A newcollaborative report by Google and the National Association of Realtors (NAR)has uncovered some interesting trends and insights into the ways digital mediais used in the home buying process.One of themost eye-catching statistics included in the report is that 90 percent ofAmerican homebuyers used online resources while searching for a new home.The data,collected by Google and the NAR through a variety of surveys conducted during2011 and 2012, also pointed to some intriguing trends related to the digitalrealm’s effect on the homebuying experience. Check out some highlights from thereport below…•Realestate related Google searches have grown 253 percent over the past four years.•Shopperswill perform an average of 11 searches prior to taking action on a real estatesite.•69 percentof home shoppers who take action on a real estate brand website begin theirresearch with a local term (eg. Houston homes for sale) on a search engine.•Mobileapplications are used by 68 percent of new home shoppers at the onset andthroughout their research.•Where donew home shoppers use their mobile devices? Here’s the breakdown: 77 percent athome, 31 percent at work, 28 percent when waiting in line, 27 percent atrestaurant and 26 percent at other peoples’ homes.•YouTube isthe top video research destination for home shoppers.•78 percentof new home shoppers visit three or more sites prior to taking action on a realestate site•31 percentof home shoppers who take action on a real estate site are aged 25 to 34.•52 percentof first time buyers started their search online.•77 percentof first time buyers drove by a home viewed online.
No! The real estate market is NOT dead. Sales are up!
I know there have been many conflicting reports and the media has been spinning some very negative stories in the news. Well, the market is still chugging along and sales are UP!
Greater Toronto REALTORS® reported 1,469 sales through the TorontoMLS system during the first two weeks of January 2013. This result represented an increase of 2.4 per cent over the 1,435 transactions reported during the same period in 2012.
I’ll keep an eye on things as the month progresses and report back to you early in February. What we ARE seeing is that the number of new listings coming on the market is a bit higher which will increase the inventory and give more choices to the buyers. Sellers and their agents will need to be aware of this. The great news is that the sellers who stick close to the real market value, still have a great chance of selling ... contrary to what you may hear or see in the news.
Who do you listen to? There are multiple opinions on what’s going on out there. If you’re confused and want to get a clearer picture, please give me a call. If you know anyone who needs help with real estate and is looking for a good agent, I have one in mind!
During the past 2 years, The Canadian Real Estate Association has been under pressure to open the public MLS to for-sale-by-owner companies. The Competition Bureau feels that the MLS system is anti-competitive, and wants the consumer to have more cost effective choices, saving the consumer commission fees, but are they? Since early 2011 for-sale-by-owner companies have gained access to post mere listings on the MLS. What I will discuss in this blog post is what these companies don't tell you, and how many properties they have actually sold. I think most of you will be surprised by the statistics I will share with you.
Two big forces that are competing for the consumers business is, Com Free (Commonsense Network Brokerage) and Realtysellers. There is a bunch of other for-sale-by-owner companies, but they have limited data, or they are not making enough of impression, so their stats are meaningless.
Before I discuss these two brokerages I will explain to you their business model. These companies now advertise that they can list your home on the MLS for a flat fee. Both of these companies run like a real estate brokerage, where they employ registered Real Estate Agents. These services require you to pay a flat fee upfront, which can range from $500-$2000. Also, there are add ons. If you require any additional assistance, they will require payment for those services. Remember you as the homeowner are solely responsible for showings, offers, marketing, selling, etc. When you are using a flat free brokerage like these two for-sale-by-owner companies, you always have to pay for the service upfront regardless of whether the property sells. The difference using a Real Estate Agent is that they only get paid when the property sells, so it is in their interest to work with you until the property sells.
All stats are taken from the Toronto Real Estate Board from January 1st, 2012 to December 31, 2012. The Toronto Real Estate Board covers areas as far east as Oshawa, as far west as Burlington, and as far north as Newmarket.
Realtysellers listed 708 properties this year, and of those listed, only 309 were sold (43%). Out of the 309 properties sold with Realtysellers, 195 (63%) were sold to a buyer who was working with a Realtor. Usually a 2.5% commission was offered when a Realtor is involved in the transaction.
The breakdown of commission is usually 5%, 2.5% goes to the listing Agent and 2.5% goes to the Buyers Agent. Out of the 90000 properties sold this year in the GTA only 0.3% were sold using Realtysellers.
Now lets take a look at Comfree which has the largest market share in the Greater Toronto Area in terms of for-sale-by-owner companies. Comfree listed 1287 properties this year. Of those properties listed, only 672 were sold (52%). Of the 672 that were sold, 368 were sold using a Realtor (55%). That translates to only 304 of the 1287 listed properties were sold without the services of a Realtor (23%).
