The Bower Blog

Why we're Different than the States

There has been much in the medias as of late describing the state of the economy.   To be sure, there are more properties on the market and homes are taking longer to sell, but this is a sign of a healthy market. Below are the facts and why we are different than our friends south of the border- borrowed this morning from my esteemed colleague, Duncan.

1.  Subprime mortgages represent less than 5% of our market, NATIONALLY.

2.  Foreclosures or power of sales (banks taking the property back) occur in about one quarter of one percent of mortgage transactions in this country.

3.  Canadians have more equity in their home and less debt than our U.S. neighbours.

4.  Speculation has played little or no role in existing home sale in Ontario.

5.  The fundamentals of our economy are quite solid.

6.  Of the G8 countries, only Canada is expected to show growth in 2008 and 2009.

7.  The Canadian banking system is one of the best in the world, relying more on old-fashioned lending than innovative financial products geared toward profit.

8.  The Canadian job market is stronger than the U.S. adding more than 200,000 jobs so far this year.

9.  Interest rates remain stable and low.

10. Housing values in Ontario major centres did not experience serious double-digit price appreciation year after year for an extended period.

11.  Our markets were characterized by stable, healthy growth.  Immigration continues to play a key role in housing markets.  Between 2001 and 2006, more than 1.1 million immigrants came to this country, with about half settling in the province of Ontario.  Immigrants tend to purchase a home within the first five years of living in Canada.  Real estate is cyclical.  There will be peaks and valleys.  The more restrained the peak, the more modest the valley. 

With all the media attention to the economy, we will soon see our own economy for what it is; stable, healthy and a great time to purchase. 

Pulling Out the Stops

We have to be dilligent in our marketplace right now.  Homes are taking longer to sell so we have to come up with ideas on how to best get the word out there and market effectively.  I've spoken about how last year, all we had to do was breath, put a property on the market and you were guaranteed an offer or two or ten. 

Today I had an open house; the weather was precarious so I thought I would call everyone that had shown this property and advise them the seller was adjusting their price on Monday morning and they had the inside track to this reduction.  I left messages for some agents and others had their phone numbers on their business card; consequently I was able to contact them directly. 

It's very interesting the attitude of some people; for the most part, people have no solutions to objections.  Price is too high?  Try an offer; we never know what a seller's bottom line is until an offer is in front of them.  Property has a pool? I have a quote to fill it in.  Single person, can't afford?  Then why was this home shown in the first place?  Honestly, I don't get objections.  I believe some American President said it, "There are no problems just challenges." I like that.  We all have to come up with solutions to objections.  I'm the first to admit, I'm not quick on my feet but when I'm able to process an objection and think it through, there are answers to everything....everything.  Just think it through and do our job. I love the Geico commercials, "I'm one with the dance; that's how I roll".  Anyway, that be me. 

When the going gets tough, the tough, well, you know.....

I've read with a great deal of interest the state of of economy.  It's my job.  The publications I seek are Canadian Business, Money Sense and periodically newspaper articles.  There has been much said about the sky falling, etc.  I spoke with an agent yesterday and she relayed a story about a broker down in St. Catherines.  They had their weekly meeting and the broker's statement was, "Okay, so what we recommend as your employer is, don't spend money on cars, houses, new appliances, new gadgets, etc......the bottom line is, given the current market conditions and the fact that most of you are ill-equipped to sell real estate, only 50% of you will be here next year.  Like they say at ING....save your money."  I'm sure that was a sobering meeting with the agents. 

SO here's what I think: one truth we have in our industry is that most agents who have been licensed over the past 10 years have not seen any kind of fluctuation in the marketplace.  You put a home on the market and it sold, sometimes regardless of price, location, condition etc.  It just sold.  There's a cockiness about this kind of selling.  There ends up being an assumption it will sell and that's that.  Anyone who has experienced the 1983, 1990-1994 market knows that real estate life can change in a flash.  I remember the day, month, hour when the phones stopped ringing in 1990.  So, what do we do?

As agents, we keep educated about our market.  We have frank discussions with our home owners about pricing, length of time on market and buyer agent feedback.  We spend money are marketing.  Yes, that's right.  If they are priced reasonably for the market, we hire professionals to take photos and provide nice marketing material.  We owe it to our sellers.  90% of the homes we sell are first internet generated.  Nothing is more frustrating to the public than to look at a home's interior and not be able to tell what it is. 

As home buyers and sellers, I need to keep you informed.  Yes, I do.  That is my job.  There are changes but we live in a huge city.  There are always people moving; some need bigger, some are downsizing, some are transferring and some divorcing, etc.  Right now, I have 4 properties on the market; it is taking longer to sell them, but they will sell.  We just have more competition right now and buyers are able to be more discriminating.  I am a dog with a bone when I have a listing.  I will pull out all the stops to get a home sold.  IT'S my JOB to do so. When I am working with a buyer, it is my job to guidedog you through this process.  I have extensively researched buyer and seller guides.  It helps you through a complicated process, concisely and without a lot of bunk.  Like Joe Friday said in Dragnet, "Just the facts, ma'am". 

