Sunday, September 10, 2017

Real Estate Insider: September 2017 News Report


Welcome back to the Lalovich Real Estate Insider! We've been busy reading a tonne of topics and wanted to share the best finds with you. How much do you need to make to buy a house in Toronto? How did a multi-million dollar home street sell for less than $100k in California? What does the end of the Canadian housing bubble market mean for you? Find out the answers and much more in this edition. Enjoy!

Don’t be tricked by ‘buzz words’; make sure you know your options when applying for insurance. >>


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Looking at the house price-to-rent index, to balance out from the recent spike in housing prices, value either needs to go down or rent needs to come up. Based on this, the OECD predicts a 28% decline in home prices by 2020. Read more here >>

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The Ontario Real Estate Association is stepping up to become the self proclaimed “watch dog” for the industry’s regulatory body. This transformation is catalyzed by the fact that as of 2020, they will no longer be providing real estate education. Read more about the transformation here >>

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Thinking of becoming a landlord? Here are 10 tips to follow to make your rental property a successful one. >>

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A change of heart ended up costing this buyer $360,000! Learn why walking away from a deal could cost you more than just your deposit. >>

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While the housing boom drew thousands into the Real Estate career, the inevitable slowdown is expected to decimate the ranks of the inexperienced realtors. >>

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A private street in San Francisco with 35 Mega-Million Dollar mansions was sold to a couple for $90,100… all because of a $994 unpaid tax bill. Read why here >>

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Are you getting the best rates on your mortgage? Experts say people need to start comparing mortgage rates the same way they do when booking flights or hotels. Read the startling facts here >>

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Thinking of moving to Toronto? A recent study has found that to afford the average detached home, residents need an average income close to $200,000. >>

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Deciding what to do with your rental properties? Considering entering the rental property market? Be sure to read this list of every indicator to consider when selling an investment property. >> 

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Going with traditional: a new mixed commercial/residential building is planned for an empty Walkerville area lot, becoming one of the first buildings of its type built there in a long time. >>

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Learning from past mistakes: it seems as though Canada’s housing market bubble is officially over, without the notoriously feared “pop”. >>

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Buyer's remorse: people are scrambling to close after the recent cool down of the housing market. >>

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The real estate association believes it's time to increase the penalty for unethical behaviour in the real estate profession and is lobbying for stricter regulations due to the fact that the current regulations are close to 15 years old. >>

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Feel like you're paying too much for your mortgage? It's likely you've made one of the top five costly homeowner financial mistakes. Find out here >>


Thursday, August 31, 2017

Basement Flooding 101


In our area of Windsor, Ontario, we had some very heavy rains this week. Although nothing comparable to some of the devastation in the Houston, Texas area, many people suffered substantial damage from basement flooding. The condo building I live in had 2.5 feet of water in the parking garage ☹. We thought this friendly reminder on basement flooding tips would be timely.

Follow any directives to turn off utilities. If you’re advised to switch off the main power source to your home, flip each breaker and then turn off the main breaker. You may also need to shut off the main valve for your home’s gas and water.

  1. Be aware that submerged outlets or electrical cords may energize standing water. Keep the power off and do not enter a flooded area until it has been determined to be safe to do so by a professional.
  2. Have an electrician inspect electrical appliances that have been wet. Do not turn on or plug in appliances unless and electrician tells you it's safe.
  3. If the flooding is due to a sewage backup (or you are not sure), do not flush the toilet, run a washing machine, dishwasher or any other feature with a drain since this will likely increase the flooding.
  4. Report the issue to the municipality. Documentation of flood locations helps municipal staff determine if any work is required on municipal infrastructure.
  5. During clean up, provide as much ventilation as you can. Open windows if weather permits and use fans to dry things out.
  6. Call your insurance company immediately. They will advise you on standard clean up procedures, contractors to call and claim information.
  7. Make sure you take lots of pictures and document items that have been damaged or need to be replaced. Before you head out and start buying new stuff, make sure you are familiar with the coverage you have with your insurer. Keep any and all receipts for emergency work done, purchases, and/or repairs.
  8. Insurance companies look favourably on homeowners wanting to undertake work on their own to reduce the likelihood of future flooding. Repeat claims with no efforts to reduce future risk may be sufficient for an insurance company to drop that form of coverage in the future.
  9. Take preventative measures in the future to make sure the water stays away from your basement as much as possible. These include: making sure downspouts are extended and flow away from the foundation, gutters are clean and flowing, grading isn’t low in any areas and if it is having it filled it to flow away from the house, and having the sewer lines checked annually to make sure they are flowing and not backed up and possibly having them eeled out if need be.
  10. If the preventative measures don’t work at keeping the water away, you may need to look at additional upgrades including: adding in a sump or multiple sumps with battery back ups, a back flow (check flow valve) to stop the sewer back up, doing the weeping tile along the perimeter of the basement, and digging up the exterior of the house to add a waterproof membrane.
Sometimes when we get a huge rain storm in a short period of time, there isn’t much you as a homeowner can do. Knowing some of these tips can help keep you safe next time and hopefully minimize the damage. Stay dry out there!


