March/April 2010 Edition: Toronto Real Estate Market Views


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March/April 2010 Edition: Toronto Real Estate Market Views

  1. 1. MarketViews MAGDA MO’S PREFERRED CLIENT NEWSLETTER MAR/APR 2010 Strong reSultS poSted in February A total of 7,291 single family homes were sold in the desire to avoid the impact of HST on closing and other costs GTA in February, representing a 77% increase versus relating to resale transactions (the new 13% HST will become February 2009 when only 4,120 sales were recorded. Since effective on July 1, 2010). last year’s performance was mired by the impact of the The average home selling price in February jumped to economic recession, a more valid comparison would be to the $431,509 which is up a whopping 19% versus February 2009. February average for the five years preceding 2009. By that In fact, this price establishes a new all-time high average selling yardstick, February sales are still up a substantial 15%, revealing price for the GTA. Market supply remains tight with only that we are indeed in the midst of a very robust market. Rock 14,514 active listings on the market at month-end (decline of bottom interest rates and increased consumer confidence are 32% versus year ago). Days on market is down to just 22 days, still powering the market; buyers are also being motivated by a far cry from the year ago number of 45 days. the knowledge that rates will soon increase and there is a strong desire to lock-in rates now. Buyers are also being motivated by a GTA RESALE HOME SALES (UNITS SOLD) - FEBRUARY GTA RESALE HOME SALES (AVERAGE PRICE) - FEBRUARY 2007 2007 2008 2008 2009 2009 2010 2010 4,000 5,000 6,000 7,000 8,000 $350,000 $375,000 $400,000 $425,000 $450,000 Magda Mo Sales Representative 416-483-8000 | PAGE 1
  2. 2. The perils of radon gas Legally Speaking It is somewhat strange that the organized real estate meter (Bq/m3),” and the community in Ontario is still highly concerned about urea government of Canada’s formaldehyde foam insulation (UFFI) in houses, years after guideline limit for radon in it was proved that it carries no health risks, and yet radon indoor air is 200 Bq/m3. Even gas and other environmental contaminants – which exist in this figure is too high for the many homes and can be fatal – are hardly ever mentioned World Health Organization, in residential purchase agreements. which last year published a handbook proposing a For several decades, the standard Ontario Real Estate maximum indoor level of 100 Association agreement of purchase and sale has contained Bq/m3. a warranty that the seller has not insulated the house with UFFI. This, despite the fact that 15 years ago a Quebec court The City of Toronto Web site ruled, after an eight-year trial, that there was no basis for advises residents that the only fear of health risks and no justification for removing UFFI way to find out if a home contains radon is to have it tested. A from houses. do-it-yourself radon gas test kit by Pro-Lab is available at Canadian Tire at a cost of $9.99 plus a $30 lab fee. The City Radon, on the other hand, has one known health risk – of Toronto Web site suggests that kits may also be available exposure above certain levels increases the risk of developing from smaller retailers and online for about $50 (Google: lung cancer. “radon test kit Canada”). As an alternative to the do-it- A detailed guide on the Web site of Canada Mortgage and yourself kits, the City of Toronto also suggests that a trained Housing Corp. (CMHC), explains that radon is a radioactive environmental technician can conduct a test for indoor gas that is colourless, odourless and tasteless. It is formed radon levels. This type of test may be more expensive than a by the breakdown of uranium, a natural radioactive material passive kit, but the results would be available much faster. found in soil, rock and ground water. If excess radon is detected in a house, Health Canada When radon escapes from the ground into the outdoor recommends that steps be taken to reduce radon levels. The air, it gets diluted and is not a concern. But when it seeps cost is estimated at about $2,500. from the ground into an enclosed, unventilated space like As more and more Canadians become aware of the dangers a house, it can sometimes accumulate to high levels and of radon in homes, it may become an important factor in contaminate the inside air. sales transactions. Back in the 1970s, Health Canada surveyed the radon levels The typical home inspection does not test for environmental of 14,000 homes in 18 cities across Canada. A small but issues such as mould, asbestos, urea formaldehyde, or the significant minority of homes in some locations were found telltale signs of a marijuana grow-op or meth lab. to have high levels of radon gas. In Canada, the Radiation Safety Institute says that long-term exposure to radon Sooner or later – hopefully sooner – an indoor air quality causes about 2,000 deaths per year and is the leading cause test will become a standard part of real estate purchases, of lung cancer among non-smokers. and the standard form agreements will contain warranties as to air quality. In addition, it can greatly increase the chances that a smoker living in a contaminated house will acquire lung cancer. This article was contributed by Bob Aaron, a prominent Toronto-based real Radon is measured in units called “becquerels per cubic estate lawyer. Visit him online at PAGE 2
