Quick thoughts...

Lots of rain followed by lots of sales. 1 floor homes in Old North and Old South have experienced multiple offers, sales are strong i thnk stronger than other summers. Can this continue? Where are all the jobs coming from? I hear Fanshawe is going crazy with the 2nd career programs. Inteerest rates are really really low. UWO is under new leadership sounds like a new direction. Interesting times ahead.

What are your thoughts?

Bricks & Mortar REAL ESTATE REPORTER

My June 2009 edition of Bricks & Mortar Real Estate Reporter is now available. Visit here to read.

To receive my newsletter by email, drop me a line at tom@dampsy.ca.

Home sales on the rise

Sales of detached homes in April topped the same month last year. According to the London St. Thomas Association of Realtors (LSTAR), 666 detached homes sold last month, compared to 654 last April. Total units sold decreased 4.5% because only 138 condos sold compared to 188 in April 2008.

This is the third consecutive month of improvement since January when total sales were down 35% compared to the year before. Prices have also seen improvement; average price of homes sold from January to April is $207,591, down only 1.8% from the same period last year.

New tax credits and programs allowing homebuyers to draw money from their RRSP for home purchases were a big driving force in the market - attracting first-time homebuyers. And with London's diverse economy, we've been more insulated from a sharp downturn in house prices hitting some other cities such as St. Thomas. Heavily dependent on the auto industry, they're really feeling the pinch with a 27% drop in sales in April, compared to same month last year.

Home sales are important economic generators in themselves. A new national study shows each home sale generates $46,400 in additional spending on furniture, appliance, and renovation moving and legal fees. Past recessions have shown that real estate sales typically rebound before the job market and general economy.

Home energy efficiency...consider a voluntary energy audit

Mary and I just came back from 2 ½ intensive days taking a passive solar course in friendly, rainy Truro Nova Scotia. Make sure you stop in at Murphy’s fish and Chips located on the Esplanade. There is a reason it is rated Atlantic’s best! I am not going to build a passive solar home, but I am going to use and adapt the principles in the course to help make my living conditions more comfortable and cost efficient.

When my buyer is seriously considering a property I encourage them to call the utility companies. This gives you a starting point for the energy costs for that property. I say a starting point because too many questions are unanswered; How hot did they keep the house? How old are the occupants? Who is there during the day? How many hours watching TV? The answer to these questions helps us understand the routine of the house.

An energy audit will help. The government’s new position now makes energy audits voluntary rather than mandatory (yes, that's right; no more mandatory energy audits!). Consider doing one and sharing with prospective buyers, not only will it help the buyer; they may forgo doing a home inspection! Everywhere you look today it is “green” this and “green” that. You can even receive rebates for making your property more energy efficient.

I ask my sellers to tape the heating bills to the furnace. Sharing the costs helps answer a basic buyer question. The rest is educating…you know…for every 2° over 70 can increase your heating bill as much as 15%. Babies and elderly people often keep their homes between 72 & 76. Programmable thermostats reduce heating costs when used properly and increase costs when not.

Back to the passive solar course, I re-learned the angle of the sun between winter and summer and its efficiency time, roughly high noon and 15°- 30° either way. In the winter allow the sun in during the day and let it warm something that can radiate heat. In the summer keep it out to help keep your home cooler. The result is less energy needed to heat or cool your home. I learned a lot this past weekend. Living in an old house our forefathers knew a lot about this emerging technology; history does repeat itself. A penny saved is a dollar earned!

Two similar properties offered for sale, 1 costs $500.00 more to heat…if you were on a budget which would you choose? Which is worth more?

Do you have any tips to share? Are you doing anything to reduce your utility costs without giving up your comfort? Please share.

My thoughts on the new mandatory energy audits

Energy Audits before you sell your home, I’m not sure on this one.

Pro: Lets the buyer know the efficiency of the property they are buying?
Con: Can be used against the seller in negotiating a final/fair price.

Pro: Shows the buyers where improvements can be made to save money on their energy usages.
Con: Forces the seller to spend $

Pro: National Association of Green Agents and Brokers apparently has a kit for a preliminary examination which points out areas in which small changes can help reduce energy costs and improve a property’s score.
Con: Question: could anybody “cook the books” for a better score?