Friday, August 18, 2017

Escalation Clause? What Is That?



Have you heard the term escalation clause?  Chances are you haven’t unless you’ve been involved in a bidding war as either a buyer or seller in the last few years.  Today we are going to discuss the controversial subject of escalation clauses and what you should know.

What Is An Escalation Clause?
An escalation clause is a clause in the schedule of an offer which is designed to defeat competing offers by automatically increasing the Buyer’s purchase price by a pre-set amount over the highest offer.  Usually there will be some sort of cap placed on the escalation clause where the buyer won’t go over that amount should the best offer exceed it.

When Would An Escalation Clause Be Used?
An escalation clause would be used in a multiple offer situation (bidding war), where the buyer wanted to ensure they have the highest offer price.

How Would An Escalation Clause Work?
An escalation clause would state that the buyer agrees to pay a certain increment over the highest offer received.  For example, say there were 5 offers on a listing and one of them had an escalation clause, stating that they would pay $5,000 more than the highest offer received.  Suppose then that the highest offer was $500,000.  The buyer with the escalation clause would then agree to increase their offer to $505,000.  The logistics of how to accept the escalated offer vary, but the most common way would include the seller countering the buyer’s offer at $505,000 and having the buyer accept.

Why Is This Subject Controversial?
There are a few inherent conflicts with the inclusion of escalation clauses in bidding wars:

  1. It hurts the confidence of buyers when submitting an offer.  Feeling that dealing with this sort offer is unfair, buyers may decide not to participate in these competitive situations.  That could affect the confidence of the market overall.  Some of these bidding war practices already have buyers feeling discouraged, so it feels like piling on.
  2. There is a privacy issue.  The only people in a multiple offer situation who are supposed to see the contents of buyer’s offers are the listing agent and the seller.  In an escalation clause situation, inherently the price of the highest offer is disclosed to the buyer with the escalation clause – this really cant be avoided.  And this contradicts many RECO rules.

What Is Happening In The Market Because of Escalation Clauses?
Although not illegal, the escalation clause use has been frowned upon in the market in our experience.  Generally, we are seeing listing agents and sellers deciding not to deal with offers that include these clauses, and stating so right in the listing.  This eliminates the potential unfairness to prospective bidders and increases the confidence in the offer process.

What Do We Think Will Ultimately Happen To Escalation Clauses?
We think they will eventually be banned by the governing bodies.  The cons seem to far outweigh the pros in the market.  And real estate professionals have been banning them from their listings for a while now.


So there you have it readers.  Do you or anyone you know have any experience with escalation clauses?

Thursday, August 3, 2017

Real Estate Insider: August 2017 News Report




Thanks for joining us for another edition of the Real Estate Insider! We've come across so many topics we know you won't want to pass up. So kick back with a coffee and browse through our collection of findings.


Controversy over the Escalation Clause! A clause designed to automatically defeat competing purchase offers, it sometimes unintentionally discloses the price and contents of competing offers. Should they be banned all together? Most realtors think so. >>

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Nationalism at its finest! Meridian shows its pride for Canada’s 150th birthday by offering a 15 month fixed mortgage rate at 1.5% to help people live the Canadian dream. >>
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‘Flipping Crazy’ Canadian TV series aimed to give viewers a first hand interaction with the step by step process of house flipping set to debut on Amazon later this fall. >>

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Whose side are you on? Ontario may be forcing Realtors to choose by banning the ability to represent both the Buyer and the Seller in a deal, fearing it could create unethical behavior. >>
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Communicate value, not statistics! With vast information available to everyone at the click of a button, it’s how you interpret the information that makes you valuable as an agent. Learn how to translate information rather than regurgitate it to prove your worth as an agent. >>

