December a real estate gift

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It will come as no surprise that the local housing market has been on a rocket ride for the better part of two years. A large chunk of this was due to buyers from the east travelling down the 401 and 403 in search of the Canadian Dream. And they found it in Oxford County! Cheap housing compared to the markets they were leaving as well as so many of the amenities they had become accustomed to. 

We noticed a significant reduction in the amount of out-of-town buyers that we were seeing in our Open Houses in August and September. There was also a steep decline in requests for home showings from this particular pool of buyers. This can be most readily attributed to uncertainty on the part of buyers and what was going to happen with the Federal governments new mortgage rules. Buyers wanted to make sure that if there was a decline in average home values, that they wouldn't be left holding the bag. What actually did happen was the return of a more balanced market. Home values held and multiple offers became more of an anomaly instead of the norm. 

The Federal stress test, in very simple terms, means that a buyer with less than a 20% downpayment would need to be approved at a mortgage rate about 2% higher than what they would actually be borrowing at. Your lender offers you a mortgage rate of 3.44%, you would need to qualify at roughly 5.44%, even though you would be borrowing the money at the lower rate. The result is that buyers can borrow about 20% less than they could under previous mortgage rules. This is the governments attempt to make sure homeowners can afford the homes they are purchasing when interest rates inevitably rise.

That brings us to the Gift this December appears to be. As of January 1, 2018, the stress test described above will apply to ALL consumers borrowing money for a mortgage (except credit unions and private lenders). There is also a predicted .5% interest rate looming in 2018. To avoid the stress test, buyers just need to have a mortgage deal in place by the 31st of December.

If you are thinking of selling, now is a great time to enter the market, even though traditionally Christmas is a slow market. These looming changes have brought Eastern buyers back to Oxford County at levels not seen in several months. The other upside is sellers can be approved on the purchase of their next home with the current mortgage rules if everything comes together in December. The deals do not need to close in December, they just need to be firm sold deals and can close in 2018.

If you are a new buyer thinking of getting into the market, and you have done all the hard work of saving a 20% deposit, buying in December will allow you to purchase 20% more home than you will be able to purchase under the impending new rules. You still have an opportunity to put those hard earned savings into your new home!

If you have any questions about this article, or any other Real Estate questions, please contact a member of the Tracey & Marshall Real Estate Team. We are always here to answer all of your questions and concerns.

Is the Woodstock housing boom over? Remember: Location, Location Location!

Ontario has been on a rocket ride over the last couple of years when it comes to housing! The City of Woodstock has been right in the thick of things. Recently, buyers and sellers have seen a softening of the market and are questioning what the future holds. None of us holds a crystal ball, but we see Woodstock and Oxford County as a fantastic investment moving forward. No market can sustain the year-to-year gains that we have seen recently. The recent slow down has several contributing factors, and a return to a more level playing field is a good thing for a healthy market.

Toronto - Many think that the hot Toronto market has been the only contributing factor to housing prices here at home. Although the Toronto market has certainly been a force in the market, pushing consumers further from home in search of affordable properties. The recent government intervention has certainly been showing signs of cooling that market, although many experts would argue that the signs were there of the market levelling off without the government measures. When you look at the areas further from Toronto, you actually see that the further a market is from Toronto, the less the market has cooled. This is because there are always multiple factors driving any market. The Toronto market does have an effect on our local market, but it is not the whole picture.

Foreign Buyers Tax - Many foreign buyers have been investing in Toronto and surrounding areas for years. And they have made a lot of money! The recent 15% tax has made them start looking at other markets. The border for this tax extends from the Golden Horseshoe all the way to Waterloo and Brant counties. But not to Oxford County! We have essentially become a tax haven for foreign investors. And they know a good thing when they see it.

Summer - We have been in such a strong Seller's market for such a long time, it is hard to remember the traditional ebbs and flows of the real estate market. Summer is traditionally a slower period, as is January because of Christmas holidays and debt load. We are seeing a much more traditional summer than the past couple as the market stabilizes a bit. We will see what happens as we head back into late Summer/ early Fall.

Recent Sales - The Woodstock-Ingersoll & District Real Estate Board recorded near record sales in April, falling just one sale short of breaking a 12-year old record. The average home sale price was $355,135, up 31.6% from the previous year. There was a new all-time record set in May. There was also a record low amount of inventory in May. These numbers point to a market that buyers are still very much interested in. Properly listed homes are still selling in a relatively short amount of time.