There is not a storm brewing; we have to exercise caution in our spending habits to be sure.  The head of the Bank of Canada indicated we will have marginal growth this year and it will be stable next year.  The rates are amazing; My mortgage has gone down over 80$ in a month (variable rate).  There are wonderful buys out there, there are great opportunities and I'm optimistic about my city and my country. 

My baby all grown up

Love my son; I must be getting older because I've started musing about him, when he was little, when he was a pre-teen, when he was a teenager (and kidnapped by aliens for approximately 3 years) and also what a neat, young man he's become.

When he was little, we'd get him to say his name over and over again.  Let me explain:  he couldn't say "S" and his name is Skyler Scott, so he'd be "Dyler Dott".  What's your name?  "Dyler Dott"  What did you say your name is again?  "I tole' you, Dyler Dott".  It was a riot.  When he was a pre-teen he went through that thing where he still wanted to be tucked in at night but God forbid if I were to ever kiss him in public, or heaven forbid, speak to him, or sing a song in a grocery store, otherwise he'd die of embarassment.  Then there were the teen years.....enough said about that.  Loved him, wasn't crazy about his actions.  On Wednesday, we spent the day together.  I was really tired and was moving some leftover furniture up to his place in Milton for his new groovy bachelor pad.  I really enjoyed our time together; for once, I just listened, fatique will do that and didn't pass judgement over anything he said.  I have to step back on that some time.  He's a man now, 25 years old, but old habits still exist and I want to counsel , protect and advise and not have him make the same mistakes I did.  The honest truth is, he has to make mistakes.  This is what allows him to grow, learn and forms his character.  His character is beautiful; he is kind and loving and absolutely loves kids.  He has his dad's patience and my sick sense of humour.  He's beautiful inside and out. I love him from the bottom, up.

My priviledge, my honour to serve

Over the past few months, I've thrown my support behind the Teresa Group (www.TeresaGroup.ca).  The Teresa Group is Canada's oldest community-based charitable organization specifically serving children affected by HIV and AIDS and their families.  The Teresa Group offers practical assistance and emotional support through professional staff and trained volunteers.  They also have a "fundraising" team, which of course is where my passion lies. 

A little bit of background of this fine organization: in 1990 there were five families that sought assistance through the Teresa Group.  Client numbers have increased over the year and we now serve approximately 350 families and 650 children.  Since that time, a dedicated team of professional staff have been providing compassionate frontline services to these hundreds.  The pupose and essentionally the mission statement is to provide practical, innovative programs and assistance and emotional support to children and their families affected by HIV and AIDS.

So, funny enough, right now I'm not asking for money like I usually do.  I've recently found out that most of the families the Teresa Group serves are at the poverty level or very low income.  They have a little clothing bank and are in desperate need of new or gently used clothing.  Of particular importance is anything, ANYTHING for children, babies, tweens and teens.  Woman's clothing, coats, hats, mits are also welcome.  I'm going through my stuff now and it's amazing how much I've amassed over the year and of course, no longer wear.  Some mom's are going into the work force, so gently used suits are welcome, too.  Of particular note, and mainly because I've been working with people recently who have new babes, cribs, strollers, car seats and any baby paraphenelia is of course, welcome.  A couple things you can do: 

Drop stuff off directly to The Teresa Group, 124 Merton Street, Suite 300 (between Yonge and Mount Pleasant) and/or:

call me and I'll pick up your stuff.  Whatever you have, it's welcome!  Cheryl  416-486-5588

THANKS BEFOREHAND!!!!!

Some New Realities....

There has been much talk about the Global economy as of late in the media.  Essentially, as a realtor, I have to be on top of this information and how it may affect my sellers and buyers.  Most of my folks are saavy enough to have knowledge of the market conditions, if only by the accounts in the media.  My first time buyers and sellers rely heavily on what I may say and how to direct them.  Some pressure to be sure.  As always, it's important to keep educated on events, market conditions, rates and lending policies. Unfortunately, there are some things we just cannot control, however.  Take this for example:

I sold a property 3 1/2 months ago.  We reached a price that was about $2,000 to $5,000 below what other properties had sold for in the building.  It was a condo.  In the course of waiting for the closing, there have been about 4-5 sales that were more in line with our sale and below.  When the appraiser went in to appraise on behalf of the buyer for his financing, the numbers came back even lower than what we had initially accepted.  Consequently, the financing is now short about $8,000.  In today's high ratio/low down payment world, this can of course, be catastrophic.  There are solutions which I don't need to go into now, but CMHC appraisals are VERY important with high ratio financing.  It's always good to have a little more money in reserve than the bare minimum constituting your down payment and your closing costs.  KEEP a bit of a buffer aside, just in case. 

