Canadian Home Sales Up Again In June

Housing Market Continued to Rebound in June and Early July

There continues to be good news on the housing front.  National home sales rebounded by a further 63% in June, returning them to normal levels for the month – 150% above where they were in April when the pandemic-induced lockdown paralyzed the economy (see chart below). Data released this morning from the Canadian Real Estate Association (CREA) showed that for Canada’s largest housing markets, activity was strong. Sales rose 83.8% (month-over-month) in the Greater Toronto Area (GTA), and 34.8% in Hamilton-Burlington. These gains reflect the pent-up demand from what would have been a stellar spring housing season.

Even on a year-over-year basis, national home sales were up 15.2% in June.

Anecdotal evidence suggests that home sales continued to be robust in the first weeks of July. Daily tracking thus far this month indicates that activity has strengthened further in July.  According to Costa Poulopoulos, Chair of CREA, “realtors across Canada are increasingly seeing business pick back up”.

New Listings

The number of newly listed homes shot up by another 49.5% in June compared to the prior month with gains recorded across the country.

The national sales-to-new listings ratio tightened to 63.7% in June compared to 58.5% posted in May. There were only 3.6 months of inventory on a national basis at the end of June 2020 – a 16-year low for this measure.

Home Prices

The Aggregate Composite MLS® Home Price Index (MLS® HPI) climbed 0.5% in June 2020 compared to May. Of the 20 markets currently tracked by the index, 17 posted gains.

The actual (not seasonally adjusted) national average price for homes sold in June 2020 was almost $539,000, up 6.5% from the same month the previous year.

The national average price is heavily influenced by sales in Greater Vancouver and the GTA, two of Canada’s most active and expensive housing markets. Excluding these two markets from calculations cuts more than $107,000 from the national average price. In the months ahead, the extent to which sales fluctuate in these two markets relative to others could have significant effects on the national average price, both up and down.

The Bottom Line

CMHC recently forecast that national average sales prices will fall 9% to 18% in 2020 and not return to year end 2019 levels until as late as 2022. We continue to believe that this forecast is overly pessimistic. Here we are in the second half of 2020, and the national average sales price has risen 6.5% year-over-year.

The good news is that the housing market is contributing to the recovery in economic activity. While the course of the virus is uncertain, Canada’s government has handled the COVID-19 situation very well from both a public health and a fiscal and monetary perspective. 

Written by: Jason Woods, Broker with TLC Mortgage Group

Jason Woods Broker

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Meet the Realtor: Colette Cooper

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Colette Cooper

Colette Cooper: Real Estate Broker Agent with Royal LePage State Realty

 

How long have you been working in real estate?

I have had the privilege of selling real estate for over 26 years.  I knew when I got licensed as a sales representative (I am now a Broker), this would be a long-term profession for me.  

What is it that makes you so passionate about what you do?

Every day is different, every client, situation and every property is different and all this makes my job (for the most part) very interesting.  Since I started working at 16 years of age, I have always been in the “Service industry”.  I love talking with people, and establishing relationships and trust.  Then to share their enthusiasm in finding the house of their dreams, or selling their house with as little stress as possible, gives me the energy and enthusiasm to do it again. 

What attracted you to this business?

The real estate business always seemed to me as a very exciting and prestigious business. Prior to getting into real estate, I owned my own fitness and personal training business. My mother was a successful business owner, and I must have inherited her entrepreneurial spirit.

Is there a particular area you specialize in, either in terms of neighbourhoods, or types of homes or perhaps the type of clients you like to work with?

Moving from Quebec when I was very young, I have lived in Burlington and primarily Hamilton for most of my life. I specialize in residential real estate and feel very comfortable and knowledgeable about selling houses and condos in Hamilton, Ancaster, Dundas, Burlington and nearby communities. I live in the Kirkendall area of Hamilton and especially enjoy working here too. 

In such a competitive market with so many realtors, what do you offer your clients that you think makes a difference?

I am a very dedicated, honest and knowledgeable realtor and I believe people sense that in me. My CC SELLS Marketing Plan has really impressed my seller clients.  I do a number of things which are unique to the business and feel that has given me an edge.  It is all part of my way of offering superior “service”. 

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REAL ESTATE MARKET UPDATE ⁠— HAMILTON REGION

The real estate market in Hamilton and the surrounding area started off strong in 2020.   Sales volumes were on par or higher than they were in 2019, and average sales prices were up significantly.  In fact, it felt a little like the boom market of 2017, with multiple offers common on many properties, and homes selling over the asking price. The number of active listings on the market was about 25% lower than 2019, which contributed to the pressure on prices.