Future Industrial Development - The City of Woodstock is currently in the process of attempting to annex a large portion of real estate on it's Eastern and southern borders. The purpose is to develop new industrial land packages as current supplies within city limits are in short supply. Woodstock is in an ideal location for industry because of its location on the 401/403 corridors. We are also within a two hour drive to almost all major manufacturing centres in Ontario plus the US border. As was seen with the addition of Sysco and Toyota, this type of development can have a major positive impact to the value of real estate independent of what is happening in neighbouring markets. High paying jobs bring in buyers willing to spend money on housing.

Future Residential Development - Because of such intense interest from buyers wanting to get into the Woodstock market, we almost ran out of residential building lots with many builders being well over a year to get a buyer into a new home. The City of Woodstock is attempting to annex land on its west side from the County of South-West Oxford. We desperately need new lands added for new construction to compliment the new areas recently added in the 11th line area. Buyers want to be here and builders need land to bring them in. On the upside for resellers, the lack of new construction lots, the long timelines and the high price tags make resale properties look better than ever.

Location, Location, Location - We Realtors always talk about location, because it's almost always the most important factor in buying real estate. When it comes to the City of Woodstock, we have location in spades. All of the above factors point to a market that will make for a great place to invest for years to come! 

 

 

The Reality of "Sold Over Asking".

There are so many stories of homes that have sold for 70, 80, 90, even 100,000 dollars over the asking price. It makes the current market confusing for both buyers and sellers. And a lot of it is smoke and mirrors. Don't get me wrong, it is a strong seller's market in Oxford County, with many sellers hitting home runs when it comes to offer day! But many times, the stories being told, although true, are missing critical information.

This is where "Sold Over Asking" needs to be addressed. We should be talking about "Sold Over True Value". In the current market, the list price can be almost irrelevant. Realtors are listing homes with a soft list price. If we think the home is worth, $500,000, we might list the home at $480,000. This exposes the home to as many buyers as possible. When offer day comes, buyers will offer as much as they think the home is worth. If we received 5 offers in this scenario, and a couple of offers are over the $500,000, and they probably will be, everyone is happy! If we receive an offer of $510,000, we just sold the home for $30,000 over asking price, but the home sold for $10,000 over VALUE! And that is the critical missing piece of information.

If the same property were to be listed at $430,000, it would sell for $80,000 over the asking price, but still only $10,000 over VALUE! Nothing has changed except the list price. Oh, and one more thing, the story has changed. The Realtor has a great story to tell, and the seller could not be happier!

Soft pricing is good for the seller, but listings a home with an overly soft price can poison the minds of buyers and sellers. I have heard of sellers turning down fantastic offers for their homes because they didn't get $60,000 over their asking price. And it is because of these stories. The truth is, their home was listed with a proper list price. The offers they received were great offers. But these offers were turned down, the school of buyers moved on, and their home sat for a week. And the next offers were lower than the original offers received. All because of the "Over Asking" stories they had heard.

For buyers, it is even harder! What do you offer on a home when you don't know what it is really worth? Do you go over asking by $20,000 or $100,000. Most buyers need to be looking at homes that are listed $40-50,000 less than what they actually are approved for so they have room to offer over asking. If the soft prices were all closer to reality this would be an easier market for them to deal with. Not all Realtors are listing severely under market value, but it is difficult for buyers to know when they are and what is happening from one listing to the next. It is frustrating and confusing!

A great local Realtor can help with this. We are in the market every day with buyers and sellers and we can help weed through the myths and legends! It is hard for us to even show good comparables right now due to the vast swings, property to property, between list and sale price. But we can help you understand VALUE! Again, some homeowners are truly hitting home runs on offer day. And usually it is an offer from an out-of-town buyer that is being represented by someone that does not truly understand the market. If you are a buyer, you need someone to lead you away from these situations and help you understand what homes are truly worth. 

The market does seem a bit like the Wild West right now. But there are strategies and information that can make it easier to understand and deal with. The truth is out there...

Ontario Home Sale Trends (Looking into 2017)

The Canadian Real Estate Association (CREA) recently released their sales statistics for Ontario for the month of October. New sales records were set, and it looks like we will be maintaining a strong seller's market into the foreseeable future.

