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The ‘Monitoring Dashboard’ – What is It, and What’s it Saying about Real Estate in Canada?

Published February 27, 2017 by Real Estate Leads

Needless to say, all of the major financial institutions have a vested interest in the state and well being of the Canadian Real Estate Market. As an agent, you’re always looking for resources for realtors and it’ll likely be good to know how the big banks employ the Monitoring Dashboard for real estate market conditions in Canada.

The Monitoring Dashboard has 10 separate individual categories, and to each of them one of three colour-coded statuses will be applied at any time.

The 10 categories are:

  1. Affordability
  2. Resale Market Balance
  3. Rental Market Balance
  4. Interest Rates
  5. Labour Market
  6. Demographics
  7. New Home Inventory – Singles
  8. New Home Inventory – Multiples
  9. Homes Under Construction – Singles
  10. Homes Under Construction – Multiples

And the statuses are:

  • Red – ‘significantly outside historical norms and posing a higher risk than usual’
  • Yellow – ‘modestly outside historical norms and posing a moderately higher risk than usual’
  • Green – Within historical norms and not seen to be creating any immediate risk

These findings are generated from the Canadian Housing Health Check Report, which is compiled by the Royal Bank of Canada. It provides solid insights into the overall Canadian housing market and the contrasting regional risk profiles and trends.

So what’s the Monitoring Dashboard saying for 2017?

canadian-housing-market-risk-profile-1024x548

Toronto

Reds for affordability and HUC multiples indicate what is called ‘overheating.’ Home prices in the city are becoming increasingly unaffordable, and a downturn in the building of multiple-unit housing developments compounds the issue. Also relevant to this trend is the city’s seeming unwillingness to consider a foreign-buyer tax like the one Vancouver has put into place.

Vancouver

Vancouver sees the same reds, but one more in demographics as well with the fact the city is bulging at the seems and struggling to accommodate the rate of population growth it’s seeing.

Home prices in Vancouver have been falling in recent months, with the average price dropping 3.1 per cent as of the end of last year. Vancouver does have “solid economic underpinnings,” though and the market appears to be adjusting in an orderly fashion with the aforementioned foreign-buyer levy.

Calgary

Alberta’s capital would seem to have the greatest cause for concern according to the Dashboard, with reds for rental market balance, labour market, demographics, and new home inventory for multiples.

Increasing numbers of condos and rental units are sitting empty in Calgary, due to job losses that are in large part an outcome from the lower price of oil – a resource that’s a major contributor to Alberta’s economy. Accordingly, the market here is most at risk of any big city in Canada. Recent drops in condo construction and a slightly improving trend for home resales have been positive developments however, suggesting that risks might ease in the period ahead.

Here’s to hoping things look up all across the board with real estate in Canada, and to that end you should make sure you’re exploring every avenue to increase your business leads. Sign up with Real Estate Leads and receive qualified buyer and selling leads that are yours exclusively for your protected region of the country. Proven effective!

The Less-Conspicuous Driving Force Behind Soaring Home Prices

Published February 22, 2017 by Real Estate Leads

 

3D rendered illustration of rising real estate pricesA very interesting article in the thetyee.ca today by journalist Geoff Dembicki entitled ‘The Real Reason You Can’t Afford A Home’ highlights a specific aspect of the new global economic realities that is manifesting itself in many people no longer being able to afford a home in hot spots like Vancouver and Toronto. There’s much in the way of real estate trends and news these days, but it’s hard to argue this isn’t easily at the forefront of them.

To introduce it in a more-simplistic overview, it’s that the amount of global capital becoming available for investing is rising much more rapidly than actual economic growth. Here now in 2017, there’s so much capital available that investors don’t know what to do with it all.

The response has been to pour a large portion of it into real estate, and not just here in Canada but in popular metropolitan city areas all around the world. It’s considered a ‘safe’ investment given the current climate, and prices are becoming sky-high as a result as the impetus for the investment shifts to a much more speculative one.

The 2 Distinct Spheres

To understand this in a more brief and easily digestible piece, we need to look at why there is both ‘real’ and ‘financial’ economies, and how distinct they are from each other as it relates here. The “real economy” – as Dembicki puts it – is what most of us are familiar with, all the goods and services produced across the world — the global GDP — and the infrastructure that makes this activity possible.