Pro: Only licensed auditors will perform these audits.
Con: Exactly what does the licensing entail? Licensing plumbers, electricians and carpenters take several years; will an auditor be as educated? After all, they are providing a professional opinion indirectly on these trades.

I read that new windows don’t necessarily save money (energy) compared to old. I believe most building inspectors will tell you my 100 year old windows should be replaced. I get a little anal sometimes and this winter we tested out my “grandparent theory”… Close the drapes! Our living/dining room is 30 feet by 16 feet with 2 large windows facing south and 2 large windows facing west. Our experiment involved opening the drapes one evening, and closing them the next. We found a 4-5° difference in temperature. Our grandparents were right, 5° warmer with the drapes closed! So if you want to be warmer…close the drapes. If you want them open, understand the extra cost associated. It’s your money!

My drapes would be closed for an energy audit. Would I pass or fail? How would we know if any standard testing could be strictly adhered to? Impossible! I am all for reducing costs through education and choices but I don’t believe we should be forced.

Comments Please?

Can't we all just get along?..

I just returned from visiting my mom in Winnipeg. The Winnipeg news featured 3 top stories throughout the weekend. The flood and how the communities are pulling together helping one another, Susan Boyle the singing sensation from Britain’s Got Talent show - over 35 million views on You Tube within the week - showing us anything is possible, and the unions comments about the Chrysler bail out.

I hate win lose situations; I much prefer win-win. The union has publicly announced they will not negotiate anymore with the government. The fate of the company hangs while this game continues to play out. Windsor with 14% unemployment does not want to afford another plant closing. I hope it is the workers in that plant that are voting for their fate. You see, they are not just voting for their fate, but the fate of many businesses and communities these workers and this company supports. The decision to keep working and take less money during this downturn should be the decision of the people working at the plant…those affected the most.

I know someone who owns a company with a fairly large workforce. The union contract is up in the fall; apparently he has asked to negotiate now so that he can bid on jobs and keep his people working. No work, no pay! Because he does not know what his labor rates will be, he cannot bid on work. Who loses? The worker, you, and me! I am not against unions, but I am against win-lose. Cami kept 2 shifts going on reduced work weeks and unemployment picks up some of the tab. That means we all share in this; that to me is a win-win, working together, supporting our communities together.

Together we stand, divided we fall! As REALTORS® we compete against one another and then turn around and work with one another with one common goal sell a property; make a buyer happy and a seller happy. By working towards a win-win anything becomes possible.

Get Rich, Stay Rich

March sales in our area rebound with a fury…yeah! Sales were within 7% of last year. I realize we had a pent up of buyers from the miserable winter we had but I am cautiously optimistic. Is our market dead? Nope, I don’t think so, I think we will remain stable and balanced.

I just read a book called “Get Rich, Stay Rich, Pass it on” by Catherine S. McBreen and George H. Walper Jr. Interesting read, a little repetitive for me however overwhelmingly this book goes on about owning investment real estate. The findings are based on 10 years or research interviewing thousands of families. It confirms what I call the “Department Store” effect. At any one point stocks are up and real estate is down or real estate is up and stocks are down. By investing in different areas helps insulate us from challenging times.

I am a REALTOR® so investment real estate works for me ;). Rental income produces a constant monthly return well into our future. In fact, it is something you can pass onto your heirs. Land, “if you can afford it”, can be easier to manage, bigger pay off usually longer hold pattern for a return.

First things first: credit card debt should be paid off monthly, your first investment should be your home and from there carefully consider what could work for you, do you hire a management company or do you take more of a hand’s on approach? Worth discussing further.

Everyone's circumstance is different. There are some very good (as Warren Buffet calls them) cigar butts out there that do not cost a lot of $ (investment) to enter the market. Interest rates are incredibly low, maybe it’s time to take advantage!

I always have time for a coffee or a juice!

New "tenant tax"?

If the City council approves, owners of small apartment buildings, with six or fewer units, will be required to obtain a license at a cost of $150 per unit every five years to allow for city inspections to ensure housing standards are met.

The new rules would allow bylaw officers to blitz neighbourhoods they believe to be rife with problems, but they would still have to give a month's notice to tenants and landlords before inspecting inside homes.

London real estate market update

A small drop in sales is good news for London. The London area real estate market saw a decline in sales by 7.2% (detached homes).