There were 20,583 units sold in October 2016. This was an increase of 8.9% from at the previous year. This set the highest October sales figure to date.  This is also the first time that more than 20,000 units were sold in Ontario in the month of October. 

Provincial home sales were up 9.7% over the first 10 months of 2015. As of October, 216,028 homes have been sold in Ontario in 2016 and the industry is on track to set a new annual record. The provincial average sale price for a home was up 19% from at the previous October. New listings on MLS® was down 2.6% in the same time period. And thus sets in the law of supply and demand. Less homes on the market with a good supply of buyers means that home prices are still on the rise. Active residential listings were down 29.8% over the previous October. Supply is at near record lows.

At the end of October, there was just two months of existing inventory. This was down from 3.2 months from the previous October. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.

Although conventional thinking would lead people to think they should "wait until Spring" if they are thinking of selling their home, that is not necessarily true in the current marketplace. The market is still strong with buyers, and inventory is down. That all adds up to it being a fantastic time to sell. We in the industry are truly having trouble finding homes for our buyers because of the very limited inventory. 

Please give Tracey or I a call if you have any questions about how this market would benefit you in the sale of your home in Oxford County.

The Possible Danger of an Exclusive Listing

We are certainly living in a seller's market right now! I was recently in a course and learned of a new practice that is questionable as to how it serves home sellers. I want to start by saying that the practice of selling your home in an Exclusive Listing in the current market may possibly serve you well. I just want to bring to your attention a very real potential danger.

In a hot seller's market, many sellers are seeing offers well above their asking price if their home is properly priced and marketed. We have been seeing this all year in Oxford County. Many buyers have needed to make offers on several homes before being the successful bidder. In this type of market, it is almost always in a seller's interest to have their home listed on the open market with many potential buyers being exposed to their listing.

Now, lets talk about why an exclusive listing may be bad for you. What if I, as a realtor, were to approach you and tell you that I would list your home exclusively, meaning only me and my office had access to showing it, and I would do that for a 3.5 or 4 % commission. I already have a buyer ready to go and I think I can sell your house this week. I am cutting you a break from my usual 5% commission. Sounds great, right? No muss, no fuss, and you are SAVING money. The question is, are you really?

Let's now imagine that you are willing to sell your house for $250,000. At 4%, I am saving you $2,500 dollars. At 3.5%, I am saving you $3,750 dollars. That's not pocket change. Great savings!

But now we need to factor the market back in. If your home is truly worth $250,000, what might the offer be on the open market? There is a very good chance that you get at least asking price. But now we are on the open market. Your home is on MLS. Multiple offices are showing the property. What if you get into multiple offers? What if your home goes for $5,000 over asking? $10,000? Or maybe even more. 

Selling your home in an exclusive listing just took away that possibility. You may have left a bunch of money on the table. Just make sure that you make the right decisions for YOU in this market. Don't miss out on an opportunity because of what your Realtor says. Being listed exclusively might be the best thing for you, but in the end, in this market, it probably isn't!

Please give myself or Tracey a call if we can be of assistance in any way. We would be happy to answer any questions you may have about Excusive Listings or any real estate related questions you may have.

UPDATED! Explaining Canada's new mortgage rules

UPDATE: It was recently brought to our attention that lenders have received a grace period on this change. They now must have this implemented by the end of November. Most lenders are choosing to do so, and this is a great opportunity for buyers with less than a 20% deposit. If this effects you as a buyer, you need to have your mortgage application in to your lender before the changeover if you want to be approved under the old system. Your house does not have to be sold by the end of November, you just need to have your application submitted. This will substantially effect the amount you can borrow. If you have any questions, Tracey and I would be happy to answer them. Please feel free to contact either of us. This is good news, even if it only has a small window, for many buyers. Please don't miss this opportunity! 

New mortgage rules came into effect on October 17th and many buyers are wondering how exactly this effects them. These changes effect anyone buying a home with less than a 20% downpayment. Before the change, you only needed to qualify at your lenders posted rate, around 2.39%. In an effort to slow a hot market in a few key cities, as well as insure that buyers will still be able to afford their house payment in the case of a future interest rate hike, these buyers must now qualify at the higher Bank of Canada benchmark rate, around 4.64%.

