Frank Steinhausen, Broker
FSteinhausen@REMAX.net
RE/MAX Rouge River Realty Ltd., Brokerage
Phone 905-428-6533
Fax 905-668-1850
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Archive for May, 2008
Canadians Don’t Have An Umbrella: Rainy Day Funds Fall Short For Most Home Owners
May 28th, 2008 Categories: Area interest, Pickering Village, Real Estate News
The National Post reported recently that Canadians are not very well prepared for rainy days, like an economic slowdown. Despite a lot of press being given to the economy inching towards the “”R-word,” most Canadians only have about one month of expenses covered. I heard it suggested that we are in a virtual recession, which is like being virtually pregnant, I’ll bet.
According the an RBC report, Canadians should be paying themselves first:
“The message we’d like to really emphasize is that it’s important to put
away money first because you never know when an economy turns and we would hope we’ve got some emergency funds put away to get us through those times,” says Mr. Ratanshi. “The reasons why people are saving less vary from person to person, but there are a lot of individuals who may have the income but don’t have good savings habits.”
A key finding was that most Canadians do not believe they are good savers, RBC said, noting that 83% worry they don’t have enough money saved, and 86% that they can’t save as much as they would like.
“Many Canadians are also not prepared to cope with an unexpected long-term emergency or sudden life-changing event,” it said.
Only 49% have a rainy-day account set up, and of those that do, 55% have only enough saved to cover one month’s worth of expenses, while just 24% have three months’ worth of expenses covered.
“Surprisingly” two-thirds consider their line of credit and credit cards to be their backup in case of an emergency, it said. Meanwhile, 60% of the more than one million Canadians who keep $1,000 or more in their bank account each month, consider that money to be their safety net.
While the survey found that being financially prepared for an emergency is a priority for many Canadians, it is one of many priorities and a lower priority than saving for retirement, paying down debt, paying down one’s mortgage faster and saving for children’s education.
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Don’t Want to Pay Development Charges? Buy a Resale Home
May 23rd, 2008 Categories: Buying real estate, Durham Region, Real Estate
Recently there was an article in the News Advertiser that suggested that Durham Region was impacting house affordability because it charges a substantial amount to new home builders to cover the costs of putting in the services to the new homes being built. The development charges and taxes have now risen to about 20% of the new home price.
The developers are complaining. I would be complaining if the region had to put the cost of the new roads and sewers and sidewalks on to my tax bill instead of the developers. Someone has to pay.
Fast forward two to ten years, the development charges and taxes were paid by the new home buyer. They probably put up a fence; added some decorating details; maybe finished the basement. And now you get to buy it.
You don’t have to pay for any of that. They put $50,000 into their basement and you pay about 75% of that value. And they will probably throw in the appliances because they want to buy new ones for their new home.
Real estate agents have been shouting from the rooftops that buying a resale home has benefits, in spades, over buying new. For example:
- New home fix-ups that are often needed after the home settles, like nail-pops or cabinets shifting, has been completed.
- Fences are put up.
- Basements are finished.
- Appliances are often included.
- Light fixtures are often upgraded.
- Blinds and drapes are often included.
- Decorating details have been added to personalize the home.
- Landscaping has been done.
- Driveway paved.
- The development is winding down so the dust has settled.
Convinced. With new home starts down, and resale listings on the rise. Now might be the time to move up.
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Ontarians Get To Air Their Laundry
May 21st, 2008 Categories: Area interest
Although I am sitting by the computer today with wool socks and a 
sweater on (because I don’t want to turn my heat back on), I am looking forward to the fresh smell that summer-air-dried laundry can have. I am not looking forward to how stiff my jeans will be. Maybe I can put them away soon and bring out my sandals and shorts.
Here’s the word from Premier Dalton McGuinty:
This summer, Ontarians will have the choice to dry their laundry on an outdoor clothesline.
Premier Dalton McGuinty said the province is putting an end to some restrictions that prevent people from using outdoor clotheslines. This includes agreements between home builders and buyers in some towns and cities in Ontario.
Using outdoor clotheslines instead of electric dryers can:
- Save consumers $30 per year when they reduce their dryer use by 25 per cent.
- Cut greenhouse gas emissions.
