How does "affordability" (sales price + interest rate) influence market direction

Greetings from fabulous Mississauga!

I received a couple of insightful questions from an avid reader and thought I would share the questions and my thoughts on them

The questions were:

Mark,

I really enjoy receiving your emails with the latest POS properties and all the real estate information that you include.

I have a couple of questions:

     1. The average house price fluctuation we see on a yearly basis, is that price when the property is sold or is it the closing date? This would shift the cycle by a couple months depending.

      2. I can’t help wonder the influence of interest rates on price. I have a suspicion that “affordability” (sales price + interest rate) has a lot to do with the market direction? Have you ever graphed the house prices vs. interest rate?

Keep the great information flowing!!

Thanks again

BB

My answer was:

Hello BB

Thank you for your email.

Regarding your first point, the sold price is as of the date the property was sold, not the closing date.   

Your second point about the relationship between interest rates and prices is interesting.  I suspect here is a relationship, but not sure how closely one follows the other.  When rates increase it seems there is often a slight pause or lull in sales and then it continues again.  On the other hand, sometimes when rates go up there is a sudden surge in sales as the people who are pre-approved and locked into the lower rate end up purchasing.  When rates are trending downwards and there is a drop in the mortgage rate or an expected drop in rates, purchasers often go into a holding pattern waiting for rates to bottom out.   It really depends upon the “mood” of the market and which direction rates are going.  I’ll see what I can find with the numbers and let you know if I find a good relationship and high confidence value.

You also mention affordability and market direction.  Yes, I believe there is a relationship between these two factors too.  Again, there seems to be a tipping point where when rates and prices get too high, affordability becomes an issue and the market slows down.  The converse is also true.  I’ve found that the trend and the mood of the real estate marketplace and the press has more impact on the market direction than the actual numbers.  There are many instances of fear influencing the market far more than a change in interest rate or price.  When the government introduced the foreign buyers tax which ultimately affects less than 4% of all sales, our market collapsed.  Conversely, the fear of missing out on the rapid and sustained rise in prices caused many people to get into the market sooner than they otherwise would have (or should have) during many periods over the past 30 years.

Depending on where we are on the “Market Cycle”  greatly affects the marketplace.  To read more, see this page: http://www.mississauga4sale.com/Market-Emotions-Cycle.htm  I see that I need to update that page!

There are many more aspects to the real estate market that one can analyze. 

All very interesting factors to consider! J

Thank you,

Mark

Bank of Canada Interest Rate stays the same at 0.5%

Greetings from Fabulous Mississauga!

The Bank of Canada announced they would leave their key interest rate unchanged again at 0.5%. 

This means that the prime rate charged by most lenders in Canada will remain unchanged at 2.7%

The full press release is below.

The Bank of Canada is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.

Inflation is broadly in line with the Bank’s projection in its April Monetary Policy Report (MPR). Food prices continue to decline, mainly because of intense retail competition, pushing inflation temporarily lower. The Bank’s three measures of core inflation remain below two per cent and wage growth is still subdued, consistent with ongoing excess capacity in the economy.

The global economy continues to gain traction and recent developments reinforce the Bank’s view that growth will gradually strengthen and broaden over the projection horizon. As anticipated, growth in the United States during the first quarter was weak, reflecting mostly temporary factors. Recent data point to a rebound in the second quarter.  The uncertainties outlined in the April MPR continue to cloud the global and Canadian outlooks.

The Canadian economy’s adjustment to lower oil prices is largely complete and recent economic data have been encouraging, including indicators of business investment. Consumer spending and the housing sector continue to be robust on the back of an improving labour market, and these are becoming more broadly based across regions. Macroprudential and other policy measures, while contributing to more sustainable debt profiles, have yet to have a substantial cooling effect on housing markets. Meanwhile, export growth remains subdued, as anticipated in the April MPR, in the face of ongoing competitiveness challenges. The Bank’s monitoring of the economic data suggests that very strong growth in the first quarter will be followed by some moderation in the second quarter.

All things considered, Governing Council judges that the current degree of monetary stimulus is appropriate at present, and maintains the target for the overnight rate at 1/2 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.com

Mississauga4Sale.com

• Thinking of selling your home in the next 3 to 6 months?  Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
  http://www.mississauga4sale.com/internet-evaluation.htm
• Power of Sales and Foreclosureshttp://www.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
  http://www.mississauga4sale.com/popupquestion.htm
• See seasonal housing patternshttp://www.mississauga4sale.com/TREBprice.htm

How to get top dollar for your home - article from MoneySense

This is an article that appeared in MoneySense about How to get top dollar for your home and some information the current state of our real estate market in 2011.  Too bad we didn't have the foresight back then to see how much the average price would increase, otherwise we would have purchased many properties!

