vacation season.

Prices receded in a similar fashion, but average remained above the $500k point, and time on market remained pretty close to the same as it has been/

Note that average price can vary by district and property type. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown

** Not intended to solicit clients currently under contract.

Hamilton Sees Strong House Price Appreciation in the Second Quarter of 2018

The aggregate price of a home in Hamilton saw strong growth in the second quarter of 2018, increasing by 6.1 per cent year-over-year to $541,778, according to the Royal LePage House Price Survey(1) and Market Survey Forecast released today.

When broken out by housing type, the median price of a two-storey home increased 5.9 per cent year-over-year to $571,330 in the second quarter of 2018, while the median price of a bungalow rose 7.6 per cent year-over-year to $496,005. During the same period, the median price of a condominium increased by 0.8 per cent year-over-year to $321,014.

Hamilton continues to see house prices rise on a quarter-over-quarter basis, yet remains an affordable place to live relative to the Greater Toronto Area. While sales activity for two-storey homes is slower than usual, the area continues to see multiple-offer scenarios on properties that are well priced.

The situation in Hamilton mirrors those across the country – the change in mortgage rules is requiring first-time buyers to rely more heavily on their families for financial assistance. However, the region provides a lot of options for new home buyers in the condominium segment, as prices remain affordable and developments continue to be built. Millennials are increasingly moving into these units in the downtown area, enabling this demographic to enjoy urban living.

Looking ahead to the third quarter of 2018, Hamilton's housing market is expected to become more balanced, with some moderate price increases as the year progresses.

Nationally, price appreciation slowed across Canada in the second quarter of 2018, marked primarily by softness in the Greater Toronto Area (GTA), where many regions have witnessed year-over-year price declines.

"It was a spring market that never blossomed," said Phil Soper, president and CEO, Royal LePage.  "As anticipated in our original 2018 forecast, the new federal mortgage stress-test measures slowed the market to a standstill in much of the country, as some families adjusted their expectations in a world with lower borrowing capacity, and others not impacted by the OSFI regulations moved to the sidelines, adopting a 'wait and see what happens to home prices' approach."

The Royal LePage National House Price Composite, compiled from proprietary property data in 63 of the nation's largest real estate markets, showed that the price of a home in Canada increased 2.0 per cent year-over-year to $613,968 in the second quarter of 2018. When broken out by housing type, the median price of a two-storey home rose 0.8 per cent year-over-year to $720,504, while the median price of a bungalow climbed 1.8 per cent to $512,979. At a national level, condominiums posted a significantly higher rate of appreciation when compared to the detached segment, rising 8.1 per cent year-over-year to $435,421. Looking ahead, Royal LePage is projecting an uptick in home price appreciation in the third quarter and forecasts that the aggregate price of a home in Canada will increase 1.9 per cent over the next three months.

"The market has begun to absorb and adjust to the new realities; we expect an uptick in sales volumes and prices during the second half of 2018," Soper continued. "The fundamentals have not changed. The economy is strong and unemployment is very low. We face shortages in our major cities, with many more people looking for homes than the market has available for purchase or rent. Upward pressure on prices will likely return to most markets this quarter."

About the Royal LePage House Price Survey

The Royal LePage House Price Survey provides information on the three most common types of housing in Canada, in 63 of the nation's largest real estate markets. Housing values in the House Price Survey are based on the Royal LePage National House Price Composite, produced quarterly through the use of company data in addition to data and analytics from its sister company, RPS Real Property Solutions, the trusted source for residential real estate intelligence and analytics in Canada.  Commentary on housing and forecast values are provided by Royal LePage residential real estate experts, based on their opinions and market knowledge.

About Royal LePage

Serving Canadians since 1913, Royal LePage is the country's leading provider of services to real estate brokerages, with a network of almost 18,000 real estate professionals in more than 600 locations nationwide. Royal LePage is the only Canadian real estate company to have its own charitable foundation, the Royal LePage Shelter Foundation, dedicated to supporting women's and children's shelters and educational programs aimed at ending domestic violence. Royal LePage is a Brookfield Real Estate Services Inc. company, a TSX-listed corporation trading under the symbol TSX:BRE.

(1) Aggregate prices are calculated using a weighted average of the median values of all housing types collected. Data is provided by RPS Real Property Solutions.

RAHB REALTORS® RELEASE JUNE STATISTICS

The REALTORS® Association of Hamilton-Burlington (RAHB) reported 1,257 sales were processed through the RAHB Multiple Listing Service® (MLS®) System in June, 14.2 per cent fewer than the same month last year and 19.2 per cent fewer than the 10-year average for the month. (cont'd)

[Read the full report] 

The 'escape clause' and how it works

As we looked at last week, [the sale-of-property condition] allows a buyer to make an offer on a property with a condition on selling their property, rather than waiting until they are sold.

Because selling a property can take longer than other conditions, such as mortgage or home inspection, a seller is often not keen on accepting this condition from a buyer.  After all, you're then stuck in a limbo of conditional sale until the buyer gets their own property sold. If they don't successfully sell and end up giving up, then you can find yourself without a buyer and a lot of wasted time.

The 'Escape Clause' is one thing that helps to mitigate this risk.  The standard wording from the Ontario Real Estate Association's clause library is:

Provided further that the Seller may continue to offer the property for sale and, in the event the Seller receives another Offer satisfactory to the Seller, the Seller may so notify the Buyer in writing by delivery to the Buyer personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto. The Buyer shall have <XX> hours from the giving of such notice to waive this condition by notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto, failing which this Offer shall be null and void, and the Buyer's deposit shall be returned in full without deduction.

