"Time is Gold" so this site is intended for the use of past and future clients of Alex & Rodney Litigio for them to read at their convenient time. It will contain up to date pricing trends of houses as well as links to articles about your housing questions, so bookmark it. Also visit the Century 21 Regal Realty Inc. website or simply call or text Alex at 416 887 5193. Feel free to share this with your friends.
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Use the above chart to guide you with whatever plans you have for 2016 in pursuing your dreams. The chart above shows a rising trend from January to May. Then it dips during the summer months when children are off school and families goes on vacation.
The above chart shows the monthly average resale home prices for the last 4 years. Needless to say, it gives you an idea as to when to buy or sell. You may use these information in conjunction with consultations with your real estate agent.
There are other factors that may affect the timing of when to go into action with your plans such as:
Curb appeal- if you feel properties will show better when the snow is gone then spring may be a good time for you
Government policy- starting next month the minimum down payment (5%) to buy will be raised to 10% for the amount in excess of $500K.
Interest rates- how important is it to you? If yes, then NOW is the word as rates are at an all time low
Schooling- the school year end in June. Is it okay with you to move children between schools when you move.
Help is only a phone call away and it is FREE. Speak with you real estate professional. Note the month when the rising trend in prices starts which is the beginning of the new year.
Excerpted from The Globe and MailToday, a mere 27 of every 10,000 mortgage borrowers are behind 90-plus days on their payments. (Mark Blinch For The Globe and Mail)
ROBERT McLISTER
Will mortgage rates dip to record lows in 2016?
ROBERT McLISTER
Special to The Globe and Mail
Published
Last updated
Mortgage rates weren’t supposed to make record lows in 2015, not if you asked economists and the Bank of Canada two years ago. But they did. And despite all the chatter about the first U.S. rate hike since 2006, Canadian rates could do it again in 2016.
But interest rates won’t be all that’s changing in the coming 12 months. Here are four mortgage trends you need to watch in 2016.
More missed payments?
Seemingly every year the government throws new rules at the mortgage market, lending gets tighter and the housing market gets safer. But one thing Ottawa can’t control is world economics. Despite manufacturing gains from a cheap loonie, global growth is slowing. That and plunging oil means more Canadians could be out of work, and when people lose jobs, people miss mortgage payments. Today, a mere 27 of every 10,000 mortgage borrowers are behind 90-plus days on their payments. While higher unemployment won’t lead to an epic mortgage default spike in 2016, a 0.27-per-cent arrears rate may not be sustainable.
Lower rates offset higher rates
Barring a surprise economic rebound, mortgage rates could dip to fresh all-time lows in 2016. But they won’t be as low as they could have been. That’s because Ottawa is raising government guarantee fees and making banks hold more capital in case mortgages go bad. On top of that, investors are demanding higher returns to compensate for perceived risk. That will make it more expensive for lenders to sell mortgages to investors and to hold mortgages on their balance sheets. As usual, banks won’t eat this cost. They’ll pass it right along to Joe Borrower, who will pay as much as one-tenth of a percentage point more for a mortgage. That’s as much as $1,400 more interest over five years on a $300,000 mortgage.
Hot and cold housing markets persist
The national average home price just hit another record, but take Ontario and British Columbia out of the mix and prices were actually down 4.7 per cent versus last year. Canada has a two-temperature market depending on the geography. Expect higher down payment requirements to put barely a dent in white-hot Toronto and Vancouver, while weaker markets will see a noticeable dip in higher-end home sales. If you’re refinancing in these weaker markets, expect more conservative appraisals in 2016, especially on homes over $500,000.
A mini private lending renaissance
Government mortgage tightening has made banks pickier about who they lend to, a boon for lenders who specialize in riskier borrowers. Private lenders, in particular, could have a big year. Most notably, they’ll have more money to lend as new regulations make it easier for private mortgage investment corporations to raise capital. This means more competition for borrowers who can’t qualify at a bank, pushing down private lending rates and raising the amount private lenders will lend, relative to home values. It’ll also encourage more bundling. That’s where you get a regular mortgage for 75 per cent to 80 per cent of your home value and add a second mortgage for up to 90 per cent, all without the need for default insurance (which is normally required when your equity is less than 20 per cent). Concerned policy-makers will watch this so-called “shadow lending” activity with eagle eyes in 2016.
