Thursday, October 23, 2014

Location, Location, Location what does it mean when purchasing real estate?

You will find the information very helpful when you are purchasing your real estate

You have heard about the importance of location, but what really does that mean?  The article below will explain what location, location, location in real estate is all about.

Enjoy,
Mark

Location, Location, Location

You've probably heard this adage many times, but what does it mean?

Location of the property you are contemplating to purchase is one of the most important aspects of consideration when establishing the value of a property.  

For example, two identical homes can be priced and valued very far apart the only difference in many cases is the location of each home.  How can this be?

The following information about location would affect both how much you pay for a home and subsequent resale value of the home, so buyer beware of these items.


  • Distance to work. How long will the rush hour commute take? House prices generally decrease as the distance for the hub-of-activity increases.
  • Recreational facilities. Parks. playgrounds, baseball diamonds, community centres, arenas, swimming pools and soccer fields help establish ambience and a community-based neighbourhood.
  • Schools. Which schools service an area is often a high priority.
  • Shopping. Large malls serve an entire community. Intermediate sized plazas are accessed by commuters and pedestrians.
  • Support services. Everyone needs a doctor. dentist and a pharmacy. Day care cent res and religious facilities also rank high.
  • Transportation. Public transit and mature road networks are more readily available in built up and established area. Projected start dates for transit routes or road construction are only educated guesses.
  • Lot size. Street frontage is important but don't overlook depth.
  • Parking and garage.
  • Corner lots. To avoid creating a tunnel like appearance, corner lots are wider than normal, meaning more grass to cut, more sidewalk to clear of snow and ice, more fencing to erect without a neighbour to share the cost.
  • Side of the street. Homes on the west side receive morning sun at the front and afternoon sun in the back. South side homes bask in the sun at the rear, ideal for backyard enthusiasts.
  • Other factors. What street hardware (sidewalk, fire hydrant, overhead street lamp, traffic signs, hydro transformer box, super mailbox, etc.) is located on or near the lot?


Potential deterrents

Negative factors can include gas stations. railways tracks, airports, commercial developments, cemeteries, industrial parks and major highways.

Positive attributes in close proximity can sometimes become drawbacks. For example being near a school is important but would you want a school next door or across the street?

Other considerations

After narrowing your choice of community and neighbourhood, focus on these factors:

I hope these points help you with your next purchase.

 I wish you all the best with your purchase,
Mark

Wednesday, October 22, 2014

Bank of Canada keeps prime rate at 1%

The Bank of Canada announced today at their regular meeting that they are keeping the prime rate at 1%

This means that the Bank rate charged to customers at the major banks will remain at 3%

It's been over 4 years since the rate was pinned at 1% and the trend appears to be continuing.

The full release is below.
Mark


The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.
Inflation in Canada is close to the 2 per cent target. Core inflation rose more rapidly than was expected in the Bank’s July Monetary Policy Report (MPR), mainly reflecting unexpected sector-specific factors. Total CPI inflation is evolving broadly as expected, as the pickup in core inflation was largely offset by lower energy prices. Underlying inflationary pressures are muted, given the persistent slack in the economy and the continued effects of competition in the retail sector.
Although the outlook remains for stronger momentum in the global economy in 2015 and 2016, the profile is weaker than in July and growth prospects are diverging across regions. Persistent headwinds continue to buffet most economies and growth remains reliant on exceptional policy stimulus. Against a background of ongoing geopolitical uncertainties and lower confidence, energy prices have declined and there has been a significant correction in global financial markets, resulting in lower government bond yields. Despite weakness elsewhere, the U.S. economy is gaining traction, particularly in sectors that are beneficial to Canada’s export prospects.  The U.S. dollar has strengthened against other major currencies, including the Canadian dollar.
In this context, Canada’s exports have begun to respond. However, business investment remains weak. Meanwhile, the housing market and consumer spending are showing renewed vigour and auto sales have reached record highs, all fuelled by very low borrowing rates. The lower terms of trade will have a tempering effect on income.
Canada’s real GDP growth is projected to average close to 2 1/2 per cent over the next year before slowing gradually to 2 per cent by the end of 2016, roughly the estimated growth rate of potential output. As global headwinds recede, confidence in the sustainability of domestic and global demand should improve and business investment should pick up. Together with a moderation in the growth of household spending, this is expected to gradually return Canada’s economy to a more balanced growth path. As the economy reaches its full capacity in the second half of 2016, both core and total CPI inflation are projected to be about 2 per cent on a sustained basis.
Weighing all of these factors, the Bank judges that the risks to its inflation projection are roughly balanced. Meanwhile, the financial stability risks associated with household imbalances are edging higher. Overall, the balance of risks falls within the zone for which the current stance of monetary policy is appropriate and therefore the target for the overnight rate remains at 1 per cent.


I hope this finds you Happy and Healthy!
All the Best!
Mark
A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

BUS 905-828-3434
FAX 905-828-2829  CELL 416-520-1577
mark@mississauga4sale.comMississauga4Sale.com
  • Thinking of selling your home in the next 3 to 6 months?  Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
    www.mississauga4sale.com/internet-evaluation.htm
  • Power of Sales and Foreclosureswww.mississauga4sale.com/Power-Sales-Bank-Sales-Alert-Request.htm
  • If you have not already signed up to receive my monthly real estate newsletter, you may do so here: On-Line Real Estate Newsletter sign up
    www.mississauga4sale.com/popupquestion.htm
  • See seasonal housing patternswww.mississauga4sale.com/TREBprice.htm
  • Would you like me to send you a desk or wall Calendar?
    www.mississauga4sale.com/Calendar-Order-Form.htm
 

Monday, October 13, 2014

Are Mortgage Interest Rates going up to down and should you buy hold and sell investment real estate?

