For Sale By Owners House, Home For Sale By Owner

In the Canada along with the rest of the world, everybody is having hard times.  For a person that is looking to build or to buy a new home there is an advantage that can be taken.  Supplies for building are now starting to remain steady, there are good deals on lands now, and the intrest rates are at an all time low.  Make sure that you are not wasting any of your time by waiting for the intrest rates to go lower then they are, this is because the federal government may not be looking to reduce the rates soon, and the next change could be the intrest rates going up.

As for the past five years home building had been an expense that was high, this had been because the lumber prices had been up.  This increase now seems to be now over and the price of lumber is now beginning to drop.  In turn anybody that is looking into building a fancier home will now be able to do so at a cheaper price.

All over the Canada land is now becoming more affordable.  Real estate agents are looking to make money and to do this they need to make the land move, not sit for months on end at a higher price.  All people that are looking to buy should take a full advantage of the economic hard times, buy the land that you see your dream home on.

The lower interest rates are the main thing that a home builder or a home buyer should be looking at right now.  Any family that is looking into building a new home from any plan what so ever needs to move very quickly to secure the low interest rates. Many banks are now offering intrest rates that are getting lower this makes the home builder or the buyers dreams come true.

Featured Local Business:

Caledon Real Estate Agent - Mary Klein - Sutton Group
123 West Drive
Brampton, ON
L6T 2J6
(519) 927-5829
MaryKlein.com

Mary Klein is Caledon’s Leading Real Estate Agent! Sutton Group’s #1 Top Producer for 8 Years, Selling Country Properties in the Caledon, Erin, Orangeville, Mono, & Surrounding Areas.

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Buying a home can be a chance of a lifetime. So much takes place during the mortgage process. Being able to get the best Calgary mortgage rates possible is something that everyone wants, but not what everyone gets. Numerous factors come into play when determining what type of rate you will receive on a mortgage.

One of the ways lenders determine your Calgary mortgage rate is by checking your credit report. The credit report demonstrates how likely you are to pay off debts. The reasons why lenders use this to determine mortgage rates is because it helps them better understand whom they are dealing with. They want to make sure that if they take a chance on lending you the money, that there is a good probability that you will pay it back. This is why it is imperative to have a strong credit history. Your past and present credit history work together and help you to obtain the best rate on a mortgage.

The lenders decision on whether to grant you a mortgage is influenced by whether you have money saved up and whether you have other material possessions, such as a car. You can also have an extra fund for a retirement account which looks great when you apply for a mortgage. The reason a retirement account and other material items are important is that it gives the lenders peace of mind knowing that they have something to fall back on just incase you are unable to make your Calgary mortgage. Lenders view your ability to save money for your future as a big plus when it comes to qualifying for a mortgage.

If you have enough money to put aside for retirement, this means that you have extra money to spare. This always looks good to lenders. Having money in your savings account shows them that you are planning for your future, and are responsible with your money. Lenders see this as a positive sign that you will be able to pay back the money they loan you.

Having a strong work history shows lenders that you also have a good cash flow. It also demonstrates to them that since you always have money available you are more likely to pay your mortgage every month. On the other hand, being self-employed can become a problem; this is because many lenders don’t view this type of employment as having a fixed amount of working hours. The reason for this belief is that often people who are self -employed make different amounts of money from week to week.

Getting the best rate on a mortgage begins with your credit history. Therefore making timely payments and paying off the balance in full looks excellent on your credit report. Also, keep in mind that having a steady form of employment also helps you to obtain the best mortgage rate possible. Having material assets not only looks good to lenders, but it shows them that you have other ways to come up with money if you ever have a problem paying your mortgage. All of these factors are important when qualifying for a desirable mortgage rate and can save you tons of money over the length of your mortgage.

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The real estate bubble in the USA exploded about two years ago. As a consequence, people participating in the real estate market in Canada came up with a demand: “How will the situation in housing market in Toronto or Canada be progressing from now on?”

The worries were based on two basic ideas. One of them is the powerful attachment between the Canadian economy and real estate market and the circumstances in the USA. Second, Canadian real estate market development in the years 2006 and particularly 2007 showed the potentiality of a analogical bubble here. So what is the status almost twelve months later?

The way how markets were developing between 2008 and 2009 didn’t actually look too satisfying, which only strenghtened all the pessimistic prophecies and only a few people still managed to keep their light-hearted viewpoint. The sales figures from each month demonstrated a great drop, which peaked at -47% in confrontation to January 2008. Clearly, the “depression panic” from autumn 2008 arrived to Canada. The property market almost froze, regarding that most Canadians were reluctant about making any crucial financial decisions. Some “experts” examined the situation and predicted Canada facing similar crisis as in the USA. However, the truth doesn’t confirm these forecasts. Now we will focus on the 2009 figures.

Number of sales and year-to-year change

The most representative and closely watched indicators. Looking at these indicators, it is evident how the business froze in during the winter months. Nonetheless, June sales reached more than four times higher than December ones. Sales began to grow again in May 2009 [compared to May in the previous year]. And the June figures demonstrated clearly that the Toronto property market is back out in the clear.

