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, 2009
Majority of Canadian Home Owners Hold More Than 50 Percent Equity
May 28th, 2009 Categories: Mortgage, Real Estate News
As Canadians weather the harsh economy, a beacon of their strength is the considerable amount of equity they have in their properties, according to a report released today by the Canadian Association of Accredited Mortgage Professionals (CAAMP). New challenges, such as budgeting for mortgage payments, are emerging, yet housingaffordability has dramatically improved due to lower interest rates and price reductions. The report is authored by CAAMP Chief Economist Will Dunning and based on information gathered by Maritz Research in an online survey conducted in March 2009.
Over 40 per cent of all mortgage holders have at least 50 per cent of the value of their homes in equity, and of all Canadian home owners, which includes those without mortgages, 65 per cent hold at least half the value of their properties. Only two per cent of mortgage holders have negative home equity, meaning the value of the mortgage exceeds the value of the home.
During the past year, 15 per cent of mortgage holders took equity out of their homes, representing a national total of $34 billion. Over half (57 per cent) used these funds for debt repayment or consolidation amounting to $12.5 billion.
“CAAMP’s report demonstrates that home owners have solid equity positions and although facing financial uncertainties, most Canadians have the ability to deal with temporary market fluctuations and reductions in personal income,” said Jim Murphy, AMP, President and CEO of CAAMP. “With only a very small number at risk of not being able to pay or refinance their mortgages, our overall market is very strong.”
There is no doubt that the current economic backdrop means increased financial challenges for Canadians. Job loss is a major risk factor for home owners and 18 per cent of those surveyed indicated an individual in their household had lost a job in the past six months.
The economy looms large when people consider buying a home. Despite the fact that 55 percent say now is a good time to buy, up almost 20 percentage points from fall 2008, only four percent of homeowners and six percent of non-owners actually say they anticipate buying – about the same number as last fall.
Low and flexible interest rates plus longer terms are adding buoyancy to the mortgage market. Mortgage holders are extremely successful negotiating their interest rates, knocking off an average of 1.68 per cent from the posted rate. Three-quarters of those who renewed their mortgage in the past year had their interest rate reduced. On average, renewals resulted in interest rate reductions of almost one full per cent. Three-quarters of Canadian borrowers are also likely to see reductions in their interest rates at their next renewal.
“While many Canadians are experiencing mortgage-related challenges, these issues are much less significant than the problems in the American market,” said Will Dunning, CAAMP Chief Economist. “We are not seeing the dramatic mortgage rate resets or panic selling that occurred in the United States, and Canadian mortgage lenders and insurers are demonstrating a willingness to work with those who encounter financial difficulties. These are good signs for the health of the market.”
The popularity of mortgage brokers continues to grow with almost half (46 per cent) of new mortgages taken out in the past year secured through brokers. Over one-half (61 per cent) of mortgage renewals occurred with the major banks.
“With increased choice and negotiation power in today’s market, informed mortgage consumers have an opportunity to leverage lower overall rates,” said Murphy. “CAAMP members are committed to educating consumers and increasing professional standards in the industry.”
Based on current housing market forecasts, the outstanding volume of residential mortgage credit is forecast to expand by close to $70 billion in both 2009 and 2010, growing at a rate of 7.6 per cent in 2009 and 7.0 per cent in 2010, although the growth rate has decreased from 10.4 per cent in 2008. Mortgage credit is expected to surpass $1 trillion about mid-2010. The volume of annual approvals may fall to about $150 billion in 2009 and $160 billion in 2010, down from totals that exceeded $200 billon per year in 2007 and 2008.
“The Canadian Residential Mortgage Market During Challenging Times” report contains a wealth of industry data, including consumers’ expectations of the housing market, profiles of mortgage holders, regional breakdowns of survey responses, and additional insight into challenges for mortgage holders in Canada. For a copy of the report, please visit: www.caamp.org.