The London St. Thomas Association of Realtors (LSTAR) reports 551 detached homes and 118 condos sold in March. The total sales of 669 units is down 10.2% compared to 745 in the same month last year.

This is a great improvement compared to the 35% drop in January, and 30% in February. And when you look at what's happening in other markets, a 7.2% decline isn't so bad.

Prices have remained stable; the average house price for the first quarter of 2009 was $206,944, which is down by only 2.7% from last year.

Active listings in March was up 20% compared to same month last year, while home sales in St. Thomas jumped 14.6%--although house prices in St. Thomas have decreased more than any other London area (down 7.2%)

The London area market is living up to its reputation as a long-term stable market.

The Good, The Bad, and The Ugly of HST

The Good

Tax experts predict the average Ontario family will be further ahead despite harmonized sales tax. Lower-income families will get hit a bit more, but the tax rebate will cushion that.

Harmonizing GST and PST is good for businesses because it lets them recover money now lost to retail sales taxes and use it for investment in new equipment and machinery. Currently, businesses receive a rebate on the GST, but not PST.

A study of Quebec, Newfoundland, Nova Scotia and New Brunswick - which harmonized their GST and sales taxes - found business investment jumped and prices (of goods & services already taxed) decreased.

In the long run, more jobs will be created (better jobs that require equipment and machinery behind them which may pay better) and increased job security.

The Bad & Ugly

We will be paying more at the checkout.

Homebuyers, especially first-time homebuyers, will find it tougher to afford a home. For a resale house priced at $360,000, a HST could add over $2,000 in new taxes to closing costs. Take a look at the table below:



In total, a HST will add $313 million annually in new taxes to resale home transactions. This will hurt the resale home market, prolonging the housing industry’s recovery from the current economic downturn.

Harmonized Sales Tax for Ontarians

More taxes to come (Yipee Yahoo!)

Starting July 1, 2010 expect a harmonized sales tax. The McGuinty government announced it will harmonize the GST and PST, causing consumers to pay extra tax on a range of goods & services.

This will increase the costs associated with real estate transactions (legal fees, moving costs, commissions, home inspection fees), which we currently pay only 5% GST on.

And better yet, we will also be paying more for goods & services we use daily: gas, utilities, haircuts. This is in response to the economic downturn; in hopes of raking in an additional $3.5 billiion in annual revenue.

The good news?

- There will be three tax rebate cheques totalling $1,000 for families with household incomes of less than $160,000 and $300 for individuals who make less than $80,000 a year.

- Some basic goods will be exempt from the blended sales tax, such as children's clothing, books, diapers and new houses costing less than $400,000.

Mandatory Green Audits

Thinking of selling your home? You won’t be able to sell your home or condo without first getting a home energy audit, which will cost you $300.

Under the New Green Energy Act, you will now have to get a private contractor to do an energy audit before selling, but there will be no requirement to take any action. This audit is simply intended to inform potential buyers what state of energy efficiency a property is in so they can take action if desired.

While this adds an expense to homesellers, it is predicted that 50,000 new jobs will be created.

This is anoter step to encourage electricity conservation and encourage renewable sources of energy. In Portugual, solar systems are required in new houses.

Advanced warning

If you’ve ever waited a long time for a train to clear a crossing – and it’s a rite of passage for Londoners – then here’s news: City council has approved a pilot project to provide advance warning a train is crossing.

For starters, the project will be centred on the CN Rail crossing of Colborne St. south of Bathurst. Signs will be situated on York and Horton, about two blocks east and west of Colborne, that will signal approaching motorists the Colborne crossing is blocked by a train. Motorists can then plan a different route.

If the idea works, it will be rolled out to other locations in the city.

Free Home Buying/Selling Seminar

Tomorrow I am hosting another Home Buying & Selling Seminar, with Andrew Young of Scotiabank.

We have added new topics; learn about the different types of Government Programs, Incentives & Grants that can help you own your home quicker than you think. Currently, there are several programs available that is offered by the local, provincial, and federal governments.

It will be hosted at the Scotiabank on 301 Oxford St. W (right inside Cherryhill Mall) 7-9pm. If you would like to RSVP, give me a call 519-642-0619 or send me an email tom@dampsy.ca

It's that time of year again!