Days on market

This is another key factor. Whereas the before mentioned ones show us the market volume, the “days on market” is indicating the speed and freshness. This factor is important because from the whole market volume figures we cannot tell how long it would take for your property to get sold - it just gives us another viewpoint of the same issue. During the hardest days in January, it took just 14 days more to sell your home. This means that the situation on our market was not so critical, if we compare it to South Florida or Detroit, where properties were stuck on the market for 120 - 150 days.

Active listings flow change

We can estimate the atmosphere of the real estate market when looking at this indicator. If the number of new listings is rising, it usually tells us that property owners are scared that their property value would decline and they want to save their investment. The opposite situation means that the dominating opinion is that this is a favourable time for buying property. The future of other market’s attributes can be foretold from the active listings flow change. For example the positive change after January was interpreted as a market turn signal.

Average price

This one usually attracts the biggest attention from my real estate clients. Their house forms the largest part of their whole property, meaning that every change in the market means losing or gaining thousands of dollars. It was not until April 2009 that the price fall from the previous autumn was overcome.

What is the explanation for such positive outcomes?! In almost every newspaper every day, we can still find some negative economic news. So how can we explain the fact that the housing market has come around so quickly? There are two crucial causes:

1. Failed expectations

A lot of Canadian people supposed their real estate market would collapse, as they witnessed the situation in the USA. But we have to be aware of the fact that the key problem of United States was in the subprime sector. A chain reaction originated out of a few problems that were not dealt with at the beginning. It started with a price decline, and as a result foreclosures and short sales were not covering all the toxic loans, so the banks were forced to put even more foreclosured homes on the marked, which lowered the prices even more. I dare to say that Canada has a very healthy financial system, which in connection with very limited subprime sector where there are only a few foreclosures occuring makes our real estate market a secure one. So the house owners can sleep tight, being aware of all this.

2. Stabilized economy and buying opportunities

Have a brief look at inflation, unemployment, GDP predictions and interest rate characteristics. Real estate market largely depends on this figures, as follows from real estate prices explanation. We can clearly see from these numbers that even though our economy is slowed and stagnating, it is still quite far from a collapse - although of course the numbers could look even better. The winter real estate panic was also stopped after people started to be aware of all these facts.

Conclusion and the future

Toronto real estate market has first very well sustained the pessimistic mood during the winter months, and then it has pulled together very quickly. Now it is growing again and condo resale market can be even evaluated as hot in the present. Low interest rates and good prices after “one year break” offer huge opportunity especially to first time buyers. Now it is also great time for investors to pick some cherries, as their prices still haven’t recovered. Sellers can be calm too – the market is fast and their property will be sold probably within a month for a good price. In the next couple of years, steep price burst and bubble creation are quite unlikely, due to the pertaining level of uncertainty and slower labor market. As the market grew unusually fast in June (+27%), it is clearly getting to catch up for the previous weak months and soon it will probably be stabilized again. Even in wild times, Toronto real estate market forms a compact base for the economy of the whole Ontario country.

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In 2007, when we faced the US property bubble burst, all the Canadian property market participants started to inquire: “What is going to be the expected progress on Toronto RE market?”

The worries were based on two crucial arguments. First, Canadian property market, as our complete economy, has close connections to the situation in the USA. Second, Canadian housing market progression in the years 2006 and above all 2007 showed the likelihood of a analogical bubble here. How does the situation look like nearly one year later?

The way how matters were developing between 2008 and 2009 didn’t really appear too good, which only reinforced all the pessimistic prophecies and only a few people still managed to keep their light-hearted approach. Monthly year to year sales statistics demonstrated a clear decrease, peaking at January’s -47% (compared to January 2008). Now we can declare that Canada has been affected by the “depression panic” from autumn 2008. The real estate market almost froze, regarding that most people were anxious about making any radical financial decisions. Looking at these facts, no wonder that some “experts” foretold that Canada would end up in the same collapse as the USA. Nevertheless, the truth seems to be quite far from these predictions. Let’s look at the 2009 figures.

Number of sales and year-to-year change

The most representative and closely observed numbers. We can clearly watch how the market froze in during the winter. Nonetheless, June sales scored more than four times higher than December ones. In the first half of 2009, the first month when we could notice the sales volume growing was May, in comparison to May 2008. And in June, with its +27%, we could state that the Toronto property market has fully recovered.

Days on market

Whereas the previous numbers draw the bulk of the market, another crucial factor illustrates its speed and freshness. This number is important because from the whole market volume statistics we cannot tell how long it would take for your property to get sold - it just gives us another viewpoint of the same issue. Even in the most difficult period in January, the average “days on market” figure was only some 14 days higher. Confronted with South Florida or Detroit, where days on market value reached 120-150 days, our slowdown was ridiculous.