Then of course, the coronavirus hit in mid-March, and real estate was not spared the impact that was felt across all sectors of the economy and society.  Sales volumes dropped by over 50% in the second half of March and through April.  And the reluctance of sellers to list their homes at this time has meant that there are even fewer listings available than normal in the peak spring market.

As we went through May and into June, we have started to see activity picking up again, although sales volumes are still well below prior year levels.  The data for June is not yet available, but the market has been active, and homes are selling quickly as long as they are well priced.  Average prices dipped a bit in April, but the data shows that prices recovered fast and are currently well above 2019 levels.

It is hard to predict how things will unfold for the rest of this year.  As long as we don’t get a second wave of Covid 19, it seems right now that the market will be stable and reasonably strong.  As things gradually return to normal and the economy opens up, I expect sales volumes will also gradually get back to their more normal levels in the second half of the year.

I also expect to see a slight increase in average sales prices through the balance of this year. The continued shortage in active listings will put pressure on prices to increase, although the economic challenges as a result of Covid 19 could work in the opposite direction.

Luke O’Reilly is a Real Estate Broker with Royal LePage State Realty in Hamilton.  He can be reached at 905.525.3737 or by email at luke@lukeoreilly.com .

Source:   All data from Realtors Association of Hamilton-Burlington

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REAL ESTATE MARKET UPDATE ⁠— HALTON REGION

The real estate market really slowed down in 2018/19 following an extremely strong 2016/17.  As we entered 2020, many of us working in real estate felt that there was pent up demand that could potentially drive a stronger market this year.  If you look at the February 2020 numbers here, this was indeed the case, with a big increase in the number of properties sold compared to 2019, coupled with a significant decrease in the number of active listings. 

This combination of low supply and high demand is of course a recipe for price increases, and you can see prices in February 2020 went up!

So – we were off to the races!  But then, along came Covid 19…  An unprecedented pause in normal social activity affected all aspects of the economy, and real estate was no exception.

If you look at the charts, you will see a huge drop in properties sold in April, to approximately one third of their usual level. At the same time, the low number of active listings continued, so prices were essentially flat.

In May, you can see a recovery of about half the lost ground in properties sold, as buyers began to slowly return to the market.  But active listings were even lower than in April, as many sellers were reluctant to list at this time.  This combination of improved demand and reduced supply led to an increase in prices in May.

We don’t have June numbers yet, but the trend of buyers returning to the market is picking up steam, and active listings are gradually returning to higher levels, albeit still below normal.

We can’t say with certainty where we go from here, but the evidence so far is that the underlying strong dynamics of the Halton real estate market, driven by the growth of the GTA and the attractiveness of the communities within Halton, bode well for a return to normalcy in sales levels.

We will have to see how prices shake out. A continued shortage in active listings could put pressure on prices to increase, while economic challenges as a result of Covid 19 could mitigate in the opposite direction.

Terry Smith is a Real Estate Sales Representative with RE/MAX Aboutowne Realty Corp. in Oakville.  He can be reached at 905.338.900 or by email at tjsmith8057@gmail.com .

Source:   All data from Ontario Regional Information & Technology Systems, Inc. InfoSparks © 2020 ShowingTime.

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Meet the Realtor: Michael Brejnik

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Michael Brejnik of Royal LePage Burloak Real Estate Services.

How long have you been working in real estate?

I started in real estate right out of University 17 years ago and haven’t looked back.

What is it that makes you so passionate about what you do?

Every day is different. I love the excitement of not knowing what each day will bring. I am very social and really enjoy taking the time to get to know all about my clients. I consider it an honour to be a part of their decision to buy or sell their biggest asset.

What attracted you to this business?

I come from a family of builders but that didn’t quite seem like the right fit for me. Real estate felt like a natural extension of that and I have always excelled at sales.

Is there a particular area you specialize in, either in terms of neighborhoods, or types of homes, or perhaps the type of clients you like to work with?

I don’t like to be typecast, but it has seemed to work out that a lot of my business is in the luxury market. However, I sell all types of homes, and every price range gets the exact same treatment and exposure. One of my team members, Jules, specializes in seniors and first-time buyers.

In such a competitive market, with so many realtors, what do you offer your clients that you think makes a difference?

Real estate is heavily saturated with agents and there is certainly a lot of choice. It is important for me to take the personal approach with all of my clients, which is why I have a very small team with a boutique style of marketing. If my clients call me, they will get me.