Read the full article here

I wish you the best,
Mark

Annual real estate cycle for Toronto and the GTA in Ontario over the past 20 years

Greeting from Fabulous Mississauga!

The graph below clearly shows the pattern of the annual real estate cycle for Toronto, the GTA in Ontario over the past 20 years.

 

This graph shows the cycle of how average price increases in the late winter and early spring, decreases during the summer months, increases again in the fall (but usually not as high as the highest price in the spring) and then decreases again over the  early winter months. The cycle repeats itself with near certainty, year after year and has done so since at least 1995.  When will this regular price increase stop? Nobody knows for sure, but it's a very interesting trend to see the seasonal fluctuations in home prices. The only period that didn't show this regular increase was late 2008 to early 2009 during the Global Financial Crisis when housing prices fell more than 50% in some markets in the USA and elsewhere.  We only experienced a small downward 'blip' in our prices and then the steady increase began again in the spring of 2009 The graph below shows average single family residential prices of homes for the Toronto Real Estate Board.  Or, maybe you would like to see the average prices of single family residential homes since 1985

Read about this and see the graph online at this page

Read about this and see the graph online at this page

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.com

Mississauga4Sale.com

• Thinking of selling your home in the next 3 to 6 months?  Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
  http://www.mississauga4sale.com/internet-evaluation.htm
• Power of Sales and Foreclosureshttp://www.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
  http://www.mississauga4sale.com/popupquestion.htm
• See seasonal housing patternshttp://www.mississauga4sale.com/TREBprice.htm

Graph showing TREB Historical Average Price Data

Greeting from Fabulous Mississauga!

Below is a Graph showing TREB Historical Average Price Data

• The graph below shows a graph of sales price data obtained directly from the Toronto Real Estate Board showing the average selling price of single family homes from 1985 to date in our GTA marketplace.
• Note the historical trends for spring and fall price increases, where spring typically has a larger increase compared to the fall.
• The benchmark for changes in price is chosen to be the average price of homes at the last height of the market, which was $273,698 in 1989

See the graph online and read more about this online at this page

See the graph online and read more about this online at this page

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.com

Mississauga4Sale.com

• Thinking of selling your home in the next 3 to 6 months?  Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
  http://www.mississauga4sale.com/internet-evaluation.htm
• Power of Sales and Foreclosureshttp://www.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
  http://www.mississauga4sale.com/popupquestion.htm
• See seasonal housing patternshttp://www.mississauga4sale.com/TREBprice.htm

When is the best time to sell your home in the GTA?

Hello,

I just read this article below that was sent to me by a client.

It contains great information about when to sell your home.

I've written about this in the past and you can read my thoughts about this subject at this link:

http://www.mississauga4sale.com/when-best-time-to-sell-home.htm

Enjoy!

Mark

Like everything in life, there are always exceptions to the rules.

Personally, I like these exceptions, as nothing is predictable – especially selling a house.

Still, it's good to know the basics, do your homework and factor in the required timelines.

Statistics show that spring is the best time to sell a house. You may read conflicting reports that will say March to May, or they may lump in April and July in to those calculations. However, with the recent real estate climate in the GTA, there really isn't a bad time. What you're selling can influence the time of year you choose to sell.

If you're listing a resale home, in order to buy a new home, you have to realistically factor in the closing date and, perhaps, add-on a bit of wiggle room. If you're listing a condominium or have to give the appropriate two-month notice to a landlord, you may not have to worry about the time of year as it relates to children starting school- unless the children are yours.

Starting a new school year at the beginning of September, and ensuring that kids can finish up the year at their old school, is one of the most important concerns for parents of school-age children. In this scenario, the family would prefer to move during the summer months, so count back and consider the following.

If your home is located in a family-friendly area, close to schools, shopping, etc., a new family will want to relocate during July or August.

Count back three months, as most offers ask for a 90-day closing. With this in mind, you'll want to have signed a deal by April. Again, if you're situated in the GTA, chances are that your home won't be on the market for long. But if you live in a rural area, or have a character property that’s quite different from the norm, you'll need to build in more selling time.

