Last Recession in GTA lasted 12 years

The last time we had a recession in the GTA real estate market was 1990. The fall in prices began in the spring of 1990 and continued for many years.

The average prices in the GTA did not recover until 2002, 12 years later!
We are not predicting or even expecting such a price decline in the future, but this is a very chilling statistic.
I wish you and your family all the best,
Mark





For more information please contact A. Mark Argentino

A. Mark Argentino, Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc., Brokerage
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1

BUS. 905-828-3434
FAX. 905-828-2829
E-MAIL: mark@mississauga4sale.com
Website: Mississauga4Sale.com

Up or down? GTA homes on the market

I had another good question from a reader of my blog and I wanted to share my answer with you.

The question was:

Hello,

Just one question. It mentions in the article that the sales volume has decreased by 50%. Are the number of homes up for sale down as well this year, month?

Hi John,

Good questions. The number of homes currently on the market is higher than the previous month. The number of homes on the market in November of 2008 was 9,925 and was lower by 7% compared to November of 2007 which had 10,692 homes for sale.

The key figure in all this is that the average time on the market has increased dramatically year over year. In November of 2007 average days on the market was 32 and November of 2008 was 41. This is a significant increase in days on the market and also points to our slowing real estate marketplace.

The Bank of Canada dropped prime 3/4% today (December 9th, 2008) and of course the banks are following, except they are only dropping bank prime 1/2% so the new bank prime will be 3.5% rather than 3.25% Nice isn't it, they will make a 1/4% extra profit on billions of loans that they have.

I hope this helps.

Thanks,
Mark

Current Interest rates after Bank of Canada Rate cut on December 10th

The Bank of Canada surprised us all yesterday morning with deeper cuts than expected as they announced cuts of 3/4 percent.

Back in October when the rate was last slashed by 75 basis points (3/4 percent), the lending institutions were sluggish and reluctant to respond with equivalent cuts as they have all been stating that they are losing money on variable rate products.

So far, the banks have only cut their bank prime by .5% not the expected .75% Current bank prime is 3.5%

It will be interesting to see how they respond following this announcement. If they do in fact match the Bank of Canada's rate cut, the prime rate will become 3.25%. This would set the lowest available variable rate at 3.85% should the banks follow suit.

As it stands today, the lowest rates are as follows:


1 year 4.35%
2 year 5.05
3 year 5.15
4 year 4.95
5 year 5.19
5 year ARM 4.60

Read more about:

• Interest Rates
• Power of Sale Properties
• Price Trends
• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

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

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
• On-Line Real Estate Newsletter sign up
• See seasonal housing patterns

December Report - Average November price is slightly up compared to previous month price

http://www.mississauga4sale.com/newsletter/monthly-mailout.htm

December Report - Average November price is slightly up compared to previous month price

December 2008 Sales volume down about 50% compared to November 2007



This is what the Toronto Real Estate Board reported for the November sales

Over 3,600 Sales In November
December 4, 2008 -- TREB Members recorded 3,640 sales in November 2008 from the 7,313 sales recorded during the same period last year in the GTA, TREB President Maureen O’Neill announced today.


The average GTA price in November 2008 was $368,582. During the same period last year, the TorontoMLS system recorded an average of $393,747, and in November of 2006 overall GTA prices averaged $355,727.


The 2008 year-to-date sales for the GTA was recorded at 72,086 from last year’s 88,695. The year-to-date GTA average price was $379,489 from last year’s $375,445


Within the 416 area (City of Toronto) there were 1,523 sales during November 2008. During the same month last year, 3,426 sales were recorded. The average price in the 416 area was $390,225 compared to $433,859 in November 2007 and $381,188 in 2006.


In the City of Toronto, 28,806 sales have been recorded year-to-date for 2008 from last year’s 36,804 during the same time period. The year-to-date 2008 average price in the 416 area is $411,155 from last year’s $411,640.


The 905 Region recorded 2,117 sales last month, compared to the 3,887 sales transacted during November of 2007. The average price in the 905 Region was $353,012 last month from $358,391 in November of 2007 and $335,522 in November 2006.


Year-to-date sales in the 905 Region for 2008 were 43,280 from the 51,891 recorded during the same period in 2007. The year-to-date average price in the 905 Region for 2008 was $359,245 from $349,774 in 2007.


Breaking down the total, 1,453 sales were reported in TREB’s 28 West districts and averaged $350,199; 629 sales were reported in the 14 Central districts and averaged $473,346; 651 sales were reported in the 23 North districts and averaged $410,253; and 907 sales were reported in TREB’s 21 East districts and averaged $295,470.

Median Price

The Median Price for November 2008 was $312,250, compared to $325,000 in November of 2007 and $298,000 in 2006. The YTD Median for the first 11 months of 2008 was $325,000, compared to $318,000 during the same time-frame in 2007, and $300,000 in 2006.

Read more about:

• Interest Rates
• Power of Sale Properties
• Price Trends
• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

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

Bank of Canada lowers bank rate by three quarters of a percent!

The bank of Canada just announced a huge reduction in the prime interest rate. They lowered it by 3/4 of a percent and this will surely have an effect on interest rates charged by the banks.

