Friday, November 27, 2009

Plastic Makes Pefect or Collingwood's Downtown Makeover

The first phase of Collingwood's downtown revitalization is nearing completion and the fences are coming down giving us a better look at what the final outcome will look like next year.
With all of the money that has and is yet to be spent on beautifying our downtown core, I think it's time Council gave serious thought to bringing forth an anti-loitering bylaw. The dictionary describes loitering as: "to linger idly or aimlessly in or about a place or on one's way....."
I certainly mean no harm to those in question that spend an inordinate amount of time on Hurontario Street but enough is enough. What's the point of having a beautiful downtown street scape with the same group of "locals" monopolizing the benches on a daily basis, some smoking and swearing, with others pan handling etc. I was even accosted one day by a woman soliciting sexual acts. Yes you heard me correctly, we have that type of activity in Collingwood.
I suspect that many, especially our out-of-town visitors and the elderly are intimidated by some of this loitering crowd. In all fairness to the merchants, citizens and visitors alike, it's time to hustle along those that detract from making downtown Collingwood a pleasant place to spend time. An anti-loitering bylaw is much more practical and enforceable than the ridiculous anti-idling bylaw we have in place especially with the proliferation of drive-throughs in town.

Wednesday, November 25, 2009

The Great Garage Door Caper

In my prior posting entitled "Painting a Good Picture on Customer Service" I recounted a pleasurable experience that I had had with one of our local retailers. Now it's time to share a less than satisfactory experience which directly relates to my own personal real estate (home).
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

Canadian Buys Detroit's "Silverdome" Stadium

As if we needed further evidence as to the morbid state of the U.S. real estate market, here it is. A Toronto developer is the winning bidder for the 88,000 seat "Silverdome" located outside Detroit in Pontiac, Michigan.
Situated on 127 acres and built at a cost of over $55 million U.S. in 1975, the Silverdome was the former home of the Detroit Lions football team and hosted concerts, monster truck shows and the like. I remember being in the area on business some years ago when Fleetwood Mack arrived at my hotel for a concert in the dome that evening. The winning bid was a paltry $583,000 which needless-to-say wouldn't pay to renovate the washrooms in the place today. Even without the building, the buyer paid just under $5,000 an acre for the 127 acres, a bargain price in virtually any urban market.
Real estate sales such as this bring a whole new meaning to the term "crash." This is not the typical price depreciation you would expect to see in recessionary times and you have to wonder if the the U.S. will ever fully recover to the economic status they once held or are developing countries such as China and India going to be the new global economic super powers of the future?

Monday, November 23, 2009

U.S. Housing Crisis Continues...

As real estate sales across Canada including the local market continue to show a positive trend with strong sales again in November, the same cannot be said for our neighbours to the south.
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

MLS® Home Sales Forecast Increased for 2009 & 2010

Despite the lingering recessionary nature of our economy, real estate activity across Canada in 2009 has far exceeded the expectations of most. Following record sales in the months of July, September and October, the Canadian Real Estate Association (CREA) has revised their 2009 and 2010 forecasts for MLS® home sales across Canada.
Canadian MLS® home sales for 2009 are now forecasted to increase by 6.6% from 2008 to a total of 460,200 units. This revised sales forecast for 2009 is equivalent to annual sales achieved back in 2004 but is below levels attained for the years 2005 through 2007. For 2010, CREA now forecasts that national home sales will increase by 7%. Should this 7% increase materialize, 2010 will be the second highest year of sales on record for Canadian home sales.
Like the rest of Canada, MLS® home sales here in the Georgian Triangle continue to increase significantly. Unit residential sales in October were up 71% while revenue increased 84%. Sales at the end of the 1st quarter were off 47% from the prior year. By mid-year the shortfall had been reduced to 23% and by the end of the 3rd quarter, the shortfall in year-to-date sales had been completely reversed and we were ahead of 2008's results.
Monthly activity in November has continued to remain exceedingly strong. As of today's date MLS® sales in the Georgian Triangle total $30.7 million a full $10 million or 48% more than November last year with 13 days yet remaining in the month.
My own personal forecast is that MLS® sales in our area will reach $500 million or better for the year, up by 14% or more from the $438 million worth of properties sold in all of 2008. Single family home sales for the year will remain constant with those in 2008. Vacant land sales are off 12% and will remain so for the balance of the year. Conversely, condominium sales year-to-date are up 12% driven by increased sales in the $200K to $500K price range. In summary, real estate sales activity in 2009 has exceeded everyone's expectations with robust sales in most markets across Canada including ours. Renewed consumer confidence and low mortage rates are helping to drive sales. In our market the migration of retirees from the GTA is also a large factor in our success and this trend is unlikely to abate any time soon.

Thursday, November 5, 2009

Selling A Non MLS® Listed Property

The renewed strength we are seeing in our real estate market seemingly brings with it an increase in oddities relative to the traditional listing and sale of properties through the Multiple Listing Service (MLS®)
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

Collingwood & Town Blue Mountain Sales Surpass Last Year

While overall real estate sales in our area have come back strongly in recent months, Collingwood and Town Blue Mountains are the two area municipalities showing the greatest improvement in sales activity.
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:

  1. Town Blue Mountains 13.3%
  2. Collingwood 4.9%
  3. Clearview -2.9%
  4. Wasaga Beach -4.8%
  5. Grey Highlands -10.0%
  6. 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

October Sales up 84% Over 2008

Further to my last post, area real estate sales during October slightly exceeded my earlier forecast totalling $52.4 million versus $28.5 million in October 2008, an increase of 84%. These results are based on sales processed through the MLS® system of the Georgian Triangle Real Estate Board and do not include new home sales in the area.
A total of 195 individual sales were recorded during the month compared to just 114 a year earlier as we entered into the early stages of the global recession. Listing activity for the month saw 27% fewer properties listed for sale as compared to October last year. Year-to-date, the pace of new listings coming onto the market has slowed considerably up just 1% which is significantly lower than the double digit increases we previously experienced. Some sellers, frustrated with a lack of interest in their properties often stemming from having them over-priced are taking them off the market and this is continuing to be reflected in the increase we see in expired listings which are up 11% year-to-date. The slower pace of listing activity is resulting in less inventory which in turn has a stabilizing affect on prices.
Year-to-date sales to the end of October are now 1% ahead of last year's results both in terms of revenue and units sold. Sales for the year now total $410 million and are just $28 million short of the $438 million worth of property sold for all of 2008. I fully anticipate that sales through the remaining two months of 2009 will remain very strong. We will certainly surpass the weak sales activity that we experienced in the dark days of November and December last year. That being said, full year sales for 2009 may very well approach or exceed $500 million.
In my next post I will review sales activity in specific areas throughout our region. In the meantime please see my 3rd quarter Real Estate Newsletter for other statistics pertaining to market activity throughout the Georgian Triangle.

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Royal LePAGE Locations North (Brokerage)

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