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Archive for the ‘Finances’ Category

The latest housing sales figures point to a stable market

Friday, December 10th, 2010 by Dan Cooper

Dan Cooper - Housing Cost

The Canadian Real Estate Association (CREA) recently lowered its forecast for the volume of home sales, primarily because the third quarter of this year was weaker than expected. However, the association is saying that sales activity has gained traction and that the improving momentum suggests the resale housing market is stabilizing. It’s just not as strong as they thought it would be.

“Lackluster economic and job growth, muted consumer confidence and the resumption of interest rate increases are expected in 2011,” CREA states, adding that against this economic backdrop national home sales are forecast to be down by 9 percent. While the sales volume is expected to soften, average prices continue to rise.

We continue to see this in Oakville and Burlington. According to the latest figures from The Oakville, Milton and District Real Estate Board, the number of sales in Oakville last month was down slightly from November 2009, but the average house price was up by 1 percent. The average house price last year was $590,970 compared to $598,675 last month.

Prices for the year to date show a larger jump – 7 percent compared to the same 11-month period last year. The average selling price for the 11 months last year was $526,909 compared to $561,650 this year. In Burlington, the average price for homes sold last month was $388,088.

According to Gregory Klump, CREA’s chief economist, “Housing demand and supply is stabilizing. That’s good news for home buyers, who will feel less hurried to make an offer than they did when transitory factors ignited housing demand in early 2010. It’s also good news for home sellers, who will feel more confident about price stability now that the housing market has become balanced.”

Klump goes on to say that interest rates are widely expected to remain low for some time due to recent downward revisions by the Bank of Canada to its outlook for economic growth and inflation. Consumer sentiment, he says, will likely remain under pressure until economic prospects improve meaningfully.

“In the meantime, many households will focus on paying down their debts before the Bank of Canada resumes hiking interest rates next year. Economic uncertainty is likely to keep potential home buyers in a cautious mood, so the continuation of low and stable interest rates is unlikely to cause housing demand or prices to swell,” Klump concludes.
While Klump speaks to a national picture, you must remember that Oakville tends to be in a bit of bubble that often bucks the national trend. As one of the most desirable communities in Canada in which to live, real estate appreciation tends to be stronger here than in many centres across Canada.

The key to selling your home is to choose an experienced realtor who will market your home effectively. Innovative advertising, knowledge about the marketplace, commitment and exemplary service differentiate the Dan Cooper Real Estate Team. The result is that we are achieving accomplishments that illustrate the Dan Cooper difference. We are the Number 1 Team in Canada for Royal LePage, which is a testament to our ability to sell homes fast in the Oakville and Burlington areas. In fact, we have been the Number 1 team for seven of the past 10 years.

Dan Cooper is an award winning Broker with Royal LePage Real Estate Services Ltd., Brokerage – the Number 1 Royal LePage Team for Canada in 2009. He can be reached at 905.338.3737, direct line at 905.849.3303 or through his innovative and interactive website at DanCooper.com. Be sure to catch the Dan Cooper Real Estate Series on DailyWebTV.com. For his free booklet How To Sell Your House For Top Dollar – Fast! or his Guide to Oakville Real Estate, please call the Dan Cooper Team.

Posted in Burlington Real Estate, Finances, Interest Rates, Marketing, Mortgage, Oakville Real Estate, Real Estate, Real Estate Market, Statistics | No Comments »

Experts are predicting cautious optimism in our economy

Wednesday, December 8th, 2010 by Dan Cooper

The Ontario Home Builders’ Association held its annual Economic Forum in Toronto last week where a panel of economists and experts outlined their predictions for the housing and real estate industry in 2011.

The important message was that these economists held cautious optimism for the coming year and felt that interest rates will remain stable, which bodes well for anyone planning to buy their first home or perhaps moving up into something larger and having to carry a mortgage.

According to Douglas Porter, deputy chief economist for BMO Capital Markets, consumer confidence is good; that while household debt is still on the high side, net worth is still in a favourable position. While the manufacturing job market has weakened in Ontario, employment across Canada has improved. Consumer confidence and a good national employment picture mean interest rates should remain stable for the next 18 months, he predicts. We’ve seen a few Bank of Canada rate increases over the summer, but as long as the U.S. Federal Reserve holds steady, there will be no reason to increase rates here, he maintains.