There are some advantages to listing your house earlier in the calendar year, rather than waiting for spring. Because the summer scenario is so popular, most people list their homes around April, which means there’s more competition. If you list your home in February, you may have other advantages.

During the winter months there's a lower supply of houses on the market. Also, maintaining your property requires less work on the outside at this time of year, since you don't have to tend gardens and keep the grass cut. Many of my clients have experienced a successful rate of return when they list in February.

Those people who are looking to buy in September or October may be looking for a better deal after the peak months have passed. Some agents will tell you that your house will sell quicker and closer to the asking price, if you list between Halloween and the New-year.

Homes look their best in the late summer and early fall. Gardens are mature, lawns (depending upon the weather) may be lush, and with a hint of autumn tingeing the air and the leaves, fireplaces can be lit and the ambiance created by indoor, and outdoor, lighting - all help to enhance the curbside appeal. Still, there are no hard and fast rules.

If you're selling and buying, it's always a juggle, so try not to have all your balls in the air at once.

Have a plan, and choose the timing that's right for you and your family.

http://www.mississauga4sale.com/when-best-time-to-sell-home.htm

Read more at this page:  Best time of year to sell your home

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

 

Predictions for Toronto GTA and Mississauga Real Estate market in 2014

Predicting the future is not for everyone.

I only like to predict about 2 to 3 weeks into the future with any certainty. Anything beyond that becomes speculation based upon trends, current conditions and human sentiment. Thus, I can speculate for you for 2014.

It would appear that our real estate market is poised to have another positive year regarding prices and sales volumes.

Interest rates are low, inventories are generally low (except the condo market) and there continues to be pent-up demand for real estate in the GTA

I don't see our condo market softening too much more than it currently is. I believe we are in for another 'normal' year for real estate this year.

With that said, unless we see an improvement in the condo market around Square One, our local condominium marketplace could sag in the first quarter. We won't know the direction until about March or April.

The December results are not out and it was a 'normal' December, slow, but typical.

January 2014 (now) is not beginning with a boom, but it could also be the ice cold temperatures - we are all hoping for some improvement in the weather and the real estate market in the coming weeks!

See a graph of how the market performs throughout the year, up in spring, down in summer, up in fall, down in winter, but always on the upslope:

http://www.mississauga4sale.com/TREBavg1995date.htm

See this graph on how steep the increase has been of late:

http://www.mississauga4sale.com/TREBprice.htm#graph

or view only the graph:

http://www.mississauga4sale.com/avgprices.JPG

I wish you all the best in 2014!

Thank you,

Mark



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.com
Mississauga4Sale.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 Foreclosures
www.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 patterns
www.mississauga4sale.com/TREBprice.htm
* Would you like me to send you a desk or wall Calendar?
www.mississauga4sale.com/Calendar-Order-Form.htm

Discounted commission rates and the buyer agent commission

I had an interesting question from a buyer. Below is the question and my answer.
Mark

Hi Mark,

Thanks a lot for the very informative email. The house I am considering selling our house, if the buyer's agent gets 2.5% commission isn't the buyer then responsible to pay the HST on behalf of their real estate agent?

Thanks,

MA

Hello MA

Even though the buyer's agent represents the buyer, 99.9% of the time (I'm guessing that maybe 1 in 1000 transactions the buyer may pay the commission to the buyer's agent) the agreement is that the listing agent pays the buyer the buyer's side of the commission and this is why the total commission to the seller is 5% or at least the buyer's agent side comes out of the total commission that the seller pays.

This is the way that it's set up in Ontario and it continues to work well.

In the US and other parts of the world the buyer's agent does get paid through the buyer, but in those cases or areas the lenders and banks need to be 'on board' and assess the property 2.5% (plus HST) higher than the price that the buyer pays in order for the buyer to pay the buyer's agent side of the commission, and it can become complicated.

This is the main reason why the commission split is similar to the way we have always done it even though the buyer's agent represents the buyer, the seller still pays the total commission.

Some Ontario lawyers have a problem with this, but let's not get into that!
:-)

All the best!
Mark

I wish I would have taken his advice starting 25 years ago!

Unfortunately, I began investing in the stock market with my RSP's beginning
in 1981 and have contributed as much as I could over the past 30 years into
my RSP's. I checked the value last week and my entire RSP portfolio and the
returns are bleak, absolutely terrible. And these are all 'quality' mutual
funds. Ya right.

Every time I had 20% downpayment I should have purchased an investment
property rather than putting money into my RSP's I too "bought in" to that
philosophy, too bad. You can bet my son's won't follow my footsteps on this
one!

