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Archive for July, 2013

Condo sales dip below average; residential units remain steady

Members of the Ottawa Real Estate Board sold 1,594 residential properties, including condominiums, in June through the Board’s Multiple Listing Service® system, compared with 1,662 in June 2012, a decrease of 4.6 per cent.

“June sales are down a bit since last month, but even though there has been a slight decrease, it seems to be the norm throughout the years,” says Ansel Clarke, Immediate Past President of the Ottawa Real Estate Board. “Since June 2003, with the exception of June 2011, sales have consistently decreased from May to June. This shows stability in the market over the last decade.” June’s sales included 314 condominiums and 1,280 residential properties. “The condo market has dipped below average. The five-year average for June condo sales is 368 – putting June in at 17 per cent lower than the average,” says Clarke. “Although, when you look at residential units sold, without looking at condo sales, the decrease from year to year is only one per cent. Inventory on hand had been building up since the beginning of the year, but we’re now starting to see a small decrease which will bring the Ottawa market into an even more balanced buyer/seller territory.”

The average sale price of all residential properties, including condominiums, sold in June in the Ottawa area was $359,232, an increase of 1.9 per cent over June 2012. The average sales price for a condominium property was $265,410, a decrease of 4.3 per cent from June 2012. The average sale price for a residential property was $382,248, an increase of 2.2 per cent over June 2012.

Single level condominium apartments: June’s figures showed 156 sales for the month, compared with 174 in June 2012. The average price in June 2013 was $292,323, a decrease of 6.3 per cent over the previous June.

Two story condominium townhomes: June’s figures showed 138 sales for the month, compared with 165 in June 2012. The average price in June 2013 was $233,562, a decrease of 1.9 per cent over the previous year’s June.

If you are looking to buy a condo, this is an amazing opportunity. Mortgage rates are still down and there is lots of inventory to choose from.


Should you tell the next buyer about a prior negative home inspection report?

By Robert Hof

Mark Weisleder has some really good information here! – Robert

“I am often asked what a seller is obligated to disclose to a future buyer if a prior buyer did not purchase because of a negative home inspection report? This raises many interesting issues, starting with the fact that a buyer is not obligated to share any home inspection report with a seller, unless it says so in the home inspection condition. But what if a buyer tells a seller about a major potential defect? Can the seller just fix the problem and say nothing further. Should the seller do further due diligence? And what duties does a real estate agent have if they know about the problem as well.

Please read the attached article about a recent case which attempted to deal with these issues. The moral of the story is it is always better to disclose problems in advance, instead of having to defend yourself in court.”

See the full Toronto Star article here:

http://www.thestar.com/business/personal_finance/2013/07/16/home_inspection_should_seller_disclose_the_flaws.html


Think small for big purchases

By Rob Carrick

The Globe and Mail: Published Monday, Jul. 15 2013

We have a big problem.

Big weddings, big cars, big houses. They add up to big debts. Next time you’re considering a major purchase, try thinking small.

The Think Small philosophy of spending may be the only way some first-time buyers will ever get into today’s housing market, where borrowing costs have risen and prices are holding firm or rising on a national basis.

Further mortgage rate increases might help keep a lid on sales and prices, but they’re deadly in terms of overall housing affordability. The average Canadian home sold for $386,585 in June, which means monthly payments of $1,865 if you assume a 3.39 per cent fixed five-year mortgage rate and a 5 per cent down payment. If prices fell 5 per cent and mortgage rates increased by half a percentage point, the monthly payment is pretty much the same. The lesson here is that small rate hikes offset sizable price declines.

Some options for circumventing high house prices: Rent, buy a condo instead of a house, live in the suburbs or countryside, or buy a house and rent out a bedroom or basement apartment. Another approach is to think small. Buy a house with three bedrooms instead of four. Forgo the main floor family room and big backyard, or go for a bungalow instead of a two-storey home.

Inspiration for considering the Think Small philosophy of spending can be found in a short personal essay written by a Globe reader named Liz Mayer. For almost 30 years, she and her husband owned a 3,000-square-foot Victorian home in Belleville, Ont. They thought big as buyers, and now they regret it.

In particular, they regret a two-storey addition to what was already a large house. “We didn’t need more space,” Ms. Mayer writes. “We could have managed just fine with less room and had more money left over, both to build wealth, and do more of the things we enjoyed – travelling, going out with friends and family and contributing to causes we believed in.”

Numbers from the real estate broker Royal LePage show the national average price for a two-storey house was $419,614 in the second quarter, while the bungalow average was $386,547 and the average price for a condo was $248.750. Buying a smaller home means big compromises, but you save a lot of money. At current discounted five-year mortgage rates, the monthly difference between the average two-storey home and condo is $823, assuming a 5 per cent down payment. You’ll also pay less in utilities, insurance and maintenance with a smaller home.

My comment: Lots of good advice here, especially for first time buyers. But it’s important to consider condo fees when calculating potential savings.  – Robert.

For the full text of this article go to http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/for-autos-and-homes-think-small-for-big-purchases/article13235210/


Ottawa’s Light Rail Transit

By Robert Hof

I recently attended a presentation on the topic of our city’s LRT that has just begun construction. It was an excellent and enjoyable presentation and provided me with lots of information that I had been previously unaware of.

To share in this information, here is a link to the City’s LRT site.


Better to disclose damages that occur before closing

By Robert Hof

A warning from Mark Weisleder. Robert.

I am often asked whether a seller is required to disclose damages to a home that occur just before closing, or can they just repair the problem and say nothing. Please see the attached decision about what happened when a basement flooded before closing and the seller chose to fix it without saying anything to the buyer. The basement flooded again after closing and the buyer was able to recover their repair costs. In my opinion, it is best to disclose damages that occur prior to closing, make sure that they are properly repaired and provide the buyer with the opportunity to conduct their own inspection.

Click here to read the article:

http://www.thestar.com/business/personal_finance/2013/06/28/couple_selling_home_should_have_disclosed_flooding.html


Banks inch up mortgage rates

By Robert Hof

Fixed-rate mortgages are experiencing an increase in rates, according to an article published by CBC News. Royal Bank is just one of several big Canadian banks moving to increase their rates, which is being done as a reaction to higher borrowing costs on the bond market. The rates are closely tied to the bond market, as this is where many banks finance their fixed-rate mortgages. Closed rate mortgages will see the hike in terms of small percentage increases, but even slight increases can add up over time.

Click here to read the full article from CBC.

For a chart showing the “slow fall” of Canada’s mortgage lending rates, visit http://www.cbc.ca/news/interactives/mortgage-rates-fixed/