Pascal Gauthier, senior economist with TD Bank Financial Group, has similar opinions explaining that the economic recovery has entered a second phase with much more subdued but more sustainable economic growth. The result is low inflation and low interest rates.

“We think the Canadian dollar can hold and even rise above parity against the US dollar over the next 12 to 24 months … We forecast the Bank of Canada’s will resume raising its overnight rate (currently at one percent) by mid-2011, to reach two percent by year-end 2011, which is still low (zero in real, inflation-adjusted, terms) and stimulative for the economy,” Gauthier says.

He goes on to explain that longer term Government of Canada bond yields (e.g. five-year) will also rise modestly, which bodes well for typical mortgage borrowing rates (e.g. posted fixed five-year) which are anchored to these rates. This will mean that affordability should remain good on a financing basis.

As we move into the holiday shopping period, CIBC World Markets has an interesting take on the consumer situation. In one of its latest reports, the bank states that in the latest quarter shoppers hit the stores, as reflected in a 3.5 percent uptick in consumption activity. The drop in the savings rate to 3.3 percent is still lower than what we are seeing in the U.S., which indicates that Canadians are feeling less guarded about the economic picture. Domestic consumption has been supported in recent months by rising wages and ongoing hiring.

So whether you are shopping for gifts or thinking of making that larger investment in the near future – buying a home – there appears to be borrowing stability in the near future. When it comes to making that major investment – real estate – the key to selling your home quickly and for top dollar is to deal with a broker who has a proven track record and is a consistent top performer.

Innovative marketing initiatives and investment, knowledge about the marketplace, commitment and exemplary service differentiate the Dan Cooper Team. The result is that we are achieving accomplishments that illustrate the Dan Cooper difference. We are the Number 1 team in Canada for Royal LePage, which is a testament to our ability to sell homes fast in the Oakville and Burlington areas. In fact, we have been the Number 1 team for seven of the past 10 years. This is an accomplishment that does not happen by accident, but rather by design. Our dedication and commitment to selling your home, along with superior marketing strategies, have time and time again helped our clients sell their homes quickly and for top dollar.

Dan Cooper is an award winning Broker with Royal LePage Real Estate Services Ltd., Brokerage – the Number 1 Royal LePage Team for Canada in 2009. He can be reached at 905.338.3737, direct line at 905.849.3303 or through his innovative and interactive website at DanCooper.com. Be sure to catch the Dan Cooper Real Estate Series on DailyWebTV.com. For his free booklet How To Sell Your House For Top Dollar – Fast! or his Guide to Oakville Real Estate, please call the Dan Cooper Team.

Posted in Buying, Finances, Interest Rates, Mortgage, Planning, Real Estate, Real Estate Market, Statistics | No Comments »

What the October real estate stats are telling us

Thursday, November 4th, 2010 by Dan Cooper

Dan Cooper - Housing Cost

The volume of house sales in the GTA was down last month compared to October 2009, but year to date we are still showing modest growth. In fact, the annual change in sales and average selling prices has been quite uniform across the GTA as the market has balanced out from record sales in the second half of 2009 and first few months of 2010.

Despite the slowdown in activity, average prices are still on the rise – up five percent last month compared to October 2009. “The average selling price in the GTA has continued to grow relative to 2009 because home ownership has remained affordable,” says Jason Mercer, the Toronto Real Estate Board’s Senior Manager of Market Analysis. “A household earning the average income in the GTA can comfortably afford the mortgage payments associated with the purchase of an average priced home.”

Oakville followed a similar track with sales volumes, dropping by 34 percent in October compared to the same month last year. But perhaps for the first time Oakville did not outpace the rest of the GTA, recording a dip in the average price by eight percent. Last month the average house price was $550,636 compared to $596,694 in October 2009.

This is a bit of an anomaly for Oakville, which up to now has seen average home prices continue to climb. I believe a significant factor that depressed real estate prices here was the power plant fight. The fact that homes in South-East Oakville were plastered with Fight the Power Plant signs undoubtedly scared away many buyers. I know for a fact that real estate in the South-East area virtually dried up during that campaign. Taking those homes out of the equation would certainly distort the October price figures.