Finance Minister Bill Morneau holds a media availability to discuss various government issues in Ottawa, on Wednesday, Dec. 9, 2015. THE CANADIAN PRESS/Adrian Wyld
OTTAWA -- Finance Minister Bill Morneau is increasing the amount homebuyers must put forward as a down payment on houses over $500,000.
It's a move designed to cool off the booming real estate market in some of Canada's biggest cities.
Homebuyers will have to put 10% down on the portion of the price over $500,000.
Anything under $500,000 will still only require a 5% down payment.
"This will impact 1% or less of the market," Morneau told a news conference.
Morneau says the new measure is aimed at expensive homes while still encouraging first-time homebuyers to get into the market.
The stiffer down payment requirement is one of three new measures targeting the stability of the housing market.
Financial institutions will face new capital requirements to keep pace with the growing risk of the real estate markets they bankroll.
And Canada Mortgage and Housing Corp. will change the fees it charges issuers of mortgage-backed securities.
"The government's role in housing is to set and maintain a framework that is equitable, stable and vulnerable," Morneau said.
The Finance Department has tightened mortgage rules on several occasions in recent years -- along with requiring stricter enforcement and management of loans -- in an effort to weed out marginal buyers and excessive speculation in the housing market.
One of the changes saw the federal government reduce the maximum amortization period for government-insured mortgages to 25 years from 30 years.
The Bank of Canada has also expressed concerns that too many Canadians risk becoming over-extended, especially once interest rates begin to rise.
When people renovate their homes, they often factor in whether those renovations will add to the resale value.
While few homeowners recoup the full cost of home renovations, updated bathrooms and kitchens, plus other improvements, can help you sell your home more quickly, and for more money. The added bonus is if you do the renovations while you live in the home, you get to enjoy the renovated spaces for at least a little while before it goes on the market.
But some renovations can actually damage your home's value. These supposed improvements not only add nothing to your bottom line, they may make your home less attractive to potential buyers and bring down its value.
How much they hurt will depend. If the home is in a highly desirable location, potential buyers may be willing to overlook purple walls and an ugly kitchen counter, or they may be willing to do their own renovations. In a subdivision where many similar homes are for sale, the one with bad renovations may linger unsold.
In general, real estate agents and design experts advise keeping resale in mind when you renovate, especially if you don't plan to stay in the home forever.
"Renovations are always best done when they're neutral and tasteful," says Gea Elika, principal broker of Elika Real Estate in New York and a regional director of the National Association of Exclusive Buyer Agents. "Don't personalize it if you plan on selling it."
According to Remodeling magazine's 2015 Cost vs. Value report, the home renovations that bring the greatest return when you sell are a new entry door (which brings you 101.8 percent of what you spend on the national average), the application of manufactured stone veneer (92.2 percent) and a garage door replacement (88.4 percent). The ones with the smallest return are a sunroom addition (48.5 percent), a home office remodel (48.7 percent) and a bathroom addition (57.8 percent).
The value of some features varies by geography. A swimming pool, for example, is more desirable in Florida or Hawaii than in Minnesota or Maine, but even in Florida some buyers might not want the added maintenance cost.
In Pittsburgh, where flat yards are rare, a home with a fabulous flat yard may sell quickly no matter what has been done to the interior. "You could get away with doing certain things to a house here that you couldn't in Florida," says Kevin Brown Jr., president of Praedium Real Estate Services in Pittsburgh and a regional director of NAEBA.
Here are six renovations that may hurt your home's selling price or keep it on the market longer than it would be otherwise.
Converted garage. Some homeowners see converting a garage as a cheaper way to add more living space than building an addition – and it is. But many buyers would prefer a garage, especially in cold and rainy climates. "That room will always feel like a cold garage," says Sabrina Booth, an agent with Redfin in Seattle. "A garage is much more valuable than an extra room in Seattle."