Read below what RE/MAX is showing as increases of house prices very RSP's,
you will be shocked!

Housing evolution driving average price appreciation in Canada's major
centres


Mississauga, ON (November 7, 2011) -- Billions spent in new construction,
renovation, and infill over the past decade have contributed to a serious
upswing in the calibre of Canada's housing stock, propping up residential
average price in the country's major centres,
<pdf housing report> according to a report released today by RE/MAX (pdf).

Since 2000, the value of a Canadian home has doubled, rising from $163,951
to $339,030 in 2010. Nowhere has the upswing been better captured than in
both the value of residential building permits issued nationally between
2000 and 2010 - at $340 billion - and the estimated $450 billion spent in
renovation. The impact of these two forces alone has fuelled the Canadian
residential real estate market - as well as the construction industry - for
more than 10 years.

As a result, investment in Canada's housing stock is at an all-time high in
the 16 Canadian residential real estate markets examined in the RE/MAX
Housing Evolution Report. Higher quality housing translated into
extraordinary price appreciation across the country - with 62 per cent (10
markets) experiencing increases in excess of 100 per cent since 2000.

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.com
Mississauga4Sale.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 Foreclosures
www.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 patterns
www.mississauga4sale.com/TREBprice.htm

* Would you like me to send you a desk or wall Calendar?
www.mississauga4sale.com/Calendar-Order-Form.htm

Sherriff sales do they sell for market value or a deep discount?

I had a question about a Sherriff sale and thought I would share my answer
with you.

The question was:

Hi Mark

Can you tell me please if you are familiar with the properties that are sold
by the Sheriff when he home owners lose out to banks or credit card
companies in hard times.

Typically do such properties go for market value or is there a possibility
that they can be had for a steep discount.

Many Thanks

H.

My answer was:

This is a good question. A Sherriff sale is almost always sealed bidding,
so not too many details are known, except final winning bidder price.
Typically a Sherriff's sale will attract people from all over the area or
province.

If it's in a city, my understanding from speaking with people who have
attended recent Sherriff sales is that the properties sell for about what
they are worth, meaning at or near market value. Sherriff sales are
typically properties that are inaccessible, have structural, mould, fire or
other major problems or that the land is unusable because it is swamp or
inaccessible by road or any other type of major impairment that affects
market value.

If the Sherriff sale is for a 'regular' city type of property, as long as it
does not have any major deficiencies, then it will likely sell for about
market value. I would recommend that you attend a Sherriff sale to see the
dynamics and familiarize yourself with the process and to get a feel for
what happens at the sale.

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.com
Mississauga4Sale.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 Foreclosures
www.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 patterns
www.mississauga4sale.com/TREBprice.htm

* Would you like me to send you a desk or wall Calendar?
www.mississauga4sale.com/Calendar-Order-Form.htm

Death in a property, do you have to disclose this fact when you sell?

I was asked a very good question about disclosure of a death in a property. Below is the question and my answer.

Mark,

QUESTION:

I want to list my house for sale. There was a death in the house and I want to know if it is mandatory that this information be devulged to perspective buyers. The death occured 9 years ago and I am wondering how long people have to be reminded of it.

If your response is that it is mandatory, then my questions would be:

1) For how many years?

2) When would it need to be mentioned? (Certainly not to everyone who comes through the doors)

3) To whom, would you have to mention it to.

Please note that I have been advised by my lawyer that there is no such law that it needs to be mentioned but am being told otherwise by realtors. I need to know if it is up to the realtor's discretion.

Thank you J.

ANSWER:

Hello J.,

Thank you for your real estate inquiry. This is a very good question and one that people have debated for years.

There is no single correct answer on this issue.

Yes, your lawyer is correct, there is no law in place. The "law" for us realtors is that we must disclose any material facts that affect the market value of the property.

When there is a death in the house and depending upon the circumstances of the death, this can be a tricky situation. People pass away in their homes all the time and there is never any mention of it.

The root of the issue is that if there was a death in the house (or some other incident) that would materially affect the market value of the house today. Without knowing the circumstances of your situation, 9 years is a long time and unless it's a famous house for one reason or another or if you think that the death 9 years ago still affects the market value today and if the neighbours would still feel and talk about the death 9 years later and if the death was such that it affects the value of the house, then you may have to disclose it. Otherwise, I would not think that you do not need to disclose the death.

