Friday, October 31, 2008

Real Estate "Lockbox" Caper

As a REALTOR® it surprises me how many local residents do not lock their homes. Gone is the "age of innocence" and while most area municipalities are safe environs inwhich to live, failing to lock you home and car is simply an open invitation for thieves to take advantage of you.
During the selling process, the real estate community as as whole goes to great extremes to protect your home from unauthorized entry. The Georgian Triangle Real Estate Board's MLS® rules require that all property showings must be booked through and confirmed by the listing Broker's office. During the listing and sale process, your home is essentially in the custody and care of the REALTOR® with whom you have your home listed. Late in 2007, the Georgian Triangle Real Estate Board implemented the mandatory use of "electronic" lockboxes on all residential property listings where applicable. These lockboxes faciliate easy showings of seller's properties yet offer the ultimate in security as they are accessed with a "Smart Card" which must be updated every 48 hours in order to work. Further, the electronic lockboxes track those persons that have been in your home thus providing a paper-trail of all showings as well as any entry to the property that was not made with the listing Brokerage.
Recently a story emerged in the U.S. whereby two individuals were charged with multiple counts of theft. The accused gained entry to their victim's homes via the old "mechanical" style of lockbox. One of the accused acquired the lockbox access codes through her employment with a real estate company that set-up property showings. Due to the lack of security provided by mechanical lockboxes, their manufacturers do not support their use in the real estate application. The electronic lockboxes used by local REALTORS® is the best means by which your home can be secured during the sale process. Even of your home is not for sale, do yourself a favour and always lock your doors at night or at any time when you are away even if only for a short time. As the saying goes, "an ounce of prevention is worth a pond of cure."

Wednesday, October 29, 2008

Demographics Continues to Shape Our Area

Noted economist and demographer David Foot was recently in Town as the keynote speaker at the annual development conference organized by the Georgian Triangle Development Institute. Mr. Foot is perhaps best known for his book, Boom, Bust, Echo in which he detailed significant trends in our society all of which are largely driven by demographics.

As a REALTOR® there is a significant quote from his book first published in 1996 that has remained with me and is something I have re-quoted myself during various speaking engagements. "Real estate is affected far more by demographics that it is by economics..." After his talk at the conference, I had the opportunity to meet Mr. Foot and asked him as to whether the current economic turmoil had any impact on on his beliefs relative to the aforementioned 1996 quote? His response was an emphatic no although he did quantify it by saying that economic condtions overall are now affected more by global issues rather than just domestic ones.
As I have reported in the past, during the past 3 or 4 years we have seen a significant increase in the number of larger homes being purchased in our market. Many of these purchasers are retired empty-nesters for which common sense would question why such a large home for primarily two people? The answer has typcially been that all the addtional and largely unused space is for visitiors such as kids, grandchildren and others that visit to enjoy the recreational activities in the area. In addtion to this, 3rd and 4th bedrooms are often used not as bedrooms but as his and her offices. I asked Mr. Foot as to whether the current economic turmoil resulting in 20% to 30% reductions in many persons investment portfolios combined with higher home energy costs etc. would curtail this buying trend by retirees for larger homes. Again he said no stemming from the fact that a large demographic pool exists of people who have made and or inherited large sums of money and that they will continue and can afford to reward themselves with luxury homes, travel and other amenities all of which are well within their financial reach whether the overall economy is good or bad.

Tuesday, October 28, 2008

The Sad State of Politics

During the 1990's I lived in the U.S. for a period of four years which was an opportunity that provided a great social/cultural experience for my family as well as offering irreplaceable business experience for myself. As much as we enjoyed our time there, it wasn't home, it gave me a greater sense of appreciation for what we have in Canada and consequently I had no desire to remain there long-term. Given the current state of affairs south of the border, I am even more grateful to be back yet I have followed the Presidential race closely.
The procedure to elect a new U.S. President is a long and onerous one taking the better part of two years. They are a country at war, their economy is in a mess and the banking/financial community, well what can one say? They desparately need new leadership in place and quickly. The process is too long, too costly and has dragged on to the point where they have thrashed over all the relevent issues enough so as to allow Americans to make an informed decsion as to whom is best capable to lead the country in these troubled times. In the last couple of weeks the process has now become nothing more than mud-slinging and inconsequential rhetoric that fails to address the real issues facing the U.S. and indeed the world.
Case in point, Vice Presidential hopeful Sarah Palin, now a mere eight days from the election is dwelling on the accusations about her alleged $150,000 wardrobe. At a political rally yesterday Ms. Palin who insists she is just a hockey-mom and typical housewife went into great detail to say that her wedding ring was purchased by her, in Hawaii for $35.00. Further, she said it was in her pocket because it hurts when she shakes hands. Everyone knows that you shake hands with your right hand and not your left which is where you wear your wedding ring. Come on Sarah. She is either (a) not very bright (b) is being completely mishandled by Republican strategists or (c) is typical of many politicians that believes you can indeed fool all the people all the time. Why she is in the position she is in is completely beyond me and can only lead you to question the competence of John McCain and the Republican party for selecting such a weak personality as a Presidential running mate.
Ms. Palin has repeatedly demonstrated thoughout the campaign that she is far from qualified and or experienced for the postion being sought. Don't get me wrong, I have nothing against women in politics or power and one need only look at Hazell McCallion the Mayor of Mississauaga or Margaret Thatcher's role as Prime Minister of Britain to realize just how capable some women are in the political environment. But Sarah Palin? Let's hope our neighbours to the south use some sound judgement come election day next Tuesday. God help them (and us) if they don't.