Michael Brejnik is a sales representative with Royal LePage Burloak Real Estate Services. You can connect with him on his professional Facebook and Instagram channels at @MichaelBrejnik, or by visiting his website at https://michaelbrejnik.ca/ .

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How Covid-19 Has Affected the Hamilton Real Estate Market

Before the Covid-19 global pandemic, the real estate market in Hamilton and the surrounding area was on the rebound after a tumultuous 2018 and a mixed 2019. Despite the lower inventory at the start of 2020, prices were rising along with an increase in consumer confidence. Then the virus hit in mid-March, April and May saw industry and businesses shut down, and nervous clients had to tiptoe carefully into the unknown waters of buying and selling homes during a pandemic.

According to Jordan Zalter of RE/MAX Escarpment Realty Inc., the seriousness of the buyer has changed. “There is a lot more pre-qualifying happening online before potential buyers make an appointment to see a house,” explains Jordan. “The changes in how we operate have weeded out the five-minute appointments. Consumers are educating themselves and getting the legwork done ahead of time and only making an appointment when they are serious about the property.”

During the quarantine, house showings were still allowed, but open houses were not. Realtors have been able to spend more time with serious buyers and sellers, which has translated into an increase in the ratio of showings to offers. The supply is still low, which has kept market prices stable, and many homes are selling over asking. A couple of factors have contributed to low inventory, including the halt in development as builders were required to put projects on hold. Sellers have also been wary of listing their homes during this time, having strangers in their homes and having to disinfect after every viewing. Fortunately, the number of calls from sellers forced to sell due to financial concerns or job loss has been negligible.

While realtors may have found a dip in overall sales for the latter half of March and April, the interest began to pick up again in May, specifically with resale homes. For some realtors, the most unexpected change has been the number of foreign buyers, specifically from the United States, who decided to move north of the border. With border restrictions in effect, these transactions have been done mainly online. Some buyers have family in Canada who can view the home and provide feedback, or they rely on their realtor to decide if the property checks all the boxes. “We have had more contact with US buyers in the last three months than we have in the last five years,” explains Jordan. “With these sorts of transactions, it becomes even more critical to have a strong, trusting relationship between client and agent.”

Perhaps the hardest adjustment for realtors, who are keen to meet clients and form a relationship, is the lack of face-to-face meetings. But, overall, clients have adapted very well to the new procedures. “Everyone has been very patient that things had to change and be done differently,” says Isaac Philips of Royal LePage State Realty. “The adaptation has been significant, but we are fortunate to be able to perform our day-to-day business and continue to work.” For many agents, the number of units sold year-to-date has not changed much. New building permits were put on hold for the first four to six weeks of the pandemic, but construction has since resumed in most areas.  “In smaller cities, there hasn’t been the big jump in springtime listings, but buyers are still there,” says Isaac. “The inventory is still low, so for sellers, it’s a good time to list if they can get comfortable with the new process.”

As the year progresses and rates of infection decline, we can expect pandemic fears to subside, and the industry should slowly return to normal.

Written by Julie Achtermeier

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How Covid-19 Has Affected the Halton Real Estate Market

Before the Covid-19 global pandemic, the real estate market in the GTA and Halton was on the rebound after a tumultuous 2018 and a mixed 2019. Despite the lower inventory at the start of 2020, prices were rising along with increasing consumer confidence. Then the virus hit in mid-March, April and May saw industry and businesses shut down, and nervous clients had to tiptoe carefully into the unknown waters of buying and selling homes during a pandemic.

Thankfully, the activity did not come to a grinding halt. However, buyers do seem to be re-evaluating their lives and lifestyles. “Buyers are thinking about their living arrangements and what that’s going to look like if they continue to work from home,” says Rina DiRisio of Royal LePage Real Estate Services Ltd. “They are reassessing their lives and taking the time for some self-reflection.”

During the quarantine, house showings were still allowed, but open houses were not. Realtors have been able to spend more time with serious buyers and sellers, which has translated into an increase in the ratio of showings to offers. The supply is still low, which has kept market prices stable, and many homes are selling over asking. A couple of factors have contributed to low inventory, including the halt in development as builders were required to put projects on hold. Sellers have also been wary of listing their homes at this time, having strangers in their homes, and having to disinfect after every viewing. Fortunately, the number of calls from sellers forced to sell due to financial concerns or job loss has been negligible.