Go to this page to see the current rates: Interest Rates

Keep checking back for more information,

Mark

Bank of Canada lowers overnight rate target by 3/4 percentage point to 1 1/2 per cent

OTTAWA – The Bank of Canada today announced that it is lowering its target for the overnight rate by three-quarters of a percentage point to 1 1/2 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 1 3/4 per cent.

The outlook for the world economy has deteriorated significantly and the global recession will be broader and deeper than previously anticipated. Global financial markets remain severely strained. Measures taken by major governments are beginning to encourage credit flows, although it will take some time before conditions in financial markets normalize. In addition, a series of recently announced monetary and fiscal policy actions will also support global economic growth.

While Canada's economy evolved largely as expected during the summer and early autumn, it is now entering a recession as a result of the weakness in global economic activity. The recent declines in terms of trade, real income growth, and confidence are prompting more cautious behaviour by households and businesses.

All of these factors imply a lower profile for core inflation than had been projected at the time of the last Monetary Policy Report in October.

Several factors are helping to counterbalance the negative drag from the global economic and financial developments. The depreciation of the Canadian dollar will continue to provide an important offset to the effects of weaker global demand and lower commodity prices. As well, money markets and overall credit conditions in Canada are responding to significant and ongoing efforts to provide liquidity to the Canadian financial system.

In light of the weakening outlook for growth and inflation, the Bank of Canada lowered its policy interest rate by a total of 75 basis points in October and by an additional 75 basis points today. These monetary policy actions provide timely and significant support to the Canadian economy.

The Bank will continue to monitor carefully economic and financial developments in judging to what extent further monetary stimulus will be required to achieve the 2 per cent inflation target over the medium term.

Information note:

The Bank of Canada's next scheduled date for announcing the overnight rate target is 20 January 2009.

A full update of the Bank's outlook for the economy and inflation, including risks to the projection, will be published in the Monetary Policy Report Update on 22 January 2009.

Read more about:

• Interest Rates
• Power of Sale Properties
• Price Trends
• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

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

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
• On-Line Real Estate Newsletter sign up
• See seasonal housing patterns

Winterizing Outside Water Faucets Reminder

This is a reminder to make sure you have winterized your outside faucets!

Please make sure that the water line that runs to the faucet into the garage and the water line that runs to the faucet at the back of the house is turned off from inside the house. This is critical in the event of the outside pipe or outside faucet freezing.

The normal procedure for winterizing outdoor faucets is to close the valve on the inside of the house which is usually located a couple of feet from the wall where the water line runs outside to the faucet. Once this inside valve is closed, the faucet outside should be opened fully so any water remaining inside the pipe will drain to the outside. You can leave this faucet open all winter if you wish.

There is usually a small drain plug that is located on the side of the inside valve that leads to the outside faucet. This drain plug should be unscrewed and this will allow any trapped water to drain out. Make sure you have a bucket handy to catch the water that drains out. This picture below shows the inside valve with the drain plug.



If you have any questions, please let me know.

Thanks,
Mark

RBC's comments on how Canada slipped into this economic downturn

This is a very good summary about RBC's comments on how Canada slipped into this economic downturn that we are currently experiencing.

It should be very interesting how deep and how long this current slowdown in our economy continues

I hope this finds you happy and healthy!
Mark



Housing downturn — Canadian-style

Canadians have watched with amazement for nearly two years now at the collapse of the housing sector in the United States, the United Kingdom and other countries that experienced overvalued housing prices with the sense that markets in this country stand on much more solid ground. After all, the sub-prime business never represented more than a marginal phenomenon here; Canadian households, while carrying heavier debt loads than in the past, were not financially overstretched; Canadian banks emerged islands of stability amid the global financial storm; incomes remained well supported by steady job creation and a strong domestic economy; and the influence of speculation — especially on new construction — was deemed to be subdued.

Then, late in 2007, red-hot Alberta markets began to slide, followed earlier this year by British Columbia’s markets. Most recently, Saskatchewan, last year’s hotspot, and areas in Ontario joined the weakening trend. All of a sudden, Canada no longer appeared immune to a generalized housing downturn. In fact, the souring of economic conditions, eroding consumer confidence and, in some instances, past excesses are creating a downdraft that the majority of Canada’s housing markets will be hard-pressed to resist.

As a sluggish economy threatens income growth and makes households much more skittish about major financial commitments, issues of affordability are coming to the fore. Much of the market correction taking place in British Columbia, Alberta and, now, parts of Saskatchewan can be traced to very poor affordability levels in those provinces.

However, high home ownership costs are not unique to western Canada. RBC’s affordability measures lie above long-run averages in all provinces and across all housing segments, which suggests that the downdraft will be felt widely.

Still, the extent of “unaffordability” varies substantially by province, with measures running as high as 48% above average in the B.C. standard townhouse segment and as low as 6% above average in the Quebec detached bungalow segment. Overall, British Columbia, Saskatchewan and Alberta remain the least affordable markets in Canada (relative to their respective historical norms).