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Location, Location… Location? Is living in Toronto or Vancouver really worth 70-80% of your total income? If you want to live there you better believe so! With housing affordability deteriorating across Canada, a rate hike is causing fears that some people in these highly sought after areas might run out of money for necessities. >>

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Canada’s banks are on the ball! Less than 24 hours after the BoC announced they would raise its rate 25 basis points, banks such as RBC wasted no time raising its rate 0.25% with hopes that this raise will be a positive development in the housing market. >>

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Getting back under control. The measures taken by policy makers to try and cool down the rapidly inflating housing market seem to be taking effect, as June home sales experienced the biggest decline since 2010. >>

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Are self driving mobile homes the “starter home” of the future? With the ability to commute while you sleep, eat, work, etc. The synergistic relationship that this vehicle offers could be very appealing in the near future! >>

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Windsor’s hot selling market is showing its effect on the rental market, with rent increasing by 2% from last month. >>

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Don’t go with your gut! This company is taking the guesswork out of potential tenant screenings, giving you the data necessary to make an informed decision, instead of relying on a simple interview or credit report. >>

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Condo owners get ready! New rules and regulations protecting condo owners are taking place this fall. >>



That's a wrap for this edition. Have a real estate topic you think we should cover? We want to hear from you! Send us your comments and your suggestion could be our next blog topic. Happy reading and enjoy the rest of summer!


Thursday, July 20, 2017

Review: Bank of Canada Raises Interest Rates



Unless you were on vacation last week, you probably saw the news that the Bank of Canada increased interest rates.  A lot of commentary has followed the move with everyone sharing their opinion on the matter and what it means for the real estate market.  Today we are going to share our take

What should I know about what the Bank of Canada did last week?
The Bank of Canada raised its overnight lending rate from 0.5% to 0.75% last week.  This overnight rate determines the rate at which banks lend money to each other on a regular basis.  This affects the bank’s cost of funds and since the banks lend to consumers based on a spread, this would lead to increased borrowing costs.  This is the first interest rate increase in seven years.

Why did the Bank of Canada raise interest rates?
The bank has 2 mandates:

1. To ensure the economy is operating as close as possible to full employment.
2. To ensure inflation is operating within an acceptable range (generally 1-3% annually).

The bank cited a strengthening economy and expectations for higher inflation as two primary reasons for the increase.  Another reason is that the Bank of Canada acts mindfully based on how the U.S. Federal Reserve acts. The U.S. has increased interest rates three times already this year!  Lastly, the Bank of Canada is concerned about runaway house prices in large markets such as Toronto and Vancouver; they want to reign in speculation and increased borrowing.

What does the interest rate increase mean for me?
The Big Banks in Canada set a prime lending rate based on their cost of funds.  For the last few years, this rate has been set at 2.7%.  Lots of borrowing products, including variable rate mortgages and home equity lines of credit, are based on a discount or premium based on the prime rate (ie. prime -0.50%).  Therefore, rates on variable rate mortgages and other products tied to prime rates will increase as a result.  In fact, the big banks had all increased their prime rate from 2.7% to 2.95% within 24 hours of Bank of Canada decision.  Fixed rate mortgages or loans (being fixed) will not see a change.

How will this interest rate increase affect the real estate market?
When looking at the big picture, this interest rate increase is very small.  Lets use an example to illustrate:

  • The current average home price in Canada is approximately $500,000
  • Suppose your mortgage is based on 80% loan to value or $400,000
  • Let's say your variable mortgage is based on the previous prime rate of 2.7%
  • Now your prime rate is set to increase to 2.95%
  • The amortization period is 25 years
  • Your previous payment was $1831.95/mth.  Your new payment is $1882.73/mth.  An increase of approximately $50/mth.


While $50 extra isn’t fun, we don’t see it breaking the bank in the big picture.  When people think about interest rate increases, they think about rates rising to historical averages of 7-10%.  We are nowhere near this.  It would take a long succession of interest rate increases for interest rates to really affect the market.

Before the rate increase, sales in markets like Toronto were pulling back on the heels of a proposed 15% foreign buyers tax.  Add chatter of increasing rates and all of the sudden people are sitting on the sidelines.  This seems to be more of a perception issue with people reading the headline news.  Prices were already sky high and speculators are pulling back.  It's doubtful that the extra 0.25% on borrowing costs is suddenly making it unaffordable for qualified buyers who were in the market looking already.