For more information, please contact:
Renée Mellow; Jim Murphy
Media Profile; CAAMP
Office: (416) 504-8464; Direct: (416) 644-5465 Mobile: (416) 940-0011
renee@mediaprofile.com; jmurphy@caamp.org
About CAAMP
Established in 1994, the Canadian Association of Accredited Mortgage Professionals (CAAMP) is Canada’s national mortgage industry association. CAAMP has assumed a leadership role in the industry it serves and has set the standard for best practices for Canada’s mortgage practitioners. In 2004, CAAMP created the Accredited Mortgage Professional (AMP) designation as part of an ongoing commitment to increasing the level of professionalism in Canada’s mortgage industry.
As a membership-based organization, CAAMP strives to develop its network of professionals and to represent the interests of these individuals to government, media and consumers. CAAMP has attracted over 12,000 members and 1,400 companies from across Canada –representing over 90% of Canada’s mortgage activity. CAAMP members make up the largest and most respected network of mortgage professionals in the country. CAAMP’s membership base consists of mortgage lenders, brokers, insurers and other industry participants.
CAAMP’s other primary role is that of consumer advocate. On an ongoing basis CAAMP aims to educate and inform the public about the mortgage industry. Through its extensive membership database, CAAMP provides consumers with access to a cross-country network of the industry’s most respected and ethical professionals. Consumers should visit www.mortgageconsumer.ca for more information.
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Housing Activity Will Moderate in 2009, Improve in 2010
May 26th, 2009 Categories: Ajax, Pickering, Pickering Village, Real Estate News
OTTAWA, May 19, 2009 — Housing starts are expected to decline to 141,900 for 2009, but increase to 150,300 for 2010, according to Canada Mortgage and Housing Corporation’s (CMHC) second quarter Housing Market Outlook, Canada Edition* report.
“The decline in housing starts in 2009 can be attributed to several factors, including the current economic climate, increased competition from the existing home market, and the impact of strong house price growth between 2002 and 2007” said Bob Dugan, Chief Economist for CMHC. “However, housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period”.
Existing home sales, as measured by the Multiple Listing Service (MLS®)1, are expected to decline to 357,800 units in 2009 from 433,990 in 2008, but increase to 386,100 units in 2010. The average MLS® price is also expected to decrease to $283,100 in 2009 and to stabilize in 2010.
As Canada’s national housing agency, Canada Mortgage and Housing Corporation (CMHC) draws on more than 60 years of experience to help Canadians access a variety of quality, environmentally sustainable, and affordable homes — homes that will continue to create vibrant and healthy communities and cities across the country.
* The forecasts included in the Housing Market Outlook are based on information available as of April 30, 2009. Where applicable, forecast ranges are also presented in order to reflect economic uncertainty.
1 The term MLS® stands for Multiple Listing Service and is a registered trademark of the Canadian Real Estate Association (CREA). Data are for 10 provinces.
Information on this release:
Kristen Scheel
CMHC
Media Relations
Tel.: 613-748-2799
kscheel@cmhc-schl.gc.ca
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Local Real Estate: The Real Story
May 22nd, 2009 Categories: Ajax, Pickering, Pickering Village, Real Estate News, Selling real estate
I have always maintained that the most important real estate stories are local. What is happening to you and me, and not what is happening in Riverdale or King West, can help us make the right real estate decision.
This week, the Toronto Real Estate Board published that prices for the sales in the area were down only by less than half a percent. Is that true for Pickering and Ajax?
In Pickering, for a two storey, 4 bedroom house with a double attached garage, at least, 3 bathrooms and a finished basement:
May 2008
Average list price $415,182
Average sale price $405,182
Days on market 23 (highest 49)May 2009
Average list price $388,864
Average sale price $381,627
Days on market 29 (highest 79)
In Ajax, for the same home:
May 2008
Average list price $385,691
Average sale price $378,154
Days on market 21 (highest 71)May 2009
Average list price $377,560
Average sale price $373,900
Day on market 28 (highest 67)
Am I painting a bleak picture?
Not really.
If you bought your home last year, and you have to sell now, you will need good advice to sell and make a move. If you bought prior to last year, you are fine. You are building equity by paying of the principle of your mortgage and your house value hasn’t dropped like the news out of the US.
With the mortgage rates almost half of what they were last May, home affordability is amazing.
