Thursday, March 30, 2017

Making Buyers Fall In Love With Your Home

In addition to being a REALTOR®, I too am a home buyer/owner. Personally I have owned eight homes over the course of my lifetime, not as a speculator but as the provider for my family. These various homes were purchased as the result of either changing family needs or changes in my employment status where I was transferred to a different location including a move to Collingwood, Chicago and others. Every time I bought a home, I knew instinctively when I walked through the door, this is, or could be the "one!" If you are thinking of selling your home you need to know what it takes for a potential Buyer to fall in love with your house.

The Ottawa Citizen newspaper recently publish a very good article titled: "Advice from a REALTOR - Helping buyers to fall in love with your home." Even in this robust market with an absence of houses listed for sale, your property needs to put it's best foot forward in terms of making a favourable impression on buyers. Much of what is contained in this article is pretty simple stuff but far too often it is overlooked by both Sellers as well as the listing REALTOR®.

Not every property needs to be staged and frankly I find that staged homes often look exactly like what one definition of staged said, "contrived for a desired impression" which is exactly how model homes look with fake food and all. Rather, your home needs to convey a look whereby the Buyer(s) could imagine living there.

Often overlooked when getting your home ready for the market are just some basic cleaning and housekeeping tasks. I have been in countless homes where the carpets were dirty, the kitchen counter(s) were cluttered and the same with bathrooms all of which are easy fixes. What about your kids rooms? Does your teenage son or daughter have posters plastered all over their walls some of which might be offensive to some Buyers? Then there is the issue of the beer bottle or ball cap collection. My advice? You are moving, start packing that stuff away now!

When preparing to sell you home, both you and the listing REALTOR® need to take a very objective look at the property. Is there anything evident that would turn off potential Buyers? Too often I find that my REALTOR® peers are reluctant to say anything to their Seller clients about getting rid of things around their home (inside or out) that may turn off a potential purchaser. This also applies to areas of the property that needs cleaning or other or attention. If the owners truly want to sell and for the best price, having an honest and frank conversation about what needs to be done to prepare their home to sell is not offensive, it's doing them a favour.

Not sure what to do to prepare you home for sale? Read my "10 Things to do before you list your home for sale." or Contact Me and I would happy to visit your home and provide you a a no obligation assessment of what should be done to get it sold and for the highest price.

Friday, March 24, 2017

Can Governments Effectively Curb Spiralling Home Prices?

  Hardly a day goes by where you don't read something about today's hyper active real estate market with everybody weighing in on what is causing the ongoing buying frenzy and how long is it going to last?  We've all read numerous articles sighting lack of supply, low interest rates, foreign investors and so on but no one seems able to put their finger on it.  

  One of the top 10 items listed by the Globe and Mail regarding the recent federal budget was housing.  Rising home prices particularly in Toronto have prompted calls for government intervention to curb spiralling price increases. Thankfully, politicians have not jumped on this bandwagon.  I have always found that government(s) can do more to screw up positive economic activity than they can to stimulate bad economic times.  That is not to say that what is happening right now in the housing market is good.  Frankly as a REALTOR® it somewhat scares me.  

  The recent federal budget, includes plans to give Statistics Canada about $40 million over five years to develop and implement a Housing Statistics Framework.  The intent is to gather data that will provide information on sales, the degree of foreign ownership, buyer demographics and the impact on financing etc. which will hopefully permit some reasonable decision making to be made.  In my opinion this is long overdue.  Typically when it comes to reporting on residential real estate, the media's focus is on "average" home prices.  This is an absolutely meaningless number.  No matter what market we are talking about, the average price can be dramatically affected by the mix of sales in any given month.

  In January of this year, the average MLS® residential price as reported by the Southern Georgian Bay Association of REALTORS® was $497,914.  This was a 41% increase over the average residential price of January 2016.  Have prices gone up since last year?  Yes.  By 41%? No!  The mix of sales in any given month can have a major impact on moving the average price up and down.  In January of this year, sales in our area for properties priced $800,000 and over amounted to over $16 million which was 29% of the total dollars sold.  As such, these 11 sales had a profound impact on driving the average residential price higher.  At the same time sales of lower valued properties were down stemming from a lack of inventory listed for sale.

