real estate market

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Housing Craze Spilling Over Into Condo Market in Lotus Land

Published May 10, 2017 by Real Estate Leads

The Foreign Homebuyer’s Tax instituted in BC last year has no doubt cooled housing prices in the city as intended, but it would appear that some of that buyer focus has shifted from detached homes to condominiums. That’s likely both a direct and indirect result, especially considering that while condos have been a nearly as popular choice for buyers looking for an investment property in Metro Vancouver, they’ve also commonly been the standard entry-into-market choice for young professionals and working couples who have yet to start a family.

Here at Real Estate Leads, we’re eager to continue providing a valuable marketing resource for realtors but we’re also keenly aware of some of the challenges, risks, and – for lack of a better word – general craziness that are marked characteristics in Canada’s big cities at this time.

After a heated four months for condos and townhouse sales, the average sales price for a condo on the west side of Vancouver is now nearly $1 million. Condos have indeed been quicker to recover than single family houses in response to the 15% tax, but of course the trickle down effect is both frustrating many qualified potential buyers as well as forcing other prospective buyers further down the chain.

Recently, realtors have made note of incidences where ‘extreme bidding wars’ that they typically only saw with detached homes are now becoming common for Condos in downtown Vancouver and on the city’s desirable west side. Some condos are selling for in the vicinity of 100k more than listing price, and according to agent Darryl Shaburo of Park Georgia Realty, “what’s quite marked about this trend is that these buyers are quite willing – and able – to compete and continue to outbid their competitors to numbers that most people find quite staggering for 800 to a thousand square feet of real estate.”

April of 2017 saw the average price for a condo in Vancouver west of Commercial Drive rise to $969,579, compared to $572,000 for East of it. What Greater Vancouver’s REB prefers is to use a measurement called benchmark price, which the board says more closely represents a typical housing unit. The April benchmark price for Vancouver West condos would seem to be more relatively indicative at $718,400 and $480,300 for Vancouver East, but agents and insiders say that doesn’t take into account the new phenomenon of ‘super bidding.’

The Concern of House Poverty

Furthering the issue is the fact that demand continues to far outstrip supply, and that is one of the trends in real estate in Vancouver that’s unlikely to change soon, if ever. Shaburo states that market is picking up these days, however, as it “always tends to do during the spring season.”

The greater concern in the big picture, and both for individuals and for the Canadian economy, is that by paying such exorbitant prices for housing – condos and detached homes – they will become what is called ‘house poor’ and be put at significant detriment due to carrying such a large household debt. As this becomes more common, it of course lends itself to premonitions of the ‘housing bubble burst’ that occurred in America in 2008.

We’re a ways from that in our opinion, but there has to be concern here. Both on the national interest level, and in making housing affordable for the people who make cities breathe and not just those who have the finances required to make investment purchases. Balance is essential.

As realtors, we stand to benefit from a profitable housing market, but it must be a healthy housing market as well. Plus, a great many of us actually live in these cities too! You want business to be good, and doing good. In in the interest of the first part of that, we suggest you check out Real Estate Leads and enjoy qualified online-generated seller and buyer leads delivered to you exclusively for your exclusive region of any specific locale in Canada

Analyzing The New Nationwide Mortgage Regulations

Published April 19, 2017 by Real Estate Leads

One of the best pieces of advice you can give to help a realtor get more listings is to put in the time and network, network, network. For a prospective homebuyer who needs a mortgage to purchase their first home, one of the best things they can do is familiarize themselves with Canada’s new mortgage regulations and how they’ll affect their purchasing power. So feel free to pass this correspondence along if you know anyone it might benefit.

It was late last year that Canada introduced its new mortgage rules, and the term that was used for them was ‘promoting responsible homeownership’ – which in large part means more of buying a home to live in it rather than as as a speculative investment purchase. So while the changes were geared toward curbing foreign real estate speculation and, to a lesser extent, promoting low loan-to-value mortgages, for the majority of Canadians what matters first and foremost with the new regulations is how it will affect affordability for the average Joe or Jane.

More specifically here to put some parameters on our discussion, let’s say they’re a first-time homebuyer purchasing with less than 20% down. Or what’s called the interest rate stress test.

