Home Sales For London Ontario in May

Homes sales for May in London, Ontario stayed steady. Thanks to record low interest rates, home buyers are purchasing at a steady rate, particularly first time home buyers. While the economy has taken a beaten in the manufacturing sector, overall it's steady enough and combined with the low interest rates, people are purchasing homes. It is not uncommon to see multiple offer situations if a home for sale is priced at market value or below market value in the first time homebuyer price range - $200,000 and under. The full market report can be read HERE.

In unrelated (yet related news) one has to wonder why the general population is completely unaware that private banking corporations own and run the Federal Reserve Bank in the USA. Yes, that is correct, private banks are in complete charge of the worlds supposed super power and have been for the past 100 years. And these mega rich and powerful banking families own major banking institutions such as Lehman Brothers, Citibank etc (remember last fall?)

Think about this for a second - it's KIND OF IMPORTANT . (And if you think I'm making this up because you haven't heard this on the 6 O'Clock news or in the newspaper, upon a little research you will find that this banking cartel own 100% of the main stream media you think is giving you the real news).

It's easy to find information on this with a simple search on your browser.

Creation of the Federal Reserve

AN ASTOUNDING EXPOSURE

How International Bankers Gained Control of America

Do your own search, your own research. As long as you ask some questions! Please don't be ignorant and think that this won't have a tremendous effect your future.

Monetary Reform, Banks, Interest Rates, Bank of Canada, Government of Canada, Taxes, Debt, London Ontario

This blog was created to follow the London real estate market. While this post might seem completely off topic, it's not. It addresses what is the single greatest issue facing every person in this country and around the world today. 99% of the population is completely unaware, not of their own ignorance, but by researching further you will learn that you are intentionally mislead and misinformed so you don't learn of their secret.

I'm going to keep this posting simple and not go into great detail. Since you are reading this I know that you have access to the Internet. I know that you have a search function on your browser. You are free to research, inquire, explore, confirm any information you want. You are free to question any facts or information presented to you. I not writing this to tell you what is fact or what is happening. I'm writing this so you will look at information and form your own questions and conclusions. As some of this information will come as a complete shock to people, it's important to keep an open mind and research, question, and confirm what is fact and fiction.

I would like to talk about the Central Bank. Boring topic you might be thinking. However, what you wouldn't find boring is who owns the Central Bank. I'm talking about the Bank of Canada, Federal Reserve, Bank of England, and every other Central Bank that operates their nation's currency. News flash: the Government of Canada (aka you the citizen) DOES NOT OWN OR RUN the Bank of Canada. Ditto for the for the US govn't and the Federal Reserve, Bank of England etc.

So who runs, owns and controls the Bank of Canada? Answer: Private Banks. Yes, private banking corporations issue money, set interest rates, and control the monetary policy. When the Canadian government borrows money for whatever purpose, it does not print its own money and issue it. It borrows the money from the Bank of Canada - which is really a private banking cartel - at interest. To simplify things, the private banks print money out of thin air, "lend" it to the Government of Canada, and charge interest so you the taxpayer can pay can pay for a debt that is impossible to pay off. What???

Now if you have read this far and this is the first you have heard of such a "scam" (cause that is what it really is) you are immediately questioning my sanity. You are thinking this is impossible, I'm just making this up, how could such a system be in place, this isn't what I learned in school or read in the news. Again, you have a wealth of information at your finger tips, research the topic, "google it" as they say, prove this to be wrong.

You can start Here:
http://billtotten.blogspot.com/2009/05/bank-of-canada-tutorial.html
http://www.members.shaw.ca/theultimatescam/The%20Bank%20of%20Canada.htm



Note: Concerning the Bank of Canada, it's a little blurry whether the international banking families directly own the BoC, or just use their influence in ensure the Government of Canada (YOU!) use their institutions. But they do! Illegally! (If you don't think they do, research who owns the IMF, World Bank, BIS who Bank of Canada follows their policy and direction and are currently in the process of implementing a world currency system)

However what is clear and documented and is not a secret is that the Federal Reserve - the most powerful financial institution we know - is privately owned by the "banking cartel" You can view the following video or search whatever source you would like. If this is true, stop and think about this for a second. (and maybe pause and think about what happened last fall)




To further the grand picture, if you would like a complete history of the banking families and their institutions and how they've shaped and impacted the world today you can view this video. 3 hours might seem long and boring but it might be the most important eye popping 3 hours you could spend. Not to many people today know that a small group of families (lead by the Rothchilds) own or control all the central banks of the developed nations.



It is important to Grasp: Private Banking Corporations run Central Banks. Same banking families own and operation the world bank, IMF etc. NOT GOVERNMENT!

I shouldn't have to spell out the consequences of such a situation, the vast control and power into a small number of hands. As you begin to explore this reality, you only begin to see the enormous impact on the world today as we know it.

From a purely selfish point of view, the very least you should do is complain to have this system abolished, clear our nations debt and rid yourselves of most taxes including income tax - which was implemented to pay the interest on Debt (if you really simplify things, the income tax you pay goes directly to the banks and the banking cartel).

This is the greatest fraud of our lifetime and has been going on under our noses for generations. Please research this topic. If you are a skeptic, prove this to be wrong. I challenge you. Our nation and civilization are in a mega crisis and the general populous is completely unaware of what is going on. (Upon "googling" it's easy to learn that this same "cartel" owns or controls virtually all of the main stream media ie why you haven't heard of this before, nor will you ever see it when you turn on the TV) As you are likely aware, there is a huge push for a world government and a world currency. Rather then being blinded by the propaganda you hear and see on TV and newspaper, please do your homework!

Real Estate Sales in London For April Improve

The results of April home sales are in and the London area proved to be very active. Detached home sales increased by 1.8% over April of 2008. This is very surprising stat - I expected the numbers to be good given the activity and interest I've seen generated over the last couple of months - but these numbers are very solid. Condos sold decreased 26% for April of 2008.

This continues with the theme I've reiterated over the last 6 months - London real estate market was in a good situation, is currently in a good situation, and will be in a good situation in the future.

I think we are closer to a neutral market now (split even between buyers/sellers market) then the buyers market we say in December for example. I'll have to crunch the numbers in a future post.

Below is part of the press release. The full release can be read HERE

Last month, 804 homes exchanged hands in the jurisdiction of the London and St. Thomas Association of REALTORS® (LSTAR), including 666 detached homes (up 1.8% from April 2008) and 138 condos (down 26.6% from April 2008). Year to date, 1,840 detached homes and 414 condos have been sold – down 15.1% and 26.9% respectively compared to the same period in 2008.

"April sales have increased by 20% over March – that’s great news, especially in a tougher economy," says Joe Hough, LSTAR President. "We have now seen detached home sales move from being down 35% in January, down 30% in February, down 7.2% in March, and now they are up by 1.8%. The federal government incentives announced in the last budget, including the increase in the maximum withdrawal allowed under the Home Buyers’ Plan to $25,000, and the First Time Buyer Tax Credit, have certainly influenced April’s sales."

Hough says the average residential price is also improving. "Year-to-date for April 2009, the total residential average price is down 1.8% to $207,591, compared with a decline of 2.7% in March, 2.4% in February and 2.8% in January."

Homes Sales for London Ontario in March

Real Estate home sale numbers are in for March. Homes sales were solid for London Ontario. They were down 7% compared to March 2008 - which is encouraging (If homes sales for the remaining 9 months are 7% less then 2008's numbers, that would be a decent year).

I've repeatedly said that home buyers took a couple of months off due to the uncertainty in the world markets. Once they see the area market is stable, and the weather warms up, home buyers are going to be ready to buy - particularly first time buyers. Historical low interest rates and a buyers market are hard to ignore. We are starting to see that activity now. Sales numbers for April and May should reflect this - they won't be 2008 or 2007 numbers - but no one is expecting them to be nor do they have to be for the real estate market to function at a healthy rate.

Homes prices have slipped 2.7% year to date compared to 2008. It will be interesting to see how this plays out the rest of the year. My prediction is by the end of the year homes prices will be 1% to 3% less the 2008 prices. (CMHC recently predicted 0-1%) I think there will be enough buyers and sales to keep the market stable and to keep in check the increased amount of new listings available.

You can read the full market report HERE. The follow is some brief comments from the report:

Last month, 669 homes exchanged hands in the jurisdiction of the London and St. Thomas Association of REALTORS® (LSTAR), including 551 detached homes (down 7.2% from March 2008) and 118 condos (down 21.9% from March 2008). Year to date, 1,174 detached homes and 276 condos have been sold – down 22.6% and 27% respectively compared to the same period in 2008.

"Compared to January and February of this year, we are certainly seeing stabilization in home sales in LSTAR’s jurisdiction," says Joe Hough, LSTAR President. "January sales for detached homes were down 35% and February sales for detached homes were down 30%, so to see March home sales for detached homes down just 7.2% is very encouraging."

Hough says the average residential price is also holding steady. "Year-to-date for March 2009, the total residential average price is down 2.7% to $206,944, compared with a decline of 2.4% in February and 2.8% in January, so we are seeing some stabilization there as well."

St. Thomas sales were up in March. "Compared to March 2008, sales of units in St. Thomas actually increased by 14.6%," says Hough. "But the average home price has declined by 7.2%." "Typically the Spring market we’re moving into generates more activity, and this year there are the benefits from historically low mortgage rates and improved affordability in most markets," says the President of the Canadian Real Estate Association, Calvin Lindberg. "REALTORS® are reporting increased interest, especially from first-time homebuyers."

Mortgage Rates in London Ontario Continue to Drop

Mortgage interest rates in London, Ontario continue to drop. 5 year fixed terms can now be purchased at 4.19% or maybe a little less. These rates are at historical 50 year lows. A $200,000 mortgage over 25 years equals $1,070 monthly payments. A $150,000 mortgage is $805/month. If you wanted to do a variable mortgage, rates and payments are even lower. Free mortgage preapprovals can be done quickly with no obligation. To find out how much you can afford to purchase go HERE.

This is one of the reasons homebuyers are going to be purchasing homes in the spring market. Judging by activity at open houses (a lot of potential homebuyers are attending), and talking with buyers, the spring market should be fairly active. Many of these buyers will be first time buyers looking to get into the real estate market for the first time.

Bank Foreclosures - Distressed Property

Homes For Sale in London Ontario

Bank Foreclosures - Distressed Property

These homes need work. Distress Sales, Estate Sales, Bank Sales available for sale in London, Ontario. Real Estate service made easy.

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LondonDistressedHomes.info

Real Estate Market Breakdown for London Ontario

I had the opportunity to listen to a CMHC (Canada Mortgage and Housing Corporation) speaker recently present their information of London Ontario's real estate market and economy. I will briefly recap some of the main points discussed. This information refers to London, St. Thomas and surrounding area.

CMHC predicted around 7000 real estate sales for the market for 2009. This is about a 25% drop from 2008. They had previously predicted a 10% drop prior to the fallout in the US in October.

Homes for sale will be around 17,000 - which is around the same as 2008. (To compare, 2006 had about 8,500 homes for sale ). One of the major reasons for the increase are homeowners cashing out their equity that they built up during the price increase from 2001 to 2008. The increase in homes for sale is the number one reason why it's a buyers market now compared to the sellers market of 2006.

Consequently, new home construction is suffering since homebuyers have ample resell homes to purchase and usually choose a resale home over a more expensive new home if given the option.

CMHC predicted average sales price to be -1% to no change from 2008. In other words, prices should flat line. (Remember this is average for the entire London region for every price range. There are certain price ranges that have seen a decrease etc)

Talked about the demand factors for the city and region:

1) Employment

Employment overall is fairly steady. It's increased from 7.1 to 7.8. (In early 90's it was around 10%).
We all know that the manufacturing sector has been hit really hard. So why hasn't unemployment risen to a higher level? It's because there are other sectors that are creating jobs. Health care and service sector are both creating jobs. (Hard to know that since the news always reports the negative stories). This is one of the strong points of London as I've mentioned before - diverse economy has helped ease the pain felt in some areas of the economy.

2) Population Growth

London has a 5% birth rate. Ontario overall has 7%. London lags behind the average a bit but a least it's growing.

3) Migration

London has a net migration (meaning more people move here compared to moving out)

Seeing international migration to the city. While still a fairly conservation city, it's a very slow change as immigrants are moving here.
Seeing migration from larger centers to London - namely Toronto area. The 25-45 year old age group is finding London a lot less expensive and more affordable. $200,000 vs $350,000 for the same house.

----

Vacancy rate for 2009 is predicted to be 4.2%. It was 3.9 in 2008 and 3.2 in 2007. The main reason for the increase is the completion of new apartment buildings (If you want proof, look at the skyline of downtown). So these new units will take a little time to be absorbed into the market.
Who are going to fill this apartments? empty nesters (older people selling and renting), international migrants and students, cautious renters, and youth moving our from parents house.


Mentioned also was that first time buyers and baby boomers (ages 25-45) will push the market. This demographic has always had a big influence over the London Ontario real estate market. The conditions are there for them to be purchasing real estate (low interest rates, supply, and steady economic conditions). The CMHC speaker mentioned that consumer sediment is a major factor right now with the public. I agree - the buyers are out there, it's just a matter of them feeling confident to do so.

February Real Estate Sales For London Ontario

Real Estate homes sales numbers have been updated for the month of February. The news report can be read HERE

480 Homes exchanged hands for the month. I predicted in my previous post the number would be around 500 so I was pretty close. This number is obviously down from 2008 February which was one of the best on record. Looks like the London area market is on pace for around 7000 sales for the year - which is off for the 8000 plus we've seen in recent years when the market was a strong sellers market - but is still good enough for what you would call a "normal" year.

Communicating with a lot of buyers, there are a lot of purchasers ready to jump in the market. A lot of these buyers will be first time buyers - these are the buyers that traditionally make the London market move. Once the weather warms up, and people get past of the negativity they keep hearing in the news and realize the market is still fundamentally strong, they will take advantage of historically low interest rates and a great selection of homes to purchase their home of choice.

Home Sales Update in London Ontario

Looking at the sales activity though the first half of February, it's not all doom and gloom - homes are selling. From what I can see, homes sales for the month are on pace to be around the 500 mark. This would be less then the previous 5 years for February - which would average in the 600's. Yes, sales numbers are down, put there is nothing to suggest the market is falling apart. Buyer's are taking advantage of historically low interest rates and great selection of homes to purchase. A buyers market it is, and talking to potential home purchasers they are going to be ready to purchase come spring.

If you would like a free list of Bank Foreclosed properties or other distressed homes, follow the link below:

These homes need work. Distress Sales, Estate Sales, Bank Sales available in London, Ontario. Receive a FREE list of weekly updates in London area:

LondonDistressedHomes.info

A Neighbourhood on the Rebound

Ten years from now, what neighbourhoods in London, Ontario are going to see a dramatic change in value? Look no further then most people's favorite location to bash - East of Adelaide.

The Old East Village (Dundas, Adelaide, Central, Quebec) is currently undergoing a major shift from it's 1990's - run down, crime ridden, poor demographic, falling apart neighbourhood; to a vibrant community, rich with history, and a great place to live.

Now, I'm sure some people might shake their head at what I just wrote. But if you are paying attention, it's happening. I want to make one thing clear, I'm not saying it's there yet - that's clear by driving down Dundas street. To put it in perspective, if we are talking about a 9 inning baseball game, the Old East revitalization has just completed the top of the 3rd, and is looking at a one, two, three bottom of the 3rd. It's a process, and before you know it, it will be the 7th inning stretch. To put a general time frame on it, I would give it a 10 year period before the transformation is really complete.

Back in 2002, I took a long hard look at the area and what struck me right away was the huge potential the area had. It had the history, the century homes, close to downtown, a potential self sustaining business district, homes were affordable etc. Most importantly as it turned out, it had the people in it that wanted it to change, improve, and succeed. A couple of groups to mention are the Old East Village Community Association and Old East Village Business Improvement Area.

Through the efforts of the people in the community, many changes have already occurred. The entire neighbourhood has been named a heritage district - the largest in Ontario. There is a very noticeable improvement in the neighbourhood and is good place to live. The commerical corridor has seen some improvements with owners renovating their store fronts. It's a long process to convert a commerical district into a vibrant place to live and do business (This goes for any place or city ie, see Downtown London - it's a 20 year process which is currently working and is on pace to meet its goals)

But it's happening. The efforts are paying off and one of the biggest confirmations that it's working is future investment made by private business. It was recently announced that a 150 unit condo project is going to happen at the corner of Dundas and English, in the process some old worn out buildings will be torn town. This is coming of the heels of Medallion Developments announcing that they are going to build a 600 unit residential complex, revitalizing an entire block spanning King, Lyle, Dundas, and Hewitt. (Interesting because back in 2003 I had the same idea about developing that piece of land - not that I was in any position to do anything at that time, it's just nice to see that other people/business have similar visions)

This is big news. This will bring 1,500 - 2,000 new people to the area. I shouldn't have to explain the effect this will have on Dundas Street corridor and its businesses.

So, if you were looking to purchase a home or an investment property, what neighbourhood do you think will have a very high rate of return over the next decade?

No Money Down Home Purchase

Are you currently renting in London, Ontario and would like to purchase a home but don't have the necessary down payment to make a purchase? Now is your chance. The City of London has extended and ammended it's no money down program for renters. Details can be found HERE

The major changes are the sale price of a home can be up to $140,000 and purchasers have to have an annual income of less then $55,000. $140,000 might not seem like a good price range to purchase, but there are homes available in that price range including townhouses, condo's and semi's which are of good value. The purchaser is still required to me able to qualify for a mortgage with a financial instituation, and the city will provide the 5% downpayment and 1% for closing costs.

For a list of homes that would qualify for this program, please contact me. This program expires March 31st.

Real Estate Sales For January in London Ontario

The numbers are in for January and they are down from January 2008 - which everyone knew was coming considering the current economic environment and strong sales last year. The month isn't broken down, but from what I saw home sales were very slow in the first half of January and picked up in the last half. (Picked up meaning what would be considered normal sales numbers for a buyers market in January)

There were, and still are, a lot of buyers who are waiting a bit for things to settle out. The buyers are out there - particularly with historically low interest rates at 4.49% 5 year term mortgage - what will be buying. Once the weather warms up (don't discount this factor, it's not an excuse. Weather has always been a factor in any year and our very cold and snowy start the year effects home sales and holds back buyers a bit).

Like in my previous post, we are in a buyers market, and buyers have the leverage and will have an easier time finding a home and negotiating a good price. With the low interest rates, homebuyers will be able to take advantage of a good opportunity.

Here's the press release:

Last month, 305 homes exchanged hands in the jurisdiction of the London and St. Thomas Association of REALTORS® (LSTAR), including 245 detached homes (down 35% from January 2008) and 60 condos (down 31% from January 2008).

“The decline in home sales last month is directly attributable to two factors: a drop in consumer confidence due to the downturn in the stock market, not to mention a government in apparent crisis and whole heck of a lot of snow and cold weather,” says Joe Hough, LSTAR President, “A bad month does not mean a bad year and our January 2008 numbers are only the third lowest for January in a decade where real estate sales broke record after record. When the dust on the global economic crisis settles . . . and the snow stops flying what we’re going to see in London is a more balanced market, with more opportunities for buyers than here have been over the last several years.”

“Moderating home prices in Canada should not be confused with the downturn in the U.S. housing market,” says Canadian Real Estate Association President Calvin Lindberg. “But any local real estate market is not immune to global economic challenges, and that is what we face today. Low prices are not the concern as much as the perception of doom and gloom. Buyers are waiting to see if the real estate market has hit bottom, and that is a very complex thing to try and calculate. Most of us will only be affected by the market correction psychologically, because the majority of Canadians will not buy or sell property in the coming year.”

“Average prices will remain under downward pressure during the Canadian economic recession,” says CREA Chief Economist Gregory Klump. “Shaky financial market confidence is pulling down business and consumer confidence. The consensus economic forecast predicts the economy will rebound in the second half of 2009, so housing market trends should strengthen next year …

There has been a fundamental shift in consumer confidence, with job insecurities prevailing in every region of Canada,” he added. ”That is unlikely to change until the worst of the recession is behind us.”

Market Update

Just a quick note on the London, Ontario real estate market. Home sales have picked up and are on a decent pace the last two weeks of January. The overall numbers for January are definitely down compared to last year (which is no surprise considering the doom and gloom economy and last January was a very strong month historically).

I'm sure the media - aka LondonFreePress - will have some great sensational headlines about the numbers that come out at the beginning of February. The numbers will be down, but the market is not falling apart. As mentioned, sales are been better the last two weeks and I expect decent sales numbers to continue. Which looking at the big picture - ie sales numbers for the past 10 years - is nothing to get overly worried about. The market now, is a lot closer to normal - it's just been awhile since we've experienced a market like this.

We are definitely in a Buyers Market right now. There are a lot of listings available for sale (twice the number compared to 3 years ago). That's great for buyers - there is selection, room to negotiate (resale or new homes) and interests rates are at an historically low rates ie. 4.59% for a 5 year term (please contact me if you would like information on obtaining a great rate). A lot of buyers sat on the sidelines for the last two months to see what was going to happen with the market. Once they realize things are OK to purchase, they will be out there buying homes. And i don't expect home prices to drop substantially (I've talked over the past 2 years on this blog about modest increase in homes prices and overall stable market we had every though the market was really hot). There are going to be some areas or price ranges that will experience a drop in overall pricing.....but as a whole the market will survive without any great damage.

Sellers. As mentioned we are in a Buyers Market right now......in the opposite situation as 2 years ago - the buyers have the leverage to select their home and negotiate the price. This doesn't mean your home isn't going to sell. It means it is going to take some work, you need to have the proper information (on the market and pricing) and you need the right real estate agent to get your home sold. The buyers will be out there, you need to separate yourself from the competition.

Once the numbers come out for January, I can examine the numbers more in depth for London. If someone would like a detailed analysis of their particular neighbourhood, please contact me and I can provide that information for you.

With the changing market environment, there will be an increase in the number of bank foreclosures for sale in London. If you would like a free list of all the bank sales and distressed properties, visit BankForeclosuresLondon.com

Increase in Bank Foreclosures in London Ontario Area

The London Free Press wrote an article on the increase of foreclosed homes in the area. It's not really that surprising, the main reason for the increase being the huge job losses in the manufacturing sector. St. Thomas in particular, as well as other small towns have been hit very hard. Job losses equal home owners not being able to pay their mortgage payments. London also hurts from this as some of the laid off manufacturing jobs were of people living in London and working in St. Thomas etc.

If you are looking to purchase a home in 2009, perhaps you would like a free list of all the foreclosed homes for sale and power of sales in the London area. Can be found HERE.

Here's the Free Press Article:


With the economy limping, London process servers have been racing to keep up with a slew of foreclosures, the likes of which they haven't seen since the early 1980s.

"It's unfortunate that when times are bad, we are busy," Doug Russell of London and Western Ontario Process Servers said yesterday.

Russell has served notices of foreclosure in London since 1983, first as a deputy sheriff and later for his own firm.

Back then, the culprit was interest rates that soared toward 20 per cent. But now foreclosures seem driven by an unemployment rate that's grown to 6.9 per cent, with thousands of manufacturing job losses in the region alone.

Another process server, Bill Armstrong, estimates the number of foreclosure notices he's delivered has more than tripled in the last year.

"I've never been this busy and I've been in the business 20 years," he said.

