If the seller’s market is over for the Toronto real estate market, what does that mean for the average homeowner?
The real estate boards in Toronto and Vancouver have just released their August reports, and the news is not particularly good for anyone selling their house.
CTV News reports that Vancouver sales August, 2010 over August 2009 were down 36%, while Toronto’s market was down 22%. While Vancouver’s prices are down 2.8% from April’s peak, Toronto prices are down 8.6% from May.
This data sounds ominous, if you are a homeowner selling your home. However, since 1953, Toronto home prices have risen more than 440%, after factoring in the impact of inflation. Since 1970, the increase has been approximately 280%, while since 1995, prices have risen 185%. Like the stock market, long term prospects for a natural increase in your home value are better than excellent.
On the other hand, in the short term, if the sellers’ market is over, then the converse is true: The buyers’ market is here! Fewer buyers tend to make sellers more eager to be flexible. Flexibility most often equates to negotiable prices or terms.
At the same time, mortgage requirements and the new HST have impacted on home sales in July, and now, August. This new cost may make buyers somewhat shy about submitting an offer to purchase, but the reality is that the HST is here to stay, as likely are the new regulations on mortgage eligibility. So, buyers ultimately will have to deal with these new realities.
This month, the Bank of Canada will contemplate raising the prime interest rate, again. Upward will be the new normal direction, it appears. So, the longer a buyer waits, the more likely that she/he will see higher mortgage rates.
This puts the emphasis back on the sellers’ situation. In truth, as the Toronto population ages, and baby boomers divest themselves of their home equity investment, smaller homes, condominiums or apartments will be required for them. At the same time, those boomers’ homes will enter the market.
So, is the end of the sellers’ market the precursor to a housing bust? Highly unlikely. In fact, houses will continue to be put on the market, and houses will continue to be bought and sold. The primary shift will be a more cautious approach to either buying or selling. Is that a really a “bad news” scenario? No.
Saturday, September 11, 2010
Aging & home purchasing trends
Bad news. We are all getting old. Good news. The market is adapting to our needs.
A new series on CBC’s The Current, entitled “Demographics Dilemma,” points out that, in the next five years, a significant shift in the average age of Canada’s population will occur, with more people over 65 than Canadians under 15. The same series stresses that we will need to respond to an evolving demand for housing.
One of the most significant changes will be the need for more “visitable” homes. That is the in-vogue term for homes that are designed to be handicapped-friendly, or easier to navigate for people with limited mobility.
Mobility issues, it should be pointed out, are not just issues that involve walking or wheelchairs. Mobility issues also consider visual or aural limitations. In many seniors’ facilities, the need for better lighting, brighter & more definitive colours to mark wall corners, stair risers or doorways is driving modifications to those premises.
Concurrent with the need to design living accommodations that reflect changing needs of the owners or tenants is the need to size homes appropriately. In recent years, the movement of the forty-somethings has been to spacious homes. As the boomers’ children left home, the larger homes remained a status symbol. Now, however, seniors and pre-seniors recognize that the big house needs big cleaning & maintenance. Fifty-somethings are travelling more, staying at home less, and requiring smaller living space.
Ownership, itself, is evolving. Life leases, condominiums and fractionals have become commonplace for the frequently-absent homeowner who does not wish to be burdened with high cost and high maintenance.
But household layouts and amenities, including furnishings, have kept pace, largely, with need. Zone & task lighting layouts have maximized lighting where needed, cut costs where warranted. Stairways are more spacious and navigable, as are washrooms and hallways. Even furniture has been adapted to meet changing preferences.
The idea that we are aging is not new. The idea that we can expect that housing will change to meet are preferences is new, however. And, while aging may not be welcome, adaptability of our surroundings is.
A new series on CBC’s The Current, entitled “Demographics Dilemma,” points out that, in the next five years, a significant shift in the average age of Canada’s population will occur, with more people over 65 than Canadians under 15. The same series stresses that we will need to respond to an evolving demand for housing.
One of the most significant changes will be the need for more “visitable” homes. That is the in-vogue term for homes that are designed to be handicapped-friendly, or easier to navigate for people with limited mobility.
Mobility issues, it should be pointed out, are not just issues that involve walking or wheelchairs. Mobility issues also consider visual or aural limitations. In many seniors’ facilities, the need for better lighting, brighter & more definitive colours to mark wall corners, stair risers or doorways is driving modifications to those premises.
Concurrent with the need to design living accommodations that reflect changing needs of the owners or tenants is the need to size homes appropriately. In recent years, the movement of the forty-somethings has been to spacious homes. As the boomers’ children left home, the larger homes remained a status symbol. Now, however, seniors and pre-seniors recognize that the big house needs big cleaning & maintenance. Fifty-somethings are travelling more, staying at home less, and requiring smaller living space.
