As many of you have probably heard by now, this June was the best on record in terms of house sales as reported by The Toronto Real Estate Board.
The total number of houses sold rose by an amazing 27% in June while the average sale price rose 2%. Keep in mind that these statistics include all of the GTA from the Hamilton/Wentworth townline in the west to the Durham/Northumberland townline in the east and from Lake Ontario north into Lake Simcoe. Of course not all areas experienced the same amount of growth, however, Durham Region (on the most part) is in line with these increases. To see a 3 year comparable market evaluation for South Pickering, North Pickering, Ajax, Whitby, Oshawa and Courtice/Bowmanville click on Durham Region.
The other statistic to take notice of is the number of homes for sale this year as compared with last year. While sales have increased 27% this June, the number of new listings has decreased by 17% and the number of active listings has decreased by 30%. What does this mean for sellers and buyers? There is a lot less inventory to choose from and a lot more people who are looking to buy. This would explain the rise in the number of multiple offers we have been seeing over the past several weeks as well as the increase in prices.
Who knows where all of this will end up in the next several months. There is still some speculation in the economic circles that the “worst is yet to come” and yet others have changed their predictions to an earlier anticipated recovery.
Any time I step into a lawyer’s office, I feel guilty.
I do not know whether it has anything at all to do with my profession, or if it is the series of books that lawyers are so fond to prominently display behind their desks. Those old, conspicuous textbooks with ominous titles written in gold Gothic characters on yellowish or greenish hardbound covers, barely readable, much less understandable. I noticed that no matter whether the law office is located in Canada or in the United States, those textbooks look exactly alike. I still have to see a single lawyer actually reading one of them, however, so my personal theory is that those books are hollow inside and used to conceal who knows whatever arcane secret items or, perhaps, just unsavory culinary recipes. In real estate too we are fast approaching the time when our shelves are going to be filled with all sorts of books. Yellow, red and blue, with manuals covering all sorts of topics from Ethics in Real Estate to How to Write a Contract And Not Go To Jail. I have been tinkering with the idea of writing a manual myself – just a small pocketbook entitled “Top 10 Successful Strategies To Defuse Sellers Armed With Pitchforks”, which I figure would be an instant hit with many of us.
With the ever-advancing technology of our times fields of expertise that are crowd-oriented, such as the legal and real estate professions, are poised to experience dramatic changes in the forthcoming years. As it relates specifically to real estate, to be sure, technology has had already a great impact but innovation is not over yet and it is not confined merely to the use of sophisticated hardware. There is on the horizon a new conceptualization of professionalism, an absolutely novel way to haess individual resources for the common good of all. It is called ‘collective intelligence’, a techno-jargon concept that will revolutionize the way we – the professionals – think, act and interact among ourselves as well as with the communities we serve. Collective intelligence tinkers with the way cognition and information processing are structured and relayed to consumers, especially when they involve knowledge, expertise and leaing. It also delves into methods of gathering and sharing information and resources that bind different groups, or associations, or disciplines. Real estate is, of course, intertwined with banking, law, economics, marketing and urban sciences and collective intelligence links and bind together different networks or resources to coordinate a more efficient and comprehensive response to ever- sophisticated demands.
Real estate professionals are called more and more to field questions that go over and beyond the mere act of selling. In fact, it can be said that selling in real estate already represents the last stage when the professional is finally compensated. But before that there is an array of issues that must be confronted and answered, ranging from understanding regional economics such as, for instance, local job environments and trades to proficiency in specific areas such as cultural orientation and demographic diversity to acquaintance with well-defined facets of disciplines the likes of architectural styles, land-assembly and development, and contract law. This radicalization of the real estate business to come is in response to the evolution of choices of market participants. Although singular consumers do not have more power over market events than before, they certainly have improved their chances of getting what they want because they have a greater variety of choices. We are, in essence, entering an era where the professional leas and stores information gathered from a group or organization and is ready to deliver it to a consumer, or another group or organization, on demand for the purpose of enhancing choices through expertise.
Sharing information is of paramount importance in real estate, since there is not a ‘national’ market per se. Real estate is made of a compilation of local economies, each abiding to a set or sets of local inputs and variables. What is happening in Toronto does not directly affect what is happening in Vancouver. And yet, there is a common thread shared in the needs of individual expressions of market participants, no matter where they are located. The Realtor, as an integral part of his function and purpose, is going to be required to contribute to the building of a consensus decision-making process that involves meeting everyone’s needs and which is intended to promote and enhance the decision-making process of each individual consumer, whether a person, a group of persons or an organization.
Housing construction makes gains in May after hitting 13-year low
When Toronto-based developer Murray Koebel put his housing project on the market last summer, he didn’t expect it would coincide with the stock market crash.
There was barely a nibble for seven months at his Vista Homes project in Pickering. So the Vista Homes president responded, like many other developers, by slashing prices by up to $30,000 on some of the units in his development, comprised of 45 single, detached homes and townhouses.
“Those were difficult times,” Koebel said.
But since February, he has sold 18 homes, or about 40 per cent of the development. That compares with the one or two he had sold in the six months prior. “Things really started to pick up in the spring, when people saw that it wasn’t as bad as they thought,” he said.
As a result, Koebel expects to break ground this summer and is cautiously looking around at future projects, a decided turnaround from a few months earlier.
The figures seem to bear him out: The market, while still slow with a recovery not yet on the horizon, shows signs of improvement. Canadian housing construction bounced back in May after dropping to a 13-year low in April, according to figures released by the Canada Mortgage and Housing Corp. yesterday, with seasonally adjusted housing starts hitting 128,400 in May, up from 117,600 in the month prior.
“With the Canadian economy poised to begin the recovery process by this fall, the worst of the residential construction recession might be behind us,” said BMO Capital Markets economist Robert Kavcic.
Starts also rebounded strongly in the Toronto-area market, up by 35 per cent in May to 22,000 units. Most of that was due to the volatile multiple family segment, which includes condominiums and apartment buildings. “After plunging precipitously since late 2007, and appearing to be in free fall in recent months, this rebound may be an indication the sector is perhaps stabilizing,” TD Securities analyst Millan Mulraine said.
The Ontario Home Builders’ Association said yesterday that builders, including Koebel, were seeing “signs of hope” and reporting increased traffic in their sales offices and model homes.
Activity is expected to pick up slightly in the second half of the year.
“Tighter resale markets in recent months, improving credit conditions and a backlog of sales awaiting construction are all factors that will boost activity,” said Ted Tsiakopoulos, regional economist for the CMHC.
Despite the positive figures, starts are still down 42 per cent in year-to-date figures compared with last year, at both the national and Toronto-area levels.
Analysts say the overall drop in starts to date is not necessarily a bad thing, since there has been massive overbuilding in some Canadian cities, particularly in the condominium sector, where more than 35,000 units in the Toronto area alone are already under construction and expected to be largely completed this year and next.
BMO expects the rate of starts to remain below long-term trends because there is too much supply already on the market.
“A sharp rebound is unlikely in this sector thanks to about six years of overbuilding – housing starts will likely remain below the rate of household formation through 2010,” Kavcic said.
One thing that should keep construction workers busy is the renovation industry, which reported $21.3 billion spent by consumers last year, up by $1.6 billion from 2007, according to a separate report by the CMHC.