Tuesday, March 26, 2013

What Is The Correct Price?

  Following a good start to 2013 in January where unit and dollar sales were up 10% and 14% respectively, unit sales in February declined modestly -1% while February's dollar volume was down 7% from the same month in 2012.  Month-to-date, the March numbers are holding steady to March of 2012 and it would appear we may eclipse last year's results by 3% or 4%.

  I am always reluctant to use the term buyer's or seller's market.  A buyer's market suggests that there is lots of inventory (which there is) and that seller's are deeply discounting their prices to attract a buyer.  The latter is not true in our market.  On the other hand, a seller's market suggests that buyers are paying the going asking price and in fact may be over-paying due to multiple offers on the same listing. Again, this is not happening to any significant degree in our market and there are a number of reasons why.

  The bottom line is one thing and one thing only sells a property and that's having it appropriately priced.  No amount of print or online marketing exposure, virtual tours, open houses or other initiatives will sell a property that is not properly priced.  As I have stated before, characteristics such as location, condition, features and so on are important but they too are ultimately a factor of  price.

So what is the correct price?  Despite a comprehensive comparable market analysis or even a formal house appraisal only a buyer knows and establishes what a property is ultimately worth.  In our market, a list-to-sale price ratio of 95% is commonplace.  Sellers often price their properties high saying "people can make an offer." The bottom line is most buyers will not make an offer on an over-priced property and in fact they may not even find it.  In the Internet age, most property hunters are looking online and in doing so, stick to a price range when executing their searches.  A person looking in the $350,000 to $400,000 range typically does not expand their search to say $410,000 or $420,000 with the assumption they can buy it for less.  For that reason I typically would recommend an asking price of just under $400,000 in order to get the listing in front of those buyers.

  In a market such as the Greater Toronto Area buyers are used to properties selling for close to or even above the asking price. That is just the nature of that market.  My belief is this "conditions" those buyers to the point where they expect they will have to pay close to the full price so why look at properties that may be priced 3% or 5% higher than what they can afford. 

  Buyers from the GTA make up a significant part of the real estate sales activity in the southern Georgian Bay region.  If you have and or are going to list your property for sale think about who the potential buyer(s) may be or where they might be from.  If you want your house or condo etc. to sell, then price it accordingly to where it should be priced.  Example: If the property's market value is $295,000 to $300,000 then price it accordingly in that range.  Not only will you attract a potential buyer sooner but you might get more than one.  That's seems to be the norm in the GTA and there is no reason the same shouldn't apply and or work here.  Pricing too high under the belief "we can always comes down" will only extend the time your property is on the market while raising the question in the buyer's mind as to "what's wrong with this place, why hasn't it sold?"

Saturday, March 23, 2013

Heading to Mt Tremblant, Why Not Fly?

I just returned from three days of skiing and snowboarding with my son at Mont Tremblant.  It was a great father son outing and to add to the adventure we flew down out of the Toronto Island Airport on Porter Airlines.   I can highly recommend this to anyone travelling to Montreal, Mont Tremblant or to any of the other 17 destinations that Porter serves in Canada and the U.S.
  Flying out of the Island Airport is a unique experience first crossing on the ferry ($11 by car).  Parking on the Island is somewhat limited but at the same time relatively inexpensive for downtown Toronto ($113 for four days).  The airport itself has been a huge success thanks to the business that has been generated via Porter. Currently under construction is an $82.5 million pedestrian tunnel which when completed, will whisk passengers from downtown on moving sidewalks under Lake Ontario to the terminal. The terminal at Mont Tremblant is essentially akin to a log ski chalet but is nonetheless very efficient at getting passengers in and out complete with the full array of security equipment. 
 Obviously the need is there and consumers are responding favourably to this flying alternative versus having to deal with travelling out of Pearson International.  There were three ladies from Collingwood on the flight as well that had gone to ski so it's not just for the city folk. Porter has carved themselves out a unique niche in the market at a time when many airlines are struggling.  It's nice to see another Canadian success story. 

Friday, March 15, 2013

Condominium Insurance - Are You Adequately Covered?

Buyers looking to purchase a condominium are often unfamiliar with this form of property ownership and how it might impact not only their intended use and enjoyment of the property but also other things such as insurance.  A recent online discussion forum among some Royal LePAGE colleagues has brought up an issue I felt worth sharing with my readers as it affects not only those that might be considering a condo purchase but those of you that are already condominium owners as well.

