The Globe and Mail today reported that Canada’s banking regulators are worried that real estate investors are getting over-exposed in the condo market in Toronto and Vancouver. They are looking at lending practices, concerned that long-term home equity lines of credit used to finance investment property purchases are reaching the point where consumers may not be able to meet their monthly interest payments or even repay the loan over time.

The report said that the analysis of condo markets in these two cities does not capture the degree of speculation. The Office of the Superintendent of Financial Services wants to take a closer look at the financial “stress tests” banks are doing in relation to credit lines.

With mortgage rates at historic lows, our federal regulators are doing what they can to tighten lending practices. Last week, we heard of rules affecting self employed individuals and condo purchasers ability to qualify for mortgages.

Related: Does it make sense to buy a reconstruction condo in KW?

Yesterday on our facebook page I posted a story from the Financial Post: That Condo might not be such a good investment.

Filed under: advice, Buying Real Estate, condo, interest rates, investing in real estate, mortgage by Keith Marshall
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There was a lot of news about the housing market last week and all of it good. Well good but cautionary really.

House Prices

First of all house prices are expected to keep rising this year. According to a report by Royal Lepage, Prudential Real Estate’s sister company, Canada’s housing market will continue to be strong this year, with rising property values expected in all major markets.

The report predicts that prices will rise across to country by 2.8% by the end of 2012, following stronger gains last year.

In the fourth quarter of 2011, the average price of a standard two-storey home was $375,427, up 4.2% from a year earlier. The average rate of a detached bungalow was up in 2011 by 6.1% to $344,392, while condominiums gained 3.6% to $234,680.

“Widespread calls for a major real estate correction in 2012 simply can’t be justified,” Royal LePage CEO Phil Soper said in a statement. “The industry has significant momentum entering the year, and buoyed by the stimulative effect of very low interest rates, we expect the market to continue to expand.”

Mortgage rules

In the face of historically low interest rates, our federal government remains concerned that the real estate market is getting overheated. Our government is concerned that the housing market will over-inflate and the bubble will burst. If this happens, it would have a large negative impact on our AAA rated economy. As they did last year, they are looking at ways to tighten regulations, making it harder for individuals to qualify for loans. One of these measures are aimed at self-employed individuals (like myself) and how we self-disclose what we make when applying for a loan.

In the case of condominium buyers, the government is considering a proposal that would include 100% of the condo fees as debt. This would impact the Loan to Debt Ratio of the loan applicant.

Third best economy in Canada

The CIBC released a report that showed that Waterloo Region has the third best economy in Canada. The report attributes our success to our high tech sector, irregardless of what’s happening at RIM.

Housing activity, population growth, employment, and bankruptcy statistics were some of the variable measured for the report.

Agents of Change weekend activity

We’ll be holding an open house this Sunday from 2:00-4:00pm at 49 Cedarwoods Crescent, Unit 29. It’s a quiet condo townhouse complex right behind the Fairview Park Mall. Come on out and see the house. It’s nice. Meet us. We’re nice too.

Filed under: Around Kitchener Waterloo, Buying Real Estate, canada, general news, open house, real estate, real estate trends, real estate vocabualry, this week in real estate by Keith Marshall
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As both a long time marketer and blogger, one of my favorite daily reads is Seth Godin. He wrote the other day that he was picking out the mat for a framed photo and there were a thousand colors to choose from. The framer uttered the scary invocation, “It’s completely up to you” putting the choice back to him.

That’s a problem.

We live in a very complicated world, full of choice. We are forced to make decisions all the time, everyday. Some are easy (until this week) “large double double”, and some, like picking out a mat for a picture frame or buying or selling a house are more difficult.

Maybe these are more difficult because there is more to lose if you guess wrong and the fact that you don’t make decisions like this everyday, you don’t have the experience and enough information to be comfortable in deciding.