While the Canadian housing sector is undoubtedly entering a cyclical downturn, the risk of experiencing a U.S.-style meltdown is remote. The supportive factors mentioned above are still mostly in play and should provide enough backing to prevent markets from spiraling down even as the Canadian economy slips into recession.

Read more about:

• Interest Rates
• Power of Sale Properties
• Price Trends
• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

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

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
• On-Line Real Estate Newsletter sign up
• See seasonal housing patterns

is a furnace and hot water tank a chattel or fixture?

I received another question that I thought I would post here:

Hi Mark,

I found your website interesting and very informative. As I read the first page I was wondering as a first time home owner, if I get an agent in our area to make an offer are the furnace and water tanks considered chattels?

Thank you for your time,
Regards,
H.

Hello H.,

That's a good question. Typically, hot water heaters are chattels and must be specified as such. Some lawyers say that water tanks and furnaces are chattels and must be specified in the agreement of P&S Always err on the side of caution and you will be fine!

Thank you,

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
RE/MAX Realty Specialists Inc.
Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
2 FAX 905-828-2829 ÈCELL 416-520-1577
› E-MAIL : mailto:mark@mississauga4sale.com?subject=Mississauga
Website : 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 ?
• 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
• See seasonal housing patterns
• Would you like me to send you a 2009 Calendar?

Mortgage Interest Rate Update

The table below will outline the current posted and best rates obtainable through specific mortgage brokers that I know.

All the best,
Mark

TERM	POSTED	Best Achievable RATES*
6 Month	6.1%	6%
1 Year	5.6%	4.45%
2 Year	6.45%	5.05%
3 Year	6.45%	5.15%
4 Year	6.29%	4.95%
5 Year	6.95%	5.25%
7 Year	7.4%	6%
10 Year	7.75%	6.15%
Variable Rate		4.6%
Prime Rate		4%

* Rates Last Updated: December 06, 2008

CMHC report GTA resale real estate market performance in 2009

Here are some highlights and thoughts taken out of the latest CMHC report on how our real estate market will perform in 2009

It's interesting to note that CMHC is still predicting growth for next year.

All the best,
Mark



From CMHC's perspective, how do they think the GTA resale residential home market perform in 2009?

• Increased resale market choice will result in less spill over demand in new home sales.
• GTA's resale home price in 2009 has been forecasted to moderately grow by 1.8%.
• GTA's MLS Sales are going to be strong from a historical standpoint.
• GTA's low rise sales trends will continue to lower according to RealNet Canada Inc. & CMHC forecasts.
• High rise sales will moderate but remain robust.
• Moderate growth in wages across the GTA has been forecasted by statistics Canada, Bank of Canada and CMHC to increase by 2.6%.
• Rising condominium completions will trigger more MLS listings.
• Homebuyer intentions for rental households will be lowered.
• Increasing choice in the resale home market will result in moderate price growth
• Price trend is flattening as average GTA existing home prices are going to stabilize.
• Resale market will be more balanced according to sales-to-new listings ratio.
• Condominium apartments will be popular as high rise sales. Share of high rise sales, as a percentage of total sales, has been forecasted to be 60% in 2009 compared to 58% in 2008.
• More supply in the condo market will result in more moderate price growth.

Drivers of Housing Demand, Economic Conditions & Interest Rate Outlook:

• Homeowners have accumulated equity in their homes across the country & the strongest accumulation of equity built was in Western Canada where homes appreciated more rapidly back in 2007.
• Immigration will continue to compensate for weaker growth from other sources & GTA will be the key beneficiary of immigration.
• Given the tight labour market, growth in disposable income will remain strong.
• Mortgage Rates will remain low, but will edge slightly higher late in 2009
• Foreign-born population as percentage of total population is 45.7% in Toronto.
• Home ownership is a key goal for immigrants & therefore rate of home ownership will increase.
• Tight labour market means job growth will moderate
• The share of mortgages in arrears is near its most moderate level since 1990
• Home owners in Ontario, Quebec, and the Atlantic Provinces have also built considerable equity in their homes.

Housing Outlook Summary

• MLS sales are expected to moderate from record levels in 2008 and 2009 and housing starts will move more in line with demographic fundamentals.
• Economic fundamentals will remain strong in Canada. High employment levels, rising incomes and low mortgage rates will provide a solid foundation for healthy housing markets. However, increased supply of existing homes listed for sale coupled with the rise in house prices in recent years will moderate the demand for housing in 2008 & 2009.

Read more about:

• Interest Rates
• Power of Sale Properties
• Price Trends
• or Search the MLS and more at my website

Thank you for reading my blog and if there is anything else I can help you with please don't hesitate to contact me,

Mark

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

Thinking of Selling? Best Mortgage Rates Current Home Prices Search MLS
RE/MAX Realty Specialists Inc.

Providing Full-Time Professional Real Estate Services since 1987
( BUS 905-828-3434
›mark@mississauga4sale.com
8 Website : Mississauga4Sale.com

• Thinking of selling in the next 3 to 6 months? Would you like a Complimentary & Quick Over-The-Net Home Evaluation ?
• On-Line Real Estate Newsletter sign up
• See seasonal housing patterns