- Reduce demand on the power grid — home dryers use about 900 kilowatt hours of electricity per year.
QUOTES
“There’s a whole generation of kids growing up today who think a clothesline is a wrestling move. We want parents to have the choice to use the wind and the sun to dry their clothes for free,” said Premier McGuinty.
“We want every Ontario family to have the tools they need to save energy and save money. Just using a clothesline instead of a dryer can make a significant difference to your pocketbook, reduce demand on the electricity grid, and help keep our air clean,” said Energy Minister Gerry Phillips.
QUICK FACTS
- Florida, Utah and Hawaii have laws in place that ensure people can use clotheslines. Similar legislation is being considered in Vermont.
- Electric clothes dryers use about six per cent of electricity in the home — as much as a refrigerator running 24-7.
- Over the course of a year, five clothes dryers could result in roughly the same amount of greenhouse gas emissions as an average-size car.
http://www.premier.gov.on.ca/news/Product.asp?ProductID=2153
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Is A Long Term Mortgage the Best Option for First Time Home Buyers?
May 18th, 2008 Categories: Buying real estate, Durham Region, Mortgage, Real Estate News
It is nice to get confirmation of your opinion from the press. The National Post published an article on long-term mortgages that echoes the post where I urged first time buyers to be cautious.
The article referenced a report from Re/Max Ontario-Atlantic, stating:
“Innovative financing” is now the key to home ownership in today’s environment, the report said, with longer amortization periods being used by 62% of first-time buyers. Low or no down payments were popular with 38% of surveyed buyers, it added.
While that may conjure comparisons with loose lending standards in the American subprime-ravaged housing market, Michael Polzler, Re/ Max’s Ontario-Atlantic regional director, said mortgage qualifications remain tougher in Canada.
“If the client is perceived of being a risk in Canada, it’s much harder to get this type of financing,” he said. “A 40-year mortgage allows them to jump into the game and capitalize on home-price gains.”
Adrian Mastracci, a Vancouver-based portfolio manager with KCM Wealth Management, referred to such mortgages as the “Freedom 95″ plan, in reference to the Freedom 55 retirement plan once popularized by London Life.
“The banks will love you because you’re going to be paying for life,” Mr. Mastracci says. If people don’t speed up repayments on such debt, they will find themselves paying it off well into their senior years, he adds.
“With a 40-year mortgage, you’re not buying, you’re just leasing long-term,” and will spend the first 30 years making mostly interest payments.
Caution is a word that Canadians take to heart. Real estate is still a great investment opportunity. Get all the facts you need to make a good decision.
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What Will $1 Million Buy You in North Pickering?
May 14th, 2008 Categories: Buying real estate, Pickering, Real Estate News
Since the April market in North Pickering didn’t produce any interesting numbers, I was curious what a million dollars could by you in the area.
In North Pickering, there are 2 million dollar listings: one on Fairport Road and one in the country on 4th concession. Both properties are spacious and upgraded lavishly. And both have lots of space around them.
Looking for a custom home that might fit your budget better. There is a gorgeous bungalow on Heathside that is worth a look—and is available for under $440,000.
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South Pickering Is One Market That Is Coasting Into Spring
May 12th, 2008 Categories: Buying real estate, Pickering, Real Estate News, Selling real estate
The national press is presenting a cautiously pessimistic attitude to the real estate market. The buyers in South Pickering must be listening.
In spite of there being some great value in the area, only 22% of the 81 active listings sold. In April of 2007, 26 homes in Pickering, south of the 401. This April saw 18.
The number of days that a home is staying on the market is 38 compared to 34 last year. In April, the homes that were selling sold faster than in March.
Unlike the national press, I like to be cautiously optimistic. With gas prices rising, Toronto home affordability questionable, South Pickering offers a value-priced, GO-train-serviced area that buyers should take a close look at.
Where else can you get a detached home a 5 minute walk to the waterfront trail, for less than $300,000. I can show you some great ones.
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Market News for Resale Homes in Pickering Village
May 12th, 2008 Categories: Buying real estate, Durham Region, Pickering Village, Real Estate News, Selling real estate
Reports of the approaching end of the housing boom tell us very little about how our local market is fairing. In short, the sky is not falling in the housing market in Pickering Village.