Ownership, itself, is evolving. Life leases, condominiums and fractionals have become commonplace for the frequently-absent homeowner who does not wish to be burdened with high cost and high maintenance.
But household layouts and amenities, including furnishings, have kept pace, largely, with need. Zone & task lighting layouts have maximized lighting where needed, cut costs where warranted. Stairways are more spacious and navigable, as are washrooms and hallways. Even furniture has been adapted to meet changing preferences.
The idea that we are aging is not new. The idea that we can expect that housing will change to meet are preferences is new, however. And, while aging may not be welcome, adaptability of our surroundings is.
Ignoring Crime Statistics
Advice for homebuyers in Toronto: Ignore crime data. Perhaps that is an overly simplistic statement, but, in fact, statistics do not necessarily reflect the true situation in a province, region, city or neighbourhood.
Take for example, Statistics Canada data on rates of violent crime. Nunavit, Yukon, and NWT have the highest per capita crime rates in the country. However, with almost half of Canada’s land mass, and only a handful of residents, one or two violent crimes spikes the data severely. The North seems like an incredibly dangerous place in which to live! On a per-square-kilometer, basis, on the other hand, the region seems like the safest place on earth.
Winnipeg infamously calls itself the “Murder Capital of Canada.” On a per-capita basis, this claim is true. But, almost without exception, the fifty or so killings that happen in Manitoba annually are gang-on-gang, or friend-on-friend issues, placing the general public in very little danger.
PEI went from “0” murders in 2004 to “2” in 2008. That meant that their homicide rate was non-existent in 2004, compared to the Canadian average of 1.95 and Ontario’s of 1.51 per 100,000 people. Turn to 2008, and that rate skyrocketed to 1.43 for PEI, compared to 1.83 for Canada and 1.36 for Ontario. So had PEI suddenly become a “Murder Capital?” Two homicides hardly qualifies it for such a label.
Toronto’s various neighbourhoods experience different rates and types of crime. But relying purely on statistics that show a community to be either safe or violent is a false premise. First, news outlets focus on violent crimes in their daily reports. More densely populated regions generally experience more crime. Even in neighbourhoods, small pockets and micro-regions may have very high numbers while the area may be predominantly safe.
The most effective way to gauge the “safety” of a community is to speak to neighbouring homeowners. The very appearance of a community, and how well it is maintained can give clues to its track record. And, as many communities are upgraded, crime stats drop. In fact, almost all statistics are severely dated by the time they are reported, anyway.
Crime data is a significant consideration in any home purchase decision. But it is critical to take those statistics, and apply them, in a common sense analysis, to your own concerns and preferences.
Take for example, Statistics Canada data on rates of violent crime. Nunavit, Yukon, and NWT have the highest per capita crime rates in the country. However, with almost half of Canada’s land mass, and only a handful of residents, one or two violent crimes spikes the data severely. The North seems like an incredibly dangerous place in which to live! On a per-square-kilometer, basis, on the other hand, the region seems like the safest place on earth.
Winnipeg infamously calls itself the “Murder Capital of Canada.” On a per-capita basis, this claim is true. But, almost without exception, the fifty or so killings that happen in Manitoba annually are gang-on-gang, or friend-on-friend issues, placing the general public in very little danger.
PEI went from “0” murders in 2004 to “2” in 2008. That meant that their homicide rate was non-existent in 2004, compared to the Canadian average of 1.95 and Ontario’s of 1.51 per 100,000 people. Turn to 2008, and that rate skyrocketed to 1.43 for PEI, compared to 1.83 for Canada and 1.36 for Ontario. So had PEI suddenly become a “Murder Capital?” Two homicides hardly qualifies it for such a label.
Toronto’s various neighbourhoods experience different rates and types of crime. But relying purely on statistics that show a community to be either safe or violent is a false premise. First, news outlets focus on violent crimes in their daily reports. More densely populated regions generally experience more crime. Even in neighbourhoods, small pockets and micro-regions may have very high numbers while the area may be predominantly safe.
The most effective way to gauge the “safety” of a community is to speak to neighbouring homeowners. The very appearance of a community, and how well it is maintained can give clues to its track record. And, as many communities are upgraded, crime stats drop. In fact, almost all statistics are severely dated by the time they are reported, anyway.
Crime data is a significant consideration in any home purchase decision. But it is critical to take those statistics, and apply them, in a common sense analysis, to your own concerns and preferences.
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