In our home market of Windsor, Ontario, with an average price of $267,000, the affordability is very good and therefore this interest rate increase shouldn’t affect demand too much.  Using the same example above, adjusted for our lower prices, we are talking about an increased payment of $27/mth.  Interest rates are still bouncing off a historical bottom and have a long way to go before affecting affordability.


What are your thoughts on this interest rate increase?

Tuesday, July 11, 2017

REVIEW: Ontario Proposing Ban Of Real Estate Agents “Double Ending” Transactions



Over the last few blog posts, we have discussed the Liberal government’s 16-point housing plan they released in the spring.  The centrepiece of it? A 15 percent foreign buyers tax and expanded rent controls.  Another plank was reviewing the rules for real estate agents to ensure consumers are fairly represented.

The government has now published several proposals for changes to real estate agent rules and penalties and is seeking public consultation on them.  One of the proposals is to ban — with some limited exceptions — salespeople from representing both the buyer and seller or more than one potential buyer in a trade.  Today we are going to discuss what you need to know about double ending and how banning it will affect your future real estate transactions.

What is Double Ending?
Double ending is a term used to describe when the Listing Agent for a property represents both the Seller and the Buyer in a transaction.

What should I know about Double Ending?
Double ending usually occurs when a Buyer doesn’t work with an agent and searches for properties on their own.  Once they find a property, they deal directly with the Listing Agent.

In the above situation, the seller is being represented by the listing agent by their listing agreement.  They would call this an agency relationship.  The buyer is only dealing with this agent because it is his listing.  In this instance, the relationship is called Buyer Customer Service.  It would be considered agency if the Buyer had enlisted the same Agent to find them a property, and most likely signed a buyer representation agreement.

Most of the time, these double ending situations arise from the former, where a Buyer without an Agent deals directly the Listing Agent.  The later example would be rare.  

Why is the government concerned about Double Ending?
This is a pretty straightforward one.  They are taking the position that it is pretty hard to work in both the Seller’s and Buyer’s best interests, at the same time, given that their interests are directly opposed.  It’s more difficult to maintain confidentiality as well when representing both parties.  Its easy to see how this could be abused in the wrong hands.

What does this mean for me on my next real estate transaction?
If this proposal is passed, when buying your next listed property, you would be required to hire your own realtor, more than likely under a buyer representation agreement.  This would mean there would be agency relationships on both sides of the transaction and in theory both parties interests should be protected.  Our guess is that there will be some exceptions to the rules but we will have to see how it plays out.


What are your thoughts on double ending?  Have you had a double ending experience in your real estate travels?

Wednesday, July 5, 2017

Real Estate Insider: 2017 Summer Report



Welcome back, real estate readers! We are going to be adding a new monthly series to our blog. In addition to interesting real estate blogs, we'll be including helpful articles and subjects we think you'll benefit from reading. Last month, we found a treasure trove of insider info we just can't help but share.


Worrying about your credit score? Make it a thing of the past! CIBC is set to launch an easy-access platform for all clients to check their credit scores whenever they want, indicating the importance of everyone being comfortable and up to date with their financial situation. >>
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How much do you know about your condominium’s governance? After investigating some questionable practices in downtown Toronto, this article gives tips on what you should be doing to ensure that your condo is well-managed. >>
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Are we digging ourselves into a deeper hole with the Foreign Buyers Tax? The Montreal Economic Institute says that public decision makers are “missing the mark” and that this tax will do the opposite of what it was imposed to do. >>
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Trying to halt the train! Chief economist at the Canadian Real Estate Association says Torontonians should prepare for a possible tax on speculative home purchases to try and stop outrageous house prices, but will it work? >>
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What goes up, must come down. Home sales dropped 6.2% from April to May 2017, signifying the largest drop since August 2012. This could possibly mean the market is beginning to balance itself out once again. >>
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Is your house under seven years old? Make sure you know about the new home warranty program in Ontario and the changes coming! >>
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Could the legalization of cannabis affect the real estate business? Who should be responsible for all the costs and risks associated with growing marijuana plants? This commentary discusses some of the legal implications that could come with the industry. >>
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Risk big, win big. With interest rates set to rise, are variable rate mortgages worth the risk? Locking in your mortgage rate now might be the way to go for the more cautious homeowner. >>
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Canada has a historically moderate financial situation. In the wake of the recent housing boom, learn how the economy is protected with policies like the Foreign Buyers Tax to ensure Canada’s economy is safe now and in the future. >>


We hope you enjoy our findings -- happy summer and happy reading!