In the Eagle Ridge area of Pickering Village, there were 20 home sales in the month of April. Of those 16 were detached homes. The highest priced home sold for $560,000 and the lowest sale was $236,000. One home sold for over its list price by 102%. Most sold close to their final list price to the tune of 98%.
The average length of time it took to sell the homes was 35 days. There were a couple of slow list-to-sale homes, in the higher price ranges that extended the average up. The median time to sale was 23.5 days.
Want to know how your street or neighbourhood is doing. I can give you the lowdown.
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Gather the Facts Before You Jump Into Your First Mortgage
May 6th, 2008 Categories: Buying real estate, Mortgage, Real estate investment
There was recently it was reported that many young women buying their 
first home alone. It is no longer love, marriage and a house with a baby carriage. More single, young women are opting for the home first.
I am all for the forced saving, nest-egg growing opportunity that home-buying offers. I wouldn’t be in real estate otherwise. I would like to present a little bit of the devil’s advocate position to caution young people before they jump in with both feet. Make sure you have all the information that you need.
Here is some helpful information:
- Two-thirds of all buyers are taking mortgages of up to 40 years amortization. This means that without pre-payment options or accelerated payments, young first time buyers may be paying their mortgage when they hit retirement age.
A 40–year amortization means that you are paying over $736,000 for a $300,000 house. That is $436,000 in interest payments. - An increasing number of buyers are putting little or no-money down. Increasing your mortgage principle increases your monthly payments, or your amortization. Either way, you are paying the bank more money to borrow theirs.
- Canadian Mortgage and Housing Corporation introduced an interest-only mortgage option echoing the US mortgage market trouble where house prices stopped increasing and people have ended up owing more than the house is worth.
Canada has taken some precautions to ensure that our housing market does not follow the US down. Higher risk mortgages are only available to buyers with good credit. However, buyers who are stretching themselves into buying a home make themselves susceptible to financial difficulties if the housing or job markets soften or if interest rates climb again.
Do you have questions about what mortgages are right for you, or when to buy into the market? I can help.
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GTA Resale Housing Market Moderate in April, But Prices Up
May 5th, 2008 Categories: Buying real estate, Real Estate News, Selling real estate
TORONTO, May 5, 2008 — With 8,762 houses sold in the Greater Toronto Area, April’s resale housing activity was down seven per cent from the record 9,452 transactions from the same timeframe a year ago, Toronto Real Estate Board President Maureen O’Neill announced today.
“The market is showing signs for a healthy 2008 compared to the diminished activity we saw in the first quarter of the year,” said Ms. O’Neill. “We continue to experience a supply and demand situation and to-date, it remains a sellers market.”
Sales activity however, was markedly different in the 416 and 905 regions. With 3,467 transactions in the City of Toronto, sales were down 10 per cent from a year ago. The 905 region was down five per cent from April 2007 sales, with 5,295 homes changing hands.
April’s GTA average price was $398,687, up five per cent from the same period a year ago. In the City of Toronto, the average price was $446,781, up six per cent from last April. In the 905 region the average price increased five per cent compared to a year ago, to $367,196.
Several neighbourhoods experienced strong sales in April.
Scarborough East (E08) saw an five per cent overall sales increase compared to April 2007, driven by robust detached home sales.
Caledon (W28) experienced a 15 per cent increase compared to the same timeframe a year ago as a result of strong condominium sales.
Condominium sales also drove Willowdale (C07) to a 32 per cent increase from a year ago.
In Thornhill sales increased eight per cent from last April due to strong detached home sales.
“The number of listings on the Toronto Real Estate Board’s Multiple Listing Service has increased to 24,539, up seven per cent from a year ago, which is good for homebuyers, who will find a greater range of options in the market,” said Ms. O’Neill. “With prices continuing to appreciate and increased listing inventory there are favourable factors in today’s market for consumers.”
Toronto REALTORS® are passionate about their work. They adhere to a strict code of ethics and share a state-ofthe-art Multiple Listing Service. Serving over 27,000 Members in the Greater Toronto Area, the Toronto Real Estate Board is Canada’s largest real estate board. Greater Toronto Area open house listings are now available on www.TorontoRealEstateBoard.com.
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