Active listings flow change

We can estimate the mood of the real estate market when looking at this number. It is based on observing the number of new listings on the market. If the home owners are afraid that their property value would decrease and they want to save their investment, the inflow is naturally increasing, while the opposite situation is generally considered as a favourable time to purchase property. It can foretell the future of other indicators - we saw positive change in listings flow after January as a market turn sign.

Average price

This is the number that my real estate clients usually consider as the most important. Your dwelling is the biggest part of your overall property and every move up or down means you lose or gain thousands of dollars. The price decrease of autumn 2008 was already overcome in April.

What is the explanation for such good outcomes?! Even now, pessimistic news about the state of our economy are coming out almost daily. So how can we explain the fact that the real estate market has recovered so soon? We can name two most important factors:

1. Failed expectations

A lot of Canadian inhabitants supposed their housing market would collapse, as they witnessed the situation in the USA. However, what is crucial to emphasize here is the fact that the problems in the USA arose from the subprime sector. Few defaults at the beginning provoked a chain reaction. It started with a price fall, and as a result foreclosures and short sales were not covering all the toxic loans, so the banks were forced to put even more foreclosured homes on the marked, which decreased the prices even more. The subprime sector in Canada is quite limited with a minimum of foreclosures. If we add it up with a healthy (and we can spell it out and say exceptionally healthy) financial system, we get the result that our housing market has been secured by this. As soon as property owners became aware of this, they calmed down.

2. Stabilized economy and buying opportunities

Now we will shortly analyze the figures about inflation, unemployment, GDP predictions and interest rates. These are very important for real estate (look at real estate prices background). Despite the fact that these figures concerning employment or economic growth could look even much more optimistic, we can be quite calm: our economy is far from a collapse, it is only slowed down, in a stagnation period. All these arguments also helped to stop the winter real estate fuss.

Conclusion and the future

Toronto housing market has first very well sustained the pessimistic mood during the winter months, and then it has pulled together very quickly. Now it is getting better again and condo resale market can be even evaluated as hot in the present. Especially people shopping for their first house have now terrific chances, looking at the low interest rates and good prices after a year break. It’s also exciting time for investors to pick some cherries, which prices haven’t recovered till now. Due to the market speed, most houses are now sold during the first month on the market and the selling price is usually quite decent. So the vendors can feel calm too. But we have to bear in mind that there is still some uncertainty pertaining and that the labor market is not quite up to its previous speed. If we take all this into consideration, we can conclude that in the next few years, a bubble is unlikely to appear and that prices will probably grow only moderately. As the market grew especially fast in June (+27%), it is clearly getting to catch up for the previous weak months and soon it will probably be steady again. Toronto real estate market forms a compact foundation of stability for Ontario’s economy in wild times.

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Have you ever thought about the reasons for the changes in property prices? In this article, I will go throught the main causes for the property prices´ shifts. I am writing from many years of experience as a Toronto realtor.

How to determine the next price move? How to determine when is the best time for an investment? Most buyers just watch for the previous direction of prices. To say it differently, what buyers expect is mostly influenced by previous movement. If the prices rise they expect the growth to continue, and vice versa. Sadly, this method has not much in common with important factors that determine the price, but yet it is often practiced. Relying on this method alone can produce very painful experiences, just as we saw not too long ago.

Which economic factors in principle is then responsible for creating the price?
- Economic growth
- Nominal interest rates (before inflation) and structure of mortgage products
- Inflation
Let’s look at these factors in more detail.

Strong economics will have a good influence on business every where and real estate is no exception to this. One of the explanation states that strong economics increases the property prices by reassuring the buyer that the demand for housing will continue, his property will gain in value and he will be able to pass it on again with profit. When considering the BIS Quartely Review, it indicates that a 1% rise of GNP is linked with 1% to 4% rise of property price after 3 years.

For the property prices to go up you firstly need plenty of eager buyers. As a result of the fact that many people can not buy a property without some sort of house lone, many buyers are eager to instead buy houses when there are attractive mortgage products with low nominal interest rates. According to the refered source, a 1% drop in the nominal interest rate can be linked with 1/2% to 1% rise in property prices after 1 year. Similarly, buyers get easily influenced by the smallest rise in the nominal interest rate which in reaction causes a settling of property prices. Be careful though since no rule should be strickly interpreted. To give an example, a credit crunch is the situation that arises when offical interest rates start to get less important and the loan market falls under the influence of the different factors. It works similarly with the real estate market.

Inflation influences changes in the level of interest rates and at the same time the interest rate strongly impacts property prices. High inflation has a different impact in different countries. Countries that consider investing into property as balancing the inflation, will have their property prices increased by higher inflation (for example Germany). Such countries are characterized by fixed interest rate loans without equity withdrawal. However, high inflation will have a bad impact on property prices in countries where interest rates are floating, as in the UK, or with equity withdrawal as in the USA.

Each rule has an exception and numbers and values mentioned don’t have to suit your neighborhood. It’s realtor’s job to know the exceptions and differences. However, it is important to note that a general system is used by means of which real estate prices are created on the market. Don’ t get caught by a lack of attitude. It is necessary to take in all matters connected with the market.

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