While realtors may have found a dip in overall sales volumes for the latter half of March and April, the interest began to pick up again in May, specifically with resale homes. “We have seen an increase in Toronto buyers looking to move further out of the city,” says Michael O’Sullivan of Royal LePage Burloak Real Estate Services. “Some individuals need space for an office and prefer a bigger yard if they’re going to be spending more time at home.”

The online presence for realtors has increased enormously, and that may not go away even as Covid-19 fades into the background. Buyers can do more research themselves and are often better prepared by the time they call a realtor.  “Having an excellent online media program has become critical, and I see that continuing,” says Michael. “Good photographs of the home are important to eliminate unnecessary showings, and buyers are not booking appointments unless they are serious.”

Perhaps the hardest adjustment for realtors, who are keen to meet clients and form a relationship, is the lack of face-to-face meetings. Long gone are the first meetings over a cup of coffee, and whether that resumes in the future remains to be seen. But, overall, clients have adapted very well to the new procedures. “There’s more work preparing for a showing,” says Michael. “But we’re dealing with serious buyers who are very co-operative with the new rules and completing the required health forms and liability waivers,” says Michael.

For many realtors, the number of units sold year-to-date has not changed much. New building permits were put on hold for the first four to six weeks of the pandemic, but construction has since resumed in most areas.  “The volume was down initially,” says Rina. “But now there are multiple offers on properties, particularly those under $1.5M. Prices have not dropped, and sellers are doing very well in this market.”

As the year progresses and rates of infection decline, we can expect pandemic fears to subside, and the industry should slowly return to normal.

Written By Julie Achtermeier

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It’s Never Too Early To Call A Stager!

Whether you’re planning to sell your home in six weeks or six months, it’s never too early to call a home staging company. The role of a stager is vital to preparing your home to enter the real estate market. They help you decide what to repair before you list and know precisely how to draw a buyer’s eye to that perfect bay window or exquisite fireplace. Most of all, since they don’t live in your home, they can be objective about what should go and what should stay.

“Knowing what to remove from your home is where most people struggle,” says home stager Beth Walder, owner of Turn Key Homes – turnkeyhomes.ca. “Stagers can see a room and how a potential buyer is going to look at it. We can direct the buyer’s eye to key features of the room with the right lighting, furniture, or artwork.”

The staging process begins with a consultation that takes about one and a half to two hours. The stager will go through your home and make a list of suggested modifications, including what should be removed, added, repaired or rearranged. You will be provided with a list of recommendations, decide what jobs to tackle yourself, or hire the staging company to help. Typically, it’s a combination of both, and the stager will provide a quote for the various options. You may be able to tackle jobs such as putting away personal
items and repainting a room but hire the stager to choose the right accents and do the final editing. The stager can also be hired to help with all stages of the preparation, including packing boxes and decluttering.

If you’re reluctant to hire a stager because you think it might be too expensive, think again. Taking the time to invest in preparing the home will increase the offer amount and result in a shorter period the home is on the market.

“If a client looks at the list and thinks, ‘this is too much work,’ that’s how a potential buyer will feel,” says Beth, “There’s a greater chance of more offers if buyers don’t see a lot of work or think they’ll have to spend money once they move in.”

It’s important to make sure a room is minimalist and for closets to appear spacious. A room with too many items will confuse the eye, and a potential buyer may be too distracted to see its potential. Many homeowners don’t consider what’s in their closets. Let’s be clear, buyers will open your closet doors to see how much storage is available. An overcrowded closet or cupboard, or even additional shelving, can give the appearance there is not enough storage room, and that can be off-putting to a potential buyer.

The colour of the rooms can have a dramatic impact on the appearance of size and space. If an update is recommended, the stager will suggest two or three neutral colours that work with your décor and lighting to create a flow throughout the home. Potential buyers don’t want to imagine repainting their new home, so it’s preferable to give the illusion of less work.

“The money a homeowner will invest in updates is a lot less than the first price reduction a realtor will make if there’s no interest in the home,” Beth points out. “Repairs and updates may cost as much as one or two thousand dollars, but a reduction in your home price would start at 10 to 15 thousand.”

Also keep in mind that in the current climate, many potential buyers are first looking online to narrow down their search.  It’s more important than ever to ensure your home looks like a showroom.

Consulting with a stager before you’re ready to list will eliminate unnecessary stress and give you more time to prepare. Stagers like to have a home set up before it goes on the market, and some repairs take longer than others, so the sooner you book that consultation, the better.