When the consumer sees a Comfree or Realtysellers sold sign they assume that these properties were sold without paying any commission. The truth is that close to 60% were sold using the services of a Realtor. Does the consumer know this? Wouldn't the consumer find this to be valuable? Of course, but most information out there is somewhat skewed and misleading. Again, it is the public that has to do their due diligence, but is this information readily available? No!
There were close 1000 properties that never sold by these companies that required a flat fee. Let us assume the consumer paid $1000 for these services. That means that these companies earned $1,000,000 in revenue for not doing a thing. In my opinion the for-sale-by-owner industry entered the market during a time when the market was red hot. If the market stagnates or slows down like we are starting to see in some regions, do you think they will have the same market share? Defintely not!
Only just over 1% of all properties sold in 2012 were sold by the two for-sale-by-owner companies that were discussed. With close to 35000 Agents working in the Toronto Real Estate Board there are plenty of services out there for just about anyone. The consumer needs to choose wisely and be aware of the services, choices, and the transperancy of these services.
Comments by George Karanopoulos on Wed, Jan, 2, 2013 10:22 PM
After checking out June’s sales numbers for the Toronto Real Estate Board today, we can see some welcome relief with inventory levels increasing moderately in many areas. In June there were 9,422 sales for the month in the Greater Toronto Area which is a slight drop of 5% off the number of sales reported during the same time last year.
At the end of June there were still only 20,583 homes for sale in the GTA, which is creeping up slightly and which in my opinion is a welcome relief. With that, in the GTA we are maintaining a 2.2 month’s supply of inventory which in anyone’s books is still in what’s considered a strong “seller’s market”.
You may hear some media reports calling for a market correction but don’t head for the life boats yet. Although we may see some challenges in the condo market in the GTA, we have a long way through our current conditions before we get to what could be considered balanced or “normal” conditions in most sectors of the market.
So ... how healthy IS the market??? My Answer: VERY healthy! We’re going to see a typical cycle for the next 6 months that we would see any other year. Sales will slow down somewhat over the summer and pick up slightly in the fall. I think inventory will rise some more over the next few months and we need that. We will still see well priced listings sell quickly and some multiple offers still happening but maybe not as frequently as in the past. As inventory rises, sellers need to be more price conscious than in the past. If listings don’t sell in 2-3 weeks, prices should be adjusted. Values will continue to rise moderately. There’s nothing on the horizon that should cause mortgage rates to rise anytime soon, so it’s a pretty safe bet for anyone to buy their first home, make a move “up”, or for anyone looking for investment properties or second homes.
They key to benefiting from this market is working with the right agent. When you hear of anyone who needs my help, please give me a call. I promise I’ll do a great job and roll out the red carpet for them.
A referral is sending someone you trust, to look after someone you care about.
Today's changes in mortgage rules mean that: the maximum amortization period will be reduced to 25 years from 30 years; the maximum amount of equity homeowners can take out of their homes in a refinancing is being reduced to 80 per cent; and there are limits to the debt load a homeowner can take on.
Inventory Rising Moderately, a small dose of relief for the Buyers!!!!
After doing my monthly check of the sales numbers for the Toronto Real Estate Board today, I’ve noticed that inventory is rising moderately in many areas but the sales are keeping pace pretty well. In May there were 10,850 sales for the month in the Greater Toronto Area which is approx 11% more sales than reported during the same time last year.
At the end of May there were only 19,177 homes for sale in the GTA, which is creeping up slightly. With that, in the GTA there is only 2.2 months supply of inventory now which is slightly higher than this time last year. We are still in what experts consider a “seller’s market”.
So ... where is this market going??? My Answer: We’re going to see very little change. Besides the typical slight slowdown during the summer months, I feel that inventory will rise moderately which is truly a welcome relief. It’s quite clear that mortgage rates will remain low well into 2013 so it’s a pretty safe bet for anyone to buy their first home, make a move “up”, or for anyone looking for investment properties or second homes.
They key to benefiting from this market is working with the right agent. When you hear of anyone needs my help, please give me a call. A referral is sending someone you trust, to look after someone you care about. I promise I’ll do a great job and roll out the red carpet for them.
There are signs that the silly winter season of bidding wars has slowed down and maybe on its way out. Anecdotal evidence from GTA real estate agents suggests the number of homes drawing multiple bids is down and in cases where there are more than one offer, there are many fewer offers than before.
That’s a far cry from the frenzy this winter. Some examples: In January, a home on West Hills Ave. in the Casa Loma neighbourhood of Toronto, listed at $950,000, drew 15 offers and sold or $1,375,000 after seven days on the market.
In March, a bungalow near the Yonge-Finch subway line was listed for $759,000 and sold for $1,180,000, after 17 offers were received. The most recent bungalow sale in the area before that was closer to $900,000, two years ago.