Friday, June 16, 2017

Ontario Fair Housing Plan – Takeaways For Windsor-Essex Real Estate Market



The Ontario Fair Housing Plan has now been around for almost 2 months.  The effects are starting to show in the GTA with month over month sales dropping 25%+.  In our last blog we reviewed the highlights of the plan and what you needed to know.  This post we are going to be discussing those highlights and specifically how they affect our home market of Windsor-Essex.

A 15% Foreign Buyers Tax In The GTA
This tax doesn’t apply to our market and only applies to the GTA area.  A large percentage of these foreign buyers were investors and this additional cost will make investing in the GTA less attractive.  With sales down since being introduced, it’s obvious these investors are pulling back.  This should lead to investors looking away from the GTA, naturally coming south where the tax doesn’t apply and their dollar goes much further.  These additional investors will only add fuel to the fire for local investment property demand and could push cap rates even lower.  Residential demand should also get an added boost.

Expanding Rent Controls
With a vacancy rate below 3% in the area, there has been upward pressure on market rents.  These rent controls will affect the functioning of this market and should ultimately lead to a lower supply of rental units pushing down the vacancy rate.  This effect will be seen in all markets in Ontario.

Changes To The Landlord Tenant Act
These tenant-friendly changes should also lead tenants to stay longer in their units when combined with the expanded rent controls.  Turnover should be lower for landlords.  This would tend to lower vacancy rates as well.  These effects will also be seen across Ontario.

Vacant Home Tax
We don’t see much evidence of vacant homes being bought by foreigners in our market.  This is more of a Toronto/Vancouver problem that shouldn’t have much effect in our area. We don’t see The City Of Windsor legislating something like this at the present time.

Levelling Property Tax Levels For New Multi-Residential Buildings
This should help the economics of building rental units, but combined with enhanced rent controls this might be nullified.  The low vacancy rate is supportive but further incentives from the City might be needed to encourage these new rental units.


Those are our local takeaways from the Ontario Fair Housing Plan.  What are yours?

Monday, May 29, 2017

REVIEW: Ontario Fair Housing Plan – What You Need To Know


Housing is all the rage in our province these days.  Everyone is talking about it.  Markets are at all-time highs and there seems to be no end in sight.  It has also become extremely unaffordable in markets like the Greater Toronto Area (GTA).  Naturally, the governing Liberal party has decided to do something about it.  Last month they introduced a comprehensive package of measures to stabilize the market called the Ontario Fair Housing Plan.  Today, we are going to review some these measures.

A 15% Foreign Buyers Tax In The GTA
This is the big one you probably saw in all the headlines.  Essentially, they are imposing a 15% non-resident speculation tax on the price of homes in the Greater Golden Horseshoe Area of Ontario.  The tax will apply to individuals who are not citizens or permanent residents of Canada and foreign corporations.  This will only apply to single family homes (or condominiums), and not to multifamily, agricultural land, or commercial/industrial property.  It will also not apply to the rest of Ontario (including our hometown of Windsor).

Expanding Rent Controls
Previously, rent control only applied to rental units built before 1991 in Ontario, but this will no longer be the case.  The allowable rent increases will be at the rate posted in annual provincial rent increase guidelines and run in-line with the Consumer Price Index (CPI) rate (also referred to as inflation).  These increases will also be capped at 2.5% per year.  For example, if you had a rental unit that was tenanted, when you come up to the 1 year anniversary date from your lease, you will only be allowed to increase the rent by this provincial guideline rate (say 2%).  So if you charged $1000/month, you could increase the rent to a maximum of $1020/month.

Changes To The Landlord Tenant Act
The Landlord Tenant Act is the legislation that governs the relationship between Landlords and Tenants in Ontario.  These changes to the Act will include developing a standard lease in multiple languages, tightening provisions for “Landlord’s own use” evictions, ensuring tenants are adequately compensated if asked to vacate under this rule, and technical changes at the Landlord-Tenant Board.  Landlords will no longer be able to use their own leases with their own clauses and will need to use this standard lease that is being introduced.  The tightening of "Landlord's own use" evictions will make it more difficult for Landlords to evict Tenants when they claim to need the unit for themselves or an immediate family member.  This has been used in the past in questionable manners at times to get around rent controls.