The “financial economy” is something different altogether. This is where investment happens. Securities, mutual funds and bonds, along with the balance sheets of banks and other financial institutions. With all this talk about a ‘bubble’ for real estate in Vancouver and Toronto, it’s the financial economy that’s blowing the air into it.

The article states – very correctly – that digital technology and globalization are the 2 primary contributors to the rise of this investment boom and all that comes along with it, good and bad. Digital technology has allowed investors to create more sophisticated and profitable ways of investing, while globalization led to massive amounts of new wealth in countries that never had much of it before.

The volume of this newfound ready-to-go capital is enormous, and it’s entirely natural that investors have begun looking for new opportunities. The simple fact is real estate is the one of the best avenues for investing now, and so here we are with super-inflated markets in our big cities.

A Persistent Market

It’s true that corrections always tend to occur with big-stage global economic trends, and this will likely be no exception. The ‘invisible hand’ always shows up, but the reality is that this trend of ‘unaffordable’ homes is likely here to stay for a good long while. And it should be said that there are plenty of very ‘liveable’ cities in Canada outside of Vancouver, Toronto, and Calgary!

B.C. First-Time Homebuyer Loan Program Meets Mixed Reviews

Published February 14, 2017 by Real Estate Leads

Happy family near new house.There are many would-be first time homebuyers in British Columbia who’ve faced the same hurdle over the years. They’re able to afford their projected mortgage payments, but coming up with down payments that are often staggering in size is an insurmountable obstacle. It’s one truth that no amount of real estate tips and advice can get you past.

Some of these folks may now have a solution to their predicament with the BC Provincial Government’s new Home Owner Mortgage and Equity Partnership Program. With it, the government would match these buyers’ savings – up to $37,500 or 5% of the home’s purchase price.

At first glance, it’s easy to see this as a generous and benevolent gesture on the part of the Liberal government to help homeowner’s enter a market that’s very daunting, particularly so for the Lower Mainland of the Province. On the other hand, however, it’s important to keep in mind that the Federal Government instituted the country-wide down payment requirements it did to exclude buyers who might be tempted to overextend themselves on properties they won’t be able to afford should interest rates increase.

In contrast to all the ‘feel good’ nature of this new program, that second part of it is something that really must be remembered as it’s an age-old maxim – If you can’t afford a home based on the existing market and its projections, you really shouldn’t try to purchase one.

Differing Perspectives

The program would only apply to homes worth less than $750,000. A buyer must be able to pre-qualify for a mortgage and have a gross household income of less than $150,000. Applications open Jan. 16, and the program ends March 31, 2020. The government would put a second mortgage on a property to reflect the amount it loaned, but not require any interest payments or payments on the principal for the first five years. After that, the 20-year repayment plan would be set at the prime lending rate plus 0.5 per cent, leaving the homeowner to pay back both the original mortgage and the down-payment loan at the same time.

It was greeted with praise by developers, the real estate industry, mortgage brokers and some housing analysts. Their argument is that it will help those who would already qualify for mortgages speed their entry into the market, and some adding further that it will continue to buoy the market in the face of a projected downturn this year (only in part due to the foreign buyers tax – but we won’t digress).

Proponents of the program state it keeps the housing continuum moving along, and that an influx of first-time homebuyers is very much needed. Critics counter with the fact that it does nothing to address the reality that “we continue to have too much demand chasing to little supply” as one industry expert put it. In response, proponents – while agreeing that supply of new housing in Metro Vancouver is limited relative to the demand – believe that this will offer a greater incentive to builders and developers to initiate new projects.

NDP housing critic David Eby said the province is encouraging buyers to go deeper into debt. He said it flies in the face of the Canadian Mortgage and Housing Corporation’s new stress tests, designed to gauge whether a buyer could still pay their mortgage if interest rates rose to the five-year standard rate of 4.64 per cent.

Differing perspectives for sure, and before we wrap it up for this week here are the eligibility requirements for the program:

  1. Have saved a down payment amount at least equal to the loan amount for which they are applying from government.
  2. Have been a Canadian citizen or permanent resident for at least five years.
  3. Have lived in B.C. for at least one year prior to the sale.Are a first-time buyer who has not owned an interest in any residential property anywhere in the world at any time.
  4. The home must have a purchase price of less than $750,000.
  5. The buyer must already be able to qualify for an insured high-ratio first mortgage for at least 80 per cent of the purchase price.
  6. The combined gross household income of all people on title must not be more than $150,000.
  7. What do you think? Is it a judicious decision on the part of the BC Liberals to introduce this program? Will it be a benefit or a detriment in the long term?