As busy as it's been in London, it's been even busier in neighbouring centres such as St. Thomas and Aylmer, he said.

"Some smaller communities are hurting more," he said.

While the number of foreclosure notices soared in November and December, this week and last have been slow, as lenders often don't proceed during the holidays.

But Armstrong fears it will get even worse this month because of a global recession whose effects have yet to be fully felt. "The economy is going to get much worse. I just don't see any signs of a turnaround," he said.

That risk was highlighted in a December report by the Bank of Canada

While central bank officials believe the housing sector is holding up so far, they warn foreclosures may increase this year, in part because household debt as a percentage of income is at an all-time high.

"With the economy expected to slow, conditions are already in place for an increase in default rates among highly leveraged households over the coming year. The risk is that the increase in default rates on household borrowing could prove more substantial if a more severe economic downturn (with significant increases in unemployment and weaker incomes) materialized," the bank wrote.

Also on the upswing among the local process servers are legal claims for unpaid loans and credit cards, Armstrong said.

And it's not just low-income earners who are struggling -- both Armstrong and Russell say they've delivered foreclosure notices to impressive homes.

"It can happen to anyone. It's really sad and I think it's going to get sadder and that's unfortunate," Armstrong said.

Sales Numbers are in for the November Real Estate Market

No surprise that sales numbers are down in the month on November. They were never going to match last year's November numbers as it was a record year. With all the turmoil and negative news we've seen in the area the last month in a half, it bolds well that sales for the month of November were only 3.4% off the 10 year average. I'll comment in the near future on what kind of market we are in and what to expect for 2009 in the London real estate market.

For now, here's that latest press release from LSTAR. To see a complete statistical package, click HERE.

Last month, 386 homes exchanged hands in the jurisdiction of the London and St. Thomas Association of REALTORS® (LSTAR), including 299 detached homes (down 43.7% from November 2007) and 87 condos (down 29.3%). Year to date, 6,436 detached homes and 1,641 condos have been sold – down 10.2% and 11% respectively compared to the same period in 2007.

"Many homebuyers across Canada battened down the hatches in October as they were concerned with dire headlines about stock market volatility and a global economic downturn," said Chief Economist Gregory Klump of the Canadian Real Estate Association (CREA).

LSTAR President Bruce Sworik said the decline in home sales comes as no surprise, especially since this has been a record-breaking year. "In 2008, the area has seen its third-best February, its second-best May (also its third-best month ever), its second-best July on record and its best September ever," he said. "A return to a more balanced resale housing market was expected."

"While some figures are down, the LSTAR jurisdiction is simply returning to more normal levels. We don’t expect to see anything like the kind of price correction that’s underway in the U.S. since Canada doesn’t have the same massive oversupply of housing, nor the credit crunch going on in the U.S. We are satisfied with the numbers we are seeing and continue to see that homes in our area are a great investment. That is also why families outside of our area are attracted to housing in LSTAR’s jurisdiction."

Year-to-date sales for November 2008 are at 8,077, 10.3% below last year’s figure of 9,077 over the same period. "This month’s sales are only 3.4% below the 10-year average," said Sworik.
"And the average price of a home in LSTAR’s jurisdiction continues to rise competitively."

Homes in LSTAR’s jurisdiction continue to maintain their affordability compared to other major Ontario and Canadian centres. According to the Canadian Real Estate Association’s National MLS Report for October 2008 (the most current available), the average price January 1, 2008 – October 31, 2008 year to date for:

London and St. Thomas was $213,055;
Calgary was $407,962;
Durham Region was $273,159;
Edmonton was $334,491;
Hamilton-Burlington & District was $282,251;
Kitchener –Waterloo was $271,648;
Ottawa was $291,081;
St. Catharines & District was $223,577;
Toronto was $381,217; and
Greater Vancouver was $598,248.

London Ontario October 2008 Real Estate Sales

Results are in for October Real Estate sales for London and surrounding area. The number of home sales are down from last year in October. The information can be found HERE. Judging by the activity in November, it looks like the number of homes sales will be down when compared to November of 2007.

Some of the reasons for this are obvious. Some home buyers are sitting on the sidelines to see what happens after the turmoil in the world financial markets the previous month. Some are no longer in the market due to the economy. We had a record number of sales in September - some of this was because of people rushing to take advantage of the no money down program from federal government which expired in October, and nice weather helped too. So those people who might have normally purchased in October or November, already bought. And finally, the overall numbers have to be less then 2007 - 2007 represented a record number or real estate sales for the year. There was no way the market could duplicate it. Overall scope, the number of real estate sales have been very encouraging.

It's a great time to buy a house now. There is inventory for buyers to look at, and buyers are finally again able to negotiate - sometimes in very favourable terms. Once a few months past and we get into March and April of 2009, people are going to realize that the London economy is going to be OK, and 2009 should prove to be a good year for real estate. Low interest rates, good inventory, and affordable housing are very attractive things. I'm going to predict a 2009 which will include historically strong sales numbers and average sales price which will remain constant throughout the year. Considering the alternatives we've seen in other markets thoughout the world, we should consider ourselves lucky.

Where is the London Ontario Real Estate Market Going?

I haven't commented too much on the current state of the economy in Canada or London. The media and it's entourage have managed to blow things out of proportion again, which is normal. It's created a lot of unknown, uncertainly, and panic amongst the public. Most of it's needless, but you can't avoid it.

The United States' "give anybody who breathes a mortgage" financial problems have come back to haunt them (along with such things as poor fiscal responsibility of the government ie racking up huge debt over the past 5 years) and have thrown the world for a loop. I'll be the first to admit, I'm very glad I don't live in some of the US markets or sell real estate there. It must be tough.

The US economy definitely has an effect on Canada and the world. However, this doesn't mean Canada is going to fall down the same path as the US economy and blow up. We are not close to having the problems they have, our economy is on stable ground to weather any downturn and the banking system is in great shape (thank you Canadian government for your policies and not succumbing to US pressure of deregulating the bank system post 911).

I would be worried if inflation is high, governments were running debts, and the economy was poor prior to this fiasco. But it's not the case. Government is in a position to cut interest rates, which they are doing (hello mortgage rates!) and help the economy maneuver through things tough times. I'm not saying all is rosy, but the sky is not going to fall. The economy will slow down in the next 6 months or so......which is normal.

Which brings me to the dreaded word. Recession! People treat this word like the Ebola virus. I think it is because it's been over 15 years since our last recession started. A recession is defined to be a period of two quarters of negative GDP growth. It's not a depression, it's not a life changing event. It's a period of negative economic growth for the country. If it happens to Canada in 2009, we will get through it. In saying that, the outlook for the economy is not even that bad.

As per Bank of Canada article:

The United States may be sucking the global economy into recession, but Canada's economic strengths will keep us on safe ground, the Bank of Canada says.

In yesterday's monetary policy report, the bank predicted slow growth for Canada while its governor, Mark Carney, warned the media not to overstate the downturn.

"Newscasts overshoot just like markets overshoot and the sky is not falling, the sky is still there, the sun is still coming up every day and the Canadian economy is still functioning," Carney said. "Be careful on overshooting on the pessimism."

Carney's report said the American economy was already in recession and the global economy was headed toward a mild recession.

Canada, Carney says, would squeak through this mess with "sluggish growth."

That means annual economic growth of 0.6 per cent this year and next, before increasing to 3.4 per cent by 2010. Carney said the reasons we'll escape the downturn are Canada's strong banking system and the low debts loads, compared with other countries, carried by consumers and governments in Canada.

"We don't have the imbalances in our economy that other economies have going into this time of difficulty," Carney said. "It's very important to stress that unlike in a number of other countries, we have a financial system that is functioning."

Carney said the big taxpayer-funded banking bailouts we are seeing around the world are an effort by countries to bring their banks up to the safe level Canada currently enjoys.

For Canadian consumers, there were some positives. Inflation, specifically with respect to the cost of goods we buy, was expected to hit a new low by the middle of next year.

"In terms of pricing, in the near term, we are going to see some softening of prices," Carney said.
The other good news in the short term, says Carney, is the plunging loonie will help manufacturers and exporters deal with a U.S. downturn expected to hit that industry hard over the next year.

Carney also applauded the government for announcing the creation of the Canadian Lender Assurance Facility yesterday, which will provide loan insurance to banks.

"We think it's a sensible thing to have done," Carney said. "With all other jurisdictions introducing some form of guarantee -- it makes sense to ensure our institutions are not at a competitive disadvantage."

The insurance would allow Canada's banks the option of paying from 1.6 per cent to 2.1 per cent of the money they borrow to buy a government-backed guarantee that what they borrow will be repaid should the bank be unable to do so.

What does this mean for home sales in London Ontario? Things are going to remain decent over the next year. We won't see record sales, but a very healthy real estate market. The economy is decent - even with the terrible manufacturing sector suffering. Homes are affordable and interest rates will remain low. People are buying houses. There is more selection now (thanks to more available listings) then in the past 5 years. It's a great time to buy, buyers are now in a position to negotiate price and find the home they want (much easier then 3 years ago). And there is not going to be any bust in homes prices. Things will remain consistent.

And once the dust settles, in 6 months people will find that life in London is no different then it was 3 years ago.

Energy Efficient Renovations Offer Good Return on Investment for Home Owners

Home buyers and home owners in London Ontario can improve their homes and increase their return on investment and quality of life. Below is an article on home renovations from the Ontario Real Estate Association.


REALTORS® are often asked to suggest improvements that will make their clients’ homes more saleable and provide the biggest return on investment (ROI). Kitchen and bathroom upgrades still offer some of the best ROI. But now, according to the 2008 Appraisal Institute of Canada (AIC) RENOVA survey, energy-efficiency upgrades are high on the list of top paybacks.

Every other year, AIC surveys its members and compiles a list of renovations that, in the opinion of professional appraisers, yield the highest recovery rate. The recovery rate is defined as the likely increase in a home’s resale value which could be attributed to a renovation as a proportion of the cost of the renovation. For example, if a $10,000 renovation increases the home’s value by $6,000 then the recovery rate is 60 per cent.

Refurbished kitchens and bathrooms can typically bring in around 75 to 100 per cent of the investment at resale, provided the renovations are professional and tasteful. “If renovating in order to sell, homeowners must plan for changes that will meet the needs of a majority of potential buyers,” says Joanne Charlebois, AIC’s Director, Marketing and Communications.
“They also need to ensure any modifications reflect current market trends.”

Since energy savings are on the minds of most consumers, this year’s survey asked respondents to rate five energy-efficient upgrades in terms of their influence on the resale value of a home. Green renovations were cited most frequently by respondents as having an average recovery rate of 61 per cent. High efficiency windows received the highest level of agreement among respondents as the energy-saving home improvement that would have a significant positive impact on the appraised value of a home.

The type of heating system, heating system efficiency and insulation were also considered to make a significant difference. Efficient hot water heaters, on the other hand, were judged to have only minimal influence on a home’s resale value.

Several other improvements were identified as having higher recovery rates including using neutral paint colours (67 per cent), the addition of a cooking island in the kitchen (65 per cent), and installing a Jacuzzi or whirlpool bath separate from the shower stall (64 per cent). Spa-style shower systems were cited as being very popular upgrades. However, while stylish and trendy, their recovery rate is a relatively low 36 per cent. Not surprisingly, adding a swimming pool also scored very low in terms of ROI. In fact, the addition of a pool, hot tub or skylights were not only considered to contribute very little to the resale price of a home, in some cases they could even have a negative effect.

According to AIC, homeowners who are thinking about making home improvements should consider the following tips taken from the 2008 survey responses:

• Renovations that add features to a home that other homes in the neighbourhood already have such as a second bathroom have a higher recovery rate than features not shared by neighbouring properties.
• Renovations done on a home with a lower market value than the others in the neighbourhood provide a higher recovery rate than renovations done on a home which is worth more than neighbouring properties.
• Poorly done renovations may have no positive effect, or worse, actually reduce the value of a home.
• Ensuring that a home is in good repair and well maintained is essential. However, renovations done on a home which has maintenance problems will have a much less bearing on its resale price.

The Resource Center page of AIC’s RENOVA Web site, www.aicanada.ca, offers a calculator to help home renovators get a better idea of the ROI they can expect for a variety of home improvement projects. The site shows a payback range in dollars and as a percentage of what you plan to pay for the upgrade. Homeowners can choose from among the 20 most popular home improvements.

Get out what you put inHere’s what homeowners can expect to get back at resale for the most common home improvements, according to AIC:
Home upgrade ROI (%)

Kitchen upgrade 75 – 100
Bathroom upgrade 75 – 100
Interior painting 50 – 100
Roof replacement 50 – 80
Replacement of furnace or heating system 50 – 80
Expansion (addition of family room) 50 – 75
Doors and windows 50 – 75
Adding a deck 50 – 75
Install hardwood floor 50 – 75
Adding a garage 50 – 75

Record Number of Real Estate Sales For London Ontario

London Ontario's real estate market continues to produce strong numbers. September 2008 was the best September ever for the real estate board in terms of number of sales. See the News Release below.

For where the economy is, and where it is headed, London, Ontario is in a good position to withstand any major negative impact from the economy. It will be interesting to see how sales go for the next 6 months. Sales will likely slow down, but there is no bubble to burst so we shouldn't see any noticable decrease in prices. In fact, if interest rates are reduced as is predicted, I have a very optimistic view for real estate sales in 2009.


Last month, 769 homes exchanged hands in the jurisdiction of the London and St. Thomas Association of REALTORS® (LSTAR), including 625 detached homes (up 19.3% from September 2007) and 144 condos (up 14.3%). Year to date, 5,664 detached homes and 1,449 condos have been sold – down 6.7% and 8.3% respectively compared to the same period in 2007.

"This has been the best September ever for home sales in our area," says Bruce Sworik, LSTAR President. "The next-best September was in 2005, when 746 homes were sold. In September of 2007, 650 homes were sold. We are very pleased with these figures – so far, 2008 has been a great year." In 2008, the area has seen its third-best February, its second-best May (also its third-best month ever) and its second-best July on record.

"Year-to-date sales are at 7,113, which is just 7.1% below the same period for 2007, which was an outstanding year," says Sworik. Year-to-date sales are just below the five-year average of 7,269 but well above the 10-year average of 6,597.

"Also, St. Thomas had a great month, with a 10.6% increase in sales. The good news continues for St. Thomas because, year to date, the average price of a home there stands at $188,472, up from $171,990 in the same period last year," says Sworik.
The best-selling house style in LSTAR’s jurisdiction for the month of September was the two-storey, followed by the bungalow, the ranch, and the townhouse condo:


Homes in LSTAR’s jurisdiction continue to maintain their affordability compared to other major Ontario and Canadian centres. According to the Canadian Real Estate Association’s Major Market Release for August 2008 (the most current available), the average price January 1, 2008 – August 31, 2008 year to date for:

�� London and St. Thomas was $213,171;
�� Calgary was $411,510;
�� Durham Region was $274,116;
�� Edmonton was $337,399;
�� Hamilton-Burlington and District was $284,951;
�� Kitchener-Waterloo was $273,185;
�� Ottawa was $292,181;
�� St. Catharines & District was $222,941;
�� Toronto was $385,035; and
�� Greater Vancouver was $606,088.

"The number of new listings of homes for sale was 1,448 in September 2008, an increase from 1,283 in August and 1,241 from last September," says Sworik. "And our active listings – the number of listings which were active at the end of the recording period, in this case, September 30, 2008 – currently stand at 3,669, up 24.6% over the same time last year, which means great selection and choices."

"While jurisdictions elsewhere may not report such positive numbers, it is important to keep in mind that the national housing market is made up of different communities. Every area is different in terms of trends and pricing, and in London we are seeing a great year," says Sworik. "It goes to show that local consumers feel very positive of our housing values here."

Building Boom Continues in London Ontario

The London Free Press had an article detailing London's construction industry. It is a good read and is posted below. It touches on London's diverse economy weathering the economic uncertainly in Ontario and paints a good future for the construction industry and London's economy.

With the manufacturing industry really struggling and all the negative news we hear in the media, it's good to keep things in perspective and understand where London is now and where it will be in 5 years or 10 years down the road.


The value of construction in London is about to top $800 million for the first time, despite the region's economic slump.

"This is going to be the biggest year ever. We are at $640 million now with four months to go, we will top $800-million," Rocky Cerminara, the city's director of building controls, said yesterday.

That is startling, considering the city has an unemployment rate of 6.7 per cent, higher than the national and provincial average. In August, London had 244,600 people working compared to 247,000 in 2007, a decline of 2,400 workers.

The boom is buoyed by $100-million in construction at the London Health Sciences Centre.
"I believe it shows that we have a diverse economy," Cerminara said. "If one sector takes a hit, the other sides will hold us up."

Gerry Macartney, general manager of the London Chamber of Commerce, agreed London's diversity has kept it moving along.

"We do enjoy a balance and, frankly, we are able to weather these economic conditions better than most," he said. "We have steady, incremental growth."

As for the hospital construction that has lifted the building totals, expect much more to come, said Dave Crockett, vice-president of facilities management for LHSC and St. Joseph's Health Care London.

The $100 million issued this year is for the completion of the Children's Hospital of Western Ontario and Grace Donnelly Women's Health Pavilion, the latest stage in what has been a $250-million project at both LHSC and St. Joseph's. But there will be another $300-million wave of building from 2009 to 2013, he said.

"This is important because of its scope and size and (because) it will bring more services, including 76 beds, to capacity. This will help a lot," Crockett said.

There are 300 construction workers at the Victoria Campus and 100 at St. Joseph's, which is also doing renovation work because some programs will shift there. The reconstruction of that hospital began in 1999. The first phase -- a $350-million project -- ended in 2006.

Brian Waltham, vice- president at EllisDon Construction, which is building the hospital tower, wasn't surprised by the boost in building, saying the industry has been steady and he doesn't anticipate a letdown.

"There is doom and gloom in the media, but the building that is going on will keep things going for a while. We are ecstatic."

According to building figures from January to August, not too many sectors appear to be taking a hit.

Institutional building this year stands at $224.8 million compared to $104 million over the same period in 2007. Surprisingly, industrial -- the sector that has been hit hardest by layoffs and plant closings -- is also up, with $59.6 million compared to $44.1 million last year, thanks to a new manufacturer, Hanwha, and the development of new industrial space that will be leased to tenants.

Residential building spending is up to $307 million over $285 million in 2007, driven largely by apartment building. Detached home building dropped 33 per cent.

Commercial building showed the largest decline, with $45 million in permits issued from January to August compared to $64 million last year.

TOP FIVE 2008 PERMITS

LHSC, $90 million. (It also has a second $10-million permit).
$18.5 million, Fanshawe College residence.
$18.3 million, seniors care facility.
$16.5 million for Hanwha, a Korean building supply company.
$16 million, seniors apartment building.

THE NUMBERS

Value of building permits
2008: $800 million+ (projected)
2007: $722 million.
2006: $773 million
2005: $622 million
2004: $648 million

London Ontario Real Estate Stats Ending August 31st

London/St Thomas Association of Realtors has released stat information for the end of August. The market is still doing well. Homes are selling. We are in a much more balanced market now compared to past years. Below is the official news release. For a complete stat pack, click HERE.

I bolded two important parts - 1st showing the real estate market is having a very healthy year. And the second showing why we are in a balanced market (buyers having more selection making it easier to buy) with the continued large number of homes sales.

Last month, 762 homes exchanged hands in the jurisdiction of the London and St. Thomas Association of REALTORS® (LSTAR), including 607 detached homes (down 11.8% from August 2007) and 155 condos (down 15.3%). Year to date, 5,043 detached homes and 1,307 condos have been sold – down 9.2% and 10.2% respectively compared to the same period in 2007.

“It’s important to keep these direct comparisons to last year’s figures in perspective,” advises Bruce Sworik, LSTAR President. “A total 9,378 homes were sold in 2007, making it far and away the best year for real estate sales since our Association began keeping records in 1978; the previous record of 8,916 sales was set in 2006. Between January and August 2007, a total 7,009 homes had already been sold - 442 units more than during the same period in 2004 (the next highest total). Sales so far this year may be down 9.4% compared to the same period in 2007, but 2008 has actually seen our third-best February, our second-best May (also our third best month ever) and our second-best July on record! Year to date sales are just 3.3% below the five-year sales average and currently stand 6.5% above the ten-year average.”

Homes in LSTAR’s jurisdiction continue to maintain their affordability compared to other major Ontario and Canadian centres. According to the Canadian Real Estate Association’s Major Market Release for July 2008 (the most current available), the average price January 1, 2008 – July 31, 2008 year to date for:

�� London and St. Thomas was $213,705;
�� Calgary was $414,213;
�� Durham Region was $274,525;
�� Edmonton was $338,511;
�� Hamilton-Burlington and District was $285,065;
�� Kitchener-Waterloo was $273,473;
�� Ottawa was $293,385;>�� St. Catharines & District was $221,646;
�� Toronto was $387,470; and
�� Greater Vancouver was $610,306.

“The number of new listings of homes for sale on the Multiple Listing Service® (MLS®) eased in August 2008, down 18.2% from the 1,568 new listings taken in July. However, new listings are up 3.7% compared to August 2007,” observes Sworik. “More significantly, our active listings - the number of listings which are active on the MLS® at the end of the recording period, in this case, August 31, 2008 – currently stand at 3,543, up 25.5% over the same time last year.”
Sworik adds: “Compared to this time last year, listings are up, average prices are up, and sales are down by less than 10% from that record-breaking total of 7,009 unit sales … we’ll take it! There’s certainly no real estate bubble bust taking place here in LSTAR’s jurisdiction!”

Home Buying Process in London Ontario

THE HOME BUYER PROCESS

You have made a decision to purchase a house, so let’s talk about what to anticipate and how to be ready for the road ahead!

• 1. Make a decision to buy
• 2. Get organized
• 3. Get Pre-Approved for a Mortgage
• 4. Shop for a home
• 5. Make an offer
• 6. Get a loan/home inspection/finalize agreement
• 7. Close on the home
• 8. Prepare to move

Decide to Buy

You are ready to purchase a home. Identify what you want and why. Below are a couple of questions to answer, before you begin.

1. What are your future plans? Do you anticipate on having a family, growing as a family or maybe reducing the size of your family with kids moving out? These questions need to be answered, so you can identify the house of your desire and ensure it meets your needs.

2. Do you have enough cash for a down payment? Identify how much you can afford for a down payment.

3. Can you afford your desired home? This is a key question that only you can answer. Will your current spending habits allow you to live comfortably with a new mortgage, or will it cause you to struggle?

Get Organized

Now it’s time to gather key information and educate yourself for the process. First, check your credit rating to ensure that nothing is outstanding, which would prevent you from obtaining a mortgage. This can be done by contacting a credit bureaus such as Equifax.

Next make sure that you have the loan capability for a mortgage. Contact a mortgage specialist and get pre-approved. This will help you identify your available loan size and provide you with your affordable target range. For pre-approval, you will need to know:

• Cash available for a down payment
• Cash available for closing costs
• Current income
• Job status
• Estimated assets
• Estimated debts

Shop For a Home

Decide how you want to proceed with this process. When purchasing a home, you often will not have to pay for an agent. The realtor will be paid from the proceeds of sale ie, the seller pays commission from the equity in their home. For your benefit, let an agent do the legwork for you. Do your homework when selecting an agent though, because you want to make sure you find the ideal home and not an overpriced lemon.