As far as I have been taught and told, you are not required or "obligated by law" to disclose anything about a property that may be a "stigmatized" property where there has been a death, murder or suicide or the house is "haunted". but if you/we are asked about these things, you/I must honestly answer any inquiries.

Another thing for you to think about is this.

• If we sell the house and it closes and a month later the buyer finds out about this death, do you think that the buyer would feel that we should have disclosed the death 9 years ago?


• Do you think that the buyer's decision to purchase the house would have been any different had the buyer known about the death before they submitted their offer?

For example, I had a listing where the woman hung herself in the garage of the house. It was all over the news at the time and we had to disclose the fact that she did this at the time of the listing. The house was listed again about 6 years later and there was no mention of the death in the house. I feel that's a reasonable amount of time where it no longer materially affects the market value and disclosure was not necessary.

Again, there is no law in Ontario that I know of that forces you to disclose a death in a house. If it was a suspicious death and after the closing if the buyer may feel that he or she was deceived then they could initiate a lawsuit. Of course, anyone anytime can initiate a law suit in a real estate purchase if they feel they were deceived by non disclosure.

I also think that you should consult with your lawyer on all issues such as these that you are unsure about.

Please let me know if you have any other questions or if there is anything else I can help you with.

Thank you again for contacting me and I will do my best to help you with your real estate needs,

Mark

A. Mark Argentino P. Eng. Broker

Specializing in Residential & Investment Real Estate

Do prices increase the same percentage in all price ranges?

I had another question from a client that I thought I would share with you
along with my answer

The question was:

Hi Mark,

Thanks for the great web site - I am trying to determine the price appreciation of a particular home that was sold in 2004

Your graphs at http://www.mississauga4sale.com/TREBprice.htm#graph suggest a 25-35% increase from 2004 levels for average home prices $300k -$400k range.

I was wondering if you thought the relationship would hold for houses higher than the average i.e. can the 25%-35% be applied to the higher price ranges??

Or is there data that indicates that more expensive homes appreciated at slower rate?

Thanks for you help

F.

This is my answer:

Hi F .,

Thank you for your real estate inquiry and kind comments.

The data that I have looked at over the past couple of decades indicates that the more expensive homes tend to increase at a higher percentage than the average.

If the purpose of your study is for a truly important purpose, it may be prudent to have an appraisal performed on the property. The cost would only be about $250 to $300 or so, but as I said, if it's important, it well worth the investment.

Please let me know if you have any other questions or if there is anything else I can help you with.

Thank you again for contacting me and I will do my best to help you with your real estate needs,

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

CREA is now bullish on 2011 resale real estate market

This is the latest press release from CREA and indicates that they are
becoming bullish on the Canadian real estate market for the upcoming year!
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.com
Mississauga4Sale.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 Foreclosures
www.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 patterns
www.mississauga4sale.com/TREBprice.htm

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CREA Boosts Annual Resale Housing Forecast

OTTAWA - February 8, 2011 - The Canadian Real Estate Association (CREA) has

revised its 2011 forecast for home sales activity via the Multiple Listing
Service(r) (MLS(r))

Systems of Canadian real estate Boards and Associations, and extended it to
2012.

Sales in the second half of 2010 rebounded faster than CREA had previously
expected.

"The hand-off going into 2011, together with the highs and lows for sales
activity posted

in 2010, provided guidance for CREA's revised forecast," said Gregory Klump,
CREA

Chief Economist.

"Home buyers recognize that low mortgage interest rates represent a once in
a lifetime

opportunity. At the same time, they expect that rates will rise, so they're
doing their

homework in order to understand what it could mean in terms of higher
mortgage

payments down the road before they make an offer," said Georges Pahud, CREA

President. "The housing market and buyer psychology is different now than it
was at the

beginning of last year, so buyers and sellers would do well to consult their
REALTOR(r)

to understand local market trends."

The upward revision to CREA's forecast for 2011 reflects recent improvements
in the

consensus economic outlook and a further expected improvement in consumer

confidence. National sales activity is now expected to reach 439,900 units
in 2011,

representing an annual decline of 1.6 per cent. In 2012, CREA forecasts that
national

sales activity will rebound by three per cent to 453,300 units, which is
roughly on par

with the ten year average.

"Recent additional changes to mortgage regulations will further ensure that
buyers don't

buy more home than they can afford when interest rates inevitably rise,"
said Klump.

"The announcement of the new changes to mortgage regulations will likely
bring forward

some sales into the first quarter that would have otherwise occurred later
in the year,

particularly in some of Canada's more expensive housing markets. This is
expected to

produce a milder version of the volatility in sales activity that we saw
last year which

resulted from additional transitory factors."

