Often when I’m talking with people about real estate (everyone loves talking about real estate) someone will say something like “the housing market is going to crash”.
I always have to disagree. And here’s why.

1) We are the USA. Things crashed there, especially in Florida and parts of Arizona and California. The subprime mortgages offered in the USA was much more aggressive (dodgy) than what our banks and other lenders will offer here. Furthermore, lenders have better recourse to go after people who walk away from their mortgages. We get a lot of news filtering in from the USA. It does not apply to us.

2) Some people argue that when (if) interest rates rise, a lot of people will get caught in a credit crunch and wont be able to afford their mortgages. This will cause sudden and severe downward price pressure on housing prices. Sounds reasonable. There has been a lot of news about Canadians spending beyond our means. But if you’re paying attention, you’ll notice that the Bank of Canada is holding the rate down, allowing it to climb slowly with economic activity, job growth and income levels.
3) In real estate, we like to say the three most important things are location, location and location. In two cities – Toronto and Vancouver there is a bit of a housing bubble taking place (especially in the condo market) and the regulators are trying to let the air out of these markets slowly. But in Waterloo Region we have a very stable market where houses priced right sell within 60 days and multiple offers occur, but not as often as a few years ago.

4) Price-to-rent and price-to-income ratios show over-valuation in the Canadian market, but valuation levels are not usually good indicators of turning points. Over- and under-valuation can persist for years in currency and financial markets. Indeed, the U.S stock market has been over-valued for more than a decade going by several yardsticks—yet it’s still holding up.

5) It’s wishful thinking. Many first time homebuyers would love to see housing prices fall by 30% overnight. Buying a house seems so much more expensive than it was ten years ago – because it is. Since 2000, housing prices nearly doubled but wages remained about the same. Hope is not a plan. House prices will not crash simply because you want them to.
source

Filed under: advice, Around Kitchener Waterloo, Buying Real Estate, investing in real estate, mortgage, Selling Real Estate by Keith Marshall
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122 Mansion Street, Kitchener is an executive town home located in the heart of Kitchener’s East Ward. This beautiful and spacious condo townhouse has two bedrooms, a den, a large open concept kitchen, dining room and living area.

There are two bathrooms.

On the 2nd floor, upstairs, you’ll find the well designed, bright and airy master bedroom. It has a walk-in closet and well appointed bathroom as well as a large private patio.

This unit has a full basement.In the basement you’ll find the washer and dryer, two of the five included appliances.

The kitchen appliances: refrigerator, stove, and dishwasher are stainless steel.

On the main floor, the front entrance opens onto Mansion Street, in the heart of Kitchener’s East Ward.122 Mansion Street is a five minute walk to Kitchener Public Library, kw/ag and Centre in the Square. It’s a seven minute walk to Frederick Street Mall, where you’ll find the Frederick Twin Cinemas Theatre, Total Skin and Body Clinic, Frederick Billiards, and Zehrs.

The Conestoga Parkway is moments away. And it is an easy walk into downtown Kitchener and all of the restaurants and nightspots it has to offer. Some of these spots include THEMUSEUM, Victoria Park, and a new favorite Mexican restaurant - Holy Guacamole.

122 Mansion has a walk score of 72 which is considered “very good”. It has a transit score of 50 which is considered “good”. Of course 122 Mansion also comes with two places to park your car, a reserved spot in the lot behind the building and in a private single garage.

If you are looking for a comfortably spacious, cosmopolitain and urban lifestyle, this might be exactly the place.

Filed under: Around Kitchener Waterloo, Buying Real Estate, condo, for sale by Keith Marshall
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If you’re looking for a home in Kitchener Waterloo and don’t know where to start, you should start with a lender and a real estate agent.

You know yourself that after you’ve been doing a job for awhile, it becomes easier. The same is true with real estate. Good agents know the answers, the process and where to look, who to ask if we don’t. I always encourage my clients to ask questions, whatever is on their mind. there are no stupid questions. Buying or selling a home is a process of learning so that you can become comfortable in making the big decision.

I encourage questions when visiting homes and through my website and facebook page. Alasdair and I always invite clients into our office to get a better idea of where they are on the learning curve and how we can help. Sometimes we make tea.

From time to time, I post a couple of questions that have come up. Here are two recent questions:

Where to get a mortgage

Q: My husband and I are starting to plan on buying a home in Kitchener Waterloo, but we don’t know where to begin. We aren’t from here. We are just married and have good credit. We are trying to find out who we should contact to arrange a mortgage.

A: You should start at your bank. You can get pre-qualified with a quick trip to your bank. They’ll tell you how much house you can afford. After that, the second step is to find a realtor that will help you identify houses that match your budget, help you understand neighborhoods, development plans, transportation and amenities, schools…

If you don’t have a banker, then start with a realtor. He will introduce you to two or three lenders who will help you understand your financial picture and the current mortgage options.

When to start

Q: We are looking to move into our first home by July. We’ve just started looking. When should we find a realtor?

A: Many people find their realtor as they are looking for their house. They meet them at open houses, or when they call on a listing. They are sometimes introduced through friends and colleagues. It’s important to find a realtor early in the process – you don’t really want to be dealing with the realtor who is selling the place you want to buy. A good realtor will help focus your search and find your next home easily, without having to see everything on the market.

A: Short answer. Next month – March. Depending on how much time and what’s on the market, it can take two months of effort to find the right house. A 60-90 day closing date is common. If you want to move in in July, starting in March will all but guarantee success.

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Filed under: 365 tips for buying or selling a home in KW, advice, Buying Real Estate, mortgage, neighborhood update, Q&A, Selling Real Estate by Keith Marshall
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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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