When evaluating a home that you like, have a list of questions ready to fire off. Your questions might include the name of the school district, what type of taxes are paid, why is the seller selling, what is the neighborhood like, and how are the neighbors. You might also want to know the condition of the house, the age of the mechanical systems (heat, plumbing, air conditioning), the amount of necessary house repairs or replacements, the builder, and date the house was built.

Next, research the neighborhood. Walk around and converse with the neighbors. Find out if the atmosphere fits your needs and family's desires. When you find the home you desire, prepare an offer.

It's also important that you are working with an agent knowledgable in different housing issues such as - type of wiring, type of insulation, zoning, building permits, possible grow houses, neighborhood changes or issues, types of plumbing, costly repairs, age of items in the house, among many other things.

The real estate agent you decide to work with will be able to help answer all these questions for you. They should be an expert in the area in which you are looking and will be able to provide you with a list of all the homes that match your criteria in London and the surrounding area.

Preparing Your Offer

You want to place an offer on the home, but do not want to pay too much. An experienced agent will be able to help gage fair market value for the home and will negotiate with the seller and seller’s agent for you. Before you prepare an offer, identify the maximum amount you can afford. This will prevent you from getting overly excited or making too high of an offer, which will then fail to satisfy you later.

Prepare your offer and ensure that it’s within your price range. To add strength to your offer, include the letter of pre-approval from your lender. You will likely have contingencies or conditions attached to your offer. Your realtor will help you with this, including helping you get a home inspection/finalizing your mortgage/insurance etc. A condition in the offer means, for example, if the home inspection isn't satisfactory to the buyer, the buyer has the option to cancel the agreement or negotiate with the seller to address any problems.

Be ready to include a deposit with your offer, which will be part of the down payment if the deal goes through. The seller may accept, reject, or counter your offer within hours or days, depending on the quality of your offer and the seller's desire to sell. You can then accept the counter offer or "counter the counter."

Once the seller accepts, it's up to you, the buyer, to finalize the conditions in the offer with the help of your realtor, ie home inspection/mortgage. Once you do this, the transaction considered "firm" and you have bought a house.

Close the Deal

This is when you will have a lawyer help you. The lawyer will close the transaction for you. Be sure that you estimate all your closing costs to avoid any surprises. Costs range around 2 percent of the purchase price of the home.

Prepare a walk through with your realtor, to ensure the house is in the same condition as originally purchased or that the seller has completed any repairs specified in the purchase contract agreement and has completed any other contingencies found in the agreement.

It’s now time to close the deal. It is closing day and the seller officially signs the house over to you. Before signing any paperwork have your lawyer discuss each detail. The lawyer will hand you the keys to your new house and you will begin a new chapter in your life.

Homes Sales are Strong in London Ontario

Stats released by the London St. Thomas Association of Realtors show that area home sales are doing very well. July was the second best July ever on record and year to date is below last year's record year but is on pace for another tremendous year. The full stats package can be found HERE.

The reason for the number of sales is the same reasons I've already talked about in previous posts. Conditions are good for home buyers - good interest rates with affordable house prices. But the biggest factor is the number of available listings. There is more selection for buyers, making it easier for people to find homes to buy. It's a great time to be purchasing a home in London, Ontario.

For sellers, it's a good time sell but the market has become more balanced. With the increase in inventory, don't expect your home to fly off the market. Multiple offer situations are more rare now and it does take some work to sell the home as home buyers have more options. Your home will sell if it's priced correctly and marketed right, but don't be fooled into thinking this is like the 2004 sellers market just because home sales are mirroring that year's total.

“Despite reports to the contrary, local-area home sales continue to perform extremely well this year,” comments Bruce Sworik, LSTAR President. “Not only was last month our second best July on record, but May 2008 was our third best month for real estate sales ever. A total 5,592 homes have exchanged hands so far this year and that’s fantastic news for our local economy, given the economic spin-off generated by each housing transaction.”

According to a study done by Clayton Research Associates for the Canadian Real Estate Association, an estimated $32,200 in ancillary spending (i.e. spending by purchasers on items other than the actual house and land) is generated by the average housing transaction in Canada.

This is great news for the local economy. As everyone knows, the manufacturing sector has taken a beating over the last 1-2 years. London's diverse economy, real estate market, and general economic outlook are going to get the area through these economic challenges.

Buying a New Home in London Ontario?

Purchasing a new home is a popular choice among home buyers. Clients like the option of having everything new and custom designed. When it is time to move in, the purchaser expects - and assumes - everything will be perfect. However, this is not always the case.

Just because the home is brand new, doesn't mean it can't come with, or incur problems in the future. The majority of home buyers get home inspections done on resale homes. Why not take the same precautions on a new home? There are many reasons why you should. You are making a huge investment.

I want to introduce you to a niche service available to London area new home buyers. SDB Inspections offers purchasers a unique service offering piece of mind from when first shovel goes into the ground, till after closing and making sure problems, or potential problems, are identified and fixed.

What can go wrong with a new home purchase? Many things, including mold, water, or ventilation problems. See examples HERE

You should have someone working in your best interests to ensure the builder does it right.

Some Changes to Insured Mortgages

The Government of Canada has announced some changes to the mortgage industry. This news came out of nowhere. Can be read HERE. The main points:

• Fixing the maximum amortization period for new government-backed mortgages to 35 years;
• Requiring a minimum down payment of five per cent for new government-backed mortgages;
• Establishing a consistent minimum credit score requirement; and
• Introducing new loan documentation standards.

The government claims that these changes are needed to "ensure Canada’s housing market remains strong and to reduce the risk of a U.S.-style housing bubble developing in Canada."

Mortgage lenders in Canada will tell you that Canadian lenders already had much stricter lending practices then its peers in the US and any threat of a sub prime crisis in Canada like what happened in the US was already minimal. Personally, I don't mind this move, as I don't think it will effect the housing market to any great degree, at least in London, Ontario.

Lets break it down. Remember, these rules only apply to high ratio mortgages - less then 20% down payment. I would imagine that Banks would still be at their discretion to offer 40 year amortization mortgages with a 20% or more down payment. As would private lenders who aren't insured buy CMHC.

On a $200,000 mortgage, a 35 year amortization is going to cost $42 more per month then a 40 amortization mortgage. A $150,000 mortgage would be $32 more per month. A small amount of money. Have to put things in perspective though.....traditionally mortgages had a 25 year amortization, and most buyers still opt for this. So the 35 year amortization is still giving home buyers more flexibility when purchasing a home. After CMHC introduced 40 year mortgages a couple of years ago, I believe the percentage of home buyers using this option was around 40-45%. So now this percentage of home buyers will have to use the 35 year mortgage instead. IF Government decided to go back to 25 year maximum mortgage, then that would be huge news and have a negative effect on the housing market. But that's not the case, I don't think the government would that stupid. Longer amortized mortgages are here to stay.

As far eliminating the 100% financing, I don't see a huge problem with this either. I was surprised they introduced this option a couple of years ago. It was a tremendous option for some home buyers to take advantage of but only a few qualified as the requirements were pretty strict. I've personally only helped one buyer who was able to use this, and it worked out great for them. But, eliminating it won't have a big impact. Those few buyers who would have qualified for it in the past will just have to wait to save up the 5% down payment, or borrow it, or use a mortgage company who offers now money down who aren't insured by the government.

Overall, the lending opportunities for home buyers are still better then they were 3 years ago, 7 years ago or any time prior to that.

Affordable Housing Program (No Money Down) For London

The home ownership program offered by the City of London has been expanded and re-released to offer renters in the city a chance to purchase a home. The initial program, launched last year, attracted some response, but wasn't used to the degree the city expected - mostly because the conditions to use the program were unfavourable to most potential buyers. One thing they have changed is the maximum purchase price is now $132,000. And there is no expire date for application, they will provide the funds until the money runs out.

Full details on the program are available HERE. To sum up the program, the City of London will provide renters - who meet their specified criteria - the 5% down payment plus 1% for closing costs to purchase a single family residence in the city.

Why is the city doing this? In conjunction with the Federal and Provincial Governments, the aim as mandated in their news release is to:

• Ease the demand for rental housing by assisting renter households across the province in purchasing affordable homes;
• Free up social housing stock to address waiting lists; and
• Provide low and moderate-income individuals and families with an opportunity to move up the socio-economic ladder through homeownership

Market Report For June 2008

Market report for London, Ontario can be found HERE. Number of sales is still very strong. Down from same point last year, but that was expected as 2007 was a record year. Historically, number of sales for 2008 is proving to be another strong real estate market. Average sale price is up 6.1% from same point last year.

One thing that's changed from previous years is the number of available listings. This isn't because there are less people buying homes, it's because more people have decided to put their home on the market (I believe the total number of active listings is about 1000 higher then what we saw in 2004). This is giving buyers more selection and making it easier for them to find and purchase the home of their choice. This is making the market more balanced compared to previous years, keeping price increases reasonable, and strong sales numbers. Working with buyers, sure makes it easier to purchase a home (compared to 3 years ago).

If you really like statistics, you can view the entire year to date statistical report for 2008 HERE

Overall, the market is playing out just as CMHC and myself had predicted as evident in previous posts.

Housing Market Remains Strong

Stats released by the London St. Thomas Real Estate Board show that May was the third best month ever for the board - based on number of sales. While conditions are still favorable for homebuyers, the key factor is the increase in the number of available listings.

The total number of listings available for May was over 3,600 - to put this in perspective, I believe 3 and 4 years ago, the active listings were around 2,500. This is giving homebuyers options and selection, and making it easier for them to purchase a home. And this is why home prices only increased 4.3% from May 2007. A more balanced market is great news for everyone.

Also, apartment vacancy rate has decreased, which is surprising given all the recent new construction. This is great news for all the developers who've built highrise rentals in London over the past 5 years. They were right in their market projections that the London market could handle all the new apartment construction.

The strong resale market and apartment vacancy numbers defy expections from those who say the real estate market is going to bust. As mentioned in previous posts, the market conditions in London should allow for a steady market for the next couple of years, as the market balances out - rather then a fallout or correction as some fear.

Here's the Free Press Article

And with all the negative news the manufacturing sector has taken in the London area over the past year, there are some positive stories of new business opening up in the area. Here's Another One

Article: Why I Will Always Buy Real Estate

The following ARTICLE by Ozzie Jurock was just published on his real estate website recently. Thanx to London Ontario Real Estate Diagnosis for posting it on their site - as this is where I first read it. I don't normally repost blog articles from other sites but I thought this was well worth the read. It puts great perspective on buying real estate and/or investing in it.


Why I Will Always Buy Real Estate

If you place a good portion of your assets into real estate today, you won't have to worry about tomorrow.

By Ozzie Jurock

Received tons of email ... Not all favorable. Some people wish to bet me money - some a case of beer, that real estate is going to go down ... just wait and see. Likely they are all the people who never bought anything. If you go to http://www.realestatetalks.com/ you can see some 16,000 people arguing for more than 14 years the ups and downs of Vancouver real estate. It is always the same guys and gals that argue collapse and (yep) often the same that argue that eventually we will always be higher (because of monetary expansion creating it).

So, take it easy. If you had listened to the experts who were dispensing the best advice available 20 years ago and locked yourself and your wealth into a plan which guaranteed to remit the then prevailing 'safe amount' of an income stream of $500 per month (a lot back then - pocket-change today) for the rest of your life, imagine the desperate poverty that you would retire to today. Stone soup would be a luxury.

Yes, we need more money now but who knows what this money will be worth tomorrow. Yes, we need more income, but who can possibly know the state of the world three months from now ... much less 20 years from now? Nobody knows for sure the 'what and where' of interest rates and inflation rates and the value of money. It's just not possible.

What we do know is that the safety that was inherent in the projected big income of 20 years ago is a pitiful joke today.

Yep, forecasting is never easy - particularly when it's about the future. Crystal balls crack, vaunted talk-show soothsayers wither and drop off the television scene and the books that were treasure maps wind up in the remainder bin at the bookstore. In the last three decades stock markets have surged up and crashed down. Certain mutual funds that looked like they were blue chips sprang leaks and sank while others soared like rockets only to burn out and fall back down.

Through all of this the average folk watched their savings chewed away by insidious inflation.

However, in all the turmoil of this sound and fury, one asset has weathered the changes. Three decades ago, had you bought good quality real estate you would not be concerned about your future today. That real estate would have kept up with inflation, remained secure in value, and steadily appreciated. Sure, there would have been some temporary dips. There has to be because real estate is cyclical in nature. But one thing is certain - over the years, the base values have been steadily increasing. Back to that purchase 30 years ago - today it would be paid off and clear title - which means either a mortgage-free home (no more monthly 'rent' payments to the bank) and/or a steady rental income courtesy of your tenants.

Put into perspective, if you place a good portion of your assets into real estate today, you won't have to worry about tomorrow. It doesn't matter how wild or turbulent the economy or the marketplace. It's like riding a horse with one spur - if half the horse goes, the other half has to go along with it. No matter how deep or tempestuous the water, you're going to be floating on top of it.

Let's review something all of us already know. The Chinese have used real estate holdings for wealth creation for 2,000 years. All huge fortunes were either started or extended with real estate. Home ownership (the most common form of real estate holding) has been the single largest factor in the accumulation of wealth for the average North American, firstly because of straight appreciation due to inflation, secondly, due to the leverage involved and thirdly real estate has a use and therefore always a value.

This basic principle of appreciation holds true for pretty well any healthy major urban center. Let's take Vancouver, B.C. for an example.

In 1960 the average Vancouver home sold for $13,105. Thirty-eight years later in 1998 the average sale price was some $310,000. Almost a 2,300 per cent return. But in March 2008 the average sale price was $895,000. Almost a 6,830 per cent return. That's on the price. Play with the return on down payment of $655 and you get tens of thousands per cent returns. If this kind of appreciation is going to continue, you have to be on the conveyor belt. If you're not, you're going to be left so far behind that it will be financially disastrous. And here we're only talking from the perspective of a place to live. This isn't even addressing the investment aspect of those monies outside the family home.

When you combine appreciation with leverage, you unlock the great secret of achieving the optimum result with real estate investment. And as you can see from the foregoing numbers, the 'lever' can lift you up or the 'appreciation', if you're on the wrong side, can crush you down.

When your gain is measured on the capital invested, not the actual price of the property, some really astounding results come into focus. But the game is not as simple as it used to be. The goal posts move. The only constant is that everything is always changing. The secret of surviving and prospering is the ability to adapt to the changes.

The 1980s were very forgiving for the amateur. Benign with a capital 'B'. That 'B' could also represent 'Bucks' and 'Brainless'. Back then if you had a few dollars you could buy any piece of real estate, anywhere, and you would make money. Even if you could barely hear thunder and see lightning, it was almost impossible to make a big enough mistake. If you paid too much, it only meant that you had bought a little too soon. The clock and the calendar made you into a financial wizard. Thanks to inflation, prices soon caught up to you and bailed you out.

Still, there were lots of people in the early 1980s who managed to lose all their money in real estate. Those were the people who put their money into the wrong syndications, limited partnerships or real estate investment trusts. But we'll talk more about that later. In the late eighties fortunes were made.

But after the 1980s the real estate world became less forgiving. For some investors the times were downright terrifying. All of a sudden there was the sudden change. Markets fluctuated area by area both as to volume of sales and prices. Different real estate categories rose or fell without any apparent linkage to each other. You could see in one market area the average single-family detached home rise in value by 40 per cent while in the exact same market area downtown condos slumped in value by 12 to 20 per cent (Vancouver 1990-1995).

The people who tried to play by the old rules found themselves playing someone else's game. And most of the time they were handed their heads. Was it possible to avoid the dangers and yet at the same time prosper with the good stuff) Yes it was, but you had to put aside location, location, location, and instead you had to read the trends, position yourself as to the timing and then implement some new techniques.

To be successful real estate investors we must understand ourselves. That means we have to understand our investment objectives in relation to the risks we are willing and able to tolerate. But having done that we then must understand that aspect of 'ourselves' that is part of the New Consumer.

Published in the Vancouver Sun, Thursday, May 01, 2008

Market Conditions For 2008/2009 Part 2

To continue the previous post about the London Ontario Real Estate Market. I'd like to touch on new construction and rental market.

New Construction

CHMC has forecasted that new home contruction will decrease a bit this year and next. Reasons cited were because of more resale homes becoming available and increased costs to build which is hard to compete against resale home prices. (replacement cost is always higher then resale)

To illustrate the difference in price - the average sale price for new homes was over $300,000 while the average sale on entire MLS for London was over $200,000.

A slight decrease in new home starts is not surprising after record years. It will still be stable/strong overall. The new home starts over the past 5 really helped the market remain fundamentally in check - ie it provided more obtions for buyers to purchase and without it we really would have had a shortage of listings => which would have increased prices a lot more then normal.

There was no mention of the problem of developers having their new starts delayed due to city hall red tape problems (Keep London Growing). Don't know how this is going to effect the market yet.

----

Rental Market

The vacancy rate for London is 3.5%. Which is a decent rate. I remember back in 2002 the rate was below 2% which was low and indicative that the market could handle and needed more rental units.

It has increased a little because:

1. Increased construction of rental units. Look downtown I can count at least 8 new towers that have been built or are in the process of being built. And there are more around other parts of the city too. It will take a little while for the market to adjust and these buildings to rent out but they are filling up.
2. There has been competition from resale market. Strong real estate market has allowed more buyers (renters) to purchase instead of rent.
3. Demographic change - stats show that 56% of youth are staying home up to 24 years old. Young people are tending to stay at home with mom and dad longer instead of jumping out and renting a place.

Who's going to fill these available rental units. Immigrants coming from out of province and country, empty nesters selling their homes and renting, and there's a lot of international university students renting luxury apartments downtown near schools. They are building these properties because the market is dictating it.

To touch on the luxury rentals being built downtown - this is something that is unique to London. Other cities don't have this type of construction. High end rental units are renting from $1,500/month to $3,000/month. They are being filled by empty nesters, international students, and others who want to live with amenities offered downtown. One more sign downtown revitalization is working and is one the right path to success.

Overall, rental market is pretty stable. I can speak from my experience, I have units that are in good shape and I have no problem renting them out to quality tenants.

Market Conditions for 2008/2009

After attending a seminar featuring a representative from CMHC (Canadian Mortgage and Housing Corporation) I'll touch on some key points they talked about in regards to the current and future real estate market in London, Ontario.

They project price increases of 4% in 2008 and 3% in 2009. (Which I consider very encouraging)
___

Employment

Full time employment increased from 2000 to 2008. Unemployment 6-7% in the same time period, much lower then the stagnant 90's.

Service sector is strong in London. These jobs pay well.

The highest paying jobs in London come from the Public sector, Education, Manufacturing, and Construction. Out of these 4, manufacturing is the only one taking a hit at the moment in London. This reinforces my previous thoughts on a well balanced economy in London overcoming any major concerns from the manufacturing sector.

____

Population Growth

Growth in London was 5% from 2001 to 2006. Ontario's rate was 6% during the same time. London's natural birth rate is lower. Net migration makes up for it. These people come from other countries or other parts of Ontario. Reasons for this are affordable home prices and the realization that jobs are now available in London.

I think you will see the %'s for London increase after 2006 for both population growth and birth rate:

Population by age

• 45-64 increased as expected - because of the baby boom.
• 25-44 was the largest segment of population to increase. This is very encouraging. These are the people who are going to be starting families, working, and buying homes in London in the future.

____

Mortgage Rates

Project interest rates in 2008 and 2009 to remain stable.

Monthly payment average. 2002-2006 was around $900/month. 2009 it will be around $1000-$1100/month. This is one of the reasons why the market will balance out. Sales will still be strong, but not record breaking strong and price increases will stabilize ie. 3% increase as mentioned already. Overall, still more affordable then the 1990's.

Consumer confidence is to remain above average.

___

To summarize:

• Sales will edge down as prices increase.
• Demand will remain strong thanks to fundamental demographics and solid economy.
• Supply will continue to grow.
• Price growth will moderate.

CMHC Enhances its Mortgage Insurance Policy

The Canadian Mortgage and Housing Corporation has enhanced its mortgage policy. (CMHC insures mortgage with a loan to value ratio of less then 20% of the purchase value.)

The following was released from CMHC:

April 17, 2008 CMHC has successfully provided a homeowner mortgage loan insurance product up to 100% loan to value since November 2006. I am pleased to inform you that based on this experience, CMHC is now able to introduce enhancements at the 95.01% to 97% range. These enhancements are effective April 18, 2008.

Premium Reduction and Borrower Eligibility Criteria
Where the borrower is contributing a traditional source of down payment of at least 3%, the premium has been reduced from 3.10% to 2.90%. CMHC’s Beacon score guideline or equivalent for these applications is 650.

Where the borrower is contributing a non-traditional source of down payment of at least 3%, the premium has been reduced from 3.10% to 3.00%. CMHC's current minimum Beacon score guideline of 680 or equivalent will continue to apply to these applications. When submitting an application with a LTV between 95.01% and 97% and the borrower’s down payment is from a non-traditional source, the emili "Flexible Downpayment" indicator must be selected.

TDS ratios up to 42% will be available for applications with LTVs from 95.01% to 97% as part of the standard offering. TDS ratios > 42% and up to 44% can also be considered for applications where all borrowers have a minimum Beacon score of 680 or equivalent. Note: These changes do not apply to 1-4 Rental applications or owner occupied applications with LTVs from 97.01% to 100%.

CMHC continues to consider applications with total debt service ratios beyond 44% where considered warranted by an Approved Lender.

Pierre Serré Vice-President, Insurance Product and Business Development

Market Conditions

Please click on the link below to see comprehensive report on the London Ontario real estate market. Updated reports, graphs and statistics detailing home sales and listing information from the past decade.

Market Report

Sale's Figures for 1st Quarter 2008

Sales figures are out for the first quarter of 2008. Number of sales are down 9.1% from same period in 2007 and average sale price has increased 7.1%.

Of course the Free Press jumps all over the decrease in sales with words like plunged and dive. To put things in perspective, if the entire year of 2008 saw a decrease of 9.1% from 2007 sales numbers, the board would still have over 8,000 sales and historically would be a great year for sales. In case anyone has forgot, 2007 was the best selling year ever for the London/St. Thomas Real Estate Board - I expect sales to be lower this year.

Market conditions are still very favourable for a strong year. One of the reasons which would account for a slight decrease in sales would be the weather. February and March say more snow then usual. As the weather warms up, so will the number of sales.

The increase in average sale price might be a surprise to some when accounting for a decrease in sales. But put things in perspective - the number of sales made was still very good (read second paragraph). It's still a slight sellers market and a strong enough market to account for an increase in sales - especially when you factor in the last 9 months.

HERE's the Free Press Article.

Mortgage Insurance: Not Always a Sure Thing

Typically when you purchase a home and you have a mortgage placed on the property, the bank offers you mortgage insurance. For $15 -$25 per month, this is supposed to give the consumer peace of mind in case of death, serious injury or illness.

However, this is not always the case. This insurance is not guaranteed and the insurance company has the right to underwrite the policy and void it after the fact - even if you believe you filled out the original questionaire correctly.

Please click on the following link and learn about the differences in getting insurance through the bank or with an actual insurance company. It may change your family's life.

Watch CBC special video HERE

Bank of Canada Official Declares London's Economy Diverse

I've been saying for the last year that London, Ontario's economy is diverse enough to weather any significant manufacturing slump caused by the poor dollar or other economic factors. It seems the Bank of Canada agrees with me. Read HERE.