Tuesday, October 21, 2008

A Piece of Collingwood's Past Maritime Past

A piece of Collingwood’s shipbuilding heritage is potentially poised to make a comeback. The steamship S.S. Norisle was built in Collingwood in 1946 and was used by the Owen Sound Transportation Company for their ferry service from Tobermory to Manitoulin Island from 1946 to 1974 when the Collingwood build Chi Cheemaun went into service. At the time of its retirement in 1974, the Norisle was the last steam powered passenger ship operating on the Great Lakes.
Destined to be scrapped, the Norisle was purchased for one dollar by one of the municipalities on Manitoulin Island. For the past thirty-four years the ship has been permanently moored in Manitowaning, Ontario during which time it’s primary use has been as a museum piece. With the ever increasing cost of upkeep, the ship was deemed to be a liability and thoughts were seriously given to sinking it as an attraction for scuba divers. Upon learning of the not so distinguishing end to this once proud ship, a group of volunteers have surfaced, intent on re-commissioning the ship as a cruise ship for tourists in the same vein as the steamship Segwin which plies the Muskoka Lakes out of Gravenhurst.
Work was started this summer to halt further deterioration of the vessel and a major environmental clean-up was completed to remove all the asbestos insulation used to wrap the extensive network of steam pipes. Much of the work has been completed at the hands of volunteers while some of the work required by professionals was provided at their cost. Further, steam power enthusiasts from across North American have offered to refurbish many of the various engine parts just for the sheer joy of doing so and seeing the ship pressed back into service.
Of particular interest to the writer is that I worked for the Owen Sound Transportation Company a couple of summers in my teens, docking the Norisle and its sister ship the Norgoma at the South Baymouth ferry dock on Manitoulin island where to this day I own a cottage. My duties also included driving vehicles on and off the ships a task done by car drivers themselves using the Chi Cheemaun ferry.
The Norisle may once again cruise the waters of Manitoulin Island visiting picturesque ports such as Killarney and others. I wish the volunteers every success in fulfilling their dream to bring back the romance and nostalgia of steam power passenger ship travel on the Great Lakes. For those interested in learning more about this project visit or watch the You Tube video.

September Real Estate Sales Show Renewed Strength

Following significantly slower sales activity in both July and August, the month of September brought with it a renewed interest in Georgian Triangle area real estate. Sales during the month of September totaled $43.7 million, up 5% from the $41.7 million sold in September 2007. Most notably was the fact that higher-end property sales were much stronger in September which has not been the case for much of 2008. For example, there were 2 sales reported over $1 million in September as compared to none in that price bracket during the same month last year.
Year-to-date sales reported through the MLS® system of the Georgian Triangle Real Estate Board now total $376.9 million, down 13% from the $434.7 million sold in the first nine months of 2007. In terms of units, residential sales are down 15% with 1,460 properties having been sold this year as compared to 1,710 in the same period last year. The number of new listings that have come onto the market this year has increased by 8% with 4,745 new listings being reported thereby giving buyers plenty of selection. At the same time, expired listings total 1,880 which represents a 16% increased in expired over last year. Many sellers are still over-pricing their properties with the result being that they linger on the market, which only serves to sell other comparable properties which are priced realistically to current market conditions.

The 12 month average residential price for our market stands at just over $280,000 up slightly from the $278,838 average of 1 year ago. Prices throughout are market are remaining relatively stable with only those properties that were over-priced to start with decreasing to any significant degree once the sellers come to realize where they need to be price-wise in order to attract buyers.
Sales activity for the remaining 3 months of 2008 is predicted to remain stable albeit at a slower pace than in prior years. The fast approaching ski season with no doubt stimulate the sale of recreational homes and condos primarily in Collingwood and Town of the Blue Mountains. For more detailed information on current market conditions throughout the area see my 3rd quarter Georgian Triangle Real Estate Newsletter.