How the math works:
The average home price in Woodstock is around $280,000, so we will use that as a benchmark. If you were applying for a 25 year mortgage, paid monthly with a 5 year amortization,  and you had saved a 5% downpayment of $14,000, your payment would be $1,239.02 at 2.39%. That is what your would be paying monthly, but under the new rules you need to qualify at the higher rate of 4.64%. And that same mortgage at 4.64% has a monthly payment of $1,571.59. That is a difference of $332.57 you must qualify for to be approved for the $280,000 mortgage, even though you will only be paying $1,239.02 per month.

If, under the old system, $280,000 had been the most the bank could approve you for, your new approval would be around $221,000. That is a difference of $59,000. Genworth, one of two companies that supply mortgage insurance in Canada, has estimated that this will leave 1/3 of new home buyers unable to purchase a home under the new rules. Fortunately, Oxford County is located in an area where great homes can still be purchased in an affordable budget. Areas like Toronto and Vancouver will be taking the brunt of the loss of first time buyers. Tracey and I would be happy to sit down and explain this to anyone with questions, or would like to see what options are available in today's home market. As always, the first best step in buying a home is to get a pre-approval from your lender. If you aren't sure who to see, we would be happy to recommend someone we know will do a great job for you!

Big Night Out Charity Ball

Tracey and I will be attending the Big Brothers Big Sisters of Woodstock & District Big Night Out Charity Ball this year and we wanted to take a few minutes to talk about these great people and their fundraising event. 

Big Brothers Big Sisters is Canada’s leading child and youth mentoring charity. They build and nurture life-changing relationships that help local children reach their potential, now and in their future. The mentors working in the Big Brothers Big Sisters are truly heroes, especially to the children and families they help and build lasting relationships with.

This is the second annual Big Night Out Charity Ball supporting Big Brothers Big Sisters of Woodstock & District. Enjoy an affordable evening of dinner and dancing to music by Ferguson Drive and Powerhouse Productions. The night includes various draws, silent and live auctions. Cocktails start at 6:00 PM and dinner is at 7:00 PM with a dance to follow. All money raised goes directly to support the children and youth in the Woodstock & District Community. Tickets are only $50 and is a great way to support this fantastic local organization!

If you have any questions, you can contact them at 519-537-6404 or email kristen.ralph@bigbrothersbigsisters.ca.

We hope to see you there! It will be a BIG NIGHT OUT!

Century 21 Golden Gala 2017

Just wanted to take a few minutes to talk about the Century 21 Golden Gala. This fantastic event is held annually in the Oxford Auditorium at the Fairgrounds in Woodstock. If you have never been, this is an event you really should try. It is such a great time as well as a reason to get dressed up and have fun while raising money for three great charities, The Alzheimer's Society of Oxford, the MS Society of Oxford, and the Easter Seals of Ontario (Oxford Chapter). 

The food is always top notch and the band always has the dance floor full as soon as they hit the stage. You might even be lucky enough to watch me bust a move! The Gala has the reputation of being a stuffy event, but trust me, nothing could be further from the truth.

Tracey served on the Gala committee for many years, and one of the hardest parts of this event is finding sponsors. If you own a local business, the committee is always on the look out for a great new sponsor, or an old one returning to the fold. Anything from Platinum Sponsor status to contributing an item for the great auction tables. It's a great way to help the community while bringing attention to your business. If you would be interested in contributing, contact us and we will make sure you are put in touch with the right people.

If I have piqued your interest, let us know! We love putting a table together and would love to have you with us this year. It's a great event, it's a great cause, and it is so much fun.

Hope to see you there in 2017!

Last year's gala with doug & tara leake

Last year's gala with doug & tara leake

Here we go!

Tracey and I are always striving for new ways to better represent our clients and ourselves.

We have recently purchased the exclusive rights to the new digital billboard on Norwich Avenue in Woodstock. This high visibility billboard will allow us to promote our listings in a brand new way and to so many drivers and pedestrians every day. We are so excited to see this board in action and you will be seeing our very large faces there in the next few days. The digital aspect of this billboard also gives us the ability to change the artwork on a regular basis and keep the attention squarely on your listing, without the sign becoming stale to passers by.

We also know that to stay current in the Real Estate market of today, visibility on the internet is of the utmost importance. We have routinely been making use of Facebook, Kijiji and Twitter. Today we add a brand new, custom website to the mix. We want to be able to showcase our listings and have a clean and attractive way of interacting with all our clients, buyers and sellers. We are so excited about this new website, and thanks for stopping by and taking a look. Please let us know what you think!