I have painted Pickering and Ajax with a broad brush. Neighbourhoods, themselves, can have large fluctuations in price. Find out what is happening in your neighbourhood by e-mailing or calling me.
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Greater Toronto Resale Housing Sales Up in First Half of May
May 21st, 2009 Categories: Ajax, Buying real estate, Pickering, Pickering Village, Real Estate News, Selling real estate
TORONTO, May 19, 2009 - Greater Toronto REALTORS® reported 4,561 transactions in the first half of May – an increase of three per cent compared to May 2008.
“Members reported a rise in buying activity this month,” said TREB President Maureen O’Neill. “Many home buyers who were undecided about purchasing a home during the winter months are now proceeding with confidence as a result of the GTA housing market’s affordability.”
The average price for MLS® sales was in line with last year, down by less than one-half of one per cent at $399,811.
“More sales and fewer listings resulted in tighter market conditions which pushed the average selling price back up to last year’s level,” according to Jason Mercer, TREB’s Senior Manager of Market Analysis. “Look for new listings to increase as home owners react to the positive news surrounding home sales and prices.”
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Home Maintenance Tips for Spring
May 19th, 2009 Categories: Area interest, neighbourhood
As seems to be the tradition for a lot of people on the Victoria long weekend, we spent it catching up on our spring clean up.
Fortunately, I had CMHC (Canadian Mortgage and Housing Corporation) remind me of all the tasks that I still had left to do:
Protect Your Home — and Your Investment!
If you’re like most Canadians, your home is probably your most important investment. It’s also the place where you and your family tend to spend a great deal of time. A regular schedule of seasonal maintenance can help you protect that investment for years to come, and help keep your home — and your family — healthy, safe and sound all year round.
This spring, Canada Mortgage and Housing Corporation (CMHC) has a short checklist of simple inspections and repairs that can help you put a stop to the most common and costly problems before they occur, in as little as a few minutes a week, including:
- Check your furnace, air exchanger and air conditioner filters, and clean or replace them if needed.
- Check and clean your range hood filters on a monthly basis.
- Make sure all indoor and outdoor air vents (intake, exhaust and forced air) are clear of snow and debris.
- From the ground or any overlooking windows, check your roof for missing or damaged shingles. Have any damaged ones repaired.
- Check the condition of caulking around windows and doors. Replace as necessary.
- Test ground fault circuit interrupter(s) on electrical outlets each month by pushing the test button, which should cause the reset button to pop up.
- Consult your hot water tank owner’s manual and follow its recommendations for testing the temperature and pressure relief valve to ensure it isn’t stuck. If you are unsure, consult a plumber.
- Shut down and clean the furnace humidifier, and close the furnace humidifier damper on units with central air conditioning.
- Have your fireplace or woodstove and chimney cleaned and serviced as needed.
- Clear all drainage ditches and culverts of debris.
- Check smoke, carbon monoxide and security alarms, and replace their batteries.
- Clean all windows, screens and window hardware. Repair any holes in screens or replace them if necessary.
- Open the valve to the outside hose connection once any danger of frost has passed.
- Examine the foundation walls for cracks, leaks or signs of moisture, and repair them if required.
- Repair and paint fences as needed.
- Make sure your sump pump is operating properly before the spring thaw sets in, and ensure the discharge pipe allows water to drain away from the foundation.
- Re-level any exterior steps or decks which may have moved due to frost or settling.
- Clean any debris from eavestroughs and downspouts, reattach any
sections that are loose, and make sure they are securely attached to your home and that the flow of water discharges away from your foundation. - Have well water tested for quality, and test for bacteria every six months.
- Carry out any spring landscaping and, if necessary, fertilize young trees.
I think I need another long weekend.
For more information or a free copy of the “About Your House” fact sheet Home Maintenance Schedule and other fact sheets on owning, maintaining or renovating your home, ask CMHC at 1-800-668-2642 or visit our Web site at www.cmhc.ca. For over 60 years, Canada Mortgage and Housing Corporation (CMHC) has been Canada’s national housing agency, and a source of objective, reliable housing expertise.