The March edition of my newsletter, 'Bricks & Mortar REAL ESTATE REPORTER' is now available. Visit http://dampsy.ca/NewsletterMarch09.pdf to read the newsletter today. You'll find valuable real estate information & tips such as: "New Building Code Requirement", "Home Improvement on a Budget", and much more. This is your link to realty.

If you would like to subscribe to my newsletter, just send me an email tom@dampsy.ca, and the next edition will be emailed to you.

The media never prints about planes that land safely…only the ones that crash!

The same can be said with the Media’s current comments about the Real Estate Market. Consumers lose confidence and buyers become more cautious.

What should you do, where are we headed?

The Canadian Mortgage and Housing Corporation (CMHC) predicts a fairly stable market with some sectors showing declines and others remaining stable. New homes are hit the hardest and builders will offer more incentives especially if they have an over supply of ‘spec” homes.

The Canadian Real Estate Association (CREA) predicts a decline in activity of 19.1% and a decline in value of 7% overall for the province. The hardest hit areas in the province are projected to be in Windsor, Oakville, and Oshawa where the impact from the declining auto sector will be felt the most.

If you treat your investment like a stock, put in a purchase order and buy more, your cost base goes down and as the market recovers you take advantage of the increase/spread.

If are thinking of selling then price vs. show ability vs. timing will determine the difference between success and “long time” on the market. Make sure your research is accurate and thorough for the best decision.

MacCleans magazine published an article last Monday predicting the market will go down 20% and they used Teranet as a basis for this assessment. Teranet is a company who records all property transfers within the province. My belief is that MacCleans did not analyze the Teranet information objectively.

Let me explain: Let’s say you inherit a property and there is a transfer of ownership recorded at $1 or you buy the water frontage in front your cottage from the township for closing costs totaling $700. All these transfers are recorded at Teranet including selling your property on the open market (mls system). Let’s say you sold your cottage for 60% of value to one sibling and your principal residence for 60% of value to the other sibling to be “family” fair. Those amounts are recorded in the Teranet system.

So my question is: How can anyone take all the transfer prices of all real estate and predict what the market is doing without doing the objective research to find out the “why” of a sale, which would help enable you to determine where the real market is headed.

MacCleans sold a lot of magazines this past week. However, it is this writers’ opinion that they sent out some misleading information to sell those magazines and that’s bad news; a plane crash!

The press to some extent helps control our attitudes and our knowledge. If you are hearing bad news and thinking bad thoughts then good opportunities will not present themselves.

London is generally a white collar town and the market reflects this. Health and Education are the major employers. Yes we will have a slow down and there are hiring freezes and research freezes in those sectors but not mass lay offs. Our housing market is inexpensive compared to so many other centers: for example, Calgary, Vancouver, and Toronto. Our market doesn’t and hasn’t fluctuated as other markets have.

London is a great place to invest, work and live.

Do-Not-Hesitate to-Call List

Was the Do-Not-Call list designed to fail?

Before registering on the list, my cellular phone rarely received unsolicited phone calls. That has changed. My cellular phone receives calls from U.S. telemarketers daily.

Many Canadians may find themselves in the same position. It has been reported that the Do-Not-Call list may have gotten into the wrong hands.

Any telemarketer can access the list by going to the National Do Not Call List website and paying a small fee. They are required to check the list regularly to ensure they are not calling registered numbers. However, anyone can pose as a telemarketer to access the list. According to reports, the list has been sold to off-shore and U.S. telemarketers and scam artists. If you recall, the Do-Not-Call list only applies to Canadian telemarketers.

As such, the Canadian Radio-television and Telecommunications Commission (CRTC) are unable to stop any calls coming from outside of Canada since it is out of their jurisdiction. When asked about what actions CRTC would take against telemarketers overseas, CRTC responded by saying they will take all complaints seriously and conduct investigations if an individual or organization is misusing the list. While CRTC is unable to stop incoming calls, they have the right to impose penalties in the form of fines ranging from $15,000 per call against a company or $1,500 per call against an individual. However, fines can go as low as one cent per call also.

"January market feels the chill"

Want to know how the London area real estate market performed in January? Click here to read this great article.

Article Highlights
- 2.5% drop in average home price compared to last January
- 35% drop in homes sold compared to last January
- downturn in Canadian real estate market still mild compared to the U.S.

Attention Home Buyers & Sellers!

Due to popular demand, I have scheduled another date for my Home Buying & Selling Seminar, February 17/09 7:00pm - 9:00pm.

If you are thinking of buying or selling a home, I recommend you check out my seminar. Andrew Young, Scotiabank and I will teach you about: Renting vs. Buying, Legalities, the Real Estate Market, Pricing Your Home, Preparing Your Home for Showing & more!

You can give me a shout at 519-642-0619 or seminars@link2realty.ca to register your seat today.
I hope to see you all there!

New Building Code Requirement

Ontario is ensuring new homes in the province are more energy efficient with a new requirement under the Building Code.

Starting in January 2009, Ontario’s Building Code will require near full-height insulation on foundation walls in all new home construction. The basement insulation requirement is the second step in a three-phase approach to energy efficiency brought in with the introduction of the 2006 Building Code.

After 2011, further requirements will see houses with at least an EnerGuide 80 level of efficiency. EnerGuide 80 is a model energy rating system for houses developed and administered by Natural Resources Canada.

For more information on the new requirements click here.

Ontario November Home Starts Moderate as Expected

Ontario’s preliminary Seasonally Adjusted Annual Rate (SAAR) of urban home starts slowed in November to 54,700 starts, down from 78,900 units in October. While multi-family home construction, which includes semi detached, town home and apartment units, accounted for much of the decline in November activity, single detached construction also moderated.

The longer term trend for Ontario housing starts has been one of high start levels gradually edging lower from peak levels in 2003-04. However, actual urban Ontario home starts for the year are still 14 per cent higher compared to the same period in 2007.

Affordable Homeownership

I few months ago, I talked about the City of London Affordable Homeownership Assistance Program, click here to read it. There is a deadline of March 31, 2009 to expend the funding allocated to the City of London. To avoid returning any unused funds, the City of London has raised the household income limit and maximum home price under this program.

To be eligible, households must now have a gross household income of $55,000 or less and must qualify for and be pre-approved for a mortgage at a recognized financial institution. The new selling price of the home must be no higher than $140,000.

Applications are accepted on a first-come-first-served basis. You must find a suitable home by the deadline March 31, 2009. However, the actual closing date of the sale may be after the date.

Time is running out, have you found your home yet?

For details on the program or an application, visit www.housing.london.ca or call 519-661-2500 ext 5524

Rent Increase Guideline

The Ontario Government has set the rent increase guideline at 1.8% for 2009.

This is the maximum amount a landlord can increase rent for a current tenant, if at least 12 months have passed since the move in date. A landlord must give at least 90 days written notice to tenants before enforcing the rent increase.

This amount does not apply if you are renting to new tenants or those not covered by the Residential Tenancies Act.

Our Real Estate Market in Perspective

I came across a couple more wonderful articles discussing our real estate market.

Average housing prices have been, and continue, to decrease nationally as Canadian home prices adjust to the market. Again, we won't be seeing a crisis here as our neighbours to the South have been experiencing.

The London and St. Thomas Association of Realtors (LSTAR) cite the average price of homes sold in December dipped below $200,000, compared to $206,557 same month last year. Nonetheless 2008 was a good year overall with 8,356 homes sold. This is down 11% from 2007, which was a record-breaking year for sales. 2008 sales were well within the 10-year average.

St. Thomas recorded 632 home sales for 2008, down from 867 in 2007. However home prices are holding up well, with the average price in St. Thomas for December was $187,361, compared to $172,550 same month last year.

A big factor in the London-St. Thomas market this year has been an increase in the number of listings. 3,133 listings in December, compared to 2,241 listings last year.

To learn more, click here to read "'Modest' dip, not crash, predicted for house prices".

Click here to read "Home sales, prices fall".

Welcome back

Happy New Years! The blog will be back on schedule now that the holidays are over. To kick off our new year, I found a great article in the London Free Press for those of you worried about the economy. Click here if you would like to read it. It echoes some of my previous posts.

Although London's housing market is slowing down, we have had a traditionally stable market. The housing market will remain healthy thanks to our diverse economy. It may look dismal in the U.S., but in Canada mortgage rates are good and inflation is under control.