Increasing numbers of ready homebuyers is going to be a plus for you as a realtor no matter which way you slice it, so sign up with real estate leads and have qualified online-generated leads provided to you exclusively for your region!

Getting the Best Quality Photos of Properties

Published February 11, 2017 by Real Estate Leads

Young Female Architect Looking At Designs Of House On Computer In OfficeIt might be cliche here to offer the age-old expression that ‘a picture is worth a thousand words.’ In today’s digital age, however, where prospective buyers make online researching a big part of the decision process before they even make proceeding to make first contact with a seller, it’s perhaps more true than ever.

Naturally, the significance of this is magnified hundredfold when the product being sold is a home worth hundreds of thousands of dollars, and perhaps more in some instances. You absolutely must have high-quality, high-resolution images of the home, and there’s a whole host of considerations that go into that beyond the one of having a high-end camera with plenty of megapixels and auto image-stabilization etc.

All that said, it is entirely possible for you to take on that challenge on your own with your own camera, equipment, and know how. Let’s talk about some tips for getting quality photos of real estate properties.

Equipment

Though pricey, a DSLR camera is preferable. Most DSLRs will have an image processor that is 18MP or higher, and the difference in image crispness and definition delivered by these kinds of processors is immediately discernible when you compare them to your average point n’ shoot camera or the one on your smartphone – which is likely 8MP.

For residential interior photography, the home itself and it’s design particulars will dictate what equipment you need. Some homes designed by great architects are designed specifically with natural lighting in mind and won’t need much extra lighting. Other homes will need plenty of it.

The bare essentials you’ll need for interior photography include a tripod, electronic flash, and non-distorting lenses. Wide angle is fine as long as it isn’t too wide. If you can, get architecture specific lenses. Try using prime lenses over zoom lenses as this will minimize curvature. Faster lenses are best, as interior photography will have much less available light to work with.

Lighting Basics

Many architects understand the importance of light, and design houses around incorporating natural light. If you are fortunate enough to have a well designed lighting system, you may be just fine with using only existing light.

A staple approach is to turn on all the lights in the house. This adds more depth and colour variance to your photos. Make sure the lights do not show up as reflections in pictures, windows, mirrors, or other reflective surfaces. This is visually disconcerting for any viewer.

It’s not difficult to determine when this isn’t working well. If that’s the case, you’ll need to use external lighting such as flashes or strobes to balance the natural and artificial light. A simple tactic is to replace the incandescent bulbs with more powerful tungsten bulbs. These have a higher output and tend to be more consistent in colour temperature with outdoor lighting.

Lastly, when using a portable flash, it is advisable to not to point the light directly at your scene. Instead, aim it at a light-coloured wall or ceiling. This will diffuse and spread the light throughout the entire room. Light coloured is better as coloured walls as the darker colour may change the reflective nature of the light.

Composition

Now to the dos and don’ts of the actual taking photos of the home. The first tip is to be spacious with your shots, and a primary means of achieving that is to avoid shooting straight at walls. This will make the photo look flat and can also create less definition to the perspective. Shoot into the corners of rooms instead to create more depth and make the room appear larger. Also, taking the photos from a lower angle and with a wider angled lens creates an effect where the room is seen to be larger and more open.

The next tip is to choose attention grabbing areas. As you can’t photograph an entire room in one picture, you should focus your lens on the parts of that room that you imagine would have the most immediate visual appeal for buyers. Choose objects of importance that really make the space attractive, or parts of the room with more interesting architecture. Be sure that the vertical and horizontal lines in your photos are straight. Crooked lines are signs of poor technical skills and will detract from the image.

These arejust a few introductory points to consider with taking photos when selling a home. There’s many more, and it’s advisable to become familiar with them if you’re a real estate agent who takes the initiative to sell more homes. Signing up with Real Estate Leads to receive qualified leads that are provided to you and you alone for your region in Canada is highly advisable too, and here’s where you can get in on the action

To Be A FSBO… Or Not

Published February 4, 2017 by Real Estate Leads

We’ll start this week’s post by explaining that we’re well aware that this is a real estate topics blog and that the majority of our readership will be real estate professionals who’ll be well aware of what exactly ‘FSBO’ means. We’re going to take a quick moment though, to explain this wacky acronym to anyone who’s not so familiar with it.