Let’s also preface somewhat by looking at how the affordability of Homeownership has been helped in recent years by low interest rates and the availability of high loan-to-value mortgages backed by mortgage insurance. What would be the result, however, if those rates jumped as they’ve been known to do? The government’s response to what could potentially be a bubble bursters was to introduce tougher interest rate stress-test criteria in the latter part of 2016, aiming to make perspective homebuyers aware of the potential for a future rise in interest rates.

So if you’re an average homebuyers with the on-paper means to afford a home – but not endlessly deep pockets – what does all this mean for you? The less-than-rosy answer is that you’ll likely have less money to work with. Here’s why.

Taking The Stress Test

Lenders and mortgage insurers will weigh two debt service ratios when qualifying you for a mortgage and mortgage insurance.

-Gross debt service (GDS)
These are the carrying costs of your home, such as mortgage payments, taxes, heating, etc., and how they stand in relation to your income.

-Total debt service (TDS)

The sum of your home carrying costs (mortgage payments, taxes, heating, etc.) plus your debt payments (credit cards, student loans, car loans, etc.), with all being measured in relation to your take-home income yearly.

To qualify for mortgage insurance, the highest allowable GDS ratio is 39%. The highest allowable TDS ratio is a little more accommodating, coming in at 44%.

Many prospective buyers will technically at least qualify for a fantastic five-year fixed mortgage rate from your bank (2.94%, for example), but it’s now important to keep in mind that the new rules use the Bank of Canada’s five-year fixed mortgage rate (4.64% at the close of 2016, for example) to make a determination on whether you can afford your mortgage payments.

The purpose of this stiffer affordability standard is to serve as a buffer to test whether you could still afford your regular mortgage payments if (and some economists state it’s quite likely) interest rates were to rise dramatically.

Bottom line is, the new rules mean you can afford less house for your income – approximately a 20% to 30% reduction in the mortgage amount most first-time buyers would qualify for.

Best Plan For Prospective Buyers

These new mortgage rules will likely not be reevaluated for many years now. However, many buyers will still be able to work within them. A revision of plans or timelines may be needed, but first-time homebuyers can still get into the real estate market.

Smart prep work in advance of buying your first home will be to lay the groundwork for this responsible homeownership they speak of: start by reducing your consumer debt, saving for a larger down payment (a big one!), and finding a way to boost your overall financial fitness.

Help your clients with their mortgage needs by recommending them to a mortgage broker you trust, and see to it you have more clients to refer in the first place by checking Real Estate Leads Availability here and having qualified online-generated leads in your area provided to you exclusively.

Hard to Argue Against Concerns Over Vancouver / Toronto Market Outlooks

Published April 14, 2017 by Real Estate Leads

There’s been a whole host of different opinions on the state of the markets in Canada’s 2 biggest cities, and ones where – not surprisingly – there’s the most demand for housing and the ever-increasing development of ‘bubbles’ of the same variety that proved to be the start of a major detrimental turn events in the USA nearly 10 years ago now. Here at Real Estate Leads, we have endless tips for realtors but we’re not exactly experts on the connection between the economy and housing investment in Canada

There was a recent interview with someone who most definitely has the credential to say he is an expert. Royal Bank of Canada CEO Dave McKay was one that didn’t see things as rosy (or perhaps ‘rosier’ would be more accurate) as others do, and considering he’s the head of a major financial lending institution you can imagine he’s got his thumb on the pulse of all this in a way most of us couldn’t even begin to.

An Unhealthy Combination

McKay attributed the rapid increase in housing prices in the two cities to an “unhealthy combination of factors” and went on further to cite an imbalance in supply and demand for residential properties, low interest rates, and speculative activity.

“All of these factors are mixing to push prices up to unsustainable levels, stressing household balance sheets and locking many people out of the housing market,” McKay remarked at the bank’s annual general meeting in Toronto on Thursday.

“More and more disposable income is going towards servicing those houses,” he said, adding further ” and more capital is getting invested in those homes. And the real risk for us as an economy is the long-term drag that has on the rest of the economy as so much of a person’s net worth and cash flow goes into servicing their home.”