  Hopefully the government's fact finding initiatives through Statistics Canada will facilitate some qualified and quantified decisions to be made about Canada's housing market.  Knee jerk reactions such as a foreign ownership tax, higher land transfer taxes and or other such measures aimed to curb escalating home prices can potentially cause more harm than good in helping Canadian realize their home ownership dreams.    

  In my next post I will discuss how REALTORS® may be responsible for at least some of the run up in home prices.  As always I welcome your comments and feel free to Contact Me to discuss your particular real estate issues. 

Monday, March 20, 2017

Are We Suffering From Housing Hysteria?

   Real estate has always been one of the more popular topics at social gatherings and with current market conditions being what they are, housing sales and prices have become a daily aspect of both social and media agendas alike.

  As a full time real estate practitioner for the past 16 years, I have been trying to come up with one word that best describes what we are seeing in the local housing market and in many major centres across Canada.  That word is "hysteria."  When referred to as a noun, describes hysteria as: an uncontrollable outburst of emotion or fear, often characterized by irrationality, laughter and weeping.

  So let's break this definition down in the context of current real estate market to see if there is some correlation.

  In recent years, many of the major manufacturers that once operated here and offered the higher paying jobs have left.  Subsequently the real estate market across southern Georgian Bay has become very much driven in large part by those looking to buy a property for recreational and or retirement purposes.  In other words its a discretionary purchase, one in which buyers are under no duress to buy and as such they take their time and rarely get into bidding wars.  All that has now changed.  

  In 2016 MLS® sales across southern Georgian Bay were up 15% in terms of units sold and for the first time ever, sales via the MLS® system of the Southern Georgian Bay Association of REALTORS® broke the $1 billion barrier.  Year-to-date 2017 sales to the end of February are equal to last year so we appear to be on the same pace.  At the same time listings are down 22% so when properties hit the market, multiple offers with properties selling over list price is becoming more and more the norm.  A Collingwood home listed at $399,900 recently received over a dozen offers and sold for $517,500, 29% over the asking price.  This is a clear example that Buyers are faced with an "uncontrollable outburst of emotion" with a fear they may lose out when faced with multiple offers combined with the added fear that prices may go even higher if they don't buy now!  

  Sellers and would-be Sellers endure the same emotions.  While they experience positive emotion with respect as to what they might get for their property in this overheated market, they have a fear of selling and not being able to find something else.  They may also have a fear they are selling too soon if prices continue to rise or conversely they may fear that current market conditions might not last and rightly so, meaning the longer they wait to sell, the less they might eventually get. It's a difficult call and if anyone really knew they'd be rich 

  As a Market Value Appraiser, I find the sale of a house in Collingwood for $117,600 or 29% over the $399,900 asking price to be pretty irrational.  As per the definition of hysteria above, the Sellers are no doubt engaged in laughter while the many Buyers that were on the losing end of the multiple offer frenzy over this property are weeping, then again maybe not.  A few years from now the Buyer of this house may be weeping as well if we have a significant market correction and they find they grossly overpaid.

  The point of all is nobody knows for sure.  Currently there is a surge in the demand for homes especially in places like Toronto which is the predominant feeder market for us.  As long as Sellers can liquidate their Toronto real estate for the prices currently attainable there, these cash rich Buyers in our market can well afford to overpay here.

 An article in the Globe and Mail sums up much of what is happening.  Typically the average house price is about three times median family incomes.  In Toronto prices have spiked to eight times family income which is okay in times of low interest rates but many of us remember what happened the last time mortgage rates jumped?

  So what's the best advice?  First, no one knows how long the current run up in real estate values is going to last.  For years we have heard the many prognostications that the real estate "bubble" is going to burst.  At the end of the day buying and selling real estate is nothing more than a business transaction and it's the role of those of us in the business to treat it that way.  Yes it may be your beloved home or your cherished weekend retreat but with conditions such as we are experiencing, hysteria can set in producing some costly mistakes.