Having won that fight and with the power plant off the table, I fully expect South-East Oakville will bounce back in the market and that we will see average home prices begin to recover quite rapidly. In fact, interested buyers who had been holding off their decisions to see what the outcome would be in that power plant battle will likely create something of a boom in the South-East section.

Year to date, Oakville had a respectable year with sales volume down only five percent and the average sale price up seven percent compared to the first 10 months of last year. In Milton, the first 10 months of the year saw volume down only four percent and the average sales price up by 13 per cent. Comparing October with the same month last year, the sales volume in Milton was down 28 percent but the average price was up seven percent – $379,843 compared to $356,030 last October. The Burlington average price was $389,003 for last month.

“The outlook for mortgage rates and income growth over the next year is favourable. The average home selling price could increase moderately next year and remain affordable for the average GTA household,” according to the Toronto Real Estate Board. I would have to add that with the power plant no longer an issue, we will see Oakville house prices rise quickly and outpace the rest of the GTA.

Choosing an experienced realtor who will market your home effectively is the key to selling your home quickly and for top dollar. The Dan Cooper Team has a proven track record through market knowledge, innovative marketing and superior client service. This is what has made us the Number 1 Team in Canada for Royal LePage for seven of the past 10 years.

Dan Cooper is an award winning Broker with Royal LePage Real Estate Services Ltd., Brokerage – the Number 1 Royal LePage Team for Canada in 2009. He can be reached at 905.338.3737, direct line at 905.849.3303 or through his innovative and interactive website at DanCooper.com. Be sure to catch the Dan Cooper Real Estate Series on DailyWebTV.com. For his free booklet How To Sell Your House For Top Dollar – Fast! or his Guide to Oakville Real Estate, please call the Dan Cooper Team.

Posted in Buying, Finances, Milton, Mortgage, Oakville, Oakville Real Estate, Real Estate, Real Estate Market, Selling, Statistics | No Comments »

Should you take a long-term or variable mortgage rate in these uncertain times?

Monday, September 13th, 2010 by Dan Cooper

Last week the Bank of Canada went ahead and raised its benchmark interest rate for the third straight time – despite predictions from many experts who said the bank might hold pat due to the fragile recovery. Even a plea from Premier Dalton McGuinty not to raise its overnight rate went unheeded by the bank.

Bank Governor Mark Carney, however, did leave room to pause at his next scheduled decision when he explained that while borrowing conditions remain “exceptionally stimulative,” the overall economy climate is fraught with “unusual uncertainty.” Carney raised the overnight rate by a quarter percent to 1 percent, claiming that future moves will depend on global developments and how they affect Canada’s economy.

The sputtering U.S. economy continues to be the number one risk to the global and Canadian recoveries. Having said that, the bank is downplaying the effect the global turmoil is having on Canada’s expectation for a 2 percent annual growth rate in the second quarter. In the future, the bank says consumption growth will “remain solid” and business investment will “rise strongly”. That’s because investors are looking for safer investments such as bonds, which is pushing borrowing costs down and helping consumers and companies.

What does this mean for the real estate market? The Conference Board of Canada waded into the debate the same day the bank announced its rate hike, saying there will not be a “free fall” in the housing market, but rather a pause in what has been a period of rapid increases.

“The fundamentals of our economy remain sound,” Mario Lefebvre, director of the Centre for Municipal Studies, told The Globe and Mail. “Contrary to the United States, this country’s labour market has rebounded from last year’s recession. Interest rates, while rising slowly, remain very low. This market will pause, but it will not nosedive – in contrast to the housing market south of the border, which is still battling a large inventory overhang that should keep it rebounding promptly even if employment were to rise swiftly.”

The question for many homeowners and buyers is it a good time to negotiate a long-term mortgage rate or are variable-rate mortgages the way to go? For the answer, I asked one of my close partner experts for the answer – Jim Panasiuk of The Mortgage Department in Oakville.

“Rates are on the rise and fixed-term rates are still at all-time lows, so I think the way to go is to lock in for a longer term, such as five years,” Jim advises. “The first-time home buyer especially should consider the fixed-rate mortgage deals that are available in order to avoid the possible rollercoaster ride with interest rates, thereby protecting themselves from rate fluctuations that will impact their mortgage payments.”
For the first-time buyer, Jim further explains that many “have qualified at the limit of their ability so taking a chance with a variable-rate mortgage at this time is risky.”