For Sale By OwnerFSBO (fizz-bo) stands for For Sale By Owner, and it’s a term used to describe a homeowner who’s made the decision to list and sell their home on their own, without the assistance of a realtor. Now we’re similarly aware that the same majority of you will obviously recommend against such a practice with vehemence, but let’s take a look at some of the pros and cons to being a FSBO. After all, being a well-informed realtor who can offer perspectives without bias or prejudice reflects very well upon you and it’s good to be able to appraise prospective clients of both sides of the coin, no matter how it may end up.

Advantages

  1. Avoiding Commission

This one’s simple to understand from the seller’s perspective, as much as it’s in contradiction to your interests as a listing agent. On average, they’ll pay about 6% to sell their home—split evenly between you and the buyer’s agent. They should factor in the realtor’s commission when determining the asking price for their property. Their decided-upon sale price should be enough to pay off the remaining mortgage balance on the property, plus pay the commission. If that calculation leaves a little bit to be desired, this is one reason they might consider becoming a FSBO.

  1. There are Plenty of Selling Resources These Days

The days of creating your own yard sign and then putting an ad in the local newspaper’s classified section are long gone. Now there are an array of resources available to help you sell a home. These included locale-specific real estate purchase agreements that can be found online, and local title companies or a real estate attorney can help with the legalities and answer questions – often online as well if you can’t contact them in person or by another means. This is huge for folks in more rural areas. Perhaps more important though are the excellent resources available on the web for advertising your property. You can include photos of your house, as well as detailed information about the property, including the number of bedrooms, upgrades, square footage and other features. The Internet is pretty much the greatest thing to ever happen to FSBOs!

  1. Sense of Accomplishment

This one doesn’t need a whole lot of explanation. If you’re the type who likes doing all manner of things yourself, and saving money accordingly – you’d probably make a great and determined FSBO.

Disadvantages

  1. Lack of Access to MLS (Multiple Listings Service)

This is definitely drawback numero uno when it comes to choosing to go FSBO as compared to working with a real estate agent. Working within a city or town’s MLS is restricted to participating (and paying) realtors exclusively, and having a home for sale featured in the MLS is of paramount effectiveness in putting the home in front of the largest number of buyers and the realtors they’re working with. It’s pretty much the bible in this regard, and selling your home without having it featured there puts you at an immediate disadvantage when it comes to exposure and finding the ‘right’ types of prospective buyers – no doubt about it.

  1. Lack of an Industry-Professionals Advice Regarding Pricing, Etc.

A qualified and experienced realtor is often invaluable with the way he or she understands the value of a home in the bigger context of the ever-changing housing market in any specific locale. You may think your home is worth X-amount – and you may have some very solid reference points in coming up with that number – but it may simply not be a realistic asking price given the conditions of the market and any of the other factors that can come into play. The majority of which are beyond the scope of understanding for anyone other than a professional realtor.

Pricing yourself realistically but fairly goes a long way in having you sell the home within the timeline you envision, and FSBOs often struggle right out of the gate this way.

  1. Being Overwhelmed / Intimidated with Requisite Paperwork

There’s a LOT of paperwork involved in selling or buying a home, and often more than the average person could ever imagine possible. Without having a realtor who’s gone through these documents many times previously on your side, you may well find yourself moving along at a snail’s pace, and becoming immensely frustrated accordingly.

  1. You Alone are the Open House Coordinator

This one’s also fairly self-explanatory. Prospective buyers will always want to tour homes they’re considering buying, and if you choose not to work with a realtor you’re very much on your own when it comes to scheduling, staging, promoting and so on and so forth. An agent can filter calls and inquiries from other real estate agents and coordinate open houses and showings for your property, so you can go about your everyday life and not have to concern yourself with it – and it always involves a LOT of concerns. And last but not least, a realtor can speak of your home and it’s attractive features and amenities in a smooth, convincing manner in a way you simply can’t. It’s a developed skill.

Here at Real Estate Leads, we provide realtors with qualified leads generated online and exclusive to them and their region in Canada. We also like to talk about trends in real estate, and if you’ve got anything to add to this post or any other we’d like to hear what you’ve got to say!