  Rudyard Kipling said something to the effect, "if you can keep your head when all about you are losing theirs..... If you are currently looking to buy or sell your real estate, now would be a very good time to heed this advice.

  As always I welcome you comments and questions.  Please feel free to Contact Me without obligation to discuss your real estate needs and or goals.


Tuesday, March 14, 2017

Lack of Inventory Threatens to Slow Area Real Estate Sales

About eighteen months ago I made the prediction that the only apparent threat to slow down sales in the local real estate market was inventory and that day now appears to be approaching.

Unit MLS® sales across southern Georgian Bay in February were down 4% with 174 properties sold versus 181 in February of last year.  MLS® dollar sales for the month posted an 11% gain as we continue to see robust sales activity in the upper price ranges.  Sales over $500,000 totalled 76 properties compared to 46 last year and that is what is really driving the stronger sales dollar volume.  MLS® dollar sales in February were $75.3 million compared to $67.7 million last year.  The trend of declining new MLS® listings continued in February as MLS® listings for the month were down 12% with 240 properties coming to market compared to 274 in February of last year.

  Year-to-date MLS® unit sales as reported by the Southern Georgian Bay Association of REALTORS  (SGBAR) to the end of February totals  285 properties, 1 less than during the same time last year.  MLS® dollar volume of $129.6 million is an increase of 23% over the $105.4 million in sales in February 2016.  This trend can not continue without a boost in available inventory for sale.  Year-to-date, new MLS® listings are down 22% from one year ago.  Through the end of February there have been 408 new listings come to market compared to 522 in the first two months of 2016.   The lack of MLS® listed properties compared to demand has created a seller's market unlike we have ever seen with multiple offers and properties selling above list now becoming quite commonplace.  A single family home in Collingwood priced at $399,900 drew approximately 14 offers and sold in 6 days for $517,500 or 29% over the asking price.

  To the end of February, single family home sales are down 10% with 168 homes sold in 2017 compared to 187 sales a year ago.  Collingwood is showing the largest year-over-year decrease in single family home sales.  A total of 23 homes have sold this year compared to 41 last year, a decline of 44%.  Wasaga Beach is seeing the same trend although not to the same extent as single family home sales are down just 12% for the first two months of this year.  Conversely, single family home sales in Grey Highlands are up 17% and Clearview is up 33% with 24 sales versus 18 last year.  MLS® single family home sales in Meaford have doubled year-to-date with 10 homes sold.  Sales activity for single family homes in the Blue Mountains on the other hand has remained very strong as year-to-date sales of 27 properties reflects a 35% increase over 2016.    

  MLS® condominium sales have remained consistent with last year, 63 units have sold in the first two months of 2017 compared to 62 last year.  Once again the lack on inventory is holding back sales in this segment of the market as well.  On the other hand, vacant land sales have taken a sharp turn for the better.  After a couple of weak years where residential lots were just languishing on the market, sales in 2017 of 43 properties is a 65% increase over 2016.  Almost 50% of the lots sold this year are in the Blue Mountains where there has been an abundance of lots available.  The absence of available housing to buy is no doubt forcing some to choose building their own home as a viable alternative.

  The remaining nine months of 2017 will no doubt prove to be interesting. Spring typically brings with it an upturn in MLS® listing activity and while this will no doubt come about over the next couple of months, I do not believe that we will the magnitude of listings needed to quench then insatiable thirst that appears to exist for southern Georgian Bay real estate.  I hope I am wrong.  The current market cannot sustain itself with the significant imbalance that now exists between demand and supply.  A day of reckoning will come, it always does and a soft landing is better than a crash.

 For a no obligation review of current market conditions as they relate to your home or area property please do not hesitate to Contact Me.

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Royal LePAGE Locations North (Brokerage)

330 First Street, Collingwood, ON L9Y 1B4


Direct: 705-443-1037

Office: 705-445-5520 ext 230


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