Vacant Home Tax
Introducing legislation that would empower municipalities to impose a tax on vacant homes to encourage property owners to sell or rent unoccupied units.  This is pretty self-explanatory with the hopes of stopping speculation and to increase supply of properties for sale and for rent.

Levelling Property Tax Levels For New Multi-Residential Buildings
Ensuring that property tax for new multi-residential apartment buildings is charged at a rate similar to residential properties.  High property taxes on apartment buildings lead to higher rents for tenants and also make it less economical for developers to build new rental supply.  This measure hopes to encourage more rental unit developments.

Those are the big measures to take away from the Ontario Fair Housing Plan.  Next week, we are going to talk about some of the takeaways from these measures as they affect our local market.  What are your thoughts on these measures?


Friday, May 12, 2017

GUEST BLOG: A Day in the Life of a Lawyer






Today we have a guest blogger! Continuing on with the theme of "a day in the life of", we have another professional that realtors often work with - a lawyer. Lyndsey Lalovich, an associate with the Willis Law Firm (and my Sister), is going to take us through a typical day.


Ever wondered what a day in the life of a corporate lawyer would look like?


I am a lawyer with Willis Business Law, a new, cutting edge business law firm, located in the heart of downtown Windsor at 1 Riverside Dr. W. Around here, they call me the “closer”. I am the lead associate lawyer on all our firm's transactional work, overseeing all aspects of a deal and going the extra mile to ensure timely completion of deliverables.


So what does a day in the life of a transactional lawyer look like? While no day looks quite the same in this field, below is a snapshot of my day!


7:00am – Rise & Shine! Hearty breakfast and morning news.


8:00am – En route to the office, Willis Business Law, to start another day.


8:30am – The calm before the storm. Catch up on emails and get organized for the day.


9:00am – Join Willis Business Law’s founding partner, William Willis, for a meeting with clients in the beautiful boardroom at Willis Business Law to discuss a proposed commercial real estate purchase. Complex factors related to the transaction made the face-to-face effective to strategize the best approach.




10:00am – Return calls and emails.


11:00am – Time to put my head down and do some work! Prepare closing agenda for an upcoming commercial acquisition and work with our corporate and real estate clerks to get the package of closing documents prepared.


12:00pm – Networking lunch! Relationship building is key in this career. One of the best parts of working downtown is our close vicinity to our referral sources and, of course, the great restaurants!


1:15pm – More emails.


2:00pm – Signing with client for a commercial financing transaction. Once the client leaves, the pressure is on! Our team needs to get the signed documents to the other lawyer as fast as we can to ensure there is no hold up in the closing of the transaction. With our experienced clerks, we have it down to a science!


3:00pm – Uh oh... Residential real estate closing gone sideways. Various phone calls (and emails of course) with the other lawyer and our client to get the issues resolved.


4:00pm – Wrap up work projects for the day. Have I mentioned responding to emails? Much like other fields, nowadays email is the primary mode of communication for lawyers. At Willis Business Law we try our best to maintain a 24 hour response time on emails, even if we are just responding to let the client know we will look into their inquiry and get back to them. This means a significant percentage of my day is spent sitting in front of this computer keeping up with my inbox!




6:30pm – Head home for some dinner with the hubby.


7:30pm – Gym time. After sitting at a computer for most of the day it’s especially important to stay active in the evenings!


9:00pm – Wind down. Watch some Big Brother Canada while treating ourselves to protein pancakes!


10:00pm – Get a head start on preparing for tomorrow’s work day and, you guessed it, respond to emails.


11:00pm – Lights out!



So there you have it folks. Thanks for participating Lyndsey. Contact her for all your business law needs. You can find more info about her and the firm at www.willislawfirm.ca. Thanks for reading!



Thursday, April 13, 2017

A Day in the Life of A Real Estate Agent



Have you ever wondered what a typical day looks like for a realtor?  Well I have bad news for you… no days in our industry are typical!  Depending on the day we could have a whole range of things going on.  You never know when your appointments could all cancel and you're left waiting around for a document to get signed or for a call back from another professional.  Sometimes you'll wake up thinking the day will be quiet, but by 10am it has completely flipped flopped and the rest of your day is totally booked.