As per Article:

Manufacturing now accounts for only 14 per cent of jobs in the London are compared to 20 per cent 20 years ago.

But he said the decline has been offset by gains in sectors such finance, transportation and professional services.

"Adjustment is not easy. But London does seem to me to stand out as an example of the importance of having the flexibility to respond and adjust to changing circumstances," said Jenkins.


A strong economy is very important to any community. London's Real Estate market will continue to benefit and real estate sales should stay strong through 2008.

Government Rebate to Improve/Update Your Home

The Federal and Ontario Governments currently have programs available for homeowners to encourage and reward people for making their homes more energy efficient. If you aren't taking advantage of this program then you are missing out.

Any homeowner can use the program, but it becomes particulary handy for people who purchase homes. Typically on a resale home, some home improvements are needed - maybe a new furnace, some new windows, extra insulation, or simply reducing air leakage etc. By taking advantage of this program, a home buyer can recoupe thousands of dollars when making impovements to their new home. The maximum amount rebated is $5000 by the Ontario goverment and $5000 by the Federal government.

It's a win win. The homeowner receives cash back and reduces their energy bills to save money and make their home more environmentally friendly. At the very least, your realtor should know about the program and be informing you on its benefits.

I've personally used the program and know clients who've taken advantage of it. In my case, I got a new furnace and did some other small improvements - insulation etc - and received over $1,100 from the federal government. Now that the Ontario governent has jumped on board (they weren't doing this a couple of years ago) they are matching the Federal governments contribution and I would receive over $2,200 for the same improvements if done today.

The government websites for more information are HERE and HERE.

If you'd like more information or for who to contact to do the energy audits please contact me.

Millionare Lottery Home For Sale

Residential London, Ontario Real Estate For Sale

Wastell Builders Group is now offering their `one of a kind` 2007 Millionaire Lottery Home for sale at $795,000 (replacement cost $958,000) located in prestigious Upland Hills pool sized lot backing onto greenspace, this 4550 sq ft home boasts 10 ceilings on the main floor, 8 ft doors (including 8.5 ft imported mahogany front doors) sweeping curved staircvase, gourmet kitchen with serving grotto and tasting room, HRV system, mullioned ceiling in family room, view-thru gas fireplace. This lovely home offers 4 bedrooms (4th bedroom/nanny suite), 4.5 baths, an enormous lower level room with removable platform ready for dream media room, a fitness room with sauna and water cooling fountain. OT 1 is serving grotto OT 2 is tasting room with keg fridge and wine cooler, OT 3 is workout room with sauna and cooling water fountain OT 4 is `Mission Control` with CAT 5 hookup for every desired AV unit.

The following was released from London St. Thomas Association of Realtors. The first two months of the year indicate a very healthy market.

“Following a record-breaking year for home sales in 2007, there has been much speculation about the demise of the real estate market in 2008, however these fears appear to be greatly unfounded,” says Bruce Sworik, President of the London and St. Thomas Association of REALTORS® (LSTAR). “Although we have seen a slight cooling of the market — year to date sales are down 7.5% compared to the same period last year — a total 687 homes exchanged hands in our Association’s jurisdiction1 last month, making February 2008 the third best February on record.” The previous record of 708 sales was set in February 2007, followed by 703 sales in February 2002. LSTAR began keeping records in 1978.

In the City of St. Thomas, 53 homes were sold in February, down 33.8% from February 2007, but up 47.2% from February 2006. Year to date, 89 homes have exchanged hands, down 35.5% from the same period in 2007, but up 7.2% from the 83 homes sold during the same period in 2006.

Continues Sworik: “Not only are local REALTORS® pleased with last month’s sales, especially given that London had nearly twice as much snow than the average for February, but there has also been an increase in the inventory of resale homes in our area. As of the end of February, active detached home listings in our jurisdiction were up by 2.5% and active condo listings were up by 3.5%. An increase in inventory is certainly expected this year, leading to a more balanced market and providing good opportunities for both buyers and sellers in our area”.

“Despite price gains, the London CMA continues to be very affordable and compares very favorably with other Canadian centres,” says Sworik. According to the Canadian Real Estate Association’s Major Market

Release for January 2008 (the most current available), the average price January 1, 2008 – January 31, 2008 year to date for:

�� London and St. Thomas was $215,542;
�� Calgary was $408,672;
�� Durham Region was $243,652;
�� Edmonton was $332,051;
�� Hamilton-Burlington and District was $278,189;
�� Kitchener-Waterloo was $268,589;
�� Ottawa was $285,736;
�� St. Catharines & District was $222,058;
�� Toronto was $374,449; and
�� Greater Vancouver was $588,183.

Bank of Canada Drops Rates

Bank of Canada has dropped the prime rate by 50 bps which now brings the prime rate to 5.25%.

This will likely also drop the fixed rates. Will keep you posted.

My lookout of another very strong London real estate market in 2008 is looking correct. A drop in interest rates combined with a strong London economy is going keep sales very strong.

Receive Up To $10,000 After Closing

No Captial Gains on Investment Property Resale?

Once again, we raise the issue of capital gains tax on sold investment properties. The Canadian Real Estate Association is one of 3 organizations lobbying the Canadian Government to change it's policy. The proposal is to eliminate capital gains tax on investment properties if the seller reinvests his equity into another property within one year.

For everyone who has rental properties, or is thinking of purchasing one, the policy will eventually get changed! So hang in there. There is an affordable housing problem across the entire country. A simple change in captial gains policy can have a big impact on investment by the private sector to help correct this problem. The following article outlines the issue:

Link

OTTAWA – January 31, 2008 – Three national associations whose members are central to the investment, management, purchase and sale of real property are calling on the federal government to change capital gains tax policy in the 2008 federal budget to encourage reinvestment. The members of the three associations generate hundreds of billions of dollars of economic activity annually.

The policy change proposed by The Canadian Real Estate Association (CREA), the Canadian Federation of Apartment Associations (CFAA) and the Real Property Association of Canada (REALpac) would support urban regeneration and expand rental housing in Canada by encouraging new investors, and by providing existing owners the opportunity to re-invest because of capital gains deferrals.

The three Associations have completed new research to support the proposal to allow the deferral of capital gains tax and recaptured capital cost allowance when an investment property is sold and the proceeds of the sale are reinvested in another property within a year.

The research shows that the first-year cost of implementing the proposal would be $415 million, not taking into account offsets from increased economic activity. The group of taxpayers who would benefit most from the change would be those with net incomes of $50,000 or less.

The research also shows current tax policy creates a negative “lock-in effect” so investors hold onto old assets to avoid having to pay tax,rather than selling and reinvesting in new assets. CREA Chief Executive Officer Pierre Beauchamp said the new research confirms the investment impact of the tax deferral proposal. “The deferral would trigger major economic activity that would far outweigh costs
to the treasury in the long-term,” he said. “Small-scale investors typically renovate property and make related purchases when they reinvest.”

CFAA President John Dickie said the proposal would reduce the cost of rental housing and improve affordability and housing supply. “Tax policy has discouraged the private sector from building and maintaining rental housing,” he said. “Renters will benefit from a larger supply of units and lower rents.”

REALpac Chief Executive Officer Michael Brooks pointed out that the proposal is for a tax deferral rather than a tax reduction. “No capital gain is actually realized when one asset is sold and another of equal value is purchased,” he said. “The sale of an asset without reinvestment would continue to be taxable.”

The new research was completed by two leading academics: Dr. Thomas Wilson, Senior Advisor at the University of Toronto’s Institute for Policy Analysis, and Prof. James McKellar, Academic Director of the Real Property Program at York University’s Schulich School of Business.

Dr. Wilson used tabulations compiled by Statistics Canada with tax returns reporting capital gains for 2005. He conducted separate studies for capital gains tax and the recapture of capital cost allowance for individuals and corporations. The cost of lost tax revenues from individuals, small businesses and other corporations would be about $258 million. The cost of deferring the recapture would be $157 million, for a
potential first-year total cost of $415 million. These figures do not include offsetting benefits from spin-off activities that would grow over time.

Using the same data, Dr. Wilson found that about 66 per cent of those reporting real property gains in the 2005 taxation year had net incomes of $50,000 or less. They realized capital gains of $3.8 billion or about 57 per cent of the dollar value of all capital gains.

Prof. McKellar also looked into what is known as the “lock-in effect”. His analysis shows taxes applied to capital gains only at the time of sale can trap capital in inefficient investments when it could be used more productively elsewhere. Those most affected are small-scale investors, including owners of rental housing, who tend to retain real property holdings to avoid tax consequences. The lock-in effect can be readily seen in underutilized and often boarded-up buildings in deteriorating urban cores throughout the country.

The complete capital gains re-investment study is available in PDF format for download from the web site of The Canadian Real Estate Association (www.crea.ca).
The Canadian Real Estate Association (CREA) is one of Canada’s largest single industry associations, representing 94,000 REALTOR® members who are active in all phases of the real estate industry. The membership includes the Canadian Commercial Council, whose 6,000 members specialize in industrial,commercial and institutional properties.

The Canadian Federation of Apartment Associations (CFAA) represents the owners and managers of close to one million residential rental units in Canada through 17 organizations across Canada. CFAA is the sole national organization representing the interests of Canada’s $37 billion rental housing industry, which houses almost four million Canadian households.

REALpac is Canada’s premier industry association for investment real property leaders. REALpac’s mission is to bring together the country’s real property investment leaders to collectively influence public policy, to educate government and the public, and to ensure stable and beneficial real estate capital and
property markets in Canada. REALpac members currently own in excess of $150 billion in real estate assets located in the major centres across Canada and include real estate investment trusts, publicly traded and large private companies, banks, brokerages, crown corporations, investment dealers, life companies, and pension funds.

136 Reasons Why to Choose a Realtor

Why Was This List Prepared?

Surveys show that many homeowners and house buyers are not aware of the true value a REALTOR® provides during the course of a real estate transaction. At the same time, regrettably, REALTORS® have generally assumed that the expertise, professional knowledge and just plain hard work that go into bringing about a successful transaction were understood and appreciated.

Many of the important services and steps are performed behind the scenes by either the REALTOR® or the brokerage staff and traditionally have been viewed simply as part of their professional responsibilities to the client. But, without them, the transaction could be in jeopardy.
Listed on the following pages are 136 typical actions, research steps, processes and review stages necessary for a successful residential real estate transaction and normally provided by a full service real estate brokerage and for which they are entitled to fair compensation.

Comprehensiveness

The list is by no means an attempt to set forth a complete list of services as these may vary within each brokerage and each market. Many REALTORS® routinely provide a wide variety of additional services that are as varied as the nature of each transaction.

By the same token, some transactions may not require some of these steps to be equally successful. However, most would agree that given the unexpected complications that can arise, it’s far better to know about a step and make an intelligent, informed decision to skip it, than to not know the possibility even existed.

Listed here are 136 typical actions, research steps, procedures, processes and review stages in a successful residential real estate transaction that are normally provided by full service real estate brokerages in return for their sales commission. Depending on the transaction, some may take minutes, hours, or even days to complete, while some may not be needed.

More importantly, they reflect the level of skill, knowledge and attention to detail required in today’s real estate transaction, understanding the importance of having help and guidance from someone who fully understands the process - a REALTOR®.

And never forget that REALTORS® are pledged to uphold the stringent, enforceable tenets of the REALTOR® Code of Ethics in their professional dealing with the public!

Pre-Listing Activities
1. Make appointment with seller for listing presentation
2. Send seller a written or e-mail confirmation of listing appointment and call to confirm.
3. Review pre-appointment questions
4. Research all comparable currently listed properties
5. Research sales activity in the area from MLS® database
6. Research days-on-the-market for similar properties, location and price
7. Review property tax roll information
8. Prepare “Comparative Market Analysis” (CMA) to establish fair market value
9. Research property’s ownership and how it is held (deed)
10. Check Municipal tax records for lot size
11. Verify the legal description from public records
12. Check Planning Department of Municipal Offices for current zoning
13. Check for land use restrictions or special zoning
14. Verify legal names in the Registry Office (or deed)
15. Prepare listing presentation with researched materials
16. Drive by the property to assess the Curb Appeal, compare with neighbourhood
17. Start formal office file on the property
18. Confirm school district and effect of schools on the property value
19. Determine whether property is subject to a shoreline road allowance (if applicable)
20. Review all pertinent information to ensure that it’s complete

Listing Appointment Presentation
21. Explain the various agency relationships using Working With a Realtor® pamphlet and get acknowledgement that this has been reviewed with the seller
22. Give the seller an overview of current market conditions and projections
23. Review sales representative and brokerages credentials and accomplishments.
24. Review and confirm all legal descriptions and ownership details
25. Measure exterior and establish the square footage above grade
26. Confirm lot size from owner’s survey - if no survey is available, make a note on the listing
27. Note any lot line fencing, easements and variances
28. Discuss with the seller the possibility of seller take back (STB) and other options
29. Review any appraisal that may have been made
30. Present CMA to the Seller including Comparable sold properties, Current listings and expired listings
31. Offer pricing strategy based on experience and current market conditions
32. Discuss a Marketing Plan to meet the goals of the seller
33. Explain the advantages and power of Multiple Listing Service ®
34. Explain the use and power of web marketing, IDX and www.mls.ca
35. Explain the work both the salesperson and brokerage do behind the scenes and availability at night and on weekends
36. Explain the sales professional’s role in taking calls and screening for qualified buyers and curiosity seekers
37. Present and explain the strategic master marketing plan
38. Review and explain the Listing Agreement and obtain the signature of the seller - give the seller(s) copies.

Once the Property is Listed
39. Measure and record all room dimensions
40. Obtain house plans if available
41. Make a copy of any house plans
42. Copy survey and retain in listing file
43. Advise seller of how showing appointments will be made
44. Prepare instructions for salespeople showing the property and confirm with the seller the best times to show to prospective buyers
45. Have Mortgage Verification Forms signed and submitted to mortgagee
46. Verify with lender any penalties, terms and current rates and if the mortgage can be discharged
47. Check on whether the existing mortgage can be assumed and under what terms.
48. Confirm any Condominium Fees or Homeowner Association fees currently in effect
49. Get a copy of the Condominium bylaws, if applicable
50. Confirm supplier of Hydro or any other provider of this utility
51. Calculate the utility usage for the past 12 months from seller’s records
52. Verify the availability of any septic bed layout or permits at time of installation
53. Water – if Municipal check on rates for the past 12 months
54. Well Water – confirm well status and have Health Unit test so remedial steps can be taken if required. Also, advise of any abandoned wells on the property and put on the listing
55. Determine natural gas, heating oil or propane supplier’s name and telephone number
56. Note on listing any rented appliances i.e. hot water tank, furnace, etc.
57. Verify security system- owned, rented, terms and service terms
58. Ascertain if any lead-based paint, asbestos insulation, UFFI or other latent defect needs to be disclosed
59. Prepare a list of property features such as pool, sauna, whirlpool, landscape pools and special plants
60. Prepare a list of chattels included or excluded from the sale of the property
61. Compile a list of recent improvements, repairs or maintenance
62. Send letter to Seller if property is vacant to advise insurance company
63. Explain the advantages of a lock box and have extra keys made
64. Verify if property has rental units. If so:
65. - Inquire as to whether they comply with the zoning by-law, fire and electrical safety
66. - Make copies of all rental agreements
67. - Determine ownership of any appliances or other chattels
68. - Verify and list all rental amounts and deposits held
69. - Inform tenant of the listing and discuss how showings will be handled
70. Arrange for installation of For Sale sign
71. Assist seller to fill in the Seller Property Information Statement
72. Give the seller a blank copy of the Agreement of Purchase and Sale and discuss it with them
73. Explain the offer presentation process and the possibility of multiple offers
74. Discuss the type of conditions that will likely be included in an offer to purchase
75. Discuss results of Curb Appeal Assessment, Interior Décor Assessment and discuss ways to improve appearances for showings.
76. Arrange for Office Tour/MLS® Tour and report comments back to seller
77. Load listing into personal database for transaction management

Entering Property in Multiple Listing Service® Database
78. Prepare and check MLS® data input sheet
79. Upload to Real Estate Board – MLS® Data Input
80. Proof read listing as it appears in mls.ca
81. Take additional photos for uploading to MLS® and for use in Flyer. Talk to seller about virtual tour possibilities

Marketing The Listing
82. Create both print and Internet Ads with seller’s input
83. Co-ordinate showings with the owner, tenants and other REALTORS®. Return all calls - weekends included
84. Install lockbox if authorized by the owner
85. Prepare personal mailing and contact list
86. Generate mail merge letters to contact list
87. Order “Just Listed” cards and handouts
88. Prepare flyers and feedback faxes
89. Constantly review MLS® listings to ensure property remains competitive in price
90. Prepare property marketing brochure for seller’s approval
91. Arrange for printing of approved brochure and distribution
92. Distribute property brochure to all company salespeople
93. Mail out “Just Listed” notices to the immediate neighbourhood residents
94. Advise company Network Referral Program of the listing
95. Provide marketing data to buyers coming through international relocation
96. Provide marketing data to buyers coming from referral network
97. Submit ads to company’s internet site
98. Price changes promptly conveyed to all databases and internet groups
99. Reprint supply of brochures as required
100. Update Mortgage information as available to all marketing facilities
101. Follow up feed back e-mails and faxes sent to representatives who have shown the property
102. Discuss feedback from showing representatives with the seller to determine if changes are required to accelerate the sale
103. Place regular weekly update calls to the seller to discuss marketing activity and results
104. Receive and review all Offers to Purchase submitted by buyers and buyers’ representatives
105. Evaluate offer and prepare a “net sheet” on each for owner comparison
106. Counsel owners on each offer – explaining merits and weaknesses of each
107. Contact buyer’s representative to discuss qualifications and motivations of their client
108. Fax/Deliver S.P.I.S. to buyer’s representative or buyer prior to offer if possible
109. Confirm that buyer is qualified by Mortgage Officer
110. Obtain pre-qualification letter from Mortgage Officer
111. Negotiate all offers on seller’s behalf, setting condition time limits and closing date
112. Prepare and convey all counter offers, acceptance and/or amendments to buyer’s representative
113. Fax copies and mail originals of all documents to lawyer for the seller
114. When Offer to Purchase is settled and finalized by the seller, deliver to the buyer’s representative leaving a true copy with the owner
115. Deliver deposit to Trust Account as soon as practicable.
116. Provide copy of the executed agreement to the office for filing in the deal file
117. Advise and counsel owner on the handling of offers while the original transaction is pending i.e. days to meet conditions in first offer and procedures
118. Update personal transaction program indicating Sale Pending
119. Assist buyer in applying for financing, if applicable
120. Arrange for appraiser to inspect the property and give any information including comparables, survey copy, etc.
121. If STB – get Credit Report of buyer for seller and review it with him/her
122. Order Septic Tank inspection, if applicable
123. Deliver water test results from Health Unit to mortgage company
124. Arrange other inspections as required by Financial Institution and/or insurance company i.e. mould, termite WETT inspection, etc.

Mortgage Tracking
125. Contact lender regarding mortgage application progress
126. Prepare/obtain waiver or condition removal documents and deliver to lawyer for the seller

Home Inspection
127. Co-ordinate buyer’s professional home inspection
128. Review the inspection report
129. If repairs required, assist seller in obtaining trustworthy contractor to perform required repairs

The Appraisal
130. Schedule appraisal appointment
131. Provide appraiser with comparables used to set list price
132. Assist seller in questioning appraisal report if it seems too low

Closing Preparations and Duties
133. Work with buyer’s representative to arrange any visits prior to closing as agreed in the Agreement of Purchase and Sale
134. Arrange for trust deposit monies, if in excess of commission due, to be given to the lawyer for the seller
135. Be available for any concerns/questions from the seller
136. Advise MLS® that property is Sold and supply details as to price, date of sale, selling brokerage.

2007 New Real Estate Sales Record for London

As per Real Estate Board release:

2007 quietly smashes previous sales numbers

Mike Carson, 2007 President of the London and St. Thomas Association of REALTORS® (LSTAR), spoke today on the real estate market for London and area: “2007 has indeed become an all time record for housing sales in London and St Thomas and area. All sectors have reported substantial increases in both unit sales and increased average sale prices. We saw steady growth in sales throughout the year, without a lot of the frenzy seen in other markets. London has a stable affordable housing market and a good inventory of resale homes. CMHC and other reports indicate that London is poised to maintain steady growth through 2008 and anticipate modest price increases keeping abreast of inflation.”

“However,” continues Carson, “new homes to be built face a little uncertainty as there are a very limited number of available building lots, and many builders are unable to locate building lots for the spring. It is imperative that the available residential building lot situation be resolved immediately by the City of London or we will continue to lose valuable jobs and skilled labour to other centres.”

The total number of homes sold in the London Census Metropolitan Area (CMA) in 2007 came in at 9,378, breaking 2006’s previous record of 8,916 by 462 units. Sales of detached homes were up 4.9%, while sales of condos were up 6.1%. The average price of a home in LSTAR’s jurisdiction (Middlesex and Elgin Counties) rose 7.0% to $202,256.

London Ranked in Affordable Housing Survey

London Free Press Article

London has turned up in the top 50 most affordable housing markets in North America in an international survey.

The survey ranked London 43rd out of 50 in the survey with Thunder Bay ranked at the top spot followed by Youngstown, Ohio. Saguenay, Que., St. John’s, Nfld., and Saint John, N.B., also ranked in the top 10.

The report, compiled by Winnipeg-based Frontier Centre for Public Policy is based on median household income and the median house price.

The average house price in London is about $202,000.

At the other end of the scale, Los Angeles was the most expensive market in North America with Kelowna, B.C., and Vancouver B.C., ranking 13th and 15th.

17 Ways to Get Buyers Inside Your Home

Here's an article with some great tips on preparing you home for sale. If you are thinking of selling your home in London, Ontario, here is some sound advice to net you more money in your home sale.


You’ve all had that experience with a client where you drive up to a house and they don’t even want to go inside. It’s an immediate “un-appeal.” You may know the inside of the house shows much better, but you just can’t convince them to spend the time to even go inside. In today’s market where lots of choices in housing are available to the buyer, why should they?

Here are some easy, inexpensive fixes that will help create that outside appeal and get you one, giant step further to a sale.

1. Paint or stain the front and garage doors, especially if they show any weathering. These are the first visuals where a potential buyer focuses. If garage doors are metal and dented, they may need to be replaced.

2. Any old, basically abandoned sheds or small structures, must be removed, the area graded and the grass replaced.

3. Change any dated, outside light fixtures.

4. Fix that driveway. If it is blacktop, make sure cracks and crumbling areas are dug out and filled and then the whole driveway sealed. If it is cement, have large cracks filled and repaired professionally. The buyer must at least feel they can drive the moving truck in confidently!

5. Make sure landscaping bricks are in their proper placement. Mowing, weed-whipping sometimes moves them and this is something the homeowner rarely notices, but makes the property look unsightly.

6. Fill in bare dirt under large shade trees. Plant shade-tolerant plants in defined planters or groundcover. Landscape properly for that area.

7. All landscaping beds should be cleaned out and updated for the time of year it is in your region. Place new bedding material down.

8. Have trees and bushes pruned and trimmed. If a bush or tree is looking old or about to expire, remove it and replace it with a similar size and type if you can. If there is a tree limb(s) over the roof, have them removed.