Saturday, October 11, 2008

Area Real Estate Sales Rebound in September

After much slower sales in both July and August compared to the same months in 2007, real estate sales across the Georgian Triangle rebounded in September. Sales for the month were virtually identical to September 2007 excceding just over $41 million. Of further note was the fact that the sale of higher end properties appears to be bouncing back as there were two sales over $1 million and one over $1.5 million reported throught the local MLS® system in September compared to none in September of last year. At the same time, September did see a slowdown in the number of new listings that came onto the market during the month albeit a modest reduction of just 13 properties or 3% compared to September of last year.
Year-to-date MLS® sales throughout the Georgian Triangle market area now totals $374.8 million down by 14% from the $434.7 million sold in the first 9 months of 2007. Listing activity for the year has increased by 8% year-to-date while expired listings are up 16%. Many sellers are continuing to over-price their properties something for which there is very little tolerance for given current market conditions. With the number of resale listings having increased 8% plus with a good selection of new home/condo developments, buyers have a vast selection of listed properties to choose from and need not nor will they over-pay. Unlike prior years where it has been the sale of higher end properties that has driven our increased sales activity, such has not been the case thus far in 2008. Unit sales for properties valued above $350,000 are down 12% as buyers appear to be taking a wait and see attitude before proceeding with any purchase decisions. In m y next posting I wilolo review the year to date sale across the various area municipalities.

Thursday, October 2, 2008

Don't Believe Everything You Read

The current issue of McLean's magazine has a cover story pertaining to the Canadian real estate market. As is the usual posture of the media, negative, sensationalisitic headlines draws attention and generates revenues through the sale of newspapers and magazines. My written response sent to the Editor of McLean's in my capacity as the President of the Georgian Triangle Real Estate Board is as follows:

Jason Kirby’s article pertaining to Canada’s real estate market entitled “It Could Happen Here” is another example of fear mongering media sensationalism that offers little relevance to current real estate market conditions here in Canada.

Much of his article is based on the so-called expert opinion of an economist and as we all know, economists have historically had a poor track record of accurately predicting what is going to happen and when as is aptly illustrated in the current real estate and economic mess south of the border. In this case it’s an economist with Merrill Lynch and given their recent write-down of $40 billion U.S. in bad debt over the past year, their past lending practices are arguably part of the problem.

Your columnist Mr. Kirby states that “…tighter lending standards affecting first-time homebuyers might not knock the foundation out from beneath Canadian house prices.” The fact is tighter lending practices exist for Canadians in general and not just first-time homebuyers which has resulted in a much more stable banking and financial environment in Canada overall. Sloppy credit management practices driven by the greed of both lenders and over-zealous buyers coupled with a weak U.S. economy are not conditions that loom ominously on the Canadian economic horizon as you would have us believe making the title “It Could Happen Here” somewhat of a reckless, unsubstantiated statement.

Too often the media is quick to make statements as does Mr. Kirby relative to “average” house prices without qualifying this information. Ultimately “average” house prices are typically impacted more by the mix of product being sold versus price appreciation or depreciation. The average house price throughout the market can be positively driven upward when there is a significant increase in higher-end home sales. Conversely, increased activity at the lower end of the market tends to exert downward pressure on the average price. Quoting in the article that “in 2000 the average selling price of a house in a major Canadian market was $158,082” followed by “Earlier this year it hit $327,620” suggests to your readers that based on this information homes have increased on average by 107% in less than 8 years and nothing could be further from the truth. Without question, housing markets in Vancouver, Calgary and other western Canadian cities have been grossly over-heated and are due for a correction. Such is not the case across much of the country. Further, quoting examples such as a trailer home in Fort McMurray originally purchased for $190,000 now allegedly worth half a million dollars or a boarded up home in Detroit which was vandalized and subsequently sold for $1 are again hardly examples of the Canadian real estate market as a whole.

Most markets across Canada have had an abundance of properties listed for sale during the past several years giving buyers ample choices so “…streets cluttered with For Sale signs…” is not a new phenomena. A high inventory of homes available on most MLS® systems across Canada in recent years, our strong economic performance and attractive yet prudently managed lending practices have helped to fuel sales activity in recent years. Comments made by Merrill Lynch’s economist that on a national basis “houses are 9.2 percent overvalued” is but one person's opinion, as market pricing is ultimately driven by what buyers can and more importantly are willing to pay. Unless our economy shrinks drastically and or interest rates spike significantly, there is no reason to think that real estate market conditions in general will not remain stable yet balanced for the foreseeable future.

Lastly, let’s not forget about the impact of demographics as author David K. Foot stated in his book Boom, Bust, Echo “…the real estate market is affected far more by demographics than it is by economics.” Baby boomers approaching retirement, first-time buyers looking to move-up and others who are perhaps able to and choose to work from home, are but many of the “non-economic” drivers that will affect future real estate market conditions. It certainly will not be the $1 foreclosure sale in downtown Detroit.

I look forward to McLean's printing this letter in a forthcoming issue. Further, a year-to-date summary of current market conditions here in the Georgian Triangle will appear in my next posting.

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