A typical day just doesn't exist. But here is an example of a recent work day I (Russel) had so you can peer into the life of a real estate agent!

8am – Breakfast (most important meal of the day) and answer some emails.

9am – Out the door ready for the day.

9:30am – Inspection out at a waterfront property in the County.


12pm – Drive back into Town and return calls in the car (over Bluetooth of course).

12:30pm – Business lunch Downtown.

1:30pm – Meet photographer for photos for new industrial property that we listed this week.

2pm – Tenant comes to view same property that was just listed this week.

3pm – Back to the office to do some follow ups and work on an appraisal for a property we are being asked to submit a listing proposal on next week.  Return more phone calls and respond to emails. Set up appointments for tomorrow.  Eat a snack (Daryl's Bar).

5pm – Meet tenant to view office unit we have listed.

6pm – Head home.  Return some more calls.  Appointments finished for the day.

6:30pm – Dinner at home.

7pm – Gym time.  Need it to stay fit and healthy.  Productivity and sleep quality slip without it.

8:30pm – Return Home.  Protein shake while reviewing new listings that came up that day.

9pm – Finish up appraisal for next week.  Prepare for appointments tomorrow.  Answer more emails.

10:30pm – Netflix and Chill.

11:30pm – Read some non-fiction.  Recent recommendation is Thinking Fast and Slow by Daniel Kahneman.  Reading is very important to keep you mind sharp and it helps me wind down.

Midnight – Lights out!


I didn’t pick the most exciting day but it was pretty busy and varied in scope.  The important thing in this business is to be consistent and work hard everyday.  It is also important to have a good work-life balance so you can keep up your productivity.  We are lucky to have flexibility in our schedules that way.  Is this day in the life different than you would have expected?

Monday, March 27, 2017

2017 Real Estate Trends: Bidding Wars – Part 3



For the last two weeks we've discussed several factors which are leading to the constant bidding wars in our real estate market.  This week we will wrap up the discussion with some factors you might not have thought of.  So without further ado…

Low Vacancy Rates
The Windsor-Essex area’s vacancy rate on rental units dropped to 2.9%, with CMHC’s latest report in the fall.  That is an amazing turnaround from 2008-09 with 12-14% rates.  With this decrease in vacancy comes a decrease in available rental supply and an increase in rental prices.  People in the area considering whether to rent or buy might be disappointed to see the available options for rent on the market and what that rent gets them.  Combine this with low interest rates and it can in many cases make it cheaper to own than rent.  This low rental supply and high rent price dynamic has definitely added to the demand from buyers in our market.

Sticker Shock On New Construction Prices
The cost of new construction in the area has really taken off in the last few years.  Part of that is based on increased demand.  But part of it also comes from increased soft and hard costs including building permits, increased building code, increased import prices due to the low Canadian dollar, etc.  Many people are no longer able to afford a new home so they are forced to settle for finding a suitable resale home, increasing demand of existing homes.  There is also a consideration that resale homes will tend to keep pace with increases in new construction prices, so the relative values don’t get out of whack.

A Period Of Depressed New Construction Before This Cycle
Approximately between the 2007-2011 period, there was a rough patch in the demand for new housing.  The auto industry was teetering on the brink of bankruptcy, unemployment was high and people were leaving the area.  Naturally, there wasn’t much building going on.  Now that things have turned around, the new supply hasn’t been able to keep up with the pent up demand due to that period of under-building.  To give an example, the condo market is extremely tight now for supply.  Hardly any condos were built in the area over the last 10 years.  But during those 10 years the population aged, the millennial segment of the population grew (with their admiration for condos) and the demographics were there for condos to be built.  However due to economic reasons, none were built.  Now we are in a period of catch up where there is a lag of new condo supply to meet that pent up demand.  Let's build some condos!

Upcoming Infrastructure Projects
Smart infrastructure has great spin off for the local economy and people are positioning themselves ahead of what’s to come.  We have some big projects coming to the area.  The new bridge crossing, the accompanying recently completed Herb Gray Parkway, the new Mega Hospital (even if the site is undetermined), the University of Windsor is moving downtown, and a new City Hall, just to name a few.  These sorts of projects if done correctly, increase economic activity and efficiency, lead to increased investment in the area, and trickles down to increased housing demand.  The future looks bright for the foreseeable future on this front.