9. If the house needs painting and a full paint job is not in the cards; have it touched up professionally in the worst, most visible spots. Paint shutters and fix them if they are hanging crooked. At least this may help get your client in the front door, even if they negotiate a full paint job into the sale later.

10. If the house is sided, have it power-washed and have gutters and windows cleaned. Window cleaning inside and out makes the house feel updated and fresh, rather than old and dingy.

11. Make sure grass is in good shape, weeds are removed, trimming done regularly. So many sellers fall down on this job the minute the house is listed, and this is critical to selling a house quickly, especially one where the owners have already moved out. In snowy climates, removal must be done regularly too. If owners have moved out, make sure you have an HWA Home Warranty to re-assure buyers.

12. Keep garbage and recycle containers inside the garage, along with all toys and equipment. Make sure the garage is neat and organized. Painted walls and floors also go a long way in this area and are inexpensive to do.

13. Decks should be washed and repainted or re-sealed; plantings around them cleaned, weed-free and looking good. Patio furniture should be in excellent condition. Even though it is in the backyard, this is the area where the family can envision enjoying the warm days and the new yard.

14. If the roof has missing shingles and they can be replaced inexpensively, suggest this be done as it may save negotiation over a completely new roof. Roof repair needs and costs should be minor or the homeowner might as well replace the entire roof.

15. If the homeowner wants to do a bit more, suggest solar lights lining the driveway or installing a more attractive front door with lead glass inserts and replacing plain doorknobs with something more custom.

16. If you have an evening showing, make sure lights are on outside and inside the house. This is warm and inviting.

17. If it’s a holiday season, by all means decorate the home! Just like sugar cookies or vanilla scent on the inside of the house, this really says “it’s a home” and I can see myself enjoying life here! In the least, always have some greenery or flowers for the season on the front step or porch; even a birdbath with a little garden around it says home.

Remember, most home buyers cannot visualize even these simple changes and clean ups in a house and the ones who can, will be looking for a reduced price. So to sell the house at top dollar and quickly, make it “appeal” to the many who will be seeing it rather than the few who are looking for a “fixer upper.” These people know what they want, go after it and need less assistance.

Finally, have neighbors or friends look at the finished results to see if you or the home owner has missed anything key that would be quick and easy to do.

Interest Rate Cut?

Economist sees a cut in Canadian interest rates as per the article below.

Regardless of some of the negative news in the media regarding the economy, with the London economy staying stable to strong, a reduction in interest rates will keep London, Ontario's real estate market humming along and another strong year for 2008 is predicted.



Canadian interest rates to tumble: Merrill

TAVIA GRANT
Wednesday, January 09, 2008

The Canadian economy is poised for a sharp slowdown as U.S. demand weakens and that, combined with cooling inflation, spell much lower interest rates in the coming year, Merrill Lynch Canada predicts.

Economist David Wolf sees a 125 basis-point cut in interest rates this year, which would bring the Bank of Canada's key lending rate to just 3 per cent.

It's a rather bleak outlook, and one that came the same day Goldman Sachs said the U.S. economy is already likely falling into recession, while former U.S. Treasury Secretary Lawrence Summers said the chance of a U.S. recession this year is at least 60 per cent.

“Canada is destined to play a primary role in global economic rebalancing away from American demand, given its proximity to the U.S., its openness to trade and its strong currency,” Mr. Wolf said in Merrill's economic outlook.

That means a swing to current account deficit as exports buckle, lower inflation and overall weaker GDP growth “as Canada's economy is thrown off-balance in 2008,” he predicted.

He expects the Canadian economy will grow 1.7 per cent this year, much slower than 2.6 per cent last year, while core inflation could fall to 1.5 per cent from 2.2 per cent. Canada's benchmark stock index will likely slide about 4 per cent this year as earnings deteriorate, he expects.

Goldman, meantime, expects the Federal Reserve will slash its key lending rate to 2.5 per cent by the third quarter from 4.25 per cent currently.

It doesn't, however, see a prolonged, deep contraction.

“The recession is likely to last two to three quarters and should be relatively mild by historical standards,” its report said, as interest-rate cuts, tax cuts and exports stay strong.

The World Bank also chimed in Wednesday, saying 2008 global growth will slow for the second year in a row amid tighter credit markets and more expensive oil prices.

“A weaker U.S. dollar, the spectre of an American recession and rising financial-market volatility could cast a shadow over this soft landing scenario for the global economy,” the bank warned in its annual forecast.

Global markets have entered a period of “heightened uncertainty,” it said, adding that growing risks and increased volatility have made some developing countries “more vulnerable to financial disturbance.”

It sees global growth this year of 3.3 per cent — down from its previous forecast of 3.6 per cent — after 3.6 per cent growth last year and 3.9 per cent in 2006.

Renters Receive DownPayment From City to Purchase Home

The City of London has announced a program that gives renters a 6% down payment to purchase a home. The City will select 120 winners from a pool of applicants at the end of the month. Renters have until Jan 31, to apply for the program.

For full qualifications and to apply, visit the City of London website HERE

Qualifications include - having a combined family income of less then $50,000, finding a home within 120 days, home purchase can not exceed $120,000, and must be currently renting in the City of London or Middlesex.

Of course, the applicant must still qualify for the home/mortgage with a financial institution. If you are currently renting and don't have the money for a down payment and would like to purchase a home, then you should consider taking advantage of this opportunity.

First Time Home Buyers Get Break on Land Transfer Tax

In an unexpected move, the Ontario Government is now giving first time home buyers a financial break on home purchases. Great news, as first time buyers will save up to $2000 on closing. The timing of it is a little weird, as the real estate market is doing just fine and I'm not sure this will make any difference in boosting the market - nor does it need to be boosted. Regardless, any time people can save some money from the government, can't complain!

The following article was released.


ONTARIO EXPANDS LAND TRANSFER TAX REFUND PROGRAM

First-time buyers of resale homes to benefit from new tax measure

The McGuinty government is giving all first-time homebuyers a break on land transfer tax by proposing to expand the Land Transfer Tax Refund Program to include purchases of resale homes, Finance Minister Dwight Duncan announced today.

"Expanding this Land Transfer Tax refund is an important part of our government's commitment to helping Ontarians buying their first home," Duncan said.

Effective midnight tonight, first-time buyers of resale homes, as well as newly constructed homes, would be eligible for a refund from the provincial government of up to $2,000 of the Land Transfer Tax paid.

The expanded Land Transfer Tax Refund Program for First-time Homebuyers is part of a package of new tax initiatives announced in the 2007 Fall Economic Outlook and Fiscal Review that would provide $1.4 billion in provincial tax relief for business and people over three years. The government is making strategic investments in people, communities and infrastructure to strengthen Ontario's economic advantage and help manufacturers and other sectors challenged by current economic conditions.

For more information please visit: http://www.gov.on.ca/

Home Prices in London Affordable

London homes sale prices are affordable when compared to other cities across Canada. Article can be read HERE.

Figures released yesterday show it takes 154 hours of work each month, based on an average wage, to make the mortgage payments on an average London house affordable.
That's about 33 per cent lower than the Canadian average of 229 hours a month. Toronto residents need to work about 275 hours, while Kitchener and Hamilton are just less than 200 hours.


"We don't see the dramatic price hikes here. We see steady growth, which makes it a great place to invest in the long term,"


Meanwhile, London's hot housing market should cool a little in 2008.
Sumnall said the new home construction and resale markets will decline slightly next year but nothing compared to the deep slump seen in the early 1990s after the last housing boom.
He said the local market will stay strong by historic standards, buoyed by a healthy local economy.
"We were on a high plateau to begin with and now we are going to step down just a bit," Sumnall said.

London on Pace for Record Year in Homes Sales

London, Ontario is on pace to break their previous record of homes sales for a year. A strong economy combined with some strong economic fundamentals is fueling the strong year. The most positive aspect, in my opinion, is that the average home sale price jumped 7.5% in a 12 month span. This has been consistant with the past 4 years and should eliminate any fears of a "housing bubble" for London or any dramatic fall out for the success the market has experience the past 6 years.

Article can be read HERE.

Some Home Buyers will Benefit From New Tax Changes

The follow was released by the Canadian Real Estate Association:

The tax changes outlined in the federal government’s economic statement are one step in helping Canadians buy a new home, but The Canadian Real Estate Association says the government should include other initiatives in the next federal budget, including the outstanding election promise of addressing capital gains taxes.

“The one per cent cut in the GST will provide savings to new home buyers,” says CREA CEO Pierre Beauchamp. For example, using the sliding GST scale that applies to the cost of new homes, a buyer of a $375,000 house in British Columbia would save $2, 738.

“The one per cent reduction in the GST will also help Canadians pay for home renovations, or in the purchase of appliances or furniture,” Mr. Beauchamp added. According to research conducted by CREA, Canadians spend an average of $7,475 on renovations when they buy a home, and spend another $3,950 on furniture and appliances. The GST cut represents $114 in savings based on these averages.

“But there are other potential measures the government could have considered that would help Canadians buy a home,” Pierre Beauchamp noted. The Canadian Real Estate Association has proposed two other tax measures to the federal government. One would help first time homebuyers, and the other would encourage investment in rental properties.

The Association has recommended the federal government increase the personal maximum withdrawal allowed under the Home Buyers’ Plan to $25,000 from the current level of $20,000. The current level has not been adjusted since the plan was launched in 1992. The adjustment, according to CREA, would at least keep the Home Buyers Plan in step with inflation.

REALTORS® are asking the federal government to amend the Income Tax Act to provide real property investors with the freedom to change asset classes without the financial penalties they currently face. Under our proposal, this would be achieved by allowing property investors to defer the capital gains tax and the capital cost allowance recovery on the sale of an investment property when the funds are reinvested into another within a specified time period.

“This change would allow investors to grow their real property investments, provide flexibility to their investment strategies, and encourage the upkeep of renovation of investment properties,” Pierre Beauchamp added.

The Canadian Real Estate Association (CREA) represents the interests of over 94,000 members who are active in all aspects of the real estate industry. For most Canadians, ownership of a home is their biggest investment and the key to financial wellbeing. CREA members advise and assist Canadians in buying and selling homes. (CREA 30/10/07)

London's Economy Continues to be Strong

London Ontario's diverse economy continues to benefit London. Even though the manufacturing sector has been hit hard by job loses, London experienced a net job gain. Other communities may have struggled because they rely on manufacturing jobs for employment, but not London.

I've commented in previous posts that London's diverse economy which includes health care, manufacturing, education, retail, construction, and hospitality, is a major strength for the city. This is one of the reasons I felt real estate market will continue to do well and there is a very positive future for the city.

The article in the Free Press can be read HERE

Preparing Your Home for Sale

I received the following from Catherine Brown, Home Staging Professional. She makes some good points about the value of preparing a property properly when putting it up for sale. Her website is http://stagedtomove.ca/ . If you are thinking of selling a property in London, Ontario or surrounding area, this is great advice.

One of the most common objections to staging is sellers mistakenly thinking that buyers will put their own stamp of individuality on the house, so there's no need to update, decorate, or repair before selling.

Other sellers misguidedly believe the house has been good enough for us all these years and there's no point to change it, after all, it should be good enough for the new homeowners, too.

The goal of home staging is to neutralize the property, making it appeal to many buyers so they can envision themselves living there, thereby encouraging them to make an offer.

Sellers who have lived in their home for a long time get used to a missing piece of baseboard, a drywall repair that was never finished, or other incomplete, do-it-yourself projects. All red flags that tell prospects the sellers have lost interest in their home. And buyers will also wonder what else has been neglected.

You can make a clear choice early on. Spend money on advertising fees for a home not ready to sell or hire a staging professional to sell your home quicker and for more money. And don't forget to consider the money sellers will spend on additional taxes, utilities, and mortgage payments waiting for the sale.

A property that becomes stale piques the interest of would-be buyers for all the wrong reasons and they're wondering what's wrong with it and open houses may draw neighbours who are curious to see why it hasn't sold.

The Realtor who partners with a staging professional not only stands out from the competition as offering a value-added service to their clients, they experience better offers, faster sales, and more repeat and referral business.

London's Market Continues to Roll

London, Ontario's Real Estate market continues to sell, sell, sell. Statistic's indicate that August was the second best month on record for number of sales, and 2008 is on pace to be the highest selling year in the highest of London/St. Thomas Real Estate Association. Story HERE

The great news is that not only are the number of sales strong, put the average sale price for homes has jumped only 7.2%. With a market this strong, 7.2% is a very reasonable increase in home sale prices. Anything higher and I would be worried a little, but as of now, market conditions are very strong and favourable for this to continue for a while before slowing down. (In comparison, market's in Alberta have experienced price increases in the the 50-60% range - which can be very dangerous and inflationary)

Sales of Luxury Homes up 43%

More homes in higher price ranges in London, Ontario are selling then compared to 10 and 20 years ago. Read story HERE

This shouldn't be that surprising. Demographics, increase in equity, and increase in home prices have made the $500,000-$1,000,000 price range in real estate more desireable.

Rent Increase Set for 2008

If you own rental property in London, Ontario, you should be aware that 2008's rent increase is set for 1.4% for 2008. Which happens to the the lowest rate percentage since the first guideline was set in 1975. In case you didn't know, the rate is calculated using the Ontario Consumer Price Index as defined in the new Residential Tenancy Act which took effect Jan, 2007.

Full Story

London - One of Strongest Real Estate Markets in Canada

A new report by the Canadian Mortgage and Housing Corporation was just released and has backed up what I've been saying on this blog for the past year. Read HERE

London, Ontario's real estate market is in a very healthy situation. It will continue throughout this year and likely next year as well. At some point, the level of activity will level off but there is no risk of any market bust.

Does the following sound familiar?

He said London benefits from a healthy, diversified economy and has the advantage of affordable home prices compared to the Greater Toronto Area. The average house price here is just more than $200,000 compared with about $370,000 in Toronto.

Record Number of Sales in July

London, Ontario experienced a record number of sales for the month of July. The economy continues to be strong and people are seeing the value of real estate, which is still very affordable. One the strong reasons for the number of sales is the available of listings. An increase in listings and new home construction allow for more selection for buyers, thus the increase in the number of home purchases.

The Free Press Article is HERE

Important Development Issues Regarding the City of London

I received the following email from London St. Thomas Association of Realtors president Mike Carson. It outlines importance of getting the development issues solved between City Hall and developers so the London can continue to prosper and not regress economically. Please read and respond if necessary with the link at the end of the article.


As some of you are aware, there has been a great deal of controversy swirling around London City Hall lately over the issue of new development. Basically what's happened is this: bringing new lots on stream for home builders has ground to a halt. Not only are new development applications getting mired in a very problematic approvals system, but there is also a significant backlog of previously approved applications that is also stuck in the same clogged pipeline.

Why is this happening?

Since March 2007, the review of virtually all new subdivision development applications has been halted pending the implementation of a City committee's recommendations (The Blue Ribbon Panel Implementation Committee) and the development of a new internal process that will streamline development. Good news! But in the meantime London is rapidly running out of serviced lots on which to build. In fact, the province has mandated that a City the size of London have at least a two-year supply of serviced lots to ensure stable, healthy growth and strong economic development. At this rate, we will run out of serviced lots in only nine to six months.

Why does it matter?

Since the late nineties we have seen a boom real estate market, with new records for home sales being set in 2001, 2002, 2003, 2004 and 2006. CMHC (according to their May 16, 2007 report) predicts, and the London St Thomas Association of REALTORSR agrees, that MLSR sales in 2007 will top 9,100 homes, setting yet another new record. Because resale housing transactions generate significant economic activity as well as create jobs, this has been great news for London. In fact, according to a study prepared for the Canadian Real Estate Association by Clayton Research Associates on the economic impact of MLSR sales in 2005, resale housing transactions in Ontario generated an estimated $33,425 in general household purchases, furniture and appliances, moving costs, renovations, services (financial, legal, real estate appraisal, survey and other professionals) and taxes. That means that last year alone MLSR sales in the London CMA generated nearly 300 million dollars of economic spin off into our local market.

What's more, MLSR sales generated approximately 40,455 direct jobs province wide and 26,235 indirect jobs - a total of 66,690 jobs -- in the manufacturing, construction, trades, finance, insurance and real estate, and professional services sectors. (In fact, all told, jobs generated directly and indirectly through the sale and purchase of home sales and purchase of MLSR homes accounts for about 1 in 100 full-time equivalent jobs across the entire Canadian economy.) Add new home sales to the mix and you can understand why times are so good.

Let's imagine, however, that we see a significant dip in new housing starts due to the projected shortfall of serviced building lots. Not only will this put at risk the livelihood of area tradesmen and suppliers, it will also result in a diminished inventory of available homes. For the market to function optimally, there has to be movement -- movement out of the rental market and into the ownership market, upward movement into bigger, more expensive homes and downward movement on the part of empty nesters and retirees into more lifestyle-appropriate quarters. For people to want to move there has to be somewhere they want to move to and, for many of those people, a new home is the answer. The new home industry spurs activity on all fronts, by providing reasonably priced product, in locations that the buyers are requesting. It must remain attractive so that people actually start to consider making a change in residence.

So, what will happen if there is no new development?

House prices will go up. New homes and resale homes will be impacted directly by this factor. Less supply, more demand, higher prices. Right now one of London's draws is how affordable its housing is compared to other Ontario centres. Preventing growth will erode that affordability. It will also have a negative impact on the formation of new households, which is ultimately what drives the new home market.

The market could slow dramatically. This happened during the recession in the nineties. People stayed put. Kids lived with their parents into adulthood. There was little to no move up activity in the real estate market (nowhere to move to) and the economy languished. Such stagnation may affect home prices again, making new homes out of sync with the resale market and putting London at a disadvantage compared to other municipalities.

Jobs created directly by the real estate sector will be lost; jobs created indirectly will be negatively impacted. And then the people who had those jobs will move to other centres where growth is seen for the positive thing it is - most notably, out west to places like Calgary and Edmonton. London Economic Development Corporation has identified the shortage of skilled tradespersons in the London CMA as a serious impediment to the City's growth and future prosperity. If we don't have enough skilled workers now, how is driving away the ones we do have going to help? If we lose this talent, will we ever get it back? It is extremely hard to attract and retain students, employers and employees to a city if there are no jobs for them. And a scarcity of skilled labour means manufacturers will rethink investing in current or future plants.

It used to take eighteen months to two years for a development application to get through the City of London's approvals process. That was way too long. Clearly a new, more streamlined process for development approvals is needed. We don't argue with that. In fact, we embrace it. However, the new internal process that was supposed to fix all this has been in the works for more than a year; the new system was supposed to be in place six months ago. The reality is that right now nobody is saying when these recommendations will be made, whether Council will approve them once they are made, or when they might be implemented. In the meantime, things are starting to slowly move but, slowly is not good enough.

Bringing growth to a halt while we're trying to fix the system is tantamount to bringing our local economy to its knees. None of us want to see happen. That's why LSTAR has joined the Keep London Growing Coalition, a group of concerned Londoners who want to ensure our community's continued prosperity.

Please: Go to www.keeplondongrowing.ca and send Council an e-mail in support of the Coalition's position.

London and Area Housing Market: Still Strong and Steady

Glad to see that homes are still steady and very active when compared historically to other years. A slight drop in homes sales is a good thing as far as I'm concerned. The market is still strong and home prices will not become to inflationary.

Released from the London St. Thomas Association of Realtors:


June of 2007 continues to be a strong market, slowing only slightly compared to June, 2006 : 992 homes were sold, a drop of 1.9% compared to June of 2006. The drop was entirely within the "detached" category (-2.7%), mitigated by an increase of 1.5% for condos. The year-to-date remains strong: condo sales are up 5.1% and detached homes were up 5.6% as compared to 2006 for the same period.


The London CMA continues to be very affordable, and compares very favorably with other Ontario centres. According to the Canadian Real Estate Association’s Major Market Release for May, 2007 (the most current available), the average price January 1, 2007 – May 31, 2007

Year-to-date for:
��
London and St. Thomas was $206,842;
��
Durham Region was $275,723;
��
Hamilton-Burlington and District was $279,496;
��
Kitchener-Waterloo was $240,371;
��
Ottawa was $276,379;
��
St. Catharines & District was $212,372; and
��
Toronto was $382,689.


Mike Carson, LSTAR President expresses his satisfaction with these numbers. "It seems that home buyers remain active and confident. The slight drop in residential sales and the slight increase in condominium sales demonstrate a flexible and adapting market. Year-to-date we are still ahead of last year, and we anticipate that the strong sales numbers will continue for the latter half of 2007. The area’s housing situation reflects that of the local economy itself: growing, adaptable and not overheated "

Sell Your Home Faster/More Money by Staging it

Many Realtors know the benefits of hiring a home stager when they list a disaster property. In fact, it could be the only way to make the sale without significantly reducing the price. But a staging professional can be instrumental in helping to sell any type of home in any market. They are trained to showcase a home to its best advantage so it appeals to a wider audience, which results in better offers and a faster sale.

After an objective home walk-through, this stager gives her Top 10 written analysis of the property inside and out to the sellers. These recommendations could include de-cluttering, packing and storage, window treatments, lighting, furniture and decorative accessory rentals, and painting, but most importantly, how to create a positive first impression and the vital factor.

Some Realtors maintain they've been staging for years, but are quick to realize the benefits of partnering with an experienced staging professional. After all, their time is now available to generate more leads and sell more properties.

How a property is presented will determine the quality of buyers and offers it attracts. And the investment of home staging will always be less than the first price reduction. A professional home stager will:

Have those difficult conversations with sellers about colours, lingering odors, or dated decorating decisions. Being educated in buyer psychology, a staging professional will explain the logic behind recommendations in a tactful way that makes sense.

Provide the objective second opinion and motivation a seller needs, from a third party who has no financial interest in their sale. A Realtor's advice may be perceived as simply a helpful hint or as having an ulterior motive. Eliminate the Realtors risk of offending their clients, friends, or relatives who referred them.

Create a series of good first impressions, enabling buyers to connect emotionally with the property.

Help sellers look objectively at their home using a buyers eyes, and showcase it in a way that many potential buyers can visualize themselves living there.

It has been proven that when a house is staged, it sells faster. This means fewer showings, less stress, and less advertising costs enabling everyone involved to get on with their lives.

Many Realtors offer (and pay) for professional home staging as a value-added service to set them apart from those who don't. They know a trained stager will make a difference in the details, and often it's the little things that get noticed by potential buyers. If the seller takes care of the details, buyers believe it will extend to the rest of the home as well.

It can be difficult for sellers to spend money on the house they're leaving, especially if they believe it's already in good shape, but a modest investment of time and money has proven to reap rewards.

-written by Catherine Brown, Staged to Move. London, Ontario

Downtown Continues its Revitalization

Downtown London Ontario continues the slow process of revitalizing itself. Out of town investors continue to purchase real estate in the downtown and invest in its future. Article HERE.

The Downtown has come along way in the past 7 years. Spurned on by the city's commitment in investments ie JLC, Library, Market, etc, and a favourable real estate market, building and investment has exceded expectations. I can count 9 new apartment or condo buildings alone. Yes, there is still issues and work to be down ie filling all commercial vacancies, parking issues etc, but it is headed in the right direction.

I would estimate that revitalizing a downtown would take approximately 20 years to fully fulfill expectations. If true, London's downtown core is going to be a fantastic place to live 13 years from now.

House Paint Problems and How to Fix Them

I ran across this article on the 10 Most Common House Paint Problems and How to Fix Them. Provides some very helpful tips on improving the condition and value of your home.

