Toronto Debt Crisis and Condo Bubble

Scarey headlines topped the newspapers this year, The Montreal Gazelle adds a year end reflective; That there was never any reality for all the bubble and housing price level concerns that dominated through out the year.

It lays the commentary directly attributable to one person.

..that Canada could be headed into the same kind of disastrous real-estate bubble and meltdown that we saw right across the border.

And a superficial look is just what this issue got. There was never a solid basis for the scary speculation, but it just kept bubbling up. Serious Canadian media, including Toronto's Globe and Mail, made housing-bubble headlines into a staple. Below the headline, there was usually an acknowledgment that there was no evidence of anything more than a hot market, but the scary headlines didn't stop.

Even big American newspapers that usually give Canada about as much coverage as Iceland became interested. The Wall Street Journal ran a front-page story in February under the headline Housing Rebound in Canada Spurs Talk of a New Bubble.

Where was the talk coming from? The most prominently quoted source wasn't an economist or a real-estate expert; it was Garth Turner, a former politician who had been promoting a book predicting a housing collapse.

http://www.montrealgazette.com/business/solid+basis+scary+speculation/4039586/story.html

I have been reporting a single fact, yes prices are increasing, so are insurance, food, clothes, movies and gasoline prices, yes everything, the term is Inflation. IMHO prices have increased a few percentage points above the rate of inflation for the last 40 years. Inventory levels for homes has been steadily decreasing in an ever expanding (GTA) city. Month over month stats show we will again be in a Seller's Market in the spring of 2011. There is no bubble if there is no excess inventory supply.

Banks talk about debt levels of families being at an average of 150K with a mortgage rate of 2%. This means the [HELOC] home equity line of credit most parents use to fund their vehicle purchase and their children's education average 600 per month plus what ever debt repayment plan they select. They also talk about the fact that one third of Canadian home Owners are debt free. CAAMP Canadian Assoc'n of Accredited Mortgage Professionals

Seniors will continue to "nest egg" their only primary asset that has a return on investment of approximately 4 - 5% annually. Liquidation of these assets into cash would create a taxable income stream with interest of less than 1.5% annually. Dipping into the principal amount of their nest egg every month for rent would erode their investment. My conclusion is that seniors are worse off by selling out. Garth's recommendations to invest the money into stocks and mutual funds places the principal at risk is [his] subjective opinion. These are mine; You need a place to live. Why pay rent when you can leverage your downpayment and pay a similar monthly amount and gain equity tax free.

Monthly statistics are published by the Toronto Real Estate Board and their market watch; I crunch these numbers further for the west end to provide you with an absorption rate of homes for sale or conversely the number of months available supply. With the reducing inventory throughout 2010 we will be back in a Seller's market as soon as we start after the New Year.

What are your thoughts? Where will our market go in 2011? Immigration to Toronto and the Golden Horseshoe continues; for jobs, education, security, political and religious freedoms and the right to raise your family in a safe environment. Our employment rate exceeds 90%.

..but don't sell books, I sell places where you can live.

Lemme Splain you .... Older Condo Developments

Buying Preconstruction is commiting to a goal and a dream. New Condominiums are selling Imagination and Hope. Developers Selling Sizzle, Builders selling the new lifestyle where you will enjoy the multi purpose recreation facilities, affluent portico and vestibules, guests will be wowed and greeted in the lobbies, interact with your new neighbours that all share your lifestyle and vision of affluence on the roof top lounge.

These spectacular presentations are made at sales centers with furnished and staged suites, scale size models, draperies and lavish upgrades; showing you what might be; VIP openings with celebrities, wine and cheese soirees with music. They may have interactive video that permits you to stroll through the building in a virtually rendered tour, they have design centers ready for you to select and match your trims items, you leave giddy with the options presented in CD - DVD format, floor plans, renderings, colour and material swatches.

You can drive the neighbourhood and examine the community that you will be living in and how far things are from where you will be living in three or four years time.

[Lets add a few details, every crane you see is a condo building site that has achieved ecomomic viability to build, each unit has ordered has 15 - 20% downpayment, with a contractual closing date. After you own it, you can rent or sell or live]

After the building has been sold out; Who speaks for the complex?

Who monitors the negative press? Who posts on the bulletin boards that have negative comments from a very few people [relative to the purchasing population] regarding the developer, builders or complex. Who answers the complaints or has a voice in the final trim colours of the hallway broadloom and paint combinations. When units appear for resale post closing does the Condominium Management Board provide updated information about the complex, recreational facilities, floor plans, amenities?

No. And maybe a few of the older building boards should take a very close look at this very issue.

There are many buildings that immediately spring to mind with large three bedroom suites, no sizzle, security guard at the front desk, indoor pool and an underground garage repair. This buildings maintenence fees are high compared to other buildings but not when compared on a per square foot basis when looking at actual suites. Lemme explain.

Let us imagine a brand new 780 square foot suite at Square One or Humber Bay Shore with all sorts of yummy guest suites, party room, theater, exercise equipment, salt water pool, whirlpool and amenities. Sounds wonderful but it needs to be looked after. The proposed maