Thursday, December 31, 2009
The problem lies perhaps not so much with Intrawest as it does with Intrawest's parent owner, Fortress Investment Group LLC which bought Intrawest in 2006 for $2.8 billion of which 60% of the purchase price was borrowed. As with any leveraged buyout wherein a large percentage of the purchase price is financed, there is little room for a financial miss-step. Loan payments must be made and any significant drop in cash flow as is being experienced in the current economy can be a disaster. I know. I worked in such an environment back in the 90's where "cash was king." Sales had to be generated not just to ensure a profit, but more importantly to pay down debt.
Little known here locally is that 1 year after the purchase of Intrawest, Fortress, a private owned equity fund went public with an initial public offering (IPO) that instantly made the 5 principals of Fortress billionaires. By the end of the first day of trading on the New York Stock exchange, Fortress shares had climbed from $18.50 to $35.00 giving the 5 principals a combined worth of $10.7 billion U.S. Now just 3 years later, one of Fortress' investments (Intrawest) can't make a half a million dollar loan payment. Notwithstanding the fact that they too have taken a hit, maybe the 5 Fortress principals need to reach into their own pockets to help out a bit?
Check Google Finance and you will see that as of today's date, Fortress shares are now worth $4.47 U.S. The pitch of their stock's decline matches that of a black diamond ski run at an Intrawest Resort. This is just one of the countless stories that have help to create the financial meltdown we have witnessed over the past year.
Intrawest's woes will not likely be reflected here locally at Blue Mountain. It's business as usual, all runs are open and the resort has been packed through the holidays. That's a good thing as cash is indeed King!
Wednesday, December 30, 2009
Most developers currently list their newly built homes for sale with GST “included in” the purchase price as psychologically, it’s better than hearing the price is $350,000 + GST which adds another $17,500. Further to this new homes purchased as the buyer’s principal residence offer a partial rebate of GST where the maximum sale price of a property does not exceed $450,000. Typically, builders have this rebate factored into their profit margin on the home and the GST rebate is assigned to the builder by the buyer on closing. The HST treatment of real estate transactions including new homes will generally follow the current GST format. Sales of new residential housing will be subject to and will qualify for a rebate(s). Further, the rebate will now be available whether the new housing is to be owner occupied or rented which is an advantage to buyers over the current program.
Under the new format, new homes in Ontario will be eligible for a rebate of 75% of the PST component of the HST paid to a maximum of $24,000. In some other provinces where the PST and GST have been harmonized, there is no provision for a portion of the PST to be rebated back. In reviewing various examples of new home sales both before and after the July 1st 2010 HST implementation date, new home prices should marginally decline. This stems from the fact that there is currently no provision for a builder to obtain a rebate on the PST paid on materials that go into the home. Example: a $300,000 home (GST included) purchased before July 1st 2010 with the GST rebate applied and assigned to the builder means the buyer pays a net purchase price of $290,698. If the same $300,000 home (HST included) is purchased after July 1st 2010 the builder receives a larger rebate amount thus resulting in a net purchase price to the buyer of $285,171 and difference or portential saving of $5,527. Hopefully this type of saving gets passed onto the purchasers of new homes.
The final taxation rules and implications have not yet been finalized so only time and human nature will dictate what really happens.
Monday, December 28, 2009
When the HST becomes effective July 1, 2010, real estate commissions which are currently subject to the 5% Goods and Services Tax will transition over to the new HST meaning that real estate commissions will now be subject to the new 13% tax rate. From the consumer seller's perspective, this will increase their tax burden by 8%, the current rate of provincial sales tax in Ontario. As an example, on a $250,000 sale with a 5% selling commission, the HST payable will increase from $625 to $1,625.
While REALTORS® will continue to be responsible for the collection of HST on the closing of a transaction as we currently are for GST, the new HST offers a distinct advantage. As a GST registrant, REALTORS® get to claim the 5% GST we pay on business related expenses while the 8% PST we pay on eligible expenses is lost. Under the new format, REALTORS® will claim an HST input tax credit of 13% not the current 5% which will result in cost savings for us. By rights, this cost savings should be passed on to our clients and I for one plan on incorporating this saving into my seller commision plans for 2010 onward.
Consumers need to be aware that real estate commissions are completely negotiable. From a consumer's perspective, REALTORS® often fail to demonstrate a level of service and overall value commensurate with the commission (fee) charged on a given transaction. The arrival of HST will no doubt present a further challenge to those REALTORS® that both fail to deliver a level of service, knowledge and value for the fee charged as well as those that fail to acknowledge the cost savings that we as HST registrants will realize with the new tax. The same applies to lawyers, home inspectors and others involved in the real estate sale process.
If you plan on selling your home in the latter half of 2010, make a mental note to ask the REALTORS® you interview how they have adjusted their commission structure to compensate for the tax savings they will now be realizing as an HST registrant.
Monday, December 21, 2009
As Canadians we live in one of the most heavily taxed nations there is. Between high rates of personal income tax, ever increasing property taxes, provincial sales taxes, the GST, excessive taxes on gas, booze, cigarettes and so on, it seems that there is always another hand(s) in our pockets. There was a great hue and cry when the GST was first introduced but did we stop spending? Yes we bitch and complain about our taxes but ultimately life goes on and our standard of living doesn't suffer too badly.
The Ontario Real Estate Association has lobbied strongly to no avail against the province of Ontario over the implementation of HST claiming that it will add between $1,400 to $1,500 to the average real estate transaction in Ontario. This is expected to perhaps cause a flurry of buying activity in the first 6 months of 2010 after which who knows where the market will go. My thought is will $1,400 or $1,500 really impact a person's ability or mindset to purchase a home?
The average house price in the Georgian Triangle to the end of November is $286,000. An additional $1,500 in taxes on that purchase represents 1/2 of 1% of the purchase price. In many cases people are paying more for 1 month's rent.
So is the real estate market going to collapse after July 1st next year? Somehow I doubt it. As Canadians we'll suck up yet another tax and life will go on. Canadian real estate has historically appreciated in value at such a rate that another tax will hardly impact the rate of return most of us have come to realize. One aspect of real estate that may feel the impact is new housing and I will cover that in my next posting.
Monday, December 14, 2009
Property taxes however seem to draw the greatest level of ire. Maybe it's getting that annual "assessment notice" or the "interim tax bill" or the fact that your bagged leaves never got picked up on time. Whatever it is , property taxes tend to infuriate us more than any other form of government cash grab.
Over the past few days I have heard numerous comments from Collingwood residents pertaining to an article in last week's Connection entitled "Municipal debt will almost double."
The crux of the article is that Collingwood's debt load will double to approximately $48.5 million by the end of 2010. Based on an estimated population of 24,600 including seasonal residents, every man woman and child in town owes $1,971. There goes my Xmas gift budget! Arguably some of the projects mentioned in the article are worthy ones. Others like a $3 million wellness centre? Well I'm not so sure they would stand the financial rigors of justification in the private sector world at least not the one that I came from.
The new library at $6 million is the largest project mentioned up for debenture in 2010. Sure a new library would be nice but when you have the likes of "Google" currently in the process of digitizing every book ever written, it really makes you wonder if spending money on bricks and mortar to house books is the way to go. I know one thing is certain, if libraries in the past had been run as private enterprise profit centres, the threat of books no longer being required in traditional print for people to borrow would be causing the ACME Library Company (if one existed) to close their doors for good or at least to revise their business model to search out sources of revenue elsewhere.
Regardless of where the money is spent, debt payments needs to be made. Spending money within their limits because it is "comfortable " as one Councillor put it hardly puts taxpayers minds at ease. Collingwood has the second highest tax rate in the southern Georgian Bay area second only to the Town of Meaford. The accompanying chart reflects what the 2009 property taxes would be on a house assessed at $350,000 in the area's various municipalities compared to a similar value house in Toronto. Admittedly, Toronto has a much larger tax base to draw from but what happened to the concept of moving to a small town because the cost of living is lower?
As 2009 draws to a close, 2010 will bring with it a municipal election year. The subject of taxes will no doubt be a hotly debated one amongst the various candidates. So the question on my current poll (above) pertains to how happy are you with Collingwood Council's current level of municipal spending?"
Wednesday, December 9, 2009
Allegedly the party in question began accumulating farms along the County Rd 124 corridor paying $8,000 per acre over market value under the pretense of becoming the largest potato farmer in Ontario. According to the aforementioned article, approximately 7,500 acres of land has been acquired with a plan to develop a 2,400 acre quarry to extract the limestone that lies below. As would be expected, many people felt duped by the scheme. Considerable public outrage has resulted stemming from the threat many people see to not only the environment but also to the way of life many of the local farming families have engaged in for years.
In addition to the loss of highly productive agricultural land, critics argue that a large quarry operation could have a significant impact on groundwater sources in the area. The same general area has already been subject to a considerable amount of development as a wind energy producer with literally dozens of wind turbines that dot the landscape.
Initiatives such as these will continue to threaten this area as we know it. Opponents to the Site 41 dump site north of Elmvale were successful in their bid to stop that controversial landfill. Hopefully those fighting this latest threat will be as successful in their efforts to what could pose a real threat to not only the agricultural production of the area but to the water deposits below and the aesthetic appearance of the countryside as well.
Friday, December 4, 2009
Through the end of November, unit MLS® sales are up almost 20% in the Blue Mountains from last year with a total of 152 properties having sold as compared to 127 last year. Recreational property sales have come back quite strongly especially at the upper end of the market. In a "distant" second place is Collingwood with a 3% unit sales increase. All other area municipalities are either unchanged from last year or are still showing decreased unit sales year-over-year.
Unit sales for the first 11 months of 2009 ranked in order are as follows:
1. The Blue Mountains 19.7%
2. Collingwood 2.9%
3. Clearview unchanged
4. Wasaga Beach -0.3%
5. Grey Highlands -8.1%
6. Municipality of Meaford -20.8%
Pricing across the entire Georgian Triangle area has shown no significant decrease over the past several months with only those properties that were over-priced to start with showing a reduction. As I have maintained in the past, average residential sale prices tend to mask significant shifts necessitating that a more detailed look be taken at specific areas and or neighbourhoods. Nonetheless, the 12-month average residential price for our area overall now stands 2.5% higher than it was this time last year at $286,445. In fact, Clearview Township is the only area municipality where the 12-month average price has declined from where it was one year ago and this number is affected more by the mix of sales.
The Georgian Triangle continues to draw strong buyer attention from the Greater Toronto Area both in terms of recreational property buyers and those looking to retire here. This bodes well for real estate demand and pricing in our area helping to ensure that your investment in Georgian Triangle real estate is a sound one.
Tuesday, December 1, 2009
Friday, November 27, 2009
Wednesday, November 25, 2009
In October I ordered a new garage door from Home Depot here in Collingwood. Home Depot promotes the fact they they install what they sell and offered both a "do it yourself" as well as an "installed" price for the door.
At the time I placed my order, it was my intention to install the door myself but in the interim I have become increasingly business serving my clients and upon being notified that the door had arrived, decided to pay the extra amount and let Home Depot's installer handle the project. Easier said than done.
After making not one but two trips back to the store I was ultimately told they could not install the door. No reason was given but I had my suspicions. Picking up the door was filled with trials and tribulations as well, taking the better part of an hour for their staff to find all the sections to the door and the accompanying hardware, track etc. It was apparent that merchandise being held for customer pick-up could be just about anywhere in the store and not necessarily all in the same location.
Needless-to-say I was not impressed with there unwillingness or inability to install the door nor with the extended waiting period it took for them just to find it. They made losing an 8' garage door seem pretty simple. Too bad having them install it wasn't as easy.
After installing the door (myself) I phoned Home Depot's Customer Care Department to register my dissatisfaction. Low and behold I got the answer I expected. It would appear their "system" as in computer can't handle an installation request for an item once said item has been ordered. In other words if a customer changes their mind, becomes hurt or otherwise can't install the product they had purchased on their own and would like to pay Home Depot to install the item be it a garage door, flooring, kitchen or whatever, too bad, their system won't allow it.
This is a classic case of the "tail wagging the dog." I am a big user and believer in technology but it's there to support your business not dictate how you run it. I suggested their system needed to be re-programmed. When a customer is standing there with cash-in-hand wanting to pay what is one of the largest retailers in the world for their service and they can't help you because their "system" will not allow it, something has gone terribly wrong.
Business these days for many companies is tough enough. When you allow the shortcomings of your computer or data system to prevent you from satisfying a customer and generating revenue, you're in real trouble. It's time Home Depot revisited their procedures and systems in order made some much needed changes that will allow them to be a little more customer driven. There are after all, other shopping alternatives and Home Depot has all but lost me.
Tuesday, November 24, 2009
Monday, November 23, 2009
With the U.S. unemployment rate climbing, the housing crisis continues to show no signs of letting up with a record 14.4% of mortgages either in foreclosure or delinquent, this according to a recent story in the Globe and Mail. The U.S. unemployment rate is now at its highest level in 26 years and even those homeowners with conventional seemingly low-risk mortgages are facing the prospect of going into default. One in seven U.S. homeowners is either in default or at least one payment behind and millions more are under threat of losing their homes in the next two years.
As I have always maintained, a low interest mortgage is of little benefit if you are jobless and can't make the payment and a growing number of Americans are now finding themselves in this unfortunate position. Housing activity is seen as one of the benchmark indicators to economic health. Real estate sales and the related economic spin-off purchases that come with them play a significant role in driving the economy. The latest sobering statistics pertaining to the U.S. housing market would suggest they are a long way from a full economic recovery.
I couldn't help but notice lately a proliferation of car ads on U.S. television networks by dealers putting a significant emphasis on "credit" availability. Isn't the over-extension of credit how this whole mess started in the first place? Until some stability in the U.S. jobless rate is achieved and people can afford to meet their debt obligations, it is unlikely we will see any improvement to the U.S. economy overall.
As one area newscaster commented on this morning, General Motor's current debt load exceeds that for the entire country at the time of JFK's assassination in 1963. That really puts into perspective the depth of the "muck and mire" our neighbours to the south now find themselves in and it is going to be a long and messy climb back to a healthy U.S. real estate market and economy overall.
Wednesday, November 18, 2009
Thursday, November 5, 2009
In the last 2 to 3 weeks I have received calls or emails from consumers seeking some guidance with respect to the sale of their homes which at the time of their contact with me were not actively listed for sale. In these instances, the sellers were asked by the REALTOR® representing the potential buyer to either sign a short-term "Listing Agreement" ie: 4 or 5 days, or to sign what is known as a "Seller Customer Service Agreement." The fundamental purpose of these agreements from the REALTORS® perspective is to ensure they get paid a commission should the house sell.
Having a seller sign a formal "Listing Agreement" for a few days in order to facilitate them showing a property to their buyer client is rather pointless. With all of the conditions typically inserted into today's offers ie: financing, attainment of insurance, completing a home inspection etc. it is highly unlikely that all of those conditions will be satisfied in such a short time frame before the listing expries unless the Listing Agreement is extended. One of the short-term listings in question had an offer accompanying it that was conditional on the buyer selling their present home in a couple of months!
The "Seller Customer Service Agreement" is the more appropriate of the two documents to use when bringing forth a buyer for a property not listed for sale and I have used this form for numerous transactions. This Agreement has dates both for the commencement of the Agreement as well as an expiry of said Agreement. Secondly it stipulates the commission to be paid by the Seller either in terms of a percentage of the sale price or just a set fee.
There is however one alternate means for a REALTOR® to sell a home that is not listed for sale and to be paid for doing so. Have the buyer pay the commission. Most REALTORS® dealing with buyers these days have or should have in place a "Buyer Representation Agreement." This Agreement establishes a formal agency relationship between the REALTOR® and the buyer(s) thus appointing the REALTOR® to act as their agent. As with the "Seller Customer Service Agreement," the "Buyer Representation Agreement" also can facilitate a commission to be paid to the REALTOR® by the buyer for successfully acquiring a property on their behalf. Although used less frequently having a buyer pay the commission removes that burden from the seller whose home is not actively listed by them for sale and this can help in the negotiation process with respect to price.
The bottom line is, it is not necessary for a seller to sign a short-term Listing Agreement in order to have a REALTOR® show their non-listed property to a potential buyer or to bring forth an offer. There are other alternatives that can facilitate an accepted "Agreement of Purchase and Sale" being achieved with the REALTOR® being paid for their efforts.
Tuesday, November 3, 2009
Year-to-date unit sales in Collingwood are up 4.9% with 236 proprieties sold to the end of October versus 225 last year. In the Town Blue Mountains, sales for the year now total 136 properties which is a 13.3% increase over the 120 units sold in the same period last year. MLS® sales in each individual municipality for the first 10 months of this year ranked in order are as follows:
- Town Blue Mountains 13.3%
- Collingwood 4.9%
- Clearview -2.9%
- Wasaga Beach -4.8%
- Grey Highlands -10.0%
- Municipality Meaford - 19.5%
The bulk of the sales activity we see continues to be at mid to lower end of the market with 83% of the sales below $350,000. This is a percentage of total sales that has not changed in the last three years. Year-to-date 2009 sales above $500,000 total 102 units compared to 100 in 2008 representing just over 6% of the total market. Again this percentage has changed little in the last three years although it has been in the last 3 to 4 months that higher end property sales have resumed a similar pace to what we were seeing prior to the commencement of the current recession.
The big question on many consumer's minds is that of pricing. As President of the Georgian Triangle Real Estate Board last year, it was my contention that we would not see any significant reduction in prices in our market. One year later that is now essentially fact. The 12 month average price in our area has in fact risen (0.8%) from $280,724 in October of 2008 to $283,009 this year. Average pricing however is an ever-changing number that is affected far greater by the mix of properties selling than by inflation or deflation. To obtain an accurate synopsis of pricing requires an in-depth look at your neighbourhood and or property type. Recent reviews I have conducted in this regard indicate that pricing is fundamentally stable with the only significant price reductions coming from those listings that were over-priced to start with.
As always, if you have any questions or comments please consult the writer and I would be happy to assist you without obligation.
Monday, November 2, 2009
Sunday, October 25, 2009
Month-to-date sales through to October 25th total $41.3 million and given the current rate of activity may well pass the $51 million mark by month-end. Back in October of 2008 we were in the early stages of a significant economic slowdown and real estate sales across the country were falling substantially in all major markets. Georgian Triangle real estate sales in October of last year totalled just $26.8 million hence we are already $14.5 million or 54% of last year's volume for the same month.
Back in March, year-to-date sales for the first quarter in our area were down 40% in terms of units and 47% in dollars. Subsequent months have seen a reversal of fortune as beginning in April we saw this trend begin to turn. Unit sales in June, July and August were up 16%, 27% and 30% respectively. As noted in my 3rd Quarter Real Estate Newsletter I predicted that by year-end, total area sales for 2009 would surpass those of 2008. Given the current rate of activity this month, year-to-date sales by the end of October may very well exceed year-to-date sales for the same period last year.
With a high level of consumer confidence, low interest rates and a substantial inventory of property for buyers to choose from, the remaining months of 2009 should see continued strength in our market as we head into 2010.
Saturday, October 17, 2009
As licensed REALTORS® we are required to carry errors and omissions insurance and we are in fact responsible for not only the accuracy of our work reading Agreements of Purchase and Sale but also with the listing of properties as well. For example, the Alliance for Canadian Real Estate Education (ACRE) has specific guidelines to follow with respect to measuring the square footage of a home in order to ensure there is no misrepresentation.
One of the more contentious issues of late is with respect to the number of bedrooms a home may have. A room without a closet is not technically a bedroom. More importantly a room in a basement without a window does not constitute a bedroom. Building code requirements stipulate specific window sizes for basement bedrooms so as to allow adequate space for a person to escape through in the event of a fire etc.
The correct format relative to accurately portraying bedrooms in a real estate listing is as follows. If a home has 3 bedrooms above grade and 1 in the basement then the listing should read 3+1 bedrooms not 4 bedrooms. A house with 2 bedrooms up and 2 down would be 2+2 bedrooms etc. To this point in time, http://www.realtor.ca/ does not have the ability to differentiate bedrooms in this manner. Consequently a home with 1 bedroom on the main floor and 2 in the basement would appear online as a 1 bedroom home. Understandably this infuriates the seller. Later in November, the Canadian Real Estate Association will be implementing programming changes to http://www.realtor.ca/ that will correct this shortcoming.
In the meantime if you were thinking of selling you home, how many "legitimate" bedrooms does it have?
Thursday, October 15, 2009
A recent article in the Vancouver Sun entitled "Rebound in house prices doesn't point to boom" quoted Phil Sopher of Royal LePage as saying "increase in sales activity and firming of house prices are the product of a normal market correction and not the beginning of another aggressive expansionary cycle.'' Mr. Sopher further went on to say that "Once housing supply returns to normal levels, we believe the economy will support low pricing growth into 2010."
We are certainly seeing this throughout the Georgian Triangle. Sales have recovered in recent months and as I stated in a prior posting, we fully anticipate that real estate activity in our area during 2009 will surpass 2008. Pricing has by and large remained stable with price reductions coming primarily on those properties that were grossly overpriced to start with now being reduced or are being taken off the market altogether. Significant price increases should not pose a threat as there is still an ample selection of both new and resale housing inventory for buyers to choose from and their willingness to "over-pay" is virtually non-existent.
Tuesday, October 13, 2009
As I have previously stated, one of the by-products stemming from a slowdown in real estate activity is the creation of a pent-up demand for housing once consumer confidence returns. The increased demand often sparks a run-up in pricing and that is already becoming evident in some markets. Clients here in the Collingwood area whose home we have recently sold and are moving back to the GTA, recently lost out on the purchase of a home for which there were 8 competing offers. Ultimately the house sold above the listed price. The Bank of Canada's stance is that surging housing prices will cool down once pent-up demand dissipates as those who were too afraid to buy homes during the peak of the recession now move forward with making their purchases.
The Central Bank's position had been to maintain low interest rates until 2011 however some other countries ie: Australia have moved to increase interest rates as a means to keep inflation in check. This is a situation which will no doubt be watched closely in the coming weeks and should consumers detect an upward movement in rates, this too will perhaps spur greater real estate activity and subsequently higher prices. More to follow....
Saturday, October 10, 2009
Area real estate sales in the 3rd quarter as reported through the MLS® system of the Georgian Triangle Real Estate Board were 22% better than the 3rd quarter of 2008. Residential unit sales were up 27% and 30% in July and August respectively while September posted an 8% gain. It was during the 3rd quarter of last year that real estate sales began to significantly decline as consumers took a wait-and-see attitude with respect to the economic outlook before making any commitments with respect to their plans regarding real estate. Low mortgage rates have continued to help fuel the housing market and the Bank of Canada has committed to holding rates until early 2010 so buyers need not feel that times is running out.
Gregory Klump the Chief Economist for the Canadian Real Estate Association was in Collingwood lately giving local REALTORS® and update of the national housing market with emphasis on our area in particular. With the ongoing strength in consumer confidence and low interest rates, the outlook for strong sales in both the 4th quarter of 2009 and first half of 2010 looks very promising and I fully anticipate that real estate sales in our area for 2009 will surpass the $438 million in area property sales that we saw in 2008. For a complete summary of real estate activity throughout our area please read my 3rd Quarter Georgian Triangle Real Estate Newsletter.
Monday, September 28, 2009
This is not a problem unique to Simcoe County. Municipalities across Canada face similar circumstances when it comes to handling waste. Piling up garbage and covering it with dirt is hardly a high tech solution. The green bin program for disposing of refuse that is compost able seems to be worthwhile initiative in reducing what has traditionally ended up in landfills. Much has been done with respect to the re-use and recycle aspects of "reduce, re-use and recycle." Where we seem to be lacking is with respect to the concept of "reduce." Too many products are in my opinion over-packaged. In addition, one only needs to review the weekly assortment of sale flyers or take a walk down any aisle of your favourite retailer to realize a wide variety of useless products that are simply not needed and or will not last that will inevitably end up in our landfills. Numerous studies suggest that we are going to witness a new generation coming forward that believes and will adhere to the concept that less is better. Smaller homes, smaller more fuel efficient cars, and in general just less "stuff" in their lives is a more desirable way to live that the excessive lifestyles lead by many people before them. Perhaps said generation will not just find and develop a more effective waste management strategy, they will in fact create less of it.
Monday, September 21, 2009
With an aging population and with countless people looking to retire to the area, health care requirements has become an increasingly important concern throughout the Georgian Triangle.
North East Grey Health Clinics is a non-profit corporation of community volunteers dedicated to recruiting new physicians and to opening two clinics in both The Blue Mountains and Meaford. Fundraisers are looking to raise a total of $4 million, $2 million each for the two respective municipalities. To date, there is $1 million in commitments and pledges for The Blue Mountains health centre, including an initial donation of $275,000 from Town Council.
The estblishment of a health clinic in Thornbury will not only address the future health care needs of the community but will also serve to further the revitalization of Thornbury's downtown core. With the recent opening of the area's first traffic roundabout and now this latest initiative in the Blue Mountains, one cannot help but feel that the Blue Mountains Municipal Council in acting rather than just talking, tackling the issues at hand with a long-term vision and strategy that appears to be lacking with their Collingwood counterparts.
Friday, September 18, 2009
Friday, September 11, 2009
Year-to-date, MLS® unit sales across the various municipalities that make up the Georgian Triangle Real Estate Board are as follows: Clearview Township -1.0%, Collingwood -5.6%, Grey Highlands -9.4%, Municipality Meaford -33.0%, Town Blue Mountains -7.9% and Wasaga Beach -13.3%. Unit MLS® sales in total have decreased 6.3% to the end of August versus the same period last year but with increased sales activity over the last three months the gap is quickly narrowing.
Despite decreased sales activity, pricing has remained relatively constant with the year-over-year average residential price in the area holding steady at just over $278,000. Average prices in the Municipality of Meaford and Town Blue Mountains have increased 8.5% and 4.9% respectively. In other municipalities average residential sale prices have declined between 2% to 17% driven largely by the fact that higher end home sales have been noticeably weaker during the past 12 months.
Sales in the upper price ranges however is where some of the greatest improvement in market activity has taken place. Year-to-date we have seen 8 sales between $1.0 to $1.5 million which is double the number of properties sold in that price range last year.
Thursday, September 3, 2009
Tuesday, September 1, 2009
One such story was penned by a disgruntled cottage owner that clearly objected to the annual expense and what he deemed as being work that is associated with owning a recreational property. Others simply felt that once you added up the annual costs for maintenance, utilities, taxes and the like then weighed them against the rate of appreciation for the property, it does not create a very good rate of return from an investment standpoint.
I was fortunate to have grown up enjoying the cottage life and to this day own a waterfront property along with my brother. Is it a sound investment? When you add up the annual costs for 5 or 6 months of sporadic use I guess that is questionable. But more specifically when I look at it as an investment I simply answer no. The reason being? It will never be sold and just like some people collect cars, art, stamps or antiques, owning anything that you will not part with can hardly be deemed a financial investment.
Many of my clients are shocked to learn that I live in Collingwood and own a cottage. To them, this is cottage country so why the need for something else? Well, everyone needs to get away from their day-to-day living and work environment at some point and for me, going to the cottage has always been a great sanctuary to escape to. I just spent four exceptional days there last week with my son and it was a great father/son experience, an investment if you will in our relationship. Further, it will be an experience that he too will share with his children some day and in my opinion you can't make a better investment than that.
Seldom do I sell a recreational property only to have the buyer(s) want to unload it a year or two later because they don't use it. Most by that time are ready for something larger because they are using it far more than they thought. A recent survey by Royal LePage found that 64% of Canadians viewed recreational property as a sound investment. Further, 55% of those surveyed said they were "willing to make compromises with regards to their financial or lifestyle choices, such as purchasing a property with family and friends, renting out their cottage, making their cottage their primary residence, buying a fixer-upper, or moving to a smaller principal home in the city" all in the name of affording a recreational property.
Financial reasons aside, in today's fast-paced stress-prone world, owning a recreational property is an investment in yourself, your family and your sanity which is why more and more people are flocking to an area that those of us who live here, all too often take for granted.
Monday, August 24, 2009
This summer I have been catching up on some maintenance at my cottage on Manitoulin Island. Unlike some, I do not view this type of thing as “work.” I enjoy home/cottage maintenance and renovation projects. For one it’s a departure from my normal daily routine as a REALTOR® and secondly, the end results I find rewarding.
Recently I purchased some paint and stain for my cottage garage from Robinsons Paint & Wallpaper on Hurontario Street in Collingwood. Both were Benjamin Moore products, a trusted name in paint for many years. The paint was for my two garage doors and despite prepping the doors and applying two coats, the paint dried with a very irregular finish, a mixture of gloss in some areas and dull in others. Naturally I was a little perplexed both for having spent over $40.00 on the paint not to mention my labour. More importantly I was confused as to why such a high quality paint would yield such poor results.
I took some digital photos of the finished product and went back to Robinsons in search of a reason for my less than satisfactory paint job. Mark Robinson studied my photos and while no definitive cause for the blotchy look to the doors was arrived at, he offered a number of suggestions as to why the paint’s final finish might be so inconsistent. More importantly he offered not only to replace the paint “no-charge” but he also threw in a new brush and some sandpaper. Frankly I was blown away. I had not blamed the paint, nor had Mark pointed a finger at my workmanship, yet here was a person willing to give the customer the benefit of the doubt. Not only did he stand behind his product but he made some helpful suggestions and tossed in some “extras.”
Clearly, here is a local, small business owner that understands the value of investing in his customers and his business. In response to my plight, would the larger chain retailers in the area have done the same? Perhaps, but this example of exemplary customer service is not about big box stores versus the little guy. It’s about providing your customers no matter what business you are in, with a level of service that “exceeds their expectations” and Mark Robinson certainly did that with me.
I am fortunate to have come from a corporate background where our success and growth was always based on providing our value customers with both products and service that exceeded those of our competitors. My real estate partner Doug Brown and I apply the same to our buyer and seller real estate clients. It’s always very rewarding when a client expresses their gratitude for the service we provide and further refers our names to their friends and or family. Recanting my “positive” experience with Mark Robinson to others is both a pleasure and a well deserved accolade for him and his business. I hope the experience I have shared herein rewards him with some additional business in the future. He will certainly get it from me.
Saturday, August 22, 2009
With the ongoing affects that climate change seems to be having on our weather, many are beginning to question as to whether we have adequate advanced warning systems in place to advise the public of pending storm fronts similar to what we experienced this week. According to a report in the Toronto Star, Environment Canada believes that we do, people just tend not to heed them. Having previously lived just west of Chicago, we became quite accustomed to violent storms (and accompanying warning sirens) when these systems swept in from Iowa and other plains states to the west. In south-central Ontario these weather events have not been so common especially here in the Georgian Triangle but this past week's events may be an indicator of what we should expect in the future.
A video of Thurday's storm that swept through Georgian Peaks was taken at the Georgian Bay Club and is available for viewing on YouTube.
Friday, August 21, 2009
This latest weather event comes on the heels of what has been a very unsual summer. Mother Nature has the ability to change quickly and dramatically. I have not heard of any injuries in the aftermath of this storm locally however a teenager was killed yesterday as the result of a roof collapse at a camp in the Durham area.
Friday, August 14, 2009
The big questions that remains is will this somewhat robust and unexpected turnaround in the overall real estate market last?
Politicians on many fronts appear to be claiming victory over this latest recession however one sobering fact remains. Unemployment still stands a relatively high levels in many provinces across the country and until there is some stability and optimism in the job market, conditions may very well remain somewhat unsettled. Certainly the slump in sales that was experienced from September of 2008 until April or May of this year created some pent-up demand for housing. The fact remains however that consumers will not make major commitments such as buying a home until such time as they are confident in their ongoing employment status.
The rebounding housing market combined with a slowdown in new listing activity has significantly reduced the unsold housing inventory that has lingered in many markets for a number of months. In July there were a total of 219,982 homes listed for sale on the MLS® systems of real estate boards nationwide. This represents a 12.4% reduction in inventory compared to July 2008 and is the largest decline in active listings in more than six years.
Locally, new listing activity in the MLS® system of the Georgian Triangle Real Estate Board is down by 4% which represents a total of 163 properties. Meanwhile, expired listings have increased by 29% with 1,765 property listings have expired to the end of July as many sellers, frustrated with no buyers have removed their homes from the market pending an improvement to the economy.
Friday, August 7, 2009
As indicated on the attached graph, despite a slight dip in May, monthly sales have been trending upwards since January. Year-to-date 988 MLS® sales have been reported through the end of July as compared to 1,120 for the first 7 months of 2007, a decrease of 13%. Listing activity has moderated significantly since last year resulted in more balanced market conditions and stable pricing. Year-to-date the number of new listings to hit the market totals 3,583 properties a decrease of 4% from the same time last year. This represents 3.6 months of inventory, slightly above the 3.3 months of inventory on hand last July just before the market went into a major slump.
If MLS® sales during the remainder of the year show the same degree of strength as shown in June and July, it is quite possible that year-to-date results for 2009 will meet and or perhaps exceed the full years sales of 2008.
For information specific to your area and or price range, please do not hesitate to contact me.
Tuesday, August 4, 2009
MLS® unit sales for the month totaled 218 properties an increase of 47 sales or 27% compared to July of 2008. Most notable was the sharp increase in single family residential sales in Wasaga Beach with 44 sales reported this July as compared to 25 last year, an increase of 76%.
The year-to-date 12 month average price in our area remains unchanged from this time last year at just over $280,000. The average residential price in Collingwood dipped slightly for the month of July the first time Collingwood prices have decreased in quite some time.