London's Vacancy Rate Stays Low

London, Ontario's vacancy rate remained low compared to the provincal average. Article can be found here.

This boads well for London's economy and real estate market. There has been a substantial increase in rental units built in the last 5 years. But London's economy has been able to handle it. Job growth is strong and people are moving to the city.

I remember back in 2001, vacancy rate for London was just over 1% - which was low (compared to today's 3.7%. Provincal average 3.9%) With the amount of new rental units built - and people buying homes over renting, one could have been worried that the rate could have increased too high. But this hasn't happened.

A lot of these renters will eventually purchase homes for themselves. Another bright spot for the London's future real estate market.

Home Sales on Record Pace

Home Sales in London, Ontario set a record in the month of May (breaking the previous record from March 2004). Information found here.

A healthy listing inventory has helped with the increase in home sales. It seems there are more listings on the market for buyers to purchase, which is making it easier for people to buy. This is also keeping price increases is check. Home prices have increased 6% from last year according to LSTAR stats (even though the article says 8%). Put things in perspective - 1989 saw increases of 30% before the market bottomed out and areas of Alberta have recently seen increases in the 60% range.

Also, I'll point out that a high percentage of home sales are occuring in the $140,000-$200,000 range. London's real estate market has always been propelled by first time buyers and these stats would indicate that to be true.

House Prices to Double in the Next 20 Years?

I just finished reading an interesting Article by Benjamin Tal, a senior economist with CIBC World Markets. He predicts that Canadian house prices are likely to double in the next 20 years, and not drop as some analysts have feared.

"Our finding is that the widely held fear of softening in housing market activity and structural downward pressure on prices due to the changing Canadian demographic landscape are largely unsubstantiated." Tal said.

Tal said it's important to not only look at population change but the level of housing market activity amoung those age groups.

While it's acknowledged that the retiring and aging baby boomers will change the demographics of the housing market, Tal says that the percentage change isn't as great as people make it out to be and the market will adjust accordingly. Please read the article for the specific stats and reasons.

Tal also stats:

* Interest rates will not be a huge factor in the coming 20 years. He says that anti-inflationary nature of globalization will keep inflation - and interest rates - at about the same levels.

* Immigration will play a large factor. It will increase population growth - which should fill the void of aging baby boomers. Government policies could allow for increased immigration in the future.

* Canadian mortgage market has yet to take advantage of many mortgage products which have been available in the US for some time but are just making there way to the Canadian market now - such as interest only mortgages and extended amortization periods.


There was some interesting points brought up in the article. No one knows for sure what the market is going to be like in 20 years time (too many factors and too many things can happen between now and then) but it's important not to get scared into inaction. If you were to purchase a home today in London, Ontario, there is more then a great chance that you will substantially benefit financially 20 years from now.

CMHC - London’s Housing Market Will Stay Strong in 2007

The following article was released by the Canadian Mortgage and Housing Corporation. Their outlook on the market is similar to what I've repeated on this blog.

LONDON, May 16, 2007 – The housing market in the London Census Metropolitan Area (CMA) will experience another strong year, according to the latest forecast in the London Housing Market Outlook released today by Canada Mortgage and Housing Corporation (CMHC). Reports are also available for other major metropolitan areas across the country.

Highlights of the London Spring Housing Market Outlook report include:

�� New home construction will remain at a high level. Total starts will reach 3,480 homes in 2007, down five per cent from the very strong year of 2006. Apartment starts will level off to 1,100 units while single-detached home construction will decline seven per cent to 1,950 homes.

�� Existing home sales will set another record year. Home sales through the Multiple Listing Service (MLS®) will top 9,100 homes, up two per cent from the record of 8,960 sales set in 2006.

�� Home prices will continue to move up strongly. The average new home price will increase by nine per cent to $297,600 while the average price for an existing home will gain six per cent to $202,200.

“2007 will be another busy year for both the new home and existing home markets. The improvement in the job market, low mortgage rates and strong inflows of new residents will continue to sustain strong housing demand in the London area.” said Penny Wu, CMHC’s London Market Analyst. “Renters and first-time home buyers will find more choice as the number of vacant apartments and homes listed for sale both remain on the upward track.”

Is There Lead in Your House Water?

Much as been made about the issue of lead in the water of older homes in the City of London, Ontario. How will this effect homes buyers or home sellers who are active in the real estate market? Here is some information from the City of London to update what is happening in the current situation:


John Braam, P.Eng, City of London Division Manager, Water and Sewer Operations states:

First of all I would like to advise that we are finding the majority of service pipes in the areas are constructed of materials other than lead service pipes. The City of London is committed to providing all homeowners within the area with a sample at the tap to determine lead levels. The testing requires about 1 week for the analysis but we do have a backlog of samples to be conducted. The sample time has stretched to about 2 weeks or so but has been impacted by ability to access the home so it may stretch out a bit more yet. Currently we have had sampling requests for about 4300 homes in the core areas.

We have been working on the resolution initially by providing the customers with the information and testing results that indicate whether or not they are impacted by lead issues; copper and other service materials are not impacting customers. We have been careful to identify and educate customers and particularly the vulnerable population groups to which exposure of high lead levels can cause long term (chronic) concerns. In many cases the lead level is reduced below the standard by simply flushing the standing/stagnant water, this is why the sampling program (lead analysis) answer is required.

The interim/longer term means of dealing with the problem is to review and possibly adjust the water chemistry to reduce uptake of lead. The process engineering is underway and we expect to move forward with recommendations and a solution by the end of the summer. If chemistry analysis and a resolution that minimizes lead uptake is successful the objective is to reduce the lead uptake to the level to the point where use of water through a lead services does not exceed the standard. The long term and most complete way to deal with the lead services is to replace them, this option is more costly, involves construction and obviously cannot be completed for all lead services in the short term.

We are providing the information on the lead analysis and confirmation of the service material into the home. We also provide information on the lead service replacement program. Basically, if the homeowner elects to replace the lead water service then the private property section from the property line to the home must be replaced by a contractor at the expense of the homeowner, then the City will replace (at it's expense) the part the goes from the water main to the property line. This does not apply to business or commercial properties. The costs have a range and are directly related to the length and the home owners property value, i.e. may need to go through an elaborate garden, pressed concrete parking area or under a verandah. The costs for many of the installations (on private property) have ranged from about $1000 to 3 or in some cases even $4000. Cost per foot is not an appropriate or accurate means to determine home owner costs. The City's cost is generally $5 to $6000 but can be as high as 10 to $12,000 again depending on restoration requirements. The average costs have been in the neighbourhood of $6,500 with about 15% of that cost apportioned to the homeowner.

10 Ways to Increase Your Home Value for ReSale

If you own real estate in London, Ontario or surrounding area and would like more information on your home value, please contact me.

The following 10 suggestions were provided by Catherine Brown, Staged to Move - 583 Princess Avenue, London, Ontario.

These are the 10 Best Ways to Increase the Value of Your Home:

10. Light-filled Additions: A well-designed addition adds light, space, and valuable square footage that will increase its value. The key is to get a professional design that is in keeping with the existing property and the neighbourhood. Don't make it so elaborate that it exceeds your streets maximum market value. The best additions are an extension of the kitchen, adding a light-filled eating or lounge area.

9. Gold is in the Details: Contemporary, high quality door knobs, handles, electrical wall covers, and cupboard door knobs and drawer pulls add to the overall well-kept appearance that buyers want and suggest luxury that buyers are willing to pay for.

8. Natural Light: Light-filled homes sell faster than dark ones, especially in our light-deprived Canadian climate. Remove heavy drapery, open sheers, and add extra recessed halogen ceiling lights on dimmer switches.

7. Glam up the Master Bedroom: This room should appeal to adult buyers and convey a sense of peace, a luxury adult sanctuary no matter what the price range. Think upscale boutique hotel. Display good quality bed linens, lots of pillows, low lighting, no telephone, no television, and no clutter.

6. Outdoor Living Space: With our short Canadian summers, there's a growing trend toward spending more on our outdoor living spaces and making them an extension of our homes. Your home should display attractive alfresco dining furniture, large potted plants and/or hanging baskets, a clean barbecue, and the garden should be mulched for low maintenance.

5. Finish Incomplete D.I.Y.: Over time, people who have lived with unfinished projects no longer notice them, but prospective buyers will zone in quickly. Incomplete baseboards, mouldings, ungrouted tile, missing kickplates in the kitchen, or dripping taps suggests you don't care about the house. If you can't be bothered to finish projects, buyers will wonder what else is uncared for.

4. Update Kitchens & Baths: As these are the most expensive rooms to renovate, they play a major role in the sale of a home. The more contemporary and updated they appear, the more appealing the entire property is to buyers. This doesn't mean a complete reno before the house goes on the market. A fresh coat of paint on the walls, a change of knobs or drawer pulls, a new faucet set, or even a new granite-look countertop will make a huge difference.

3. Cleanliness is next to Godliness: If you were going to sell your car, you would have it professionally detailed. The same should be true for a house as it is probably the biggest purchase people make. Other people's dirt makes buyers uncomfortable.

2. De-Clutter: Reducing clutter adds more saleable space, makes room sizes look bigger, and it costs nothing, unless you have to rent storage. Most buyers can't see beyond clutter. If you haven't got room for your possessions, what makes buyers think there will be enough for theirs?

1. Curb Appeal: Buyers often decide whether to view a house on the basis of a one inch exterior photo and they will judge the entire house by the exterior appearance in less time than it takes to park their car. Don't put all your energy into the interior only to let buyers down with peeling paint, cheap rusty light fixtures and mailbox. Keep windows sparkling clean. Add large potted plants near the entry and give the door a fresh coat of paint in a neutral colour.

London Ontario Homes Sales Incease

Just released from the London and St. Thomas Association of Realtors:

“So far, so good,” says Mike Carson, President of the London and St. Thomas Association of REALTORS® (LSTAR). “2,089 homes sold in the first quarter of 2007. That’s 4% over last year at the same time. Given that 2006 was our best year ever for sales, that’s very encouraging.” Sales of detached homes were down 2.7% last month from the previous March, while sales of condos were down 2.3%. However, last March was the second best March on record with 869 sales as compared to March 2007’s combined numbers of 846, setting the bar high indeed.

In terms of affordability, the London CMA continues to compare very favorably with other Ontario and national centres. According to the Canadian Real Estate Association’s Major Market Release for February 2007 (the most current available), the average price January 1, 2007 – February 28, 2007 Year To Date for:

�� Durham Region was $264,084;
�� Hamilton-Burlington and District was $265,513;
�� Kitchener-Waterloo was $243,109;
�� Ottawa was $263,215;
�� St. Catharines & District was $218,513;
�� Toronto was $362,207;
�� Halifax was $205,891; and
�� Montreal was $215,309.

(For the London CMA the average price for the same period was $198,241.)


According to a study conducted by Clayton Research that calculates the average amount of economic spin-off generated by a real estate transaction over the period spanning 2003 and 2005 at $32,200 per transaction, “MLS® sales in the first quarter of this year in the Board’s jurisdiction injected approximately $67 million into the local economy so far this year,” says Carson. “A strong first quarter suggests that 2007 is going to be another good year for real estate in our market area,” says Carson. “Our local economy is vibrant, diversified and expanding and housing continues to be affordable by Ontario standards.”

Now Easier for Self Employed HomeBuyers

If you’re a self-employed Canadian who has found it difficult to buy a home because you couldn’t qualify for the required mortgage insurance, there’s good news ahead. The Canada Mortgage and Housing Corporation (CMHC), the country’s largest mortgage insurer, recently announced that it is improving its mortgage loan insurance approval system, through a product enhancement called Self-Employed Simplified, to help more self-employed borrowers realize their dream of homeownership.

In recognition of the growing proportion of self-employed people in today’s workforce, CMHC’s new system will make it easier for borrowers who have difficulty obtaining third-party validation of their income using traditional forms of documentation. “Self-Employed Simplified will make it easier for certain self-employed borrowers to obtain mortgage loan insurance and, as a result, benefit from competitive interest rates,” said CMHC Vice-President Pierre Serré.

With this product enhancement, self-employed borrowers and commissioned salespersons will be able to obtain a CMHC-insured mortgage, much like borrowers who receive a salary or hourly wage from an employer. CMHC Self-Employed Simplified is designed for borrowers who have a minimum of two years in the same type of work and a proven track record of responsibly managing their debt. CMHC Self-Employed Simplified will insure mortgages on one- or two-unit homeowner properties and will also be available for refinance transactions, for mortgages up to 90 per cent of a home’s value. Homeownership just got a whole lot easier – and affordable – for self-employed Canadians!

Not only is this a welcome change for prospective buyers who are self-employed, it’s also great news for home sellers in London Ontario or surrounding area. With this new innovation easing the approval process and providing access to lower interest rates, there will soon be more buyers entering the market and looking for just the right home. If you’d like to know more about the home buying or selling process, just contact your local real estate professional.

Renovations to Sell Your Home Quicker and for More Money

In today's London, Ontario real estate market, home sellers tend to be more sophisticated than even just a few years ago. An explosion of ‘how to’ programming on TV, the Internet and other mass media has helped to raise the awareness of what buyers are looking for in a home. Yet, despite a generally improved awareness level, some homeowners are still unable to translate what they’ve seen or read into an effective action plan to get their home ready for sale.

Here are a few simple guidelines to help you put your renovation dollars where they’ll do the most good at sale time:

• Concentrate on the entrance, kitchen and main floor bath – most buyers make up their minds within the first 2 minutes of entering a home. Focus on the areas they’ll see in that time frame. In other words, do the main floor bathroom first. If you want to do the upstairs bathrooms too, so much the better, but finish the first one that buyers will see before you devote any time to the upstairs.

• Splurge on quality materials in small areas – You may not have the budget to use top-of-the-line materials throughout your home, but you can make a big impact in a small area. Your entranceway, foyer or a downstairs powder room are perfect locations to use the finest marble or slate flooring, an upgraded light fixture and a new window treatment.

• Use top grade accessories and hardware to upgrade cabinetry -- Whether it’s for kitchen, bathroom, laundry room or closets, it’s an expensive proposition to replace old or poor quality cupboards and cabinets. An effective compromise is replacing the door knobs, handles and drawer pulls with top quality hardware to step your look up a notch.

• Invest in improvements you can take with you – Remember that improvements that are easily removed, such as window coverings, light fixtures and ceiling fans, fireplace tools and screens, mirrors, lawn furniture and even potted shrubs can all be taken with you after the sale of your home -- provided you plan for it properly. Make sure you advise your Real Estate professional exactly what items are to be excluded from the purchase so that your listing will reflect this.

Tips for London Ontario Homesellers

It’s amazing how many home sellers spend a considerable amount of time and money getting the interior of their home ready for showings, yet they pay almost no attention to that all-important first look at their home’s exterior. As your Real Estate professional can tell you, some buyers won’t even bother taking a look inside at all if the outside falls well below their expectations. Even if you’re successful in drawing your prospective buyers inside, they’ve already started to form opinions about your home before they’re even out of the car. So, step up your home’s curb appeal. Here are a few ideas that you can do yourself with minimum expense and just a few hours work:

• Make your front door ‘pop’ with colour – Paint your front door in a rich contrasting colour that differs from the rest of your exterior. Be bold, but not garish – wine red or royal blue will really draw the eye.
• Upgrade your door with ‘accessories’ – A new doorknocker, foot plate, mailbox or house numbers will all take your doorway ‘up a notch’. When choosing new accessories, don’t just pick what looks best at the store. Make sure they complement the style and period of your architecture.
• Spring cleaning to the max – The weather’s already improving, so get an early start on sweeping or even power-washing the walk and driveway.
• Add ‘presence’ to your entranceway – It’s easy to make a statement with the use of urns and planters. Try two black cast iron planters flanking your front walk or on your porch. Use hardy, colourful plants that will last.
• Use ‘borrowed finery’ to create ambiance – Who says you have to break the bank to make a good first impression? Ask family and friends for the loan of some of their lawn furniture and ornaments while your home is up for sale. You can return that sundial or statue as soon as it’s sold!

If you are thinking of selling your home in London Ontario or the surrounding area, then contact us to see how you can improve the value of your home with minimal effort.

London, Ontario's Real Estate Economic Outlook Part 2

A few weeks ago, I talked about London, Ontario's Real Estate market and its health. Specifically, I talked about inflation and recession risks and concluded that London's housing market wasn't at risk as some might be speculating. I got that information from CMHC market research and TD Ecomonist's market research. That article can be read HERE

I will continue that topic.....

As most people know, Canada's economy is closely tied to the U.S. ecomony. So when the housing market in Texas and California (among other States) started to slow down a couple of years ago (and are now currently in a buyer's market) many felt that there would be a ripple effect and Canada's housing market would slow down accordingly. However, it looks like any ripple effect is going to be minimal.

Without getting into great detail about the U.S. ecomony, it looks to be recovering and has avoided any recession threats that some thought were possible. The TD economist explained that US profit growth slowed, but the markets are looking to recover - as he explained using data/charts about U.S. corporate profits and US Real Gross Domestic Product which is forcasted to improve in 2007 and throughout 2008.

Now, looking directly at London, Ontario's economy, there are some positive signs. Even though there has been some softness in the Auto sector - Ford cuts, some part plant closures etc, there have been other positive news to offset these losses. Such as - Toyota's new plant in Woodstock, various new parts plants in and around London, and the just recently announced possible new Billion dollar Oil refinary to be located in Sarnia.

The TD economist forcasted a slight restraining in economic growth in London (due to the above mentioned softness in the auto sector) - just under 2% GDP in 2007. However, TD forecasted close to 3% GDP in 2008. This is compared to 1.5% in 2006, 2.5% in 2005, 2.5% in 2004, and over 1% in 2003. So London's economy appears to be headed in the right direction.

Job growth is another interesting stat. After experiencing a percentage employment negative in 2005, 2006, London, Ontario is expected to have a percentage increase of 1.5%/2006 and 2%/2007, outpacing the Ontario average. Also, London did experience a net population increase in 2006 and expected increase in 2007. But out of the net migrant gains London has made, the most interesting stat is the age group of the net migrants. London has for a long time been considered a place where young people leave the city and old people move to.

However, during the period between 2000-2005, London experienced a net increase of 4,071 between the all important 25-44 age group. This is in contrast to the period of 1995-2000 when London had a net decrease of 212 in the same age group. In fact, between 2000-2005 for the 18-44 age group, London had a net increase of over 8,600 which was greater than all other age groups combined. It seems people are moving to London for a reason - the 18-44 age group are the ones that are going to lead London into the future.

And the last statistic I'd like to mention is the retail sales spending in London, Ontario. The stats showed that after a decrease in 2003, 2004, and 2005, London's annual retail spending increased in 2006 and is forecasted to remain strong. This doesn't necessary mean that people will buy houses, but shows that people are spending money, contributing to the economy, which is one small factor in helping keep a healthy housing market.

So what does this mean for London, Ontario's real estate market? Put all this information I've mentioned today, along with the information provided in the previous post, and the housing market looks to be in good shape. It's one thing to just say that things are going to be OK, but to support it with actual facts is another. I'm a firm believer that now is an excellent time to invest in London, Ontario's real estate market. I will put my money where my mouth is a purchase investment properties myself. I won't be able to convience everyone that the future looks good (some will always just assume that the market must fall apart because we've had such a good 3-4 year run), all I can do is provide information and advice. For those who choose to stand on the sidelines out of fear or misinformation, you will be left in the dust.

Why you Need a Home Inspection

Whether you are thinking of buying a home in London, Ontario or anywhere else, here is an excellent article about home inspections:

By Nalliah Thayabharan, Registered Home Inspector, Member of CAHPI-Ontario and ASHI, Expert Building Inspections Ltd., Markham ON 905 940 0811 www.expertinspector.com

When the home buyers are caught up in the speed, drama and pressure of bidding on a house that they may willing to skip a few steps to make sure they acquire their dream house. They're suddenly willing to pay a few thousand more than they had intended. They're willing to go for a quicker closing date. They're even willing to skip the home inspection process.

Don't fall in love with a house until the house had been examined by a professional. The house could have any number of problems in structural, roofing, exterior, foundation, heating, plumbing, electrical, insulation etc.

Home inspections have been around for quite a while, and for good reasons. This process, which can cost between $300 and $500, is often a condition on buying the house. It usually takes a few hours and is easy to arrange. Hiring a professional home inspector is a small investment of your time and money. But, it's well worth the expense because you won't have to deal with costly and unexpected surprises once you've bought your home. Also you can gain a wealth of information about the condition of a property before they buy it. A home inspection is not intended to provide warranties or guarantees, and is not to be mistaken as a warranty on the house.

The final sale of a home can hinge on the results of a home inspection – even for a million dollar home. While a home inspection is a critical component of buying and selling a home, knowing your home inspector is just as important. What home buyers need most is a source of trustworthy, competent, qualified home inspection professionals.

Recent surges in the popularity of home inspections have created an over-populated inspection industry where not all inspectors have the training or experience to do a good job. Anyone can say that they are a home inspector. Be wary of low-priced home inspectors whose only credential is a certificate acquired online, or by correspondence, or from attending a three day course. There are some people in the home inspection industry who are not fully qualified - if at all - and they should not be recognized as home inspectors.

Home inspection is a discipline that requires special training, knowledge and communication skills. That is why it is important to choose an inspector wisely. Home inspectors should have a general understanding of all the various systems and components in a home. Many have practical experience or a background in engineering, construction and related building trades. The more experienced a home inspector is, the more they have seen, the more likely it is they will be able to detect any less obvious problems.

Reputable home and property inspectors generally belong to CAHPI-Canadian Association of Home & Property Inspectors, which has set standards, which, is recognized by the Real Estate Associations and federal and provincial governments. CAHPI is the only national non-profit professional organization in Canada that rigorously tests home inspectors about their technical knowledge and diagnostic expertise prior to joining the organization as well as requiring continuing education after admission to keep current with new technology and building practices. Membership in CAHPI's Provincial Associations and the Registered Home Inspector designation are earned credentials which attest to an inspector's competence and professionalism. To earn the right to be Registered Home Inspectors (RHI), inspectors must demonstrate to the CAHPI's provincial association that they have a broad knowledge of construction and building practices in their province and that they have acquired three components for qualification: basic skills specific to the practice of home inspection; technical background acquired through education and experience related to building science; and practical home inspection experience through the performance of at least 200 home inspections to CAHPI Standards. A member cannot advertise or promote his or her membership until they have reached the minimum standards of a practicing member. To become a member, an inspector must meet professional and educational requirements followed by a review. Seasoned, professional registered home inspectors are full-time home inspectors. Registered home inspectors are bound by a strict code of ethics and must adhere to specific standards of practice. Registered Home Inspectors perform the best inspections by far.

You should ask to see proof of the inspector's membership in CAHPI's provincial association. Determine if the inspector intends to meet the CAHPI national standards of competency. To guard homebuyers against incompetent, negligent and bogus home inspections, the association in your province will be pleased to clarify their membership categories and any particular inspector's membership level. Check out www.cahpi.ca. The site will refer you to a complete list of Registered Home Inspectors in your area.

Visit www.ashi.org to find more detailed information about home inspection. Be present when the professional home inspectors assess your potential home. Ask questions and take notes of what repairs need to be done. They will give you their initial reactions as they are touring your home, and will follow up with a comprehensive package of information on the condition of your home. It is an invaluable piece of the home buying puzzle.