I received an email from a reader and thought I would share the question and my answer with you.

The question from Aijaz was:


I love your site.
Thanks for keeping the data up to date.
Lots of good data on it.

Question. Do u think with interest rates going up possibly mid 2015.
This will cause a correction in pricing.

What is your opinion on the over value of canadas house pricing.
Some forecasters saying 20% drop in pricing.

Are you currently on the Buy, hold, or sell model for investment property?

My answer was:


Hello Aijaz

Thank you for your email and kind comments.

You are asking very good questions.  Unfortunately, nobody can predict the future but these are my thoughts and opinion.

I can see the prime rate rising to 3.25 and maybe 3.5% by the end of next year, at the earliest.  Even if/when this happens, the banks will raise their rates only slightly, I don't see them keeping in step with the Bank of Canada Rate. 

Rates will only rise to keep inflation in check.  I don't think that rates will cause a correction in pricing.  Yes, slightly fewer people will be able to enter the real estate market due to a price increase, but I don't feel this will have a large impact on our resale market.

I believe that it will be some other event or combination of events that will cause our real estate market to have a correction.  Our rise in prices has been unprecedented and nearly constantly upward since 1995.  Logic says this cannot continue forever.  Eventually the market increase in prices will slow and possibly retreat.  When this will happen is anyone's guess.  My opinion is that we will have a gradual slowdown of the market prices in late 2015 and into 2016, maybe only a 2 or 3% increase over that period rather compared to previous year over year increases of 4 to 10%  You have to compare figures from the same period previous year as prices fluctuate during the year and you need to watch the month over month trend to get a handle on real estate prices.  Year over year increases are what I am referring to.

Even if rates increase 0.5 or 1% we are still in extremely low interest rate period compared to last 50 years.  I think that these low rates will be with us until at least 2020 and possibly longer.  There is no reason for the rates to rise to 8% or higher and if they did, the economy would have great difficulty absorbing this shock and may crumble and correct as you and many are suggesting.  I feel this is a generational phenomenon, low rates may be with us for 20 years. Rates have been exceptionally low since 2009 and I see rates staying in this very low range well into the 2020's

Our real estate market, similar to the stock market, can have a major correction in a very short period of time.  Our TSX stock market has dropped (corrected - good grief I don't like that word, as it's a drop/loss/fall, not really a correction) nearly 10% since the high in mid September.  In a similar way, if buyers stop paying the prices that sellers are asking and the real estate market softens then we can easily have a correction in the average price of 10% or $60,000 on the current average price of nearly $600,000  It would take about 2 to 4 months for this correction to happen.

I am always of the mindset to buy and hold for the longer term, at least 5 years and more like 10 to 20 or longer.  Buy real estate, hold, reduce original amortization to 20 years, use bi-weekly accelerated payments, pay yourself by making up the $100 to $300 per month shortfall with your savings and let the tenants pay off your investment properties in 15 to 20 years.  Then you can enjoy the income in your later years.

I hope this helps.

If you have more questions, please let me know.

Happy Thanksgiving to you and your family!
Mark



Friday, October 03, 2014

Toronto Real Estate Board regarding sales of single family residential properties in September 2014

Hello from Fabulous Mississauga!

This is the latest report from the Toronto Real Estate Board regarding sales of single family residential properties last month

Average price was $573,676 up 7.7%
Number of units sold was up to 8,051 about a 10% increase compared to September last year

The full report is below
Mark


Sales and Average Price Growth Continued in September

TORONTO, October 3, 2014 – Toronto Real Estate Board President Paul Etherington announced that there were 8,051 transactions reported through the TorontoMLS system in September 2014. This result represented a 10.9 per cent increase compared to September 2013. On a year-to-date basis through the first three  quarters of the year, sales were up by 6.9 per cent annually to 73,465.

"Despite a persistent shortage of listings in some market segments, we have experienced strong growth in sales though the first nine months of 2014.

This is evidence that GTA households remain upbeat about purchasing a home. The majority of home buyers purchase a home using a mortgage. The share of the average household's income dedicated to their mortgage payment remains affordable, which is why buyer interest has remained solid," said Mr. Etherington.

The average selling price for September 2014 transactions was $573,676 – up by 7.7 per cent compared to the same period in 2013. Average year-over-year price growth was strongest in the City of Toronto, both for low-rise home types like detached and semidetached houses and for condominium apartments.

The average selling price year-todate was $563,813 – up 8.5 per cent compared to the first nine months of 2013.

"If the current pace of sales growth remains in place, we could be flirting with a new record for residential sales reported by TREB Members this year. On the pricing front, the multitude of willing buyers in the marketplace coupled with the short supply of listings will continue to translate into very strong annual rates of price growth in the fourth quarter," said Jason Mercer, TREB's Director of Market Analysis.


I hope this finds you Happy and Healthy!
All the Best!
Mark
A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987

BUS 905-828-3434
FAX 905-828-2829  CELL 416-520-1577
mark@mississauga4sale.comMississauga4Sale.com
  • Thinking of selling your home in the next 3 to 6 months?  Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
    www.mississauga4sale.com/internet-evaluation.htm
  • Power of Sales and Foreclosureswww.mississauga4sale.com/Power-Sales-Bank-Sales-Alert-Request.htm
  • If you have not already signed up to receive my monthly real estate newsletter, you may do so here: On-Line Real Estate Newsletter sign up
    www.mississauga4sale.com/popupquestion.htm
  • See seasonal housing patternswww.mississauga4sale.com/TREBprice.htm
  • Would you like me to send you a desk or wall Calendar?
    www.mississauga4sale.com/Calendar-Order-Form.htm