New listing activity thus far this year has slowed significantly over the past couple of years resulting in more balanced market conditions. Year-to-date, the number of new listings that have come onto the market is down 4% whereas expired listings continue to run at an extremely high level up 21% over last year. Many sellers still persist in attempting to attain above market value prices for their properties and it's just not going to happen.
In my next posting I will review the local condo market. In the meantime my 2nd Quarter Georgian Triangle Real Estate Newsletter is available online summarizing the overall market for the first six months of 2009.
Tuesday, July 28, 2009
As was the case with ureaformaldehyde foam insulation used in home construction and renovation years ago, the presence of imported Chinese drywall is stigmatizing homes throughout numerous areas in the U.S. Click on the link below to view a CNN report on the matter:
Despite reports of alleged issues with Chinese drywall in British Columbia, Health Canada and Customs Border Services report that no such material was ever imported into Canada. As such, this would appear to be a U.S. only related issue and is yet another hit to the ravaged real estate market south of the border.
Ureaformaldehyde foam insulation,(UFFI), was at one time believed to have been a major source of concern for homeowners to the extent that the standard Agreement of Purchase and Sale document used in Ontario has aspecific clause dealing with the matter. Subsequent studies have found that the danger associated with UFFI has long since passed and was only essentially onloy a threat during the curing process after installation. The same is unlikely to be found however with this imported drywall wherein the only cure is to completely remove it from the home, repair any damage to wiring etc. and re-drywall the premises with new material.
Sunday, July 19, 2009
Several segments of the expensive, upper-end market have come back sharply in most markets across Canada which tends to skew both the national and local “average” residential prices. “Average price” is a term which the media focuses on relentlessly thus giving consumers misleading information with respect to overall pricing trends both up and down. Whether buying or selling, it is always best to contact a local REALTOR® that has access to MLS® data specifically for your market area and price range in order to correctly gauge what is truly happening with prices for a specific property location and type.
Nationally, MLS® home sales rose almost 18% in June, the local market showed similar gains posting a 16% increase in unit sales over June of 2008. The inventory of new resale home listings coming onto the market has continued to decline in recent months. Year-to-date the number of new residential MLS® listings throughout the Georgian Triangle has decreased 5%. The age old relationship of supply and demand has as a result, created a stable market in terms of pricing throughout our area. Over-priced properties simply do not generate interest and as a result do not sell. We continue to have a great number of these scenarios in the local market as is evidenced by the fact that the number of expired listings in the local MLS® system has risen 31% in the first six months of 2009 versus the same period in 2008.
Click on the link below to listen to a podcast by the chief economist of the Canadian Real Estate Association regarding resale housing market activity in the second quarter.
Thursday, July 16, 2009
Mayor Carrier and Members of Council.
During the public meeting of July 6th, it was apparent that there are two strongly opposing sides re: the issue of commercial vehicle parking in residential areas.
Those against, (myself included) would appear to be respectful of the assets and community identity(s) that we as the current custodians living in this municipality have to be mindful of and to protect for future generations to aspire to live in and enjoy. Those for this controversial bylaw change are certainly entitled to make a living however a person’s livelihood should not come at all cost nor at the expense of your neighbours. I believe that Council has shown this to be the case with respect to the Collingwood Ethanol situation wherein trading jobs for our environment was not acceptable. As with our natural environment, neighbourhood environments deserve the same level of consideration.
Using current economic conditions and the lack of significant new jobs in the area are hardly valid arguments to support the need for self employment and the ability to park a commercial vehicle in one’s driveway. Recessions typically last 9 to 14 months whereas the decision you make regarding this issue will last a lifetime.
A couple of years ago those of us in the real estate profession worked diligently and cooperatively addressing the use of real estate For Sale and Open House signs. These signs although rather small and temporary in their use were felt by some to be an eyesore and detracted from the overall appearance of the Town. We were sensitive to these concerns and arrived at an amicable solution with Town staff which has worked to everyone’s satisfaction. A “For Sale” or “Open House” sign erected temporarily for a few hours to a few weeks is in no way even remotely comparable to a large commercial vehicle with graphics and other lettering adorning a private residence on a daily basis/permanent basis.
As I stated during the public meeting on July 6th, people’s homes now more than ever have become their sanctuaries. It is where they go at the end of their workday and on weekends to relax with family and friends and this is being done so on an ever-increasing basis. A study just released by the Canadian Real Estate Association indicates that from 2005 to 2007, the amount of money spent by Canadian homeowners on renovations and home improvements during their 3 years of home ownership has doubled to $15,000. In Ontario the number is actually higher at $15,875. Based on the residential property sales in Collingwood for the period in question (2005 – 2007) this could arguably have an impact of $12.9 million in economic income to local business. I do not belief that the owners of commercial trucks looking to park said vehicles in their driveways can boast of anything even close to that number. Vacations are actively being replaced by “staycations” with homeowners improving their homes and yards both to enjoy as well as to further enhance their investment. Their willingness to do so may be compromised if commercial vehicles are allowed to invade residential neighbourhoods with the owner electing to move versus improve. One can only speculate as to the impact on property values but I can state unequivocally that many buyers will resist purchasing a home in an area faced with having to cope with the presence of a commercial vehicle next door or across the street.
Decisions with respect to planning and other matters made in the past have already had a profound impact on our Town. The Town’s identity has in fact been compromised on occasion in favour of the commercial identity for those such as Wal Mart, Home Depot and others. Now is the time to stop and reflect on why people choose to come here in the first place. Spending millions to improve Hurontario Street or adding to our parks and trail systems are worthy initiatives to improve the lifestyle that Collingwood residents have come to enjoy but what’s the point if individual neighbourhoods are deflowered of their aesthetic appeal?
Other alternatives do indeed exist with respect to the off hours parking of commercial vehicles. I note that Hydro One has several vehicles parked in a secure, fenced-in area within one of the public storage facilities on the 10th Line. There is little chance of theft and certainly no opportunity exists for “Lot Lizards” to ply their trade. In addition the parking of these vehicles in such facilities in itself is an economic benefit.
Lastly, there is a fundamental lack of courtesy and respect being shown to their neighbours by those in favour of this bylaw. As was presented at the July 6th meeting condominium owners are protected by the rules and regulations of their respective condominium corporations. Single family home owners many of which have a far greater financial investment than their condo dwelling counterparts are entitled to the same level of enjoyment and protection of their properties. By voting against this proposed change, you will ensure that they receive it with little or no economic consequences within the municipality or service standards to consumers as a result.
Yours for a better Collingwood.
Tuesday, July 14, 2009
Given the uncertainty of our economy, significant layoffs particularly in the auto sector and tighter lending conditions, this edition of the report was approached with a degree of caution, fearing that Canadians would be shying away from purchasing a secondary property. Surprisingly, many Canadians (64%) still maintain their belief that a cottage or other property purchased for recreational use is still a very good investment. Of these, 55% said they would be willing to make significant financial sacrifices in order to fulfil their desire of owning a summer cottage, ski chalet/condo or other form of recreational property.
The survey also found that 89% of Canadians think a cottage is a great place for family to gather, and 86% think a cottage is a great way to escape the city and today's hectic, stress-filled lifestyle. Having grown up enjoying the cottage lifestyle and now as a waterfront owner myself, I can attest to this belief. Is it costly to own and maintain a second property? To some degree it certainly is but so are a lot of life's other pleasures ie: my costs are less than some annual golf course dues etc. The cost of ownership seems to dissipate once you arrive at your particular getaway when those costs are weighed against the enjoyment such ownership delivers. That continues to be one of the main drivers that propels the ongoing sale of Collingwood area real estate. Seldom do my recreational buyers regret their purchase and find that they are not using the place and want to sell. Typically it's the other way around wherein after a year or so they are using the place so much, they are ready to move up to something larger.
If you are contemplating purchasing a recreational property in 2009, the Royal Lepage Recreational Property Report can be a big help in determining what and where is the best place for you to buy and the relative costs. For further information on local market conditions and or to ascertain where to find the best values in the Georgian Triangle, please do not hesitate to contact me.
Sunday, July 12, 2009
Between living in Collingwood and owning a cottage on Manitoulin Island, this marks the 56th summer that I have spent time on Georgian Bay and Lake Huron . During this time frame I have seen it all from the record low water levels of the mid 1960's when I was a kid to several years in the late 1980's when there was no shoreline at all in some areas due to abnormally high water levels. It should be noted that Lakes Michigan and Huron and the only two of the five Great Lakes that do not have a mechanism to control the outflow of water which exits at will down the St. Clair River.
During the past two years over 100 scientists in Canada and the U.S have been studying the St. Clair River system between Lakes Michigan-Huron to Lake Erie. Many people myself included have held the belief that the deepening of the St. Clair River stemming from dredging in 1963 to accommodate larger freighters through the St. Lawrence Seaway and subsequent erosion of the river bed has increased the outflow of water thus depleting the levels in Lakes Michigan and Huron which of course includes Georgian Bay. Preliminary results from these studies tends to downplay the increased flow rate of the St. Clair River which has raised the ire of many including the Georgian Bay Association which commissioned its own study known as the Baird Report.
Current water levels in Lakes Michigan, Huron and Georgian Bay are up approximately 9" over last year which is encouraging. According to the most recent studies, the St Clair riverbed has been stable with no further evidence of erosion resulting in no increased outflow from these bodies of water since 2000. It was also emphasized last week, that the area surrounding Georgian Bay has experienced a significant amount of glacial isostatic adjustment which is the rebounding of the earth's crust after the melting of the glaciers that covered this area some 10,000 years ago. In essence, the land surrounding Georgian Bay has risen some 4.3 inches since 1963 so it's not so much a matter of the water going down as the land is going up. That's fine but does not explain where the other 30+ inches of water has disappeared to since the late 1980's. Many of those that attended the meeting in Collingwood, were like myself, waterfront property owners. Many expressed their frustration with the fact that there appears to be a classic example of paralysis by analysis going on with countless studies, many of which contradict each other and no action. While the current studies pertaining to the St. Clair River are to be finalized and submitted by October of this year, their position at the present time is that no remedial action should be taken on the St. Clair River at this time. I suspect it will be many years and perhaps not even in many of our lifetimes before any action is taken to control the outflow of water from Lakes Michigan-Huron via the St. Clair River. As such we will no doubt see many years of continued water level fluctuations and perhaps to chronically low levels before action is taken to protect these critical fresh-water resources.
330 First Street, Collingwood, ON L9Y 1B4
Office: 705-445-5520 ext 230
- Rick Crouch
- Rick relocated to Collingwood from Toronto in 1985 through a transfer with Goodyear Canada. In 1987 Rick was recruited by a major client of Goodyear’s, managing their Canadian business based in Barrie before moving to Chicago in 1992 as Vice President of Sales & Marketing. Upon returning to Canada in 1996, Rick ran an industrial products manufacturing company in Stratford, Ontario. In 1998 Rick returned to Collingwood with his two children. Rick is a licensed real estate Broker with Royal LePAGE Locations North in Collingwood and holds his MVA designation (Market Value Appraiser-Residential). He is an active volunteer in the community serving several years on the Board of Directors with the Collingwood Chamber of Commerce as Treasurer, 6 years on the Board of Directors for the Southern Georgian Bay Association of REALTORS® of which he is the Past President (2008) and currently serves on a committee with the Ontario Real Estate Association. Rick is a diverse executive manager with extensive experience in strategic planning, manufacturing, finance, human resources and quality assurance management.