Written By Julie Achtermeier

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How To Approach Your Neighbour About Shared Cost Projects

Depending on how well you get along, it can be awkward as a homeowner when you have to approach your neighbour to discuss a repair or project of a shared area. Typically, this might involve putting up or repairing a fence, but it can also include a joined boulevard, overgrowing trees, or the space between homes.

Recently, we decided to chop down the overgrowth of weeds between our house and the neighbours, install a weed barrier and fill the area with river rock. We were prepared to pay for it ourselves as the modification wasn’t required, but we chose to speak to our neighbour before beginning. It was well worth the effort as they were keen to clean up the area and happy to share the costs. That did involve us performing much of the labour ourselves, but it was worth it to divide the expenses and save ourselves a bit of money.

If you’re wondering how to approach your neighbour, here are some tips to get the conversation started.

Choose an appropriate time to speak to your neighbour. Do not catch them on their way to work in the morning or after they’ve picked up their kids from daycare. Wait until neither of you is rushed. Ideally, you want to both be in the right frame of mind without obvious time constraints. This consideration is less important if you have a good relationship with your neighbour and can chat freely. Approach the conversation from your point of view and explain the goal of the project without dictating. If it’s a problem that needs to be resolved, speak calmly and avoid laying blame. Have a resolution in mind and how it will benefit both of you.

Give your neighbour a chance to speak and express his or her point of view. No one likes to be dismissed, so give him or her a chance to speak, and be sure to listen.

If you cannot initially agree on a course of action, make sure you fully understand the whole problem. Take the time to work on a solution together and agree on something you can both live with. Keep an open mind and realize ahead of time that you may have to compromise. Write down what steps you have agreed upon, along with the timeline and costs to complete the project. Keep a copy of the agreement and give a copy to your neighbour. Decide on a time and date to check in again as the project progresses, and keep smiling!

Written By:  Julie Achtermeier

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How To Verify Your Down Payment When Buying A Home

Saving for a down payment is one of the biggest challenges facing people wanting to buy their first home. To fulfill the conditions of your mortgage approval, it’s all about what you can prove, with hard documentation not just your word. Documentation of down payment is required by all lenders to protect against fraud and to prove that you are not borrowing your down payment, which changes your lending ratios and potential your mortgage approval.

The documentation required by lenders to verify your down payment is determined by government anti-money laundering regulations and protects the lender against fraud.

1. Personal Savings/Investments:

Your lender needs to see a minimum of 3 months’ history of where the money for your down payment is coming from including your savings, Tax Free Savings Account (TFSA) or investment money.

• Regularly deposit all your cash in the bank, don’t squirrel your money away at home.

• Any large deposits outside of “normal” will need to be explained (i.e. tax return, bonus from work, sale of a large ticket item). Lenders want to see a paper trail of where your down payment is coming from and how it got into your account.

2. Gifted Down Payment:

In some expensive real estate markets like Metro Vancouver & Toronto, the bank of Mom & Dad help 20% of first time home buyers. You can use these gifted funds for your down payment if you have a signed gift letter from your family member that states the down payment is a true gift and no repayment is required.

• Gifted down payments are only acceptable from immediate family members: parents, grandparents & siblings.

• Be prepared to show the gifted funds have been deposited in your account 15 days prior to closing. The lender may want to see a transaction record.

3. Using your RRSP:

If you’re a First Time Home Buyer, you may qualify to use up to $35,000 from your Registered Retirement Savings Plan (RRSP) for your down payment.

• Home Buyers Plan (HBP): Qualifying home buyers can withdraw up to $35,000 from their RRSPs to assist with the purchase of a home.

• If you buy a qualifying home together with your spouse or other individuals, each of you can withdraw up to $35,000.

• You must repay all withdrawals to your RRSP’s over 15 years. Generally, you will have to repay an amount to your RRSP each year until you have repaid the entire amount you withdrew

• Verifying your down payment from your RRSP, you will need to prove the funds show a 3-month RRSP history via your account statements which need to include your name and account number. Funds must be sitting in your account for 90 days to use them for HBP.

4. Proceeds from Selling Your Existing Home:

If your down payment is coming from the proceeds of selling your current home, then you will need to show your lender an accepted offer of Purchase and Sale (with all conditions removed) between you and the buyer of your current home.

5. Money from Outside Canada:

Using funds from outside of Canada is acceptable, but you need to have the money on deposit in a Canadian financial institution at least 30 days before your closing date. 

Buying a home for the first time can be stressful, therefore being prepared with the right documentation for your down payment and closing costs can make the process much easier.

Mortgages are complicated, but they don’t have to be. Contact a mortgage broker to help make this process smooth and stress free.


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