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Disaster Strikes
May 13th, 2009 Categories: Area interest
I recently read that parliament decided not to pay for the 72 hour disaster kit for high paid civil servants.
That got me thinking…what is a 72 hour disaster kit?
As it turns out, I am not alone. 42 percent of Canadians are not ready for a flood, earthquake, ice storm, extended power blackout, terrorist attack or other disaster.
I guess I can only live in ignorance for so long. I was in Durham Region for the blackout a couple of years ago. I listened to the concern over the chance that the terrorist might target the Pickering Power Plant after September 11th. I sign my children’s permission slip for administration of potassium iodide.
Well, what should you do to prepare for disasters?
Public Safety Canada suggests that an emergency kit should include:
- water – 2 litres of water per person, per day, and enough for 3 days
- food – non-perishable items such as canned food, energy bars and dried food
- a manual can opener
- a first aid kit
- a flashlight and batteries
- prescription medications
- infant formula or equipment for people with disabilities
- extra keys for your car or house
- cash - smaller bills and/or travelers cheques
- photocopies of personal documents such as passports and birth certificates
You might also include items like toilet paper, blankets, extra clothing and shoes, other personal care items, or maybe a whistle to attract attention.
The Canadian Red Cross can help you prepare. They also supply a Disaster Preparedness Kit.
I think my grocery list just got longer.
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Sales Break 8,000 in April
May 7th, 2009 Categories: Ajax, Durham Region, Oshawa, Pickering, Pickering Village, Real Estate News, Selling real estate, Whitby
TORONTO - May 6, 2009 — In April 2009, Greater Toronto REALTORS® reported 8,107 sales – down seven per cent from April 2008. While April sales remained lower than last year, the housing market gained momentum on a month-over-month basis. The seasonally adjusted annual rate of sales in April, at 80,900, was up 26 per cent from March and up two-thirds compared to January’s ten-year low.1
“Conditions in the resale housing market have improved markedly this Spring,” according to TREB President Maureen O’Neill. “Home purchases have increased as households have taken advantage of low interest rates and slightly lower home prices.”
The average price for April transactions was $385,641 – down three per cent from last year.
“The rate of average price decline continued to diminish last month. This is due in large part to a tightening in the resale market,” stated Jason Mercer, TREB’s Senior Manager of Market Analysis. “The level of sales relative to new listings increased in April.”
1Seasonally adjusting TREB MLS® data removes recurring seasonal trends observed each year. For example, MLS® sales are highest in late spring each year and lowest in the winter months. Removing the recurring seasonality, allows for the analysis of a meaningful trend reflecting actual changes in market conditions. By multiplying the monthly seasonally-adjusted figure by 12, creating an annual rate, we can compare how the current month relates to historical annual figures.
Median Price
The median price in April was $330,000 from the $334,950 recorded in April of 2008.
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What Can You Afford?
May 6th, 2009 Categories: Buying real estate, Mortgage, Pickering Village
I had a conversation with a colleague yesterday who was surprised to find that his mortgage payment was the same as when he bought the house 20 years ago. When he bought the house, he paid $190,000 and his interest rate was 11.25%. He now carried an $800,000 mortgage and the payments were the same with his mortgage interest running at 2.75% (prime plus a half). Not addressing the fact that he ran up his mortgage, I decided to test his theory on my house.
We moved into our house in 1993 and paid $318,000. The interest rate was about 7.25%. If we had put down 25% (I don’t feel like hunting for my original mortgage documents—cobwebs are creepy), our mortgage payment would have been about $1707.
My house is now worth about $490,000. If I again put 25% down (I’d have to save a little bit longer), my mortgage payment would be $1923 with the current posted rate of 3.95%. That rate is for a fixed mortgage with a 5 year term. There are several other options that I can now take that would bring my mortgage payment down.
What does this mean to you?
You might not be in the market for a $500,000 home (if you are, we can talk), but consider that my 2600 square foot house would rent for upwards of $2500. I can buy it for less.
Maybe you are looking for a $350,000 house. Check my mortgage calculator to find out how easy it is to afford more home. Moving up or moving out is a very attractive option right now.
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