This exhausts our discussions on the factors leading to bidding wars in our local real estate market.  We hope you found it insightful.  Do you agree or disagree with any of these factors.  Any you feel we missed?


Thursday, March 16, 2017

2017 Real Estate Trends: Bidding Wars – Part 2



Last week we discussed a topic that everyone seems to be talking about: bidding wars.  Some of the cause and effect for these trends are hard to pinpoint.  Today we are going to expand on some of the factors leading to these bidding wars, with some that are less obvious.

Migration To The Area
As explained last week, part of the population growth that is occurring in the area comes from elevated levels of immigration.  The other part of the equation is the people migrating to the area from other parts of Ontario and Canada.  One large drag we had back during the economic downturn was people moving out west for Jobs after being laid off in the auto industry.  With the rebound in the auto industry and the downturn in the oil patch, this trend has reversed.  And not just out west, but from other population centres in Canada as well.

People Choosing Windsor-Essex As A Retirement Destination
As the population of Canada ages with the Baby Boomers, a large segment is hitting or will soon hit the traditional retirement age.  Some of these boomers are choosing to retire in lower cost areas such as ours to boost their retirement balance sheet.  Moving from high priced markets such as Toronto or Vancouver to ours provides a way for them to access the equity in their home and in many cases buy a similar home and put a very significant sum in the bank to fund their retirements.  To add to this, the area boasts some of the best weather, easy access to the US, wineries, and more – all perks to retiring in Windsor-Essex.

Increased Investment From Out-Of-Towners
A lot of real estate investors invest based on economic fundamentals, something our area didn’t have for a long period of time.  That has changed and so has the appetite to invest in our market.  Leading indicators such as economic growth, low unemployment, population growth, new construction, etc. have all been very supportive and investors have followed.  Traditional investor segments of the market, such as multifamily, might be the hottest markets of all.  In fact, the inventory of investment properties is so low its makes it extremely tough for buyers in this market.

Unseasonably Good Weather This Winter
The prognosticators were calling for a brutal winter in our area this year.  Didn’t end up playing out that way (fine by us ).  In fact, people were golfing in February this year in our area!  This balmy weather pulled up some of the traditional spring market activity and definitely added to demand.  This is a seasonal effect but no doubt helped the statistics to start the year.

Those are some additional factors that have resulted in the continued bidding wars.  Next week we will exhaust our analysis to wrap up our thoughts on the subject.  Have you seen any of these factors playing out too?


Thursday, March 9, 2017

2017 Real Estate Trends: Bidding Wars



As spring quickly approaches, the typical peak period housing market activity is almost here.  Only this year it seems to have come early.  The statistics for the first few months of 2017 have been off the charts.  Bidding wars are everywhere and people are asking when will it calm down.  Well today we are going to talk about some of the factors driving these bidding wars and buoyant market activity.

Low Levels of Inventory
It seems month after month the same story emerges.  Sales are up 10%+ and listings are flat to down on a monthly year over year basis.  As this trend continues, each month the increasing sales are eating up more and more inventory and driving down inventory.  We are now at the point where we have very low inventory… not enough houses to go around to meet demand.

Continued Low Interest Rates
Interest rates have been trending down for years and have pretty much held near record low levels for the past year to 18 months.  Today you would be looking at 5 year fixed rates in the 2.5% range and variable as low as 2%.  These low rates make it easier for the buying public to service more debt and afford to pay more for their homes.  This all leads to increased demand from buyers who are willing to pay more for what they want as it is still affordable to them on a monthly basis.

Immigration
The population is growing and a big part of that influx is coming from immigrants.  The type of immigrants coming to Canada these days have much deeper pockets than previous generations and hold widely held beliefs in the concept of home ownership and hard assets (such as real estate).  This is a large and growing segment of the market, and they also seem to be buying up lots of new construction.

Low Unemployment
Not that many years ago our region had among the highest unemployment rates in Canada.  We have rebounded from 10%+ to as low as 5.2% recently, which is below the Federal and Provincial average.  Manufacturing is booming again, the economy has become more diversified since the downturn, and now when we talk to business owners their biggest complaints are about difficulties in staffing.  What a turnaround it has been and these workers have steady paycheques allowing them to buy larger homes and more of them. Demand increased!


Those are some of the straightforward factors leading to the strength in our local real estate market recently.  Next week, we will continue on with some lesser known factors.  What has your experience been out there this year?