As stated, this kind of precarious arrangement was a big part of what preceded and initiated the crash in the US in 2008, and the concern of course is that something similar could happen here.

More of the Up, Up, Up

McKay offered his observations a day after the latest data from the Toronto Real Estate Board showed the average price of a home in the Greater Toronto Area increased by 33% over the last 12 months concluding at the close of March 2017.

What’s come as a result is a whole array of responses about what can be done to rein in housing costs in the city, which are now spilling over to the rental market via exorbitant rent increases. After all, the operating principles of supply and demand never really change.

What’s Up Out West

While it is true that price increases in Vancouver have cooled off, Lotus Land has also seen runaway double-digit gains, month after month after month, until the implementation of a 15% tax on foreign buyers last year.

McKay believes one single solution being applied to the entirety of these problems is unlikely to be successful.

He said interventions from federal, provincial, and local governments to come up with a more nuanced solution to a very complex problem would have much more propriety.

“We would welcome any effort by the three levels of government to coordinate their interventions, and to do so reasonably quickly,” he said.

“But longer-term, I believe all parties need to come together — governments; developers; realtors; banks; community groups and others — to accelerate our progress in finding policies and solutions for this issue.”

2 Further Sobering Statistic Comparisons

In bearing out a good portion of what MacKay has alluded to, have a look at these 2 charts indicating average home prices in both these cities in comparison to others, along with what is required for a down payment on that home.

Purchase prices

Vancouver: $420,000
Calgary: $370,000
Toronto: $425,000
Montreal: $250,000
Atlantic: $185,000
*National median: $293,000

Down Payment

Vancouver: 20%
Calgary: 10%
Toronto: 21%
Montreal: 13%
Atlantic: 8%
*National median: 12%

Of course, that means business is good for realtors in Toronto and Vancouver, but the need for housing is a social issue and naturally we all take a vested interest in the well being of that.

Check Real Estate Leads Availability here and help yourself to a bonafide lead generation system for realtors that’s great for ANY region of the country, even the hotbeds of Vancouver and Toronto.

Creating Yourself as a Brand as a Realtor

Published March 27, 2017 by Real Estate Leads

Here at Real Estate Leads, we won’t even began to suggest we’re experts on the subject but we do know of a number of tips for getting ahead as a realtor. These days – in the age of digital media – one of them most prominent of them is being able to create yourself and your services as a brand all within itself. Some of you may not know exactly what that entails, so let us explain.

What Exactly is Branding?

To give a definition, branding is “the marketing practice of creating a name, symbol or design that identifies and differentiates a product or a service from other products or services. In a nutshell, a brand is what sets us apart from our competition.

That’s exactly it – we want to secure greater numbers of clients, and setting ourselves apart from our competitors in the industry is key to doing that. Clients have choices – plenty of them. Being really good at what you do just isn’t enough. You need to start making yourself recognizable as a distinct choice for them. Different from others. A unique name or catchy slogan won’t come even close to doing that on their own.

Every part of your marketing collaterals need to be geared towards creating a greater ‘whole’ – if you will – that’s regarded by prospective clients as a brand.

What Makes Up a Brand?

There is the “look of a brand” or the visual components. This can include logos and colours that you use on your website, specific repeated images, communication language choices, etc.

To use a very well known example, think about Apple. The distinctive logo, the “i” precursor in the titling of its products, etc. You associate a quality personal computing product when you see them, right?

When done properly, your brand will tell your customers exactly who you are and what they can expect when they use your company.

Creating your brand involves online and offline strategies, and that probably comes as no surprise. Your brand might begin with your website. Give some thought to the following; when someone goes to your website from one of your promotions, what do they see? Do they see the same logo? Do they feel like your website is an extension of your personal brand that you have built? If you can’t say ‘yes’ to that definitively, you either may not have much of a brand for yourself, or your brand is a work in progress.

That’s perfectly fine, and it’s not like this has been a staple process for realtors for decades. We’re still adjusting to the information age.