Eliminating a bedroom or powder room. In older homes, combining smaller rooms in the public living space might add to the value because today's homeowners like large, open spaces. Eliminating a powder room, however, is a bad idea. And turning a bedroom into a master closet or combining two bedrooms to create a large master suite may not pay. "You've eliminated a whole living space," Brown says.
Heavy personalization. We all want to make our homes into our signature spaces. But some unusual features may turn off potential buyers. Matt Francis, branch manager of Better Homes and Gardens Mason-McDuffie Real Estate in the San Francisco Bay Area, once showed a $1.5 million home with a custom kitchen that had two college dorm refrigerators instead of a full-size fridge and no freezer. "Anything that is too personal or too specific would not appeal to the broadest pool of buyers," Booth says.
Too much color. If you love color, paint the walls of your home all the hues of a rainbow – and then paint over them in a neutral color when you're ready to sell the place. Be aware that aqua appliances or neon tile may not appeal to most buyers. "Everybody has an opinion about a color. Nobody has a strong objection to neutral color," Booth says. "Even though they can paint over it, their impression of the house is negative."
Adding a pool. In some neighborhoods in warm states such as Florida, Hawaii, Arizona and California, pools are expected, and adding a pool to homes in those neighborhoods is unlikely to scare off buyers. In cooler climates, where pools have to be opened and closed every season, a pool may be seen as more of an expensive hassle than an asset.
Renovations without permits. Nearly every municipality requires permits for major (and sometimes minor) renovations. That's partly to ensure that all home improvements are up to code. Savvy buyers will ask whether renovations were done with permits (requesting copies of them is a good idea), and some cities require inspections before homes are sold. Buying a home with unpermitted work can cost later if the city requires the work to be torn out and redone or levies a fine.
Forget working. The real way to accumulate wealth is to buy a single-family house in Toronto, and wait.
OK, that’s bad advice. But given what’s been going in Toronto’s housing market, you can be forgiven for coming to a conclusion like that.
If you own an average single-family home in Toronto, your net worth has been growing by about $8,500 a month over the past year.
According to the latest numbers from the Toronto Real Estate Board, a single-family home in the 416 now averages $1,053,871, up 10.7 per cent from a year ago. Break down that increase by month, and you get around $8,500.
But in yet another sign of the growing gap between condos and houses, Toronto’s condo dwellers aren’t seeing anywhere near that kind of wealth growth.
The average Toronto condo is now worth $418,603, 5.6 per cent more than a year ago. That works out to a wealth gain of $1,925 a month. Condo owners are growing their wealth at less than one-quarter the pace of homeowners. In the 905 region around Toronto, condo owners are adding only $637 per month in wealth.
Condos just aren’t seeing the same rate of appreciation. While standalone homes in Toronto have grown by 34.8 per cent in price over the past three years, condo prices have gone up only 10.9 per cent in that time.
Say hello to the new face of wealth inequality in Toronto, where owning a back yard is a pass to riches, and owning a balcony is a pass to condo fees.
But so what, you may ask. This value is tied up in the home, it’s not like people can live off it.
Well, yes and no. A growing number of Canadians are taking out home equity lines of credit against the value of their house. The higher the house value, the more they can borrow, and some experts are getting worried Canadians have borrowed too much this way.
And there is also the wealth effect: People change their behaviour when they feel richer, generally buying more than they otherwise would.
This effect seems to be strong in Canada right now. It certainly helps to explain why consumer spending held up in Canada this year despite all the talk of recession, and why imports to Canada are strong even while exports are flailing.
So the money may be stuck in your home, but its effects on the economy are real.
Here’s a breakdown of how much wealth Toronto-area residents are accumulating per month off their real estate. Single-family homes in Toronto (416):
$8,491 in wealth per month (avg. price $1,053,871, up 10.7 per cent in a year) Single-family homes in GTA (905):
$6,404 in wealth per month (avg. price $732,852, up 11.6 per cent) Condos in Toronto (416):
$1,925 in wealth per month (avg. price $418,603, up 5.6 per cent) Condos in the GTA (905):
$637 in wealth per month (avg. price $307,295, up 2.2 per cent)