Three transitory factors contributed to volatility in sales activity last
year: changes in

mortgage regulations announced last February, the early withdrawal by the
Bank of

Canada of its conditional commitment to keep interest rates on hold until
the second half

of 2010, and the introduction of the HST in BC and Ontario during the summer
of 2010.

CREA expects that home sales activity will gain traction after dipping in
the second

quarter as the economic recovery and job growth continue, incomes grow, and

consumer confidence further improves. "Even though mortgage interest rates
are

expected to rise later this year, they will still be within short reach of
current levels and

remain supportive for housing market activity. Strengthening economic
fundamentals will

keep the housing market in balance, which will keep home prices stable,"
said Klump.

Page 2

The national average home price is forecast to rise 1.3 per cent in 2011 and
2012, to

$343,300 and $347,900 respectively. Average price is expected to rise
modestly in most

provinces, reflecting the continuation of a healthy balance between supply
of, and

demand for, homes listed for sale. Although the supply of new listings is
expected to

trend higher, the expected continuation of sellers' market conditions in
Manitoba is

forecast to result in a bigger percentage increase in average price in 2011
and 2012

compared to other provinces.

Residential real estate market in GTA shows volume of sales is up, new listings are up more, so the market is softening

Chart below shows current housing market indicators, showing that the number of sales is up 35% in April 2010 compared to April of 2009, New listgs are also up 58% and Active listings down 2% for the same periods. This indicates that although the market volume of sales is up, new listings are up more, so the market is softening.

For more information please contact A. Mark ArgentinoA. Mark Argentino, Broker, P.Eng.,Specializing in Residential & Investment Real EstateRE/MAX Realty Specialists Inc., Brokerage2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1BUS. 905-828-3434FAX. 905-828-2829E-MAIL: mark@mississauga4sale.comWebsite: Mississauga4Sale.com

FAQ's on power of sale properties

I had a client email me with question about power of sale properties and I thought I would share my answers with you.
Mark

Hi Mark,
I saw the property below listed on the most recent POS listing.
I read that usually POS properties are sold "As Is".
I am sorry I am not familiar with some of the terminology and would like to
kindly ask for clarification:
- Pls Call The L.A Before Preparing Offer??? - what does this mean?
- Pls Allow 2 Banking Days Irrevoc. On All Offers.???
- No Survey, Property Being Sold As Is, Where Is Condition As Seen From
Outside Property As Per Mls - what is MIs

Thank you,
M.

Hello M.

Good questions! :-))

"As is" means that you are purchasing everything in the current as seen condition, whether or not any systems such as plumbing, electrical or otherwise are function or not. It's up to you to determine the current state of all systems in the house and we do this by performing a home inspection. The home inspection will uncover any deficiencies in the property.

"calling the listing agent before preparing offer" usually means that there are very particular disclosures that must be made prior to submitting an offer, such as the fact that the property was used as a grow house or something similar.

"2 banking days irrevocable" means that the bank needs 2 banking days to review and respond to your offer

"No Survey, Property Being Sold As Is, Where Is Condition As Seen From Outside Property As Per Mls" means that the agent and the seller are not making any disclosures regarding the current state of the property and that you must see the property only from the outside and your offer must be conditional upon seeing the inside of the property and you must make your
decision to proceed based upon the outside of the property and as per the MLS listing agreement.

MLS is Multiple Listing Service and these are all the listings that are available to any member of the mls through TREB or mls.ca

I hope this helps, please let me know if you have other questions.

Thank you,
Mark

Has the market peaked? Should you sell your property now or later? What if market drops in 6 months?

Has the market peaked? Is this the time to "cash out" and move to a smaller home?

These are very difficult decisions to make.

I've always said this "you have to make the best decision you can at the time given all the information you have at hand and hope you make the right decision and most important accept it", such as me getting out of the financial mutual fund markets last fall, the stress was too large compared to the potential returns/losses.

You have a similar decision and ultimately, if you sell your current home and buy, for example, 1/2 to 2/3 of whatever your current home sells for, you will benefit more by selling now if the market drops.

But if the market does not drop you've not lost too much, but, if you don't sell now and the market drops you will lose more, but the house you were moving to would also drop, so your difference in prices is not as bad as it sounds.

Let's work with some numbers.