Getting Started

You want to create a ‘total’ brand. That’s the sum of two parts; the first being your companies brand (likely already well established if you’re part of a major brokerage) and the second being your personal brand (which again, is perfectly natural to be lacking at this point) The first step here – again considering we’re in the 21st century – should be a no-brainer. Secure a domain name that is immediately associated with ‘you’ as a realtor. And yes, that’s your name!

If you don’t already own your “name domain” you should get that as soon as possible. So if your name is Ron Donaldson you will ideally acquire the domain rondonaldson.com. Don’t delay in making the inquiry with a reputable web hosting provider asking if that domain name is available

Next up is a sharp, distinctive logo that speaks to who you are – both as an individual and a professional. Don’t hesitate to hire a creative designer who can coax ideas out of you if you’re at a loss for them yourself. You can get a simple logo on Fiverr.com for just $5 bucks or if you want to spend a little more you can check out companies like 99designs.com.

On to your tagline, or slogan as it’s also called. It should tell everyone what you do, but not be so plain and obvious as ‘I sell homes.’ Try to be creative, and again it’s vastly preferable to hire a communications pro rather than settle on something you came up with yourself if you’re really not sure about it.

Just do a little brainstorming to come up with your own tagline. This is just one more way your customers can remember you.

Consistency is Key

Before you begin this whole process of building your brand, you want to spend some time thinking about the big picture. Everything that is used in your business should contain the same branding. The same logo, colours, and tagline should be incorporated uniformly with all of your printed materials – letterhead, newsletters and business cards, all pieces of marketing collateral. The look and message of your website should be consistent with this too. If you buy company apparel you will want those to be the same too.

Your brand should embody your values, your ethics and your way of doing business, along with a healthy bit of who you are ALL the time, not just when you’re working as a real estate professional. The brand that you create is how you want people to think about you. Just remember that if you aren’t able to deliver what your brand promises or what it stands for, then a nice logo and some cool colours won’t make up for that.

We’ve just scratched the surface of what brand building for realtors entails here, but there’s a wealth of information out there for you and we’re happy to introduce you to the idea if it’s something that’s unfamiliar for you. Advancing your real estate career is going to be a priority for all of you, and it’s a great idea to sign up with Real Estate Leads here for qualified buyer and seller real estate leads delivered to you each month for your (and yours alone) territory in Canada.

Quarter-Mark Stats & Trends

Published March 22, 2017 by Real Estate Leads

Here we are almost at the quarter mark for the year, and here at Real Estate Leads we like to discuss the state of the markets from coast to coast, in addition to providing a valuable online resource for real estate agents.

Vancouver and Toronto continued to see significant price appreciation in the first quarter of the year. In keeping with that, the average residential sale price of a Vancouver home in the first quarter of 2016 – compared with the same period for 2015 – rose 24%, while single-family homes in the city of Vancouver were selling for upwards of $2 million on average. In the Greater Toronto Area, the average residential sale price during the first quarter rose to $675,492, up 14%.

Inventory continues to see reductions in both cities. Competition among buyers has discouraged sellers from listing their properties, and while sellers know their homes would be quick to sell there are conversely many who are reluctant to become buyers themselves and enter what continues to be a highly competitive market. In addition, some potential sellers are hesitant to list their homes, buoyed by a belief that home prices could appreciate further.

Nest Eggs

Keep in mind as well that many Canadians are relying on their homes as a source of retirement income. They will move cautiously accordingly. According to a recent RE/MAX poll conducted by Leger, 56% of Canadians aged 55-64 who are considering selling their homes will be selling to release equity for retirement. Outside of Vancouver and Toronto, surrounding regions continue to experience a ‘spillover’ effect. This means buyers are moving farther out in search of affordable single-family homes. This has led to significant price appreciation in regions such as Victoria (+10%), Hamilton-Burlington (+10%) and Barrie (+14%). The population growth in these regions – in large part driven by housing demand – is providing a related boost to local economies as restaurants, shops and services expand.

In Flux

Some Canadian cities have experienced an economic slowdown due to the significant drop in the price of oil, and for these cities there are a pair of factors that have been mitigating the short-term economic effects. Take Calgary for example. It has a diversified economy after years of population growth, while Edmonton and St. John’s are benefiting from numerous capital projects in the region including infrastructure investments and continued investments from the oil industry.