Newer Homes also need Inspection

New construction isn't always problem-free. Since the 1980s, when Canada Mortgage and Housing Corporation (CMHC) ended its consumer protection role through construction inspections, housing quality has suffered. For instance, CMHC estimates that more than 65,000 homes in B.C. suffered serious water infiltration problems in B.C.'s leaky condo crisis of the 1990s – a crisis that continues to this day. While B.C.'s crisis is perhaps the best known disaster in Canadian history, defective homes are a serious problem across Canada. In 2005, the Canadian Home Builders' Association (CHBA) estimated that 10 per cent of Canada's builders are problematic. Other estimates find 20 per cent to 25 per cent of home builders as problematic. Although there are good builders in Canada, consumers and Realtors have no reliable means of knowing who they are. Consumers who find themselves with a defective home and an unresponsive builder naturally turn to their home warranty program for assistance. This too can be problematic. In Ontario, for example, new home purchasers face a mandatory payment to TARION for warranty coverage. Purchasers should recognize TARION as an insurance company that will require that you prove your claim.

TARION does not serve as an advocate for purchaser. The TARION claim process is complicated, and, therefore, must be pursued with great care in order to avoid pitfalls. Municipal government officials involved in the home construction process usually acknowledge home construction industry and warranty program problems, but often simply advise the homeowner that they can settle their issues through civil litigation. Given the time and high costs involved in the legal system with no guarantees of success, the courts are not a viable option for most Canadians.

Given a system that is not conducive to construction dispute resolution, many homeowners conclude that they have no option but to quietly sell their flawed homes without disclosing the known problems to potential purchasers, despite the fact that sellers are required by law to disclose known defects. Home buyers protect their investment by retaining a competent registered home inspector to inspect the home, regardless of whether it is newly built or a resale home. While some problems may remain hidden behind drywall, a registered home inspector can often detect problems unrecognizable to the average consumer.

Deal with the Bad News

It can be heart breaking to find out all the problems after a home inspection, but be realistic. Remember that no home is perfect. What you need to decide is whether or not you are willing to fix the problems. Ask yourself these questions:

• Can you afford the recommended renovations or repairs?
• Does the house meet your needs in its current condition?
• Knowing these problems, is the house still a good investment?

Once you've had a home inspection, you'll have peace of mind that you've made an educated decision on buying a home. It's worth it!

Recent London Ontario Real Estate News

I would like to bring attention to a couple of recent news articles that relate to London Ontario's real estate market.

Today, Canada's census numbers were released showing that London Ontario grew 4.7% since 2001. The national increase was 5.4% and Ontario's increase was 6.6%. The article can be found here. This may seem like London is lagging behind in population gain when compared to its peers but a closer look at the numbers shows that London is going in the right direction. In a few days, I will outline London Ontario's net population gains in more detail and show that the last 2-3 years has been very positive in terms of net population growth. And I will show how this relates to the housing market in London, Ontario.

We also heard this past weekend that Shell is considering building a 6-8 BILLION dollar refinery plant in Sarnia, Ontario - which would be North America's first completely new one in more then 2 decades. Read Here Even though this plant wouldn't open till 2012/2013 and is about 45 minutes away from London, Ontario, it would still have an impact on London's economy and its housing market in the future. Something of this magnitude can only be a positive for the real estate market. This would be a huge deal for Southwestern Ontario and I only pray that it becomes a reality.

London Ontario Real Estate Sales In February

London Ontario continued its strong real estate sales in February by breaking the previous February homes sales record from 2002. Full London free press article can be read Here

I can speak from personal experience, this year is mirroring the last 4 years in terms of market activity and sales. Homes priced correctly are selling fast and can even attract multiple offers. The current real estate market conditions in London, Ontario will fuel this market through out 2007 and as some have forecasted (CMHC) well into 2008. I've been detailing those market conditions in many of my other posts.

What I consider the most important part of the Free Press article is the increase in available listings for London, Ontario:

(Mike) Carson said the inventory of homes for sale has also been climbing steadily to more than 2,600, compared to about 2,000 listings three years ago.

Carson said the listings growth has boosted sales numbers and given home buyers a break by keeping prices from becoming overinflated.

As a realtor, we've seen more listing come available on a daily basis then in the past. It's given buyers more selection and accomplishing two things - providing opportunity to buy a house for those ready hungry buyers and keeping price increases modest. Increase in available listings is the single greatest factor that lead to the home sales record.

Compare this to other markets like Calgary for instance who have seen 40-50% increase in prices in one year due to lack of listings and huge buyer demand. I predict homes prices in London to increase in the 5-6% range this range as they've done in the past 4 years. (CMHC predicted an increase of 4% at the beginning of the year)

London, Ontario's Real Estate Economic Outlook

It's time to examine the economy and how it will effect London, Ontario's real estate market in the next couple of years.

Having the opportunity to listen to two separate real estate related seminars - CMHC (Canadian Mortgage and Housing Corporation) and TD Canada Trust Economic Outlook - it's becoming clear that London, Ontario's Real Estate Market is currently in a healthy state. Fears of a housing bubble or downturn in real estate prices don't look like they will occur. Let's look at some economic factors that are contributing to a continued healthy real estate market.

6 Factors Lowering Recession Risk (As described by TD senior economist):

1. Inflation - One-third to one-half lower than past recessions.
2. Real Interest Rates - Half recession levels and Federal Reserve able to react quickly with rate cuts in necessary.
3. Labour Market - Less job overhang in this cycle. Wages to remain solid.
4. Energy Prices Have Fallen.
5. Exports boosted by weak $US.
6. Corporate America - Net savers and very liquid. Lean inventories.

Bottom line, London, Ontario is not in the same inflationary position which led to the last major recession in 1990.

If we look directly at housing prices now, compared to 1989 (the last major strong real estate market in London, Ontario) we can see a major difference. In 1989, London saw huge increases in resale homes but it was due to speculative buying - that year saw huge price percentage increases in the range of 15%-30%. From 1987 to 1989 the inflation adjusted home prices far exceeded the sales to new listings ratio. After the recession hit in 1990, homes prices and the real estate market were doomed to decrease.

By contrast, the last couple of years in London, Ontario has seen the inflation adjusted home prices mirror the sales to new listings ratio. This means homes prices are based on market conditions of supply and demand rather then speculation, out of control buying usually seen before a market crash. In fact, home sale prices in London, Ontario have increased on average between 5%-7% in year over year in the past 4 years. This is far from inflationary and is certainly sustainable for this period of increased home prices. Considering home prices in London, Ontario stayed stagnant through the entire 1990's, I consider home prices to finely be catching up to where they should be. London, Ontario was long overdue for home price increases. And accordingly, London is still very affordable city to live in when comparing it to other major cities:

Average Sale Price in London from Jan 1st, 2006 - Dec 31, 2006 was $190,521

Other Comparable Cities:

�� Durham Region was $258,362;
�� Hamilton-Burlington and District was $248,754;
�� Kitchener-Waterloo was $237,913;
�� Ottawa was $257,481;
�� St. Catharines & District was $213,032; and
�� Toronto was $352,388.

I will comment in future posts about the US economy, Canada's economy and housing market in general and what all these factors mean for London, Ontario's housing market in 2007, 2008, and beyond.

Boost to Local Economy

Southwestern Ontario received a large boost last year to its economy when Toyota announced that it was building an automotive plant in Woodstock. Now, rumours are swirling that this plant (not even built yet) might expand an produce a second vehicle READ HERE.

This is more positive news for London Ontario's housing market. The housing market continues to move along at a brisk pace in London thanks to a combination of factors. Low interest rates, job growth, healthy economy, and affordable prices are all contributing to a high number of sales. The market is expected to repeat its sales numbers of the past few years and continue in 2008 as market conditions remain favourable to a strong real estate market.

Update on Captial Gains Tax Changes

Today I received an email from my real estate association outlining potential changes in this years federal budget concerning possible capital gains tax changes. It goes on to say that the government is in its final stages of preparing the 2007 budget and now is the time to press the government for over due changes to its captial gains tax policy.

To quote the email "On February 15th, CREA's CEO Pierre Beauchamp participated in a small face-to-face roundtable meeting with Minister Flaherty and Parliamentary Secretary Diane Ablonczy at the Minister's office in Ottawa. At this meeting he outlined and reiterated some of the REALTOR® priorities for the upcoming Federal Budget, namely Reinvesting in Real Property (Capital Gains Tax deferrals, and Capital Cost Allowance Recapture rollovers), and an immediate increase to the Home Buyers' Plan withdrawal thresholds (and subsequent inflationary adjustments)."

Last week, Finance Canada announced that it will be allowing public consultation via the internet allowing Canadian to voice their concerns about the upcoming budget. The current federal government made a 2006 election pledge stating that they would introduce a deferral of capital gains taxes when the proceeds are reinvested within a specified time period. Now is the time to make the government live up to their promise!

It only makes sense that when a person sells an investment property, he or she should be able to purchase another investment property without being taxed every time. In a future post, I will outline the advantages of having a deferred captial gains tax policy.

Below is a link to allow anyone to contact Finance Canada and voice any of their concerns towards this years upcoming budget. Please be part of the solution click on the link below.

http://www.fin.gc.ca/scripts/prebudgetsurvey/selectMainPriorities_e.asp?lang=e%20

If you like, you can copy and paste the following and send this message:

As per your electoral promise to deal with capital gains taxes, I would like to propose the deferral of both the capital gains tax and the capital cost allowance recapture for all real property investments when an investment property is sold and the proceeds are invested in another real property.

Home Buyers Finding The Right Real Estate Agent

If you're considering buying a home, you may have a number of things on your mind: finding a house that suits your budget; locating a house in the right school district; deciding on the right floor plan. While all of these things are important, the single most critical decision you have to make when home-shopping is which Realtor you will choose. It's true, you could go it alone, but without proper representation, you'll be at a distinct disadvantage, not only in negotiating a deal, but also in finding the right house.

For your sake and the sake of your family, it's best if you work with an agent. An agent can help you locate properties for sale in the neighborhood you desire. He or she can also provide valuable advice during the "looking stage"; your agent is likely to notice things that you don't and therefore could end up saving you a great deal of money. In addition, since chances are the seller will be represented by an agent, you'll want an agent there to look out for your best interests.

Once you make the decision to retain an agent, the next decision you'll have to make is whom to choose. This is not as easy as it might appear. You'll want to do more than just flip through a phone book to find a name. You'll need to do some homework to make sure you select an agent who's right for you.

Given this fact, there are a number of questions you should ask when agent-shopping. Some agents work as "Exclusive Buyer Agents." These are agents who represent buyers and buyers alone. They do not list properties; therefore there is no danger of a conflict of interest. However, you can retain an agent who also sells property, although you might want to ask whether the agent will be showing you properties that his company is also selling. It's best to know these things in advance, so there are no misunderstandings down the road.

Find out how long the agent has been in the field. A more experienced agent is likely to give you better service and greater attention to detail. Also, ask how much of the agent's work involves representing buyers. This will give you a clue about whether the agent is likely to ask the right questions throughout the buying process.

Ask for references, specifically, the names and phone numbers of about a half-dozen buyers the agent has represented in the last six months. If the agent is readily willing to give you this information, it shows his or her confidence and provides some indication of trustworthiness. Once you have the contact numbers in hand, be sure to follow up by making calls. You can find out whether the agent was responsive, helpful, and knowledgeable. And who would know better than the clients he or she has represented?

Also, ask the agent if he or she will have information about "For Sale By Owner" properties. You'll want to ensure that you get a chance to view a wide variety of properties so that you can make an intelligent decision about which home is right for you.

In addition, ask the agent about credentials. Has the agent had specific training related to the unique needs of buyers? Does he or she hold special accreditation? Any agent who is not willing to share this information with you is probably not worth dealing with.

Also, make sure you settle financial matters with the agent before you look at your first house. Find out whether he or she will receive a commission on the purchase of a house, or whether he or she works on an hourly basis. Obtaining answers to such questions now will eliminate headaches in the future.

Another important question is whether the agent has a list of lenders, home inspectors, and contractors that he or she likes to work with. It will certainly save you time, and probably money, if you can rely on your agent to supply this information rather than trying to hunt it down yourself. The answer to this question will also give you an idea as to whether the agent is knowledgeable about the community.

London, Ontario's Economy Continue's Strong Pace into 2007

People often question why or how long the strong real market will last in London, Ontario. London's economy is one of the reasons the housing market will continue to stay strong and avoid any fear of a "market crash" as predicted by some doomsayers. Diverse ecomony, job creation, influx of new residents, favourable interest rates, and general affordability of homes, will ensure London Ontario as a good place to invest in real estate. The following article from the London Free Press illustates some of these points:


London's economy gained more than 10,000 jobs during the last year, bucking Ontario and national trends, with manufacturing posting the biggest increase, new figures show.

The addition of 10,600 jobs gives London job growth of 4.4 per cent early this year over last, topping the 1.6-per-cent Ontario growth average during the same period.

"I am delighted to see this," London Chamber of Commerce general manager Gerry Macartney said of the Statistics Canada figures. "This is another arrow we can put in our quiver of success to show we are well armed."

Making the job figures more striking is that London lost 3,200 jobs during the previous year, with employment dropping to 240,000 in 2006 from 243,200 in 2005 -- a decline of 1.3 per cent.

London now has a jobless rate of 6.1 per cent, compared to 6.2 per cent for Ontario and 6.4 per cent nationally.

"London is not doing badly at all," said Vincent Ferrao, a labour force analyst with Statistics Canada. "The unemployment rate is lower than Ontario's rate."

The London-area job figures are based on a three-month average from November, December and January -- the only figures available this early in the year, said Ferrao.

"This is substantial growth," said Derek Burleton, economist with TD-Bank Financial Group in Toronto. "In London a weakness in any one area is being offset by strength in other areas."

While London gained 3,500 manufacturing jobs, Ontario lost 54,500 jobs during the same period and nationally 42,000 manufacturing jobs were lost.

Manufacturing has been shrinking in Ontario since 2002, added Ferrao, but not in London.
"We all know London has a diverse economy, but people don't know we have a diverse manufacturing sector as well," said Steve Glickman, director of retention and business growth with the London Economic Development Corp. "There have been a lot of initiatives in this city and a lot of them are bearing fruit."

The growth of 900 technology and research jobs is also significant, said Macartney.
"To me that spells out we have balance -- we are seeing it across the board, as opposed to in any one area. It bodes well," he said.

Burleton also credited the job growth on "macro-economic factors" from which London benefits, such as low interest rates, low inflation and the fact business cycles aren't as severe as they once were, meaning a drop in one sector won't necessarily spill into other areas.

London's gross domestic product -- the value of locally produced goods and services -- is also expected to rise this year to 2.5 per cent, compared to 1.5 per cent for Ontario.

For all of Ontario, employment in manufacturing was down four per cent, health-care hiring was up 7.5 per cent, accommodation and food service up nine per cent and finance grew 3.4 per cent.

Education hiring dropped two per cent and scientific and technical jobs and service jobs were up each up two per cent.

"Consumer spending is up and that has propped up a lot business," Burleton said.

THE NUMBERS

London job gains 2006-07
Total employment by sector this year compared to last:

Manufacturing: 40,600 vs. 37,100.
Hospitality industry: 16,000 vs. 13,000.
Professional, scientific and technical: 12,800 vs. 11,900.
Education: 23,400 vs. 21,900.
Health care: 31,400 vs. 30,200

London job losses 2006-07
Total employment by sector this year compared to last:

Trade retail and wholesale: 36,700 vs. 37,000.
Finance, insurance and real estate: 16,800 vs. 18,100.
Construction: 11,900 vs. 14,000

http://lfpress.ca/newsstand/News/Local/2007/02/14/3615990-sun.html

CMHC Wants New Measures in Place for Potential "Grow Op" Houses

OTTAWA -- Canada's Crown mortgage corporation is subsidizing criminal marijuana grow-ops to the tune of millions of dollars each year, according to MPs.

Conservative MP Patrick Brown said the Canada Mortgage and Housing Corporation paid out $50 to $80 million in insurance claims related to criminal activity last year -- including lucrative pot-growing operations disguised as family residences.

New policies must be adopted, said Brown, so honest home-buyers' premiums aren't driven up to cover insurance payouts covering criminals.

"No matter how you look at it, it's either subsidizing the banks or it's subsidizing those people who have broken the trust of their community by engaging in criminal activity."

Next month, Brown will press a Commons committee to investigate CMHC policy to determine if banks need to more closely scrutinize borrowers, since the organization has a contractual obligation to pay for all loan defaults unless a bank employee is involved in fraud.

"Let's be upfront about this. People don't go to a lending institution and say, 'I want a property to use as a grow-op.' So it's fraud -- and fraudsters are good at what they do," said Phil Smith, CMHC's national manager of insurance services.

Liberal MP Jim Karygiannis wants a new mechanism whereby CMHC could refuse to pay if it's deemed the lender did not do enough to screen out a marijuana grow operator.

"The Crown corporation has to put more quality control measures into the process," he said.
Tom Stamatakis of the Canadian Police Association said lax penalties are fuelling a grow-op epidemic.

"When you're pulling several hundred thousand dollars from every crop you produce," said Stamatakis, then even a $10,000 fine is "just a cost of doing business."

"If we're not going to make it difficult for people to engage in this kind of activity, it will continue to be a growth industry."

http://lfpress.ca/newsstand/News/National/2007/02/11/3586920-sun.html

London Hits Record House Sales for January

From LSTAR Press Release

"The year is definitely off to a good start," says Mike Carson, President of the London and St. Thomas Association of REALTORS® (LSTAR). "Five hundred and thirty eight homes exchanged hands last month, breaking all previous records for the month of January. The second best January on record was that of 2006, which saw 529 unit sales." LSTAR began keeping records back in 1978.


Average prices year to date were:


Total Residential - 538 Sold, $196,246 Average Sale Price, 8.8% Increase from January 2006


House Style, Units Sold, Average Price
2 story, 112, $267,171
Bungalow, 89, $160,944
Ranches, 60, $246,468
Townhouse Condo, 57, $137,751


In terms of affordability, the London CMA continues to compare very favorably with other Ontario centres. According to the Canadian Real Estate Association’s Major Market Release for December 2006 (the most current available), the average price January 1, 2006 – December 31, 2006 for:


�� Durham Region was $258,362;
�� Hamilton-Burlington and District was $248,754;
�� Kitchener-Waterloo was $237,913;
�� Ottawa was $257,481;
�� St. Catharines & District was $213,032; and
�� Toronto was $352,388.
(For the London CMA the average price for the same period was $190,521.)

Possible Changes to Capital Gains Tax on Income Properties

The Canadian Real Estate Association has told the Standing Committee on Finance that a change in tax rules to allow for investment in real rental properties would help improve Canada's international competitiveness.

“The Minister has spoken about a pro-growth strategy. He has talked about liberating the forces of investment as a key to economic competitiveness. Our proposal is a natural component of such a strategy.” CREA CEO Pierre Beauchamp explained in his presentation to the Committee on October 18th. “It has the potential to help revitalize our communities and contribute to wider economic prosperity.”

The specific CREA proposal presented to the Standing Committee involves the deferral of capital gains tax when an investment property is sold and the proceeds of the sale are reinvested in another property within one year.

“Households can move their furniture and belongings, including their stocks and bonds – but not their real estate investments without substantial tax consequences” Pierre Beauchamp added.
The CREA CEO said Canada is not leveraging its wealth to maintain its capital advantage. “Our proposal responds to those issues. Reinvestment in income property is an effective means to leverage some of this wealth to provide the quality environments that are required to sustain economic prosperity.”

The CREA CEO told the Committee members that the only major criticism of the rollover concept has focused on the potential losses the federal treasury may report because of deferred tax revenues. “But please note - this is a deferral and not foregone revenue,” Mr. Beauchamp added.

In making the annual pre-budget submission to the Finance Committee, CREA also called for an adjustment to the successful Home Buyers Plan to reflect market realities. “We are asking this Committee to recommend a maximum loan amount be raised from $20,000 to $25,000 to account for inflation,” Pierre Beauchamp said. “These limits were set back in 1992 and should be adjusted every five years,” he added.

According to CREA statistics, the Home Buyers Plan has helped more than 1.5 million Canadians finance the down payment for a first home since it was created in 1992.

****This report was from CREA.

Baby Boomers Selling Houses in Favour of Renting

London is going "vertical," with so many new highrise apartments it's become Ontario's rental capital.

Fuelled by baby boomers leaving their homes into carefree rental living, London is building more apartments than any other city in the province on a per capita basis.

And that's not including the biggest new rental project rising on the city's skyline, Tricar's twin-tower Renaissance project downtown.

The city led the province over the last three years in per capita rental units built, while other cities are building more condominiums for sale, said Ken Sumnall, senior market analyst at Canada Mortgage Housing Corp.

From 2003 to 2006, 12,859 rental units were built in Ontario, 2,948 -- or 23 per cent -- in London. Only Toronto, at 47.4 per cent, had more.

"London, for its size, has been very active. We have seen numbers go up the last few years," said Sumnall.

The figures back up what many developers in the city are saying, said Derek Anderson, president of the London Home Builders Association: London appears to have more baby boomers set to retire and move into rental units.

"It is very attractive for seniors who want to take the equity in their homes and go out and travel," said Anderson, president of Graystone Development Group in London.

"We hear all the time people do not plan for retirement, but they have $400,000 in equity after their home is sold."

With the vacancy rate hovering at about 3.6 per cent, "there appears to be demand, but developers are primarily targeting the empty-nester market with the apartment developments," said Sumnall.

Of the apartment units now under construction in the city, "they are all local developers with extensive portfolios, they know the market and have capacity to build," he said. "These are not short-term investments, they are building now because they think the market will grow for a while."

Londoners want to rent highrise units more than residents in other cities because it remains a good value, said Anderson. And if they're interested in buying, there's a large selection of homes.
"People still look at London as having open space, they have more choices before they go vertical," he said. "We are also gaining a lot of young professionals who want to rent; it's an attractive option."

The next great wave could be retirement home construction as leading-edge boomers -- now turning 60 -- start looking at options, said Barry Parker, vice-president residential for Sifton Properties.

Four retirement residences are now under construction in the city, he added.

"Demographically, we are ramping up to a huge increase in demand in 15 years when the boomers reach their mid-70s," said Parker.

http://lfpress.ca/newsstand/News/Local/2007/01/19/3406514-sun.html

Homebuyers and Sellers Show Increasing Use of Internet, Reliance on Agents

Technology is transforming how Americans buy and sell homes in unexpected ways, including how they work with real estate agents and brokers, according to one of the largest surveys of real estate consumers ever conducted. The study was released today by the National Association of Realtors®.

Nine out of 10 home buyers use a real estate agent in the search process, but use of the Internet to search for a home has risen dramatically over time, increasing from only 2 percent of buyers in 1995 to 77 percent in 2005; it was 74 percent in 2004. The next largest source of information for buyers is a yard sign, mentioned by 71 percent of buyers.

When asked where they first learned about the home purchased, 24 percent of buyers identified the Internet, up strongly from 15 percent in 2004 and only 2 percent in 1997. Although most buyers use an agent to complete the transaction, 36 first learn about the home they buy from a real estate agent and 15 percent from yard signs; five other categories were 7 percent or less.

The 2005 National Association of Realtors® Profile of Home Buyers and Sellers, based on more than 7,800 responses to a questionnaire mailed to a large national sample of consumers located through county deed records, is the latest in a series of surveys evaluating demographics, marketing and other characteristics of home buyers and sellers.