Say your current house is worth $800,000 and you are purchasing a home for $500,000 If you do this today then you will net approximately $300,000 If you wait 6 months, for example, and if the market were to drop on average 10% then the $500,000 home would be worth $450,000 but the larger home would drop more than 10%, due to the larger properties dropping more in a downswing (and rising more in an upswing), but even if we use the absolute number of 10% then the $800,000 home would be worth $720,000. Now the difference is $270,000 This indicates that all things being equal you would lose approximately $30,000 if you are trading down and you wait 6 months and the market drops 10%

If you wait and the market increases 10% in 6 months from now, then you gain an additional $30,000.

Thus, the difference in the buy/sell today versus buy/sell later if the market is up or down in the future is not as great as you think - the key is that the larger priced property will rise more in absolute dollars if the market increases and similarly will drop more in absolute dollars if the market falls, thus the dilemma, but the absolute difference is not as large as you may think.

Ultimately, it's your risk tolerance and whether you are betting the market will be better or worse than it is today.

I wish you the best of luck with everything you do!

Mark

CREA and the Competition Bureau

This is the letter that our VP and regional director sent to us on March 25, 2010. It's in response to the CREA and competition bureau controversy.

RE/MAX, CREA and most realtors do not have a problem that people can put their homes on the mls for a flat fee. CREA still wants us realtors to give client service to these sellers and if so, then we must provide many services that we currently do. If this is the case, then a small flat fee may not suffice for the amount of responsibility and work that we must continue to put forth, even for a flat fee listing.

The competition bureau still believes that since CREA is mandating that we realtors continue to provide services to the client, they are still 'restricting' the openness of the mls.

In my opinion the competition bureau is a government organization that by definition must argue any restrictions, thus the reason for the problem.

If you want a realtor to list properties and give agency, then there are restrictions. If you don't want to use an agent but still want to list on the mls, why, it's CREA's system and they can make the rules.

Ultimately, as Michael states below, the public in Canada will have one more option to list their home on the mls with a flat fee. Not many will utilize this option. Not many agents will offer this option at a low price.

Everything will even out and reach an equilibrium based upon our free economy.

Sellers will have another option when selling.

Life will go on.

All the best!
Mark

This was the letter we received on March 25th, 2010:

_____

From: Michael Polzler
Sent: Thursday, March 25, 2010 5:21 PM
To: mark@mississauga4sale.com
Subject: CREA and the Competition Bureau

RE/MAX Ontario Atlantic Canada Inc. - Voice Of Real Estate
<http://www.remaxoa.com/10/Regional/REMAXVoiceOfRealEstate.jpg>

Dear RE/MAX Broker-Owners Managers and Sales Representatives:

CREA and the Competition Bureau

Confusion reigned across the country this week as the Canadian Real Estate
Association (CREA) announced anticipated amendments to the Multiple Listing
Service (MLS) in response to issues raised by the Competition Bureau.

My subsequent comments in the Globe and Mail didn't help. They were,
unfortunately, taken out of context and may have added fuel to the fire. Let
me assure you that I did not say that we should throw in the towel. However
I've also been in the business too long not to recognize the fact that our
industry is changing.

CREA was a little less than crystal clear in their communications, but in a
nutshell, under the new rules, clients can now choose a realtor for the sole
purpose of listing their property on MLS for a flat fee, but few will.

There is no doubt in my mind that the playing field is going to change in
the coming years. I do believe, however, that the impact on our industry
will be minimal and I speak from experience based on our US operations.
These rules have been in place south of the border for several years and
little has changed. In fact, the value of a great realtor has never been
more important.

Consumers are entitled to options and yes, there will be those that choose
to go it alone. But most people don't want to sell their own cars, let alone
their own homes. The fundamentals of this business are etched in stone and
will remain the same, no matter what happens between CREA and the
Competition Bureau. Those buyers and sellers who are making the largest
financial investment of a lifetime will still require the knowledge,
expertise and negotiation skills that a full-time, experienced real estate
professional brings to the table - and most, if not all, are willing to pay
for it.

There is more to what we do as realtors than place properties for sale on
the MLS. We should not define ourselves by MLS alone. MLS is just one of the
many tools that we use during the course of a transaction. The vast majority
of homes in this country are currently sold through a full-service realtor
and that trend will continue in the future. Let's not lose focus. We're
helping thousands of Canadians to buy and sell real estate annually. Our
role has not and will not be diminished.

