Booming Rebound, No Bubble!

As we near the year's end (already!) BMO Nesbitt Burns came out with a great report examining at length whether the real estate market is in an actual rebound or if we are actually in a bubble.

Here is a summary of their report and my comments follow...

1. The record surge in resale volumes reflects unleashing pent-up demand.

2. Existing home sales might already be starting to stabilize, and at levels below their past peaks.

3. Double decade extreme spike in prices is less of a concern because average existing home prices are a flawed measure.

4. New home prices have begun to incrementally increase but still remain 2.7% below year-ago levels.

5. Mortgage credit growth has also been decelerating, not accelerating, and remains well below pre-crisis double-digit peaks.

6. Thus the only truly concerning aspect of current conditions in the resale market is the level of prices.

Bottom line:

Canada's resale market metrics are stoking fears of a housing bubble, but the fears for them most part are unfounded. It's not a bubble when a record sales rebound follows a massive sales collapse, owing to the vagaries of pent-up demand. It's not a bubble when prices accelerate because growing demand is butting up against shrinking supply. It's not a bubble simply because relative prices are at record heights. Furthermore, given that mortgage credit growth is moderating, and new home and land prices remain subdued, the evidence on the ground argues against a housing bubble.

My comments:

What I am seeing out there right now that I don't like is the fever of multiple offers causing buyers to grossly over pay. I advise my clients against it, even if it means losing a few offers to get to the right home at the right value.

Lack of inventory is definitely plumping things up a bit in certain market segments.

What I would like to see in the spring market to feel confident about continuous healthy growth is better inventory, which should lead to reasonable market values and better balance between sellers and buyers.

And buyers who are playing it smart, thinking long term and considering future interest rate rises when considering their purchase.

For the full BMO Nesbitt Burns report, click here.

Shop Till You Drop

Every year we struggle to think of the perfect gift for everyone.

After a lot of brain strain, here are our team's top favorite gifts to give for anyone on your list...

Personalized Stationary

It's great to give things to people that they would not otherwise do for themselves, like personalized stationary or a personalized journal.

http://www.paperthings.ca/ or www.thepaperplace.ca

Print to Canvas & Photo Books

Forget the mugs and t-shirts. Take any photo and have it printed to canvas...you can even choose a brush stroke texture and pretend you painted it. Experiment with landscape shots or images of your gift recipient's favourite place or thing and you'll look like an artistic rock star. Or take a collection of photos and have them printed into a photo book - the quality is incredible and feels and looks like a true book.

Black's Photography $20-$180 www.blackphoto.com - 2036 Queen Street East

PowerMat Wireless Charging Mat

This is so cool...

Cut the cords, and the adapters, chargers and wall plugs and toss your device onto the Powermat Wireless Charging Travel Mat to charge it wirelessly through induction.

The Source - $99.99 - www.thesource.ca - 2140 Queen Street East

For Kids - Hanging Alphabet

This laser-cut wood hanging alphabet is a fantastic find for toddlers and font-lovers.

Bookhou's $50 - 798 Dundas Street West - 416.203.2549

Improv Classes

An incredible experience and learning opportunity to push anyone's boundaries. Second City training center offers multiple formats...once a week, weekend intensives - whatever fits your gift recipient's schedule. And they offer convenient gift certificates.

http://www.secondcity.com/

If you think of anything else, comment and let us know!

Cheers,

Mark

Market Watch - October 2009

With a strong October it will be interesting to see if the momentum carries over into the new year.

Typically from here on out we see a drop in inventory as most people who are selling are doing so with greater motivation or due to external factors rather than just testing the market.

In the coming months, don't let the traditional seasonal drop in activity spook you.

Right now, we're confident that the market will sustain. Why?

• Low interest rates that will continue for the foreseeable future
• Continued pent up demand from buyers who help off earlier in the year
• Lower inventory (favouring of course sellers)
• The advantage of real estate being a stable long term investment compared to stocks and bonds...and as they say, you can't sleep under your RRSP!
• General strength of Canada's economy in the global context

The factors to watch out for will be interest rates jumps, affordability as prices are on the rise and if too much inventory hits the market at once.

Check out the complete Market Watch and comments from the Toronto Real Estate Board...

TORONTO, November 4, 2009 - In October 2009, Greater Toronto REALTORS® reported 8,476 sales, up 64 per cent from October 2008.

The average price for October transactions was $423,559 – up by 20 per cent compared to the same month last year.

"Strong sales growth has occurred across many property classes – from price ranges that would attract first-time buyers to luxury properties selling for over one million dollars," said TREB President Tom Lebour. “The highest rate of sales growth in October was experienced for properties selling for over $750,000. In contrast, luxury home sales declined at an above-average rate last year.”

Year-to-date sales, at 74,721, were up nine per cent compared to the first ten months of 2008. Average price, at $392,264 was up by almost three per cent.

"After a short dip in the winter, the average home price in the GTA has rebounded because sales have been high relative to listings," according to Jason Mercer, TREB's Senior Manager of Market Analysis. “Watch for listings to rebound in 2010 as home owners react to the strong sales and price growth experienced in the latter half of this year.”

Market Watch - October 2009

Mortgages - Focus on the Long Term!

Check out this great video from the Business News Network featuring Peter Majthenyi from Mortgage Architects where he discusses great strategies for managing your mortgage options and how to focus on the long term for the best savings.

Business News Network - Click Here

(interview appears after short advertisement)

To talk Peter about your mortgage, contact him today!

Peter Majthenyi AMP
Mortgage Planner
phone: (416) 236-9300 ext.11
peter@mymortgageplanner.ca

Winter Clean Up

With the transition from fall to winter upon us (thank you mother nature for the double-digit temperatures this week!), here is a reminder of things to do around the house to prepare it for the coming months.

Outside Your House

• Wash all of your windows inside and out. This will let the light pour through in the darker months.
• Store all patio furniture and outdoor toys but clean and dry them properly first. Be sure to cover them with drop sheets or even fabric sheets.
• Make sure the caulking, seals and weather stripping around all your windows and doors are in good shape and repair where needed. Be sure to wipe down window wells and ledges and hose and wipe down exterior doors.
• Drain and store garden hoses. If you have an in-ground sprinkler system, have it professionally blown out and winterized.
• Empty any ceramic planters and store so they don't freeze and crack.
• Clean out your eavestroughs and downspouts, otherwise you could have blockage when it freezes causing water to drain improperly.
• Give your garage and driveway a good clean.
• Make sure your shovels are in good shape and stock up on salt or sand for the sidewalk.

Inside Your House

• Inspect and clean your fireplace and chimney.
• Change your furnace filters for cleaner air and more efficiency.
• Replace the batteries in smoke alarms, carbon monoxide detectors and other home safety devices.
• Flip your mattress and turn it end-to-end. Clean all bedding you don’t do every week, such as mattress pads, pillows, blankets, bed skirts and bedspreads.
• Clean all your carpets.
• Clean out the kitchen cupboards and pantry - anything you haven't used since spring that is non-perishable can be donated to the Food Bank.
• Pull your refrigerator, clothes washer and dryer out from the wall and clean behind them (and retrieve any long lost socks!). Brush dust off of refrigerator coils and use a narrow vacuum hose attachment to clean inside the lint catcher of your dryer.
• Clear out summer clothing items and store to make more room in your closet. Bring out your winter clothes and donate anything you didn't wear last season.