Conversely, other areas of the country have benefited from the return of workers who had moved away to pursue employment opportunities in the West. Regions that for years experienced an exodus of their young working population as they headed to Alberta have started to see that trend reverse. In Atlantic Canada, young people from outside the urban centres who would have moved west several years ago are now going to cities such as Halifax. It’s having a positive effect on those economies.

This trend is notable in Southern Ontario, where manufacturing cities are offering greater numbers of employment opportunities as a result of the low Canadian dollar. Windsor previously had one of the highest unemployment rates in Canada, but it is now trending below the national average. It’s expected that this trend will continue for smaller cities in Southern Ontario, and that’s good news for the regions.

In Canadian housing markets where prices have softened, construction has also slowed to align with decreased demand. This is expected to stabilize prices as population growth catches up to inventory levels. When you consider that Canada is on track to welcome approximately 300,000 new permanent residents this year – the highest number since 1913 – that trend is particularly noteworthy with everything it connotes for certain cities.

We’re eager to see what the next quarter-year has in store for us, and as things look up it means even more in the ways of opportunities for realtors to find new clients. Sign up here for Real Estate Leads and have qualified buyer and seller leads provided to you every month.

Tips for Even More Success with Open Houses

Published March 14, 2017 by Real Estate Leads

If you’re a successful Real Estate Agent, chances are you spend nearly every Saturday and Sunday holding Open Houses. And while that keeps you very busy on the weekends – truth is, you wouldn’t have it any other way! These events are an integral part of the selling process for homes, and prospective buyers obviously put a lot of value in their ‘walk through.’

We imagine you hold great open houses, and that a good many of them lead directly to you matching the right buyer with your seller. But there’s always room for improvement isn’t there? Here at Real Estate Leads we’re all about advice for real estate agents, so here’s 10 tips for making your Open Houses even better.

Advertise online: This is a no-brainer these days of course, but advertise online with an aim to STAND OUT from all the listings in the neighbourhood. Write colourful, descriptive ads and place them in web classifieds or open house directories, too. Post Internet listings everywhere.

Map your open house signs: Find the busiest intersection closest to your home and put an open house sign at that corner, with arrows pointing buyers in the right direction. Repeat them every few blocks until you end up at your house, and don’t be afraid to jazz them up so that they’re remarkable. It helps!

Remove all vehicles from the driveway: A clear and unobstructed view from the street is preferable. If you feel comfortable, ask the neighbours to help out by not parking in front of your listing.

Let in the Light!: Open all the drapes, blinds and window coverings –– natural lighting does wonders for the real ambiance of a home shining through. This is true even if it’s not sunny outdoors.

Serve beverages and refreshments.

Do NOT use air fresheners of any sort: Many people are allergic to synthetic odours.

Illuminate!: Turn on every light in the house, except lights that produce noise such as exhaust fans without separate on / off switches.

Soft, pleasant music: If possible, play it at an appropriate level on each floor to help set a mood.

Have good looking print collaterals for buyers: 4r-colour flyers filled with quality photos and attractive points for the property should be available for all buyers, even if more arrive than expected.

Do the same for materials with financing options so buyers can make estimations regarding financing and long-term affordability.

Being upbeat, cheery and greeting each buyer who enters the home is also highly advisable. Try to prioritize your movements around the home and similarly try to be engaged with all guests in a timely manner. Find out what the buyers are looking for and, if possible, show them why your home fits those requirements.

And last but not least, ask for feedback. Ask each buyer what they thought of your home and would they consider buying it. Agents and sellers can be hesitant to ask for a buyer’s opinion, but just put your apprehensions away and ask. It’s the only way you’re going to get a direct answer, and the answer just might surprise you and help you make more informed choices.

All the best in your ventures this week, and we always welcome feedback here. Sign up with Real Estate Leads to receive qualified monthly leads provided to you exclusively as the only realtor assigned to a specific area of the country. It’s a big plus and definitely worth the investment!

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:

Affordability
Resale Market Balance
Rental Market Balance
Interest Rates
Labour Market
Demographics
New Home Inventory – Singles
New Home Inventory – Multiples
Homes Under Construction – Singles
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?

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

A 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!