  3. 3. Challenging the urban painting myth Trendy Corner The right colour of paint in the right place can often add more perceived value to your home than investing in a new furnace or roof. An urban myth exists that, for the purposes To update the look, the foyer was painted with a strong welcoming shade of muted raspberry. Next, the living room, with its pale floor, ivory upholstery and celery green of resale, it’s best to paint your home pale and neutral. You cushions and drapes, received a mocha brown on the walls. don’t want to offend anyone, right? Because there was a lot of light, the mocha brown created a wonderful backdrop without closing in the room. You walk a fine line while playing it safe because pale and neutral could very well bore a prospective buyer. If a buyer The opening from the living room to the dining room was looks at several homes, yours might be forgotten because an open double doorway; so it was critical the next colour it’s neutral. flowed from the mocha. A rich, mid-tone salmon colour was selected and it fit perfectly. The depth of this colour Real colour will evoke emotional responses. Usually, buying enhanced the pale wood, creating the intimate feel a dining a home is an emotional decision made within ten minutes of room should have. For flow, the salmon tone was carried entering the home. It’s not just the listed features that clinch into the kitchen as well where it revamped the look of what the deal. It’s how a person feels about the space. had been an all-white kitchen. Although it’s not possible to second-guess a potential Next for the central hall and stairwell, the three warm buyer’s taste in colour – everyone has different tastes – a colours were tied together with a pale, cool green-based good balance of neutral and dramatic, pale and saturated, stone colour. The balance of warm and cool colours gave a or warm and cool colours will set the stage and market your harmonious feeling to the space. home, even if the buyer plans to change it when they move in. Finally the upstairs of the house was transformed. The living room mocha was repeated in the bathroom which updated Your paint colours must be in accord with your furniture. For the look of a once very basic bath. The walls of the master example, if you have a big red sofa bought on impulse, help bedroom which had white furniture were painted a sage it fit in by putting the same red on an accent wall nearby. gray-green. The walls of the teenager’s room which had If you have an expanse of green carpet, don’t fight it. Try pine furniture became denim blue. And the nursery was muted green tones on the walls in that room. The end result painted a pale lavender. will flow much better. Overall the new paint effects made the house dramatic; it A Case Study showed well and sold quickly with strong colour playing a One traditional three-bedroom home had plenty of natural major role. light with ivory and celery green furnishings and off white walls throughout. It appeared very washed out and slightly This article was contributed by Sylvia O’Brien, a Toronto-based colour clinical. consultant. Visit her online at PAGE 3
  4. 4. TO MY VALUED CLIENTS Economic growth surged by 5% on an annualized basis in combined with the July 1st introduction of the HST in the 4th Quarter of 2009, which is the clearest sign yet that a Ontario will almost certainly result in a “perfect storm” for broad-based recovery has taken hold in Canada. The surge the resale housing market over the next few months. Buyers was fuelled by everything from a strong housing sector and will be out in full force to mitigate against both of these healthy consumer spending, to a surprise turnaround for increased cost factors. In fact, it may be a very long time net trade. In fact, our exports grew at almost double the before we will ever see a “perfect storm” like this again. pace of imports. So if you were planning a move over the next 1-2 years While this is certainly welcome news, it does potentially anyway, you may want to give serious consideration to increase the risk of interest rates rising a bit sooner than advancing your timetable. Prices have been increasing but previously expected as well as interest rates rising on a more so toward the bottom end of the scale than the mid greater scale than previously expected. While the Bank of to upper end, meaning that this is also an ideal time to Canada decided to hold the trend-setting central bank rate “trade up” in the housing market. at the record low 0.25% in its March 2nd announcement, it is becoming increasingly likely that the widely anticipated As usual, your client referrals are both highly valued and rate increases will start occurring sometime around June of much appreciated. Until next time, take care! this year. Widely expected summertime interest rate increases PEARLS OF WISDOM Finally some definitions that really make sense: Cannibal: Someone who is fed up with people. Egotist: Someone who is usually me-deep in conversation. Flabbergasted: Appalled over how much weight you have gained. Abdicate: To give up all hope of ever having a flat stomach. Coffee: A person who is coughed upon “your reFerralS are SinCerely appreCiated!” Magda Mo Sales Representative 416-483-8000 Sutton Group Bayview Realty Inc., Brokerage 1820 Bayview Avenue, Toronto, ON M4G 4G7 | In accordance with PIPEDA, to be removed from this mailing list please e-mail or phone this request to the REALTOR ® Not intended to solicit buyers or sellers currently under contract with a broker. The information and opinions contained in this newsletter are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for damages resulting from using the published information. This newsletter is provided with the understanding that it does not render legal, accounting or other professional advice. Statistics are courtesy of the Toronto Real Estate Board. Copyright © 2010 Mission Response Inc. 416.236.0543 All Rights Reserved. D114 PAGE 4