Jim offers sound advice in these uncertain times, but the bottom line remains that any time is a good time to invest in real estate. There are always highs and lows, but over the long term, real estate appreciates. Even in a soft selling market, you may be facing lower offers for your existing home, but you will find great opportunities for your new home.

The key is to work with a broker who knows the market and has a track record for selling homes quickly and for top dollar. The professionals at the Dan Cooper Team have such a track record, which has lead to our achieving the Number 1 Team in Canada for Royal LePage for the seventh time in the past 10 years.

Dan Cooper is an award winning Broker with Royal LePage Real Estate Services Ltd., Brokerage – the Number 1 Royal LePage Team for Canada in 2009. He can be reached at 905.338.3737, direct line at 905.849.3303 or through his innovative and interactive website at DanCooper.com. Be sure to catch the Dan Cooper Real Estate Series on DailyWebTV.com. For his free booklet How To Sell Your House For Top Dollar – Fast! or his Guide to Oakville Real Estate, please call the Dan Cooper Team.

Posted in Finances, Interest Rates, Mortgage, Real Estate Market | No Comments »

Blame the decline in home sales on the harmonized sales tax

Wednesday, August 25th, 2010 by Dan Cooper

As predicted, the pace of home sales slowed in July as consumers adjusted to the new harmonized sales tax. Coupled with the fact that interest rates were rising, the rush to buy homes prior to the HST coming into effect on July 1 resulted in an overheated market in May and June. But this current slowdown in the market is expected to be short lived.

Earlier this month Jeff Mahannah, President of the Oakville, Milton and District Real Estate Board, said, “Sales transactions are down for July, but overall for the year-to-date we are on par or are observing a slight increase in transactions when compared to 2009. What I anticipate, once the public has time to adjust to the HST and realize that interest rates are still affordable, is an increase in activity in sales transactions in September.” This is what he is talking about. Last month residential sales for Oakville were down by 48 percent compared to July 2009 and the average sale price – $505,999 – decreased by 0.2 percent. However, year-to-date sales were still up by 5 percent and the average sale price was up by 13 percent.

In Burlington, the story is quite similar. “July was certainly a quiet month for sales,” said Joe Ferrante, President of the Realtors Association of Hamilton-Burlington, “but it was not at all unexpected. Despite the slower sales in July, our year-to-date sales are still up 10.7 per cent over this time last year.” The average price of freehold residential properties sold in Hamilton-Burlington in July was $329,317, an increase of 5.5 per cent over July last year. In the condominium market the average price of condominiums in July was $237,304, an increase of 1.6 per cent over July 2009. “We have a good inventory of listings,” Ferrante explains, “which makes Hamilton, Burlington and our outlying areas such a great place to buy real estate right now.”

Whether it is a slow market or an overheated market, each brings particular challenges of their own and the key to making the best deal possible is to work with a broker who has a proven track record and is a consistent top performer – someone who you are confident will be able to sell your home quickly and for top dollar. Innovative marketing and investment, knowledge about the marketplace, commitment and exemplary service differentiate the Dan Cooper Real Estate Team. The result is that we are achieving accomplishments that illustrate the Dan Cooper difference. We are the Number 1 team in Canada for Royal LePage, which is a testament to our ability to sell homes fast in the Oakville and Burlington areas. In fact, we have been the Number 1 team for seven of the past ten years. We were also named Best Real Estate Agent and Best Real Estate Team in North Oakville Today’s annual Readers’ Choice Awards. The Readers’ Choice Awards are as grassroots as you can get, and being named Number 1 for both agent and team are proof that we are having a significant impact right here in our own community.

Dan Cooper is an award winning Broker with Royal LePage Real Estate Services Ltd., Brokerage – the Number 1 Royal LePage Team for Canada in 2009. He can be reached at 905.338.3737, direct line at 905.849.3303 or through his innovative and interactive website at DanCooper.com. Be sure to catch the Dan Cooper Real Estate Series on DailyWebTV.com. For his free booklet How To Sell Your House For Top Dollar – Fast! or his Guide to Oakville Real Estate, please call the Dan Cooper Team.

Posted in Burlington Real Estate, Finances, HST, Oakville Real Estate, Real Estate, Real Estate Market, Taxes | No Comments »