I have no doubt that we will continue to thrive, as we always have. But more
important than ever before will be the value proposition you, as a realtor,
brings to a transaction. Knowledge, experience and professionalism are the
foundation on which our industry has been built. At the end of the day, it's
what the public expects of a professional realtor.

Don't underestimate your importance in the home-buying and selling
experience. The fact is, consumers need us. I welcome your thoughts at
mpolzler@remax-oa.com

Sincerely,
Michael Polzler Signature
<http://www.remaxoa.com/10/Regional/MikeSignature.jpg>
Michael Polzler
Executive Vice President and Regional Director
RE/MAX Ontario-Atlantic Canada Inc.

Should you sell now while the market is high or wait for your price to increase more?

Should you sell now while the market is high or wait for your price to increase more?

To get an idea on the prices in Oakville and Mississauga or anywhere in the GTA, but you can always search anywhere in Canada using http://www.mls.ca/ and it's got a pretty cool map function to use so you can see where you are searching and the number of listings.

I've been suggesting to my clients who have been thinking of selling this year to "get your home on the market pronto"

I feel we are near the end of the current real estate cycle and possibly near the edge. I say this because I have noticed the there are clearly more listings on the market now compared to even a month ago.
Although we are currently at the 'historically speaking' height of the yearly cycle, this indicates to me that the market is softening a little.

I know from past experience it does not take much to slow our market and when it does, it can be sudden.

See annual cycles here:
<http://www.mississauga4sale.com/TREBavg1995date.htm and the large graph
here: <http://www.mississauga4sale.com/avgprice1995todate.jpg

I read an article yesterday that the Bank of Canada may consider raising the bank prime before the initially scheduled, if this happens it could create that 'sudden' feeling in the market and things could slow down.

As you know, perception not only becomes reality, but perception IS reality and if people "think" the HST and increased mortgage rates will slow our market - then when those two things happen, our market will likely slow.

Of course, the market may just continue to cycle each year as it has for the past 15 years, up in the spring, down in the summer, up in the fall, down in the winter BUT each year the market will creep up overall about 5%

So, on average, if you wait another year, the average price of a home in the GTA will likely rise about $25,000 increase year over year, all things being equal, but if the market softens your $500,000 house can easily drop to $425,000 and stay there for a while. We have seen this in hte past:
http://www.mississauga4sale.com/TREBprice.htm#last_recession

The decision is yours, enjoy!

Mark

If you are for rent and for sale at same time on MLS, does this hurt you?

Another good question from an intersted reader

Hi Mark,

My question is this;

If a residential property is available for lease or sale, whichever occurs first, and is being handled by a real estate agent, is there a tendency for said agent to hold out and discourage the lease prospect if it occurred first in favour of a potential sale at a later date?

I would greatly appreciate a response from you.

Best Regards,

Frank

Hello Frank,

Good question. There is no easy answer to this question. There are many factors that this would depend upon, including the motivations of your listing agent. I've noticed that the agents showing properties may shy away from properties that are for sale and for lease as they may think the motivation of the seller is less on the sale. Again, there are many factors.

I like and prefer rental listings so it would not matter to me either way. I want to impress the client with my skills renting their property just as much as if I were selling their property.

Thank you,

Mark

Real Estate Toronto, Mississauga and GTA Market Analysis Explanation

This is an explanation of real estate comparable market analysis in the Toronto, Mississauga and GTA

Market Analysis Explanation

This is an explanation and overview of this market analysis.

This Comparative Market Analysis will help to determine the correct selling price of your home. Ultimately, the correct selling price is the highest possible price the market will bear.

This market analysis is divided into three categories:

1. Comparable homes that are currently for sale

2. Comparable homes that were recently sold

3. Comparable homes that failed to sell

Looking at similar homes that are currently offered for sale, we can assess the alternatives that a serious buyer has from which to choose. We can also be sure that we are not under pricing your home.

Looking at similar homes that were sold in the past few months, we can see a clear picture of how the market has valued homes that are comparable to yours. Banks and other lending institutions also analyze these sales to determine how much they can lend to qualified buyers.

Looking at similar homes that failed to sell, we can avoid pricing at a level that would not attract buyers.

This Comparative Market Analysis has been carefully prepared for you, analyzing homes similar to yours. The aim of this market analysis is to achieve the maximum selling price for your home, while being able to sell your home within a relatively short period of time.

I hope this finds you Happy and Healthy!

All the Best!

Mark

A. Mark Argentino
P. Eng. Broker
Specializing in Residential & Investment Real Estate

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS Newsletter
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