It's the 3rd time I've heard it this week:  appraisers are being conservative.  Buyer beware.

Up Nord der, eh?

I was born and raised in Toronto; a large city to be sure.  There is something in me that absolutely loves the North country.  When we were little, my dad used to drive and drive and it was always in the country.  I suspect I became a budding Real Estate Agent/Designer/Entrepreneur when I was 4.  My dad's family had a property in a town called Hornings Mills. The property was gorgeous and my great grandmother lived there, tilled the land and had this spectacular old Victorian home that sat nessled at the bottom of a hill.  The heat was an old wood stove in the kitchen and hot rocks at the bottom of the bed.  I recall standing in that kitchen, overlooking the back meadow, filled with spots of yellow and purple flowers and say, "one day I'm going to have something like this"  Throughout my life I have had those moments that changed a direction of focus.  That was an early one, but every home I've ever had was at least 80 years old.  I love the creaks, nuances and the character of them.  The purchase of a new condo in central Toronto was quite a departure to say the least!

Over the years I have driven up north to either our own cottage or other peoples.  This week we are heading up to a lodge in Algonquin Park.  I keep going on-line to look at the place.  With all the rain this year, I'm so happy the trees have been late in turning their colours.  I can't wait to see the explosion of colour and experience fresh air, a fireplace, good books and...ATV riding on Monday through the bush.  Have a great Thanksgiving everyone, from our home to yours.

Real Estate Market Explained

There has been much discussion about the Real Estate market as of late, both in the Toronto Star and south of the border, on various news shows, including 60 Minutes. I watched with particular interest the 60 Minutes piece because I wanted an explaination as to what has happened to their Real Estate Market.  In layman's terms, large companies sold the rights to risky mortgages to investors and sold insurance policies to go along with them.  Hence, you have seen huge companies like AIG going into receivership.  The whole house of cards has collapsed as a result of these huge companies greed factor.

How are we affected by this?  Well, since the U.S. is our largest trading partner, it makes sense to keep an eye on their economy.  There are major differences, however.  Our lending policies on mortgages are much more stringent.  We have implimented on October 15 the elimination of 0% down payment mortgages, 40 years mortgage amortizations and we have seen an increase in the credit score so the risk factor is not as great for the lender.  In the Greater Toronto Area, prices fell for the first tim ein more than a decade, down by 3 percent .  The average existing home prices dropped to $368,549 in September, from $380,132. in the same month last year, per TREB stats.  LEt's look at this clearly though.  2007 was the highest recorded sales/prices in history.  I am not a Pollyanna.  I believe we have to tighten our belts and have frank conversations with sellers about pricing.  We have to show them the numbers and depending on their urgency to sell, they have to be realistic about the area sales. 

What about buyers?  Still a great time to invest.  The rates are incredibly attractive, you can still get 35 year amortization mortgages and can still purchase with only 5% down payment.  On $300,000. that means $15,000.  Don't forget closing costs. 

I LOVE GOOD IDEAS!

This evening I attended the Condo Show down at the Metro Convention Centre. This show, in it's first year, is small but has great potential to explode as our city expands.  Great idea, but more interesting to me was my colleague and friend, Elaine was speaking at 6:30 p.m. 

Elaine has developed a concept called The Newlywed Nest.  Basically, it's to help Newlyweds or about to be wed kids, weed their way through the daunting process of buying (versus renting) and the mountains of information we have at our fingertips, condensed into a concise presentation that is user friendly.  Of particular interest was a partnership Elaine has set up with HSBC; a newlywed registry.  So, here's the gig:

When you get married, you register at Birks or Ashleys or places that sell "THINGS".  Why not register at HSBC and then anyone wishing to give you a cash gift at your wedding or shower, can do so.  It can go towards the down payment of a home.  WHAT A GREAT IDEA!!!  I'm so jealous I didn't think of it myself.  KOODOS to you Elaine for a great little talk and an awesome idea.

Essentially, the world is good.

I did a little job yesterday that I didn't feel like doing but basically, it got me on the phone calling people to invite them to an event.  The calls were directed to people who had sponsored an event we had at our company and invite them to a party to celebrate....them.  The event raised over $30,000. so these people deserved acknowledgement.  The weird thing about the calls was that most of the people thought I was calling for more money!  I said, "No we want to THANK YOU for donating in the past; this is a small token of our appreciation for your generosity"  Another oddity was, how easily they were going to bring out their cheque book AGAIN and donate.  I loved the response, "THANK YOU, this is so unexpected" or "Boy, that sounds like fun; are you sure I don't have to bring anything?"  My response: "No, bring yourself, we're so incredibly grateful you can come and we want to celebrate YOU"  My hopes is that the sponsors have name tags as they are milling about on Thursday and our agents buy them a drink or two.  Name tags for people who are kind and generous.  Gotta love it.