So the seller gets to continue to market their property for sale and potentially accept another offer from a different buyer (with a condition on the seller getting out of the previous sale).  If this happens, then the buyer will have "XX" hours from the time the seller gives them notice to either firm up or back out.  The time given varies, typically between 24 and 72 hours.  The seller naturally wants less time, the buyer wants more. I find 48 hours to be a pretty usual compromise. 

The buyer can waive their sale-of-property condition and enter into a firm sale.  The obvious risk is that you don't sell your house in time to close on the agreed [closing day].  This puts you into a breach of contract with all the related problems that brings. 

But the other way, you're backing out of the sale and letting the other buyer have it, with your deposit being returned just like any other condition falling through.  Not very attractive option, but better than not closing, not getting your deposit back, and getting sued for it.

In a situation like this, it is important to discuss your options with your real estate professional and maybe even your lawyer.

Market Snapshot: June 17-23, 2018

Local MLS® Sales Data
 
All Hamilton Real Estate Districts Combined*

Total Sales: 159
Average Price: $515,125
Median Price: $476,000
Avg Days On Market: 27

A small increase in sales volume, but nothing significant.  Prices also recovered from the shot-lived drop the week before, with average price bouncing back above $500k and a typical increase to median as well. 

Still no significant change in time-on-market, suggesting a pretty stable activity level.

Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown

** Not intended to solicit clients currently under contract.

The sale-of-property condition and how it works

When you're putting an offer together, you have to decide what conditions to include.  The usual ones people think of are mortgage/financing and a home inspection, and maybe insurance.  Rural properties typically also see conditions on a septic inspection and water-supply test.

One that might not come to mind right away is the sale-of-property condition, where the offer is conditional on the buyer selling their own property.  It's not an unusual condition, but its use varies by market.  In a strong sellers' market, it can be hard to convince Sellers to accept it because it means a longer conditional time and they often have other offers to choose from. But depending on your situation, you just might not be comfortable making an offer without it.

Here's the way the standard condition reads and how it works:

This Offer is conditional upon the sale of the Buyer's property known as <address>. Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than <deadline time> p.m. on <deadline date>, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of the Buyer and may be waived at the Buyer's sole option by notice in writing to the Seller as aforesaid within the time period stated herein.

So in simpler words, if you include this condition, you will have until the condition deadline to secure a firm sale of your property.  If you do NOT give notice to the Seller before the deadline that this has happened (and you don't agree to extend the condition), then the offer becomes dead and you are entitled to get your deposit back.

The standard wording includes the property address, so the Seller and their agent may well look up your listing if you're already on the market, and their personal assessment of the listing and price may impact their decision about your offer.  If you're not listed, then they're going to have some questions about when you're listing, at what price, and so on.

As for the deadline, although average time-on-market might be less, you never know how long it will take to sell your property.  This condition is usually 30 days but can be more or less.  As with any condition, if the deadline is approaching the Buyer and Seller can agree to extend it.  But this must be in writing and both parties must agree.

If you have a property you need to sell to close the next purchase, then making an offer without this condition can be a risk.  That is something to discuss with your real estate professional.  What you do will depend on time-frames involved, your market conditions, the demand for your current property's specific type and location, and so on.

Next week, we'll look at the ['Escape Clause'] that often accompanies the sale-of-property condition, which allows the Seller to continue to market the property.  Although this creates some pressure on the Buyer, it helps to make the condition palatable to the Seller.

Real Estate Terminology: Closing Day

More formally referred to as Completion Date, or sometimes Date of Possession, the Closing Day is the day the sale "closes" - when the buyer pays the seller and ownership is transferred.

Closing can happen any time during the day, usually up to about 4:00pm.  My experience is that many sales close earlier in the day, but one of the more typical delaying factors is how promptly the buyer's mortgage lender gets the funds to the buyer's lawyer (the lawyer obviously can't pay the seller's lawyer until this happens).

Market Snapshot: June 10-16, 2018

Local MLS® Sales Data

All Hamilton Real Estate Districts Combined*
   
Total Sales: 143
Average Price: $468,690
Median Price: $443,000
Avg Days On Market: 28

Sales volume receded this week, and sale prices dropped significantly.  This drop is not necessarily a concern as weekly fluctuations can be pretty dramatic.  It is likely to be an indication of a more active value market this particular week.  It will take time will tell if it suggests an unexpected shift in market direction.

No significant change in time-on-market.

Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **
  

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown
 
** Not intended to solicit clients currently under contract.

Market Snapshot: May 27-June 2, 2018

Local MLS® Sales Data

All Hamilton Real Estate Districts Combined*
   
Total Sales: 188
Average Price: $519,138
Median Price: $476,500
Avg Days On Market: 26

Sales volume picked up a little this week, and average price remained above $500k with divergence from median shrinking a little.

No significant change in time-on-market.

Average price varies by district. Call to discuss sales data for your specific area, or for a sale price estimate specific to your property. **
  

*Ancaster, Dundas, Glanbrook, Hamilton, Stoney Creek, Waterdown
 
** Not intended to solicit clients currently under contract.

RAHB REALTORS® release May statistics

The REALTORS® Association of Hamilton-Burlington (RAHB) reported 1,317 sales were processed through the RAHB Multiple Listing Service® (MLS®) System in May, 27 per cent fewer than the same month last year and 18 per cent fewer than the 10-year average for the month.

[CLICK HERE to read the full report]