NAR President Thomas M. Stevens from Vienna, Va., said the findings underscore the complexity of the home-buying process. "Buyers who use the Internet in searching for a home are more likely to use a real estate agent than non-Internet users, and consumers rely on professionals to provide context, negotiate the transaction and help with the paperwork," said Stevens, senior vice president of NRT Inc.

"The real estate industry today bears little resemblance to the way we did business 10 years ago. It is hard to find another industry that has adopted technology so readily to its customers," Stevens said. "Realtors® have invested a lot of time and money in building information technology, and because of these efforts, more consumers than ever are using the Internet in their home search."

The survey shows 81 percent of buyers who use the Internet to search for a home purchase through a real estate agent, while 63 percent of non-Internet users buy through an agent; non-Internet users are more likely to purchase directly from a builder or an owner they knew in advance of the transaction.

"We find that the level of for-sale-by-owners is on a sustained decline and is now at a record low. In addition, a growing share of FSBO properties are not placed on the open market - they're private transactions," Stevens said.

A clear downtrend in FSBOs has been seen since that market share experienced a cyclical peak of 18 percent in 1997. Only 13 percent of sellers conducted transactions without the assistance of a real estate professional in 2005, and 39 percent of those FSBO transactions were "closely held" between parties who knew each other in advance, up from 32 percent in 2004. The FSBO market share was at 14 percent in both 2003 and 2004. NAR began tracking the FSBO market in 1981; the record was 20 percent in 1987.

"In reality, the term 'FSBO' is a misnomer when used to broadly describe homes sold directly by owners. Since two out of five of these transactions are between related parties, and those properties are not placed on the open market, we believe that 'unrepresented sellers' would be a much more accurate term to describe this segment," Stevens said.

The median home price for sellers who use an agent is 16.0 percent higher than a home sold directly by an owner; $230,000 vs. $198,200; there were no significant differences between the types of homes sold. "While many unrepresented sellers are motivated to save on paying a commission, we think the price difference speaks for itself," Stevens said. "Owners without professional assistance also have problems in understanding and completing paperwork, prepping the home for sale, getting the right price and selling within the time planned."

Survey data don't explain the price difference, but Stevens offered some context. "Agents know best how to prepare a home and maximize value, agents provide broader exposure to the market and are more likely to generate multiple bids, and the portion of sales that are between private parties are likely to be at a lower price than those on the open market."

"The housing market today contrasts sharply with predictions a decade ago that the Internet would 'disintermediate' real estate agents, including speculation that NAR membership would fall in half. In reality, it's grown dramatically - selling real estate is not like selling a book or buying an airline ticket," he said.

http://www.realtor.org/press_room/news_releases/2006/hmbuyersellersurvey06.html

2006 Record Year for House Sales In London Ontario

“2006 was full of surprises,” acknowledges Costa Poulopoulos, 2006 President of the London and St. Thomas Association of REALTORS®. “We expected the market to slow down in 2006. Instead it just kept on delivering, month after month. When the final tally came in, we were delighted to find that, not only was 2006 a good year, it was, in fact, the best year for real estate sales in LSTAR’s history.”

The total number of homes sold in 2006 came in at 8,916, breaking 2004’s previous record of 8,903 by 13 units. Sales of detached homes were up 1.4%, while sales of condos were down 2%. The average price of a home in the London and St. Thomas Association of REALTORS®’ jurisdiction (Middlesex and Elgin Counties) rose 6.1% to $188,942.


Year Sales Average Price
2006 8,916 $188,942
2005 8,859 $178,058
2004 8,903 $166,465
2003 8,120 $152,586
2002 8,097 $142,106
2001 7,307 $136,636
2000 6,505 $134,593
1999 6,720 $131,899
1998 6,416 $129,706
1997 6,269 $130,534


Despite price gains, the London CMA continues affordable, especially when compared to other Ontario centres. According to the Canadian Real Estate Association’s Major Market Release for November (the most current available), the average price year-to-date for:

�� Durham Region was $258,921;
�� Hamilton-Burlington and District was $248,791;
�� Kitchener-Waterloo was $237,966;
�� Ottawa was $257,913;
�� St. Catharines & District was $213,150; and
�� Toronto was $353,283.

(For the London CMA the year to date average price year-to-date in November was $193,963.)
The best-selling house type in the Association’s jurisdiction in 2006 was the two-storey home, 1,783 of which sold for an average $260,792. The bungalow came in second, with 1,519 sales and an average price of $148,372.

http://realtors.mls.ca/london/Board%20Stats/2006/Dec_06/06NR.pdf

Know Your Neighbours Before Buying Your Home

Having great neighbours is one the more pleasant aspects of home ownership, and it’s something that many of us simply take for granted. However, there are few things that can spoil the enjoyment of your home more than realizing that you’re in the wrong neighbourhood, or worse still, living right next door to an intrusive or disruptive individual. What can you do about it? Well, if you wait until after you buy, the short answer is there’s very little that you can do at that stage of the game aside from keeping a low profile and developing a thick skin. The time to check out your neighbourhood – and neighbours – is before you buy.

The first and perhaps best source of information is your real estate professional. They can give you an overview of the area, show you where the major amenities are located, and can also tell you about the neighbourhood character, including some of the major events that take place in the community. Just as importantly, your real estate representative is a valuable source of information such as zoning changes, new construction and public transportation changes that may have an impact on both your future enjoyment of the property and its resale value. Make sure that your salesperson knows what your long term plans are for the property, so that they can put the right questions to the sellers and their agent. Knowing why a vendor has decided to sell their property is important information that can help you make an informed decision.

Another valuable source of information is the local police station and/or community offices. The police can tell you a great deal about how your prospective neighbourhood stacks up in terms of traffic problems and crime statistics compared to other residential areas. They can pinpoint ‘trouble spots’ in the community that you will want to stay clear of. If you’ve already found a property that you like, you can even ask them about activity surrounding that particular address. Likewise, neighbourhood fire halls, the Principals of local schools or local church leaders can also be great sources of information about the community and your prospective neighbours. If you receive a good report card, you can make an offer with peace of mind that the community is a good ‘fit’ that will suit your family’s needs.

Of course, nothing takes the place of a first hand look. If you don’t already live in the area, try visiting the location at different times of the day, especially during morning or evening commute times. That will give you a feel for traffic conditions as well as establishing the neighbourhood’s character. If you see people out and about, raking leaves, sweeping the steps or working on their car, stop and introduce yourself and say you’re thinking of moving into the area. You might be surprised at how much valuable information you can learn from the people who already live there. By the time you’re ready to move in, you’ll feel like an expert!

London Ontario's Economy to Remain Strong

London's economy is on an upswing, driven by its diversity and strength in manufacturing. The Conference Board of Canada predicted yesterday that the city's economy will grow at a greater rate than originally projected by two other economic forecasters.

The city's growth in gross domestic product -- the goods it produces -- will improve to 2.4 per cent in 2007, stronger than the 1.5 per cent London posted in 2006, Alan Arcand, economist with the board, said yesterday.

The city is gradually shaking off the effects of a economic slump this year, Arcand believes. "You will see a slowdown in London, but it will be shallow given how much investment there has been in manufacturing."

The Conference Board report comes after Export Development Canada and TD Bank Financial Group both projected in the fall London's economic growth will be two per cent next year.

Although London has been hit with recent layoffs in the automotive sector, they have been limited to North American automakers and suppliers, Arcand said. Other areas of manufacturing and suppliers to Asian automakers are still doing well, he said.

In addition, London has a diverse economy, with an emphasis on health care and service sector jobs.

"It is stable, it is less cyclical than other economies. The provincial government is pouring millions into the health-care sector now and that will keep it growing," Arcand said.

John Kime, chairperson of the London Economic Development Corp., agrees with Arcand. London has 20 businesses in growth mode, meaning they are hiring staff and spending money on capital projects, and 12 of them are in manufacturing, Kime said.

"It doesn't surprise me. A dynamic has been created in Southwestern Ontario, created by the enormous investment in Woodstock, and things are happening."

In 2008, growth is projected to be even stronger, going to 2.8 per cent, Arcand said.

"A real east-west trade corridor has opened in Ontario between Sarnia and Niagara region and London is right in the middle of that."

Gerry Macartney, general manager of the London Chamber of Commerce, also points to agriculture as an area poised to grow next year, benefitting London.

"Our diversity keeps us in good stead, agri-manufacturing will do very well," along with medical devices, life sciences and manufacturing other than automotive, said Macartney.

"All in all, I think we are in a bit of a catbird seat in terms of our diversification and geography."

The board cited solid non-residential construction, steady growth in the services sector and a rebound in manufacturing output as reasons for growth, Arcand said.

The services sector will grow about 2.1 per cent, up from 1.9 per cent this year, and manufacturing will post growth of 3.5 per cent in 2007, up from 2.4 per cent this year.

According to the Conference Board of Canada's Winter 2006 Metropolitan Outlook, London has enjoyed economic growth from 1998 to 2004 averaging 3.3 per cent.

London's growth will be comparable to other Southwestern Ontario cities, with Windsor posting growth in 2007 of 2.6 per cent, St. Catharines 3.1 per cent and Hamilton 2.3 per cent.

Ontario's GDP grew 1.8 per cent this year and will grow 2.5 per cent next year while nationally, Canadian GDP output up was 2.7 per cent this year and will go to 2.9 per cent next year, reported the board.

In November, Stephen Poloz, vice-president and chief economist at Export Development Canada, reported London will be dragged down by a cooling U.S. economy, but growth areas will include agri-food, livestock producers, farm machinery, telecommunications, aerospace and advanced technology -- all areas in which London is well positioned.

In October, TD Bank Financial Group economist Craig Alexander also cited the U.S. economic downturn, the cooling in the housing market on both sides of the border and slowing consumer spending as factors putting the brakes on the London economy.

http://lfpress.ca/newsstand/News/Local/2006/12/22/2931431-sun.html

Flipping Property in London Ontario?

Anyone who owns a television set can’t have helped but see the recent ‘bumper crop’ of programs about people who buy properties, fix them up and quickly resell them at a profit. If you’re the handy type or if you have an entrepreneurial spirit, the idea of ‘flipping’ a property for a fast return on your investment probably has some appeal. However, you may also be wondering how this scenario might work for the Canadian real estate market.

If you’d like to make a business out of buying and selling property, there are many different ways to go about it. Most people trying it for the first time will want to keep their existing job, at least while they’re getting started, or if you’re just thinking of ‘flipping’ as a sideline to supplement your usual income. The most profitable way to ‘flip’ a property is to have that home be your principal residence, so that you can avoid paying capital gains tax on any increased value you achieve on the property. Appreciation on your principal residence is not taxable. So, if you’re prepared to live in the property while you improve it and cope with the disruption and inconvenience of renovating while you’re living there, then this option is likely the best one for you. If you plan on owning more than one property at a time, talk to your lawyer or tax advisor before you buy. It may be more advantageous to put the title under a different name, for example that of a spouse or another family member, to avoid paying unnecessary tax.

If you are planning on buying a home for a quick return, make sure you share all your goals with your real estate professional. They can counsel you on what areas are up and coming and stand a good chance of appreciating at a higher than average rate. They’re also experts on what home buyers are looking for in a home, so they can advise you on what improvements are likely to give you the best return. Kitchens and bathrooms are the two rooms of the house that generally give you the best bang for your renovation buck, but there are countless options to consider. Your Coldwell Banker representative can help you weigh your options to make an informed choice

Remember too that market changes should be reflected in your planning. London, Ontario property values are expected to continue to rise in 2007, but the growth rate is expected to be more moderate than the increases we’ve experienced in recent years. For 2007, the average increase in house values that has been predicted by the CMHC is 4%. Your real estate professional can help here too, with up to date pricing information on your local market and valuable information to help you predict where the market is headed. Then you’ll be ready to use that information to your best advantage.

Vacancy Rate Declines in London

LONDON, December 14, 2006 – Canada Mortgage and Housing Corporation (CMHC) released its annual Rental Market Report for the London Census Metropolitan Area (CMA) today. Highlights of the 2006 Rental Market Report are as follows:

�� The vacancy rate for private rental apartments in the London CMA dipped to 3.6 per cent in 2006, down from 4.2 per cent last year.

Rental apartment vacancy rates for all bedroom types moved lower, except for units with three or more bedrooms. Increasing demand for two-bedroom units contributed to the lower overall vacancy rate.

�� The average rent for a two-bedroom apartment increased by 1.7 per cent for a fixed sample of structures which were surveyed in both 2005 and 2006. By excluding the impact of new structures built since the last survey and conversions from the calculation, we can get a better indication of the rent increase in existing structures.

"Lower than average rental apartment completions and the continuous inflow of a younger population contributed to the decline in the apartment vacancy rate this year." said Penny Wu, CMHC’s London Market Analyst. "However, the overall vacancy rate remained reasonably high and constrained the average rent increase to a pace close to the general rate of inflation."

Condos Are Becoming More Popular

As house prices continue to rise in Canada’s major markets, young home buyers are beginning to think beyond the traditional dream of a family home in the suburbs surrounded by a white picket fence, and are considering other options for the place to build their futures. According to a 2006 survey, younger Canadians (aged 25 – 44) are more willing to consider raising a family in a condominium that are those age 45-59 (22% vs. 13% respectively). The survey, conducted by Ipsos Reid on behalf of TD Bank, asked Canadians aged 25-59 living in Toronto, Vancouver, Montreal, Calgary and Ottawa, if they would consider living in a condo if they were planning to start a family and raise children. The survey also found that 25-34 year olds are most likely to agree that living in a condo is suitable for families with very young children (46% of respondents vs. 40% among those aged 35-59).

"Attitudes towards families and condos may be shifting among youngerpeople in urban centres," said a representative from TD Canada Trust. "Younger Canadians who bought condos as their first step into the housing markets have grown accustomed to the numerous benefits of the condo lifestyle, and many are considering extending them into the next phase of their lives.”

Not surprisingly, Torontonians and Vancouverites, residents of two of Canada’s highest priced real estate markets, were the most likely to purchase a condo as their primary residence.

The consumer poll also shows widespread recognition that condos offer amenities important to families, including:

- "building security" (91%)
- "close to public transportation" (87%)
- "pool or recreation facilities for children" (83%)
- "close to work" (81%)
- "schools nearby" (81%)

Homes Sales in London Ontario Remain Strong

November 2006 proved to be the third best November on record. 490 detached homes and 126 condos exchanged hands in November 2006 for a total of 616 units. Year-over-year, 2006 maintains a slight lead over 2005 year-todate.

As of November 30, 2005, 8,471 homes had sold; as of November, 2006, 8,504 transactions have taken place – thirty three less than this year. “Our market continues to do very well,” observes Costa Poulopoulos, President of the London and St. Thomas Association of REALTORS®. “2006 will be on a par or even beat 2005 when it comes to sales and that’s good news for our community, given the economic spin off generated by real estate transactions.”

According to a study done by Clayton Research Associates for the Canadian Real Estate Association the economic impact of MLS® homes sales and purchases in Canada between 2002 and 2004 is significant. “It is estimated that a total of $24,700 in ancillary expenditure is generated by the average housing transaction in Canada over a period of three years from
the date of purchase,” says Poulopoulos.

The average price for a detached home is up 5.4% year to date to $201,705, while the average price of a condo is up 10.2% to $139,112 year to date. As a point of comparison, according to the Canadian Real Estate Association’s Major Market Release for October 2006 (the most recent release), the average price of a home in the following
centres was, as follows:

�� Durham Region: $256,753;
�� Hamilton-Burlington: $249,244;
�� Kitchener-Waterloo: $246,791;
�� Ottawa: $259,397;
�� St. Catharines: $220,161; and
�� Toronto: $356,423.

The best-selling house type in November 2006 for the Association’s jurisdiction was the two-story, 133 of which sold for an average $275,484, followed by the bungalow, 103 of which exchanged hands for an average $142,196. Townhouse condos came in third, with 69 sales and an average price of $127,300, while 68 ranches sold last month for an average $264,146.

Importance of a Home Inspection

For most Canadians, buying a home is the single largest investment they'll ever make and it’s become increasingly true in recent years of record home prices. As a homebuyer, you’ll want to ensure you get good value for your investment, and that's why professional home inspections are becoming an integral part of the buying process. In fact, the field is now becoming more specialized and some buyers are even using the services of more than one type of inspector to review a property before committing to the purchase.

A professional Home Inspector makes a comprehensive review of the operating systems and structural aspects of a home. Following this first-hand look beneath the surface, the inspector then prepares a detailed written report for the buyer, describing the condition the foundation, heating and cooling systems, electrical service, roof, insulation, and other critical structural factors. It gives you a far greater measure of security before finalizing your offer to purchase a property.

With rising home prices and a corresponding rise in the use of home inspectors, in recent years, the field has actually become more specialized to suit specific needs of certain markets or properties. For example, some offers to purchase may require the services of a swimming pool inspector, termite inspector, or where a well is present, a water quality inspection.

Inspection costs will vary by community, by the service provider and sometimes even according to the special demands of a property. Still, you can expect to pay in the area of three to five hundred dollars for a typical home inspection of a single family dwelling. In almost every case, it’s the buyer who pays the cost of the home inspection, since the service is provided almost entirely for their benefit. Most buyers agree that it's a small price to pay for peace of mind. A home inspection report can also give you additional negotiating power if it unearths some unforeseen problems that must be remedied.

Your offer can be conditional upon a professional home inspection being conducted and a satisfactory report being received by you. If the conditional offer is accepted, you get the advantage of temporarily holding the property against most other offers, while you have a legal ‘out’ if the report turns up some major surprises, such as a roof or furnace that needs immediate replacement or foundation problems to be put right. If the inspection report indicates some large expenses, or problems you simply don’t want to deal with, your offer can either be terminated or possibly re-negotiated to accommodate the cost of any major remedies. Remember though, if you don’t proceed with the original offer, the seller is also free to renegotiate any aspect of the offer or accept an alternative offer from another buyer.

Tips to Reduce Home Heating Bill

Winter’s here and it’s time to turn up the heat! Some Canadians are looking forward to skiing, snowmobiling and winter sports. However, the one thing that no one is looking forward to is getting their home heating bill. The cost of heating a home during the winter months has increased dramatically in recent years. The good news is there are some cost saving measures that you can take that will help you turn on the heat without having to see your dollars fly out the door.

It’s always a good idea to have a professional inspection done of your furnace each year. Your furnace will work safely and much more efficiently if it’s in top condition and that means you’ll spend less on gas or oil to fuel it. An inspection will ensure that pilots and vents are unobstructed, worn out filters are replaced, and blowers and coils are unobstructed. Your investment in the furnace inspection will be offset by all the energy you’ll save over the long winter season.

If you have forced air heating, you might also want to invest in a duct cleaning. Since your windows and doors will usually be closed, it’s the perfect time to clear out the dust, pollen and other allergens that have built up in your home over the summer. Clean vents will also contribute to your furnace running cost-efficiently.

If you want to save even more on your home heating bill this winter, consider a programmable thermostat. This device lets you pre-set the temperatures for different times of day. You can enter the time and temperature to automatically set the thermostat back by a few degrees overnight and bring the temperature back to a comfortable level again before you get up. Many energy companies are offering discounts on such energy saving devices, so be sure to check out your local gas or hydro company’s website for even greater savings.

You can use a similar principal whenever you leave the house. Simply turning down your thermostat by two degrees when you go out and returning the temperature to normal levels when you come back home can really make a difference. Even simple measures like this can add up to less energy used – and that’s good for both the environment and your pocketbook!

Sell Your Home in the Fall

Looking back on historical patterns, the majority of Canadian home sellers have a tendency to list their homes during the very active Spring or Fall markets. Due to this trend, listings in past years have generally tended to taper off as the busy year-end and holiday season approaches. But is waiting really the best selling strategy for your home?

If you’re considering selling, you may find that it’s really in your best interest to list your home now, rather than waiting until sometime in the new year. Here are a few reasons why you may want to act now:

1)If the overall inventory of homes for sale decreases toward year-end, you’ll be competing against fewer other homes to attract and win buyers.

2)As fewer and fewer new listings come on the market, your home will attract a lot more attention and increase your chance of a viewing.

3)Today’s low mortgage rates will help make your home more affordable to potential buyers. As interest rates increase in the future, more and more home buyers – especially first time buyers -- will drop out of the market.

4)If you’d prefer to move in the Spring, you can still list now and specify a long closing period. This will give potential buyers ample time to arrange for their down payment and closing costs.

5)If your home is already sold when you start to look for your next home, it puts you in a much stronger negotiating position. You’ll know exactly what you’re getting for your current home and you won’t have to make your offer to purchase conditional upon the sale of your existing property.

October Home Sales Up in London Ontario

With 711 home sales last month, October 2006 proved to be the best October for the London and St. Thomas Association of REALTORS® on record. The next best October was October 2005, with 679 sales. Year to date sales are up as well. So far this year 6,274 detached homes and 1,614 condos have exchanged hands for a total of 7,888 transactions, compared to last year’s year to date figure of 7,826 sales. "There are signs that we are moving away from a Sellers market to a more balanced market," says Costa Poulopoulos, LSTAR President. "For example, active listings end of period is up 10.5% for detached homes and 6.3% for condos. That means that we have increased inventory to offset demand. However, October’s sales figures clearly indicate that, for the time being at least, we have sufficient momentum in the market to fuel it for the near future."

The London CMA continues to outperform other centres when it comes to affordability. According to the Canadian Real Estate Association’s Major Market Release for September (the most current available), the average price year-to-date for:

�� Durham Region was $242,622;
�� Hamilton-Burlington and District was $248,519;
�� Kitchener-Waterloo was $237,677;
�� Ottawa was $257,608;
�� St. Catharines & District was $212,804; and
�� Toronto was $352,759.

By comparison, the average price for all residential (detached and condo) in the London CMA at the end of September was $187,030.

The best selling house type in October was the two-story home, 138 of which sold for an average $248,709. The second most popular was the bungalow, 124 of which sold for an average $150,457.Next came ranches, 83 of which sold for an average $223,833, followed by townhouse condos, 67 of which sold for an average $131,066.

What Every Landlord Should Know

In these days of low interest, some Canadians are dissatisfied with the returns offered by many investment vehicles and are turning to real estate. Investing in real estate for use as an income property potentially offers the dual advantage of both appreciating in value, while you rent it out at a profit. If you’re considering this option, here are a few tips you should keep in mind:

· Know your rights – and your tenant’s rights too: Before you decide to rent out your property, you should have a clear understanding of the rights and obligations this will entail. Your real estate lawyer will be a good source of this information and there are many helpful websites that spell out the requirements under the Landlord and Tenant Act and other legislation. Be sure that you research both roles of the rental relationship. You’ll need to know not only what your rights are as a landlord, but also what tenant’s rights you’ll be expected to honour.

· Target your advertising: If you’re looking for a certain type of tenant, you can ‘weed out’ undesirable applicants simply by targeting your advertising. For example, if you’re looking for a student, a professional woman or a senior, target publications or bulletin board locations that will be seen by only these groups.

· Screen your applicants: It’s amazing how many people would never let a stranger drive their car, yet they’ll turn over the keys to a house that costs hundreds of thousands of dollars just because the prospective tenant presents themselves well and has the rent cheque ready. There are many different tenant screening services available online. Simply run a search for “tenant check” or “tenant screening”, plus your province name and your search engine will offer you several to choose from.