I meet and talk to people every week that look for houses on their own. I think that’s great, we have the tools (like MLS) and the opportunity (like open houses) to educate ourselves about the Kitchener Waterloo real estate market. Although it would be easier to hire an agent right from the start its another of these decisions that are difficult because we make them so rarely.

How do I find an agent?

What do I look for in an agent?

What do agents do that I can’t do for myself?

Anytime we do something we don’t normally do, we’re on a voyage of discovery. We have to move along the the rocky coast of the learning curve, educating ourselves. We have to make little decisions that will help us make the big one.

Seth Godin goes on, “If you think you have no choice but to do what you do now, you’ve already made a serious error.”

Sooner or later, when you buy or sell a home, there is a 90% chance at least one realtor will be involved. If you are comfortable enough to find yourself a trusted advisor early, you can learn what you need to know a lot faster. After all, your decision is completely up to you.

Filed under: About me, advice, Around Kitchener Waterloo, Buying Real Estate, editorial, general news, life of a realtor, real estate, real estate trends, Selling Real Estate by Keith Marshall
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Alasdair and I were holding a couple of open houses over this past weekend. There are a couple of things we learned and the impressions we got from our visitors that we’d like to share.

One of the main impressions from conversations we had this weekend was that people are struggling to understand property values and how different properties compare in the current market place. This is hardly surprising considering that for one family that we spoke with, the properties visited ranged from 1960’s bungalows to much newer construction. Trying to draw a link between different property types in different but adjacent neighborhoods, and arriving at a reasonable opinion of value, based upon very little detailed information and analysis is challenging.

This is where having the services of professional, knowledgeable and service oriented realtors like Alasdair and I will help you make sense of the pricing and value of the properties visited.

It’s surprising to me that people try to learn about the market on their own, when we are here to help. If you’d like to sit down with Alasdair and I to plan your approach to the market, let us know and we’d be glad to meet you and help you as early in the process as possible. Sooner or later it is likely that a realtor will be involved in the sale or purchase of your home. You want great value in your home, you might as well get value out of your realtor as well. the earlier you involve a realtor in your home search, the more value you are receiving and the more help we can be to you.

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Filed under: advice, Around Kitchener Waterloo, Buying Real Estate, editorial, open house, real estate trends, Selling Real Estate by Keith Marshall
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…and how is this related to real estate?

In the dark of night in your local supermarket, from canned vegetables and salad dressing to fresh fruit and deli meats, countless items are being removed from store shelves. They are expired or expiring, past their prime.

What happens to them?

Much of the meat and, fruit and vegetables end up at the deli counter. Food banks get some of the can and dry goods, some gets marked way down for a quick sale and some ends up in the dumpster behind the store. It’s just the way it is, the cost of doing business, oversupply and under-demand…

In happens in real estate too. The majority of houses sell, most within about 90 days, but many don’t sell.

They don’t sell for many reasons: the agent didn’t market the home properly, the home is flawed or stigmatized or overpriced, the timing was bad, or perhaps it wasn’t on the market long enough, or too long, maybe there are too many similar homes on the market. These are all possible reasons. And there are more.

What’s important though, is that you the seller does not take it personally. It’s hard not to do. You’ve gone to the trouble of getting your house ready for sale, you’ve kept it neat and tidy, you’ve been asked at short notice to be absent between 7:00-8:00pm because there are some people who want to see it. You’ve been told to stay away on weekend afternoons for open houses. You’ve signed all the paperwork, talked to bankers and lawyers. Your neighbors know you want to move.

It’s frustrating. But like I said. Don’t take it personally. It is what it is.

You still want to sell. What should you do now?

The best thing to do, is to find out why it didn’t sell, address that issue and try again. Invite real estate agents like Alasdair and I over for a chat. We’ll be able to tell you why we think it didn’t sell. We’ll give you the advice you need to get your house on the market again and this time, learn from your mistakes and sell it in 90 days.

That’s what I’d do.

Filed under: home, home owners, real estate, real estate trends, Selling Real Estate by Keith Marshall
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