Fundamentally, insurance coverage that condominium owners take out is much the same as contents insurance for renters.  You are responsible to obtain coverage for your belongings etc. whereas the condominium corporation’s master insurance policy covers liability insurance for any accidents that may happen on the property as well as any losses incurred to the building through flooding, a fire etc.   
A unique feature of condominium insurance which individual owners need to secure is what is referred to as loss assessment coverage.  What is loss assessment coverage?  As an example, let’s say a party was injured on the condominium’s ground such as in the parking lot or elsewhere which resulted in a $1.5 million insurance claim.  If the condominium corporation’s policy has a liability limit of $1 million then under the condominium association's bylaws, each owner will be assessed a proportionate share to cover the balance of $500,000.  The amount of loss assessment insurance you have under your particular policy may or may not be enough to cover your share.

As insurance coverage for all of us seems to go up, some condominium corporations are attempting to reduce the annual premiums on their master insurance policies by increasing their deductible amounts.  These increased deductibles subsequently increase the financial burden on your loss assessment coverage so it is important to keep that coverage in line with what might be required should a liability payout ever be incurred.
  Having sold many condominium properties over the years as well as having attended and spoken at annual owner’s meetings, I find that many condo owners don’t attend these meetings and or when correspondence comes from their property manager it is seldom opened or reviewed.   Here is just one example of why staying on to of your condominium corporation’s activities is of paramount importance.  Should an accident happen resulting in a hefty insurance claim that is not adequately covered via the master insurance policy held by your condo corporation, the last thing any owner wants is to have to reach into their wallet to cover a loss assessment against them for which they had inadequate loss assessment coverage.  My advice is to review your policy and talk with your insurance broker to make certain you are not exposed in this regard and as always, attend your owner’s meetings and review any and all correspondence that they or your property manager sends out.

Tuesday, March 12, 2013

Jay Peak Vermont

 In a posting on February 28th I commented about a recent ski trip I made to Stowe Vermont.  During my visit to Stowe I also skied a day at Jay Peak, Vermont.

  My visit to "Jay" as it is offered to referred to, was my first to the resort which is about an hours drive north of Stowe and is located just south of the Vermont/Quebec border. In terms of skiing, Jay Peak offers some challenging runs with 40% of the hills for those with advanced ski/snowboard skills while novice and intermediate runs make up the balance of the slopes at 20% and 40% respectively.  In terms of lifts, Jay Peak has the only tram in the east and they also have the longest quad chairlift which seems to go on forever.

  Jay Peak has seen a sizable cash infusion in recent years with the goal of making it much more than just a ski resort.  The major attraction of note is their huge "Pump House" indoor water park which makes Plunge at Blue Mountain look somewhat like a kid's backyard wading pool.  As recommended, I had pre-purchased tickets online for the water park which was very busy.  I hazard to guess that many of the water park patrons were not skiers or snowboarders and were their strictly to experience the indoor aquatic amenities.  After skiing on what was a sunny but very cold day, it was rather unique to spend the balance of the day in the somewhat tropical environment looking out at the mountain with skiers and boarders going past the windows.

  While I certainly enjoyed the day at Jay, I wouldn't rush back as I much prefer Stowe for a multitude of reasons.  Stowe offers a more diverse selection of runs.  Unlike Jay Peak which is somewhat out on it's own, the village of Stowe offers ample apres' ski things to do whether it's shopping, dining, visiting their ski museum etc. I was also told by some locals that Jay Peak can be cold and very windy and it's not hard to see why.. Unlike Stowe which is somewhat nestled into the Green Mountains, Jay Peak rises up on it's own with little around it to shelter it from the a strong prevailing wind.  I could easier imagine riding the longest quad chair in the east as being a very cold and unbearable ride on some days.
  For more photos of  Jay Peak including their very cool water park, see my Pinterest page.
  Next week I am off to Mont Tremblant with my son for 3 days of skiing and snowboarding via Porter Airlines from Toronto Island airport.  Look for my report on our father/son adventure in a future posting.

Friday, March 8, 2013

Collingwood Makes Headlines on CBC News

The entire town of Collingwood is abuzz today about a story by CBC News regarding  an OPP investigation into members of Town Council amid allegations of conflicts of interest and other matters.
  While this is not an envious distinction for the community to endure it's obviously long overdue and will clear the air so-to-speak of the rumours and innuendos that have been rampantly circulating over the past several months.  In reading the various stories and yes there is more than one, you have to question the actions of various members of Council and where their loyalties really lie.
  If what the story says is true and we don't know all the details, one member of Council is quoted as saying they  "...didn't recall voting to approve the sale of the public utility..." Collingwood Public Utilities to Powerstream.  This was a $14 to $15 million transaction and saying you "don't recall" doesn't fly with me nor will it with anyone else.  Not recalling as to whether she did or did not call a party interested in purchasing the grain terminals as the Mayor is alleged to have done on numerous occasions is equally as disturbing and that too is not very plausible.
  Whether or not according to municipal or any other law the Mayor or anyone on Council for that matter has a conflict of interest involving their brother or a family member/friend and their business dealings with the Town is immaterial.  We have to ask ourselves one thing and I have to agree with Councilor Hull's assertion. Would it not be prudent for anyone in such a position of authority to completely and fully disclose any and all relationships affecting the Town regardless of what the law requires?  That speaks to transparency, integrity and the fundamental ability to decipher what is in effect in the best interests of the community that you have been duly elected to serve.  Click the following link to view CBC's video story on the matter: http://www.cbc.ca/player/News/Canada/ID/2341542578/

Thursday, March 7, 2013

Condo & Upper End Home Sales Showing Strength in Early 2013

The month of February saw weaker overall real estate sales than in February of 2011 resulting in decreased year-to-date sales in most area municipalities around our area.
   Through January/February, MLS® single family home sales in the Blue Mountains are up 17% year-to-date with 27 sales this year versus 23 during the first two months of 2011.  Year-to-date sales of single family homes in Collingwood total 45 properties which is equal to last year while sales in Wasaga Beach are up slightly.  As per the graph, all other areas are lagging behind sales compared to the first two months of 2011.
  Sales in the upper price segments of our market have rebounded somewhat this year with 4 sales year-to-date in the $900,000 to $1 million range compared to none in the first two months of 2011.  Additionally, two MLS® sales above $1.5 million have been reported this year versus none through January/February 2011, both of which were in the Blue Mountains.  A property located at the top of Arrowhead Road with a panoramic view of Georgian Bay sold for just over $2 million.  This was the first MLS® sale in our area over the $2 million mark since mid 2011. The other high end sale was a listing of mine in the Nipissing Ridge subdivision, a gorgeous stone and timber frame home/chalet which sold for just over $1.5 million.
  One additional bright spot in our market at the moment is the condominium market.  Year-to-date, MLS® condo sales are up 27% with 47 units having been sold in the first two months of the year compared to 37 sales one year ago.  Resale condominium sales continue to remain strong given the fact that a number of new condo projects are underway as well.  Obviously this form of property ownership in the area has not lost any of its lustre despite the fact that many of the older condominium developments are starting to incur special assessments and or high monthly condo fees to meet their increased maintenance costs.  

Tuesday, March 5, 2013

Area Real Estate Sales Remain Sluggish in February

  Despite more stable winter weather with an abundance of weekend visitors throughout the month of February, area real estate sales softened during the month illustrating the fact that we are still experiencing some uncertain market conditions overall.
  Unit sales reported through the MLS®system of the Georgian Triangle Association of REALTORS® totaled 127 properties, 1 less than sold in February 2012.  Dollar volume for the month of $36.1 million reflected a 7% drop from the same month last year which was due to the fact that there were far fewer sales at the upper end of the market.  Individual sales above $1 million in 2012 totaled 7 properties whereas this year there were only 3.
  Far fewer properties were listed for sale during the month with new MLS® listings totaling 405 properties as compared to 502 in February of 2012, a decrease of 19%.  Year-to-date the number of new MLS®  listings is down 3% with 975 new properties having come on the market since Janaury 1st.  As expected with the decrease in new MLS® listings there has been an increase in the number of expired listings.  The number of expired listings jumped 16% in February resulting in the number of expired's being up 7% year-to-date.  Some sellers may be electing to wait until spring to re-list their properties and or are simply taking a break as they wait for market conditions to improve before putting their properties back on the market.
  Contrary to 2012, we are seeing a somewhat stronger demand for more expensive properties this year.  In the first two months of 2013, sales between $500,000 to $800,000 are up 31% with 17 properties sold.  In the $800,000 to $1 million price range there have been 6 sales compared to just 2 last year reflecting a 200% increase. 
  In my next posting I will review sales across the various municipalities in our area that make up our market.

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Royal LePAGE Locations North (Brokerage)

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