Here’s what I’ve been hearing from real estate agents about why things might have changed:
1.Sellers are getting greedy. With prices that have been steadily rising since the beginning of the year, some are jumping in with unrealistic demands.
2.Buyers are more cautious as they consider news coverage of high household debt and what that might mean for house prices.
3.The January to March period was an anomaly with demand created by many buyers entering the market and few properties available.
4.Agents artificially created bidding wars by not permitting any offers until up to seven days after a property came onto the market. Now, sellers are looking at offers right away.
Still, home prices are remaining stable, and in many cases higher than 2011. The Toronto Real Estate Board reported 10,350 deals in April 2012, which was 18 per cent higher than April 2011. The average price was $517,556, up 8.5 per cent over April 2011.
In my opinion, prices will remain stable for the following reasons:
1.Interest rates remain at historic lows.
2.Based on New York prices in general, the GTA is still a bargain. The new development at 66 E. 11th St. in Manhattan will offer the City’s first $1 million dollar parking space, according to MSNBC. The space will go to the owner of the 8,000 square foot townhouse or penthouse in the eight story building. In New York, people will pay more for a parking space than the average American pays for a home.
3.Immigration to the GTA remains strong. Just look at the news from Europe. Where would you want to live?
4.Economists have been predicting doom and gloom in the GTA for the past twelve years. It still hasn’t happened.
This slowdown in bidding wars is still good for buyers and sellers. Buyers can now conduct detailed home inspections before agreeing to buy a home, to avoid surprises after closing. They can also take more time to research the neighbourhood when a home comes up for sale, to make sure that there are no surprises on the street or with any planned future developments. Finally, they can focus more on what they can truly afford, without getting caught up in the hype of bidding wars.
Sellers can take comfort that if they are realistic in their sale price demands, their home should still sell in a reasonable amount of time.
It’s springtime in Toronto, height of the annual home-buying frenzy, and, along with the tweeting of birds, the air is full of the sound of gnashing teeth and rending garments. Look at all those condos popping up everywhere, blocking out the sky. Craziness. And those house prices: ridiculous, obscene, out of sight.
A whole website, FML Listings, is devoted to rants about the latest million-dollar bungalow being marketed as a dream home. Its tone is one of despair at the prospect of ever owning a decent place in Toronto. The ML stands for “my life.”
But before we all lose our minds and move to Hamilton, let’s look at the bright side of the real-estate boom. That home prices continue to rise in Toronto is a powerful sign of confidence in the future of the city and the stability of the national economy. With Europe in a tailspin and the United States still struggling, Canada and its largest city are a haven. Toronto, for all its troubles, remains a highly desirable place to live and buy a home. If soaring home prices are a problem, it’s a lot better than the plunge suffered by our neighbours south of the border.
The condo boom is bringing tens of thousands of people to live downtown, giving the centre of the city an electrifying urban buzz. By one expert’s calculation, more than 140 condo projects are under construction, the most in any North American city. The empty parking lots that used to fill downtown like gap teeth are being replaced by soaring new towers. That means greater urban density, better use of energy and more people on the streets, with scores of new restaurants, bars and stores to serve them.
As for houses, if prices are rising, it is partly the result of the success of the provincially imposed green belt around the city, which has slowed sprawl and made it hard to throw up cheap new homes on open fields in the city’s far reaches. Higher prices in the centre, meanwhile, are a product of the premium that residents put on being close to the heart of the city, another great sign of urban vitality.
The real estate board says the average price of a resale home in Greater Toronto reached $517,556 in April, up 8.5 per cent from a year earlier. In the 416 area code, it hit $568,436 – and $831,214 for the premium product, a single detached home.
That’s obviously out of reach of most young people trying to get into the market, but there are other options. An average townhouse in the 416 is $423,062 and a condo $360,807. Couples or singles who don’t mind living small in a starter home can still get a condo in the $200s.
Prices over all are still well below Vancouver’s and, by the standard of many world cities, quite reasonable. The real estate board says that, thanks in part to low interest rates, its affordability index, which measures the share of income needed to cover the carrying costs of owning a home, has remained pretty stable for years in percentage terms, in the high 20s or low 30s.
Of course, it could all come crashing down. Ottawa is worried about a possible bubble in the condo market. And any time you have bidding wars, with some houses going for tens, even hundreds, of thousands over asking, you have to wonder. Real estate veterans can’t forget the crash of the late 1980s, proceeded by a similar froth.
But the rise in Toronto home prices has not been as dizzying as in some pre-crash markets. Annual increases have mostly stayed in the single digits. “Clear evidence of a bubble is lacking,” the Canada Mortgage and Housing Corp. says of the Canadian housing market in general.
If we avoid a crash and prices do keep rising, it’s not a calamity either. It’s a sign that people believe in the city and are willing to pay a handsome sum to put down roots here.