Tuesday, July 28, 2009

The Latest Threat to Homeowners - Chinese Drywall

An emerging issue with homes constructed in the early years of this decade (2002 to 2007) stems from the use of imported drywall that came from China. This particular drywall has a high sulphur content which results in amongst other things a rotten egg smell. This is essentially the least of the problems that this material creates. It was produced with materials that emit hydrogen sulphide gas and other sulphide gases, which may cause serious health problems, such as shortness of breath, dizziness, headaches, fatigue, insomnia, eye irritations and respiratory difficulties. The sulphur gas has caused the affected homes to have blackened, scorched wiring behind switch plates, wall plugs, air conditioners and on copper piping.
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

National Versus Local Market Conditions

The resale housing market across Canada has rebounded significantly in the second quarter of 2009 wherein sales exceeded those reported during the same three months of 2008. When uncertainties about both our domestic as well as the global economy surfaced last year, many potential buyers which retreated to the sidelines are now back. As has historically been the case, soft market conditions typically create a pent-up demand which sooner or later comes back stronger than ever. Those waiting for the market to in fact bottom out will only know this has happened when prices start to increase so “timing” the market to maximize the greatest financial benefit whether selling or buying is next to impossible to gauge. Resale housing sales across Canada during the second quarter totaled over 147,000 properties, the fourth strongest quarter for sales ever reported. MLS® sales in the Georgian Triangle during the second quarter totaled 535 properties down 3.6% from the 555 units sold in the second quarter of 2008.
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

Round and Round We Go!

Located at the junction of Mountain Road and Scenic Caves Road, the area's first traffic roundabout is really starting to take shape so-to-speak. Collingwood has reviewed the concept of implementing roundabouts at various locations around Town and are intending to install them at some point on High Street. The Blue Mountains however have one-upped Collingwood by seeing the merit of using this form of traffic control to better manage the flow of vehicles into the south end of Blue Mountain Resort, up the escarpment via Scenic Caves Road and on Mountain Road to and from Collingwood.

Roundabouts have been used elsewhere, particularly in Europe for years as well as in other ski resort destinations such as Aspen, Colorado. While living in Chicago, I regularly encountered them throughout certain suburbs. Most will at some point in time have used the one on University Avenue in Toronto by Queen's Park without even perhaps realizing what it was. Given the adverse winter driving conditions we encounter in this area, combined with the over zealous drivers racing to beat the morning rush to the ski slopes, this will be an interesting experiment to watch. If the Mountain Road location works with minimal incidents/collisions, then roundabouts will work anywhere. If not, then it might be a good location for the insurance industry to set up a claims centre. Time will tell.

Commercial Vehicles

In the continuing saga regarding the debate over commercial vehicle parking in residential areas, the following was emailed by myself to Collingwood Council for their deliberation on the matter.

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

Royal LePage Summer 2009 Recreational Property Report

As one of Canada's leading authorities on cottage and recreational properties, Royal LePage have just released the summer 2009 edition of their Recreational Property Report.
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

Great Lakes Water Level Update

This past week members of the International Upper Great Lakes Study group held public meetings in Collingwood and simultaneously in Mequon, Wisconsin for the purpose of providing an update regarding the fluctuating water levels in the upper Great Lakes.
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.

Thursday, July 9, 2009

June Real Estate Sales Exceed Prior Year

Following two months of modest yet steady improvement through April and May, area real estate sales in the month of June rebounded significantly. Monthly unit sales reported through the MLS® system of the Georgian Triangle Real Estate Board increased 16% in June versus the same month last year. A total of 206 sales were reported for the month as compared to 177 in June 2008. Of note, sales activity at the upper end of the market has continued to show strong gains. In June, 15 sales were reported between $400,000 and $500,000 whereas in June 2008 there were only 8. In addition, 2 sales were made in June over $1 million compared to none in June 2008, bringing the total of $1 million+ sales for the year to 6 versus 4 in the first 6 months of 2008.
Year-to-date sales to the end of June reflect a 19% drop from the same period last year however the overall trend as reflected in the accompanying graph shows a steady improvement. The number of new listings coming onto the market has declined considerably in recent months. New listings year-to-date total 3,055 properties, a decline of 5% over last year. Expired listings however continue to increase, up 31% of the first 6 months of 2008. The increase in the number of expired listings coincides with the annual year-to-date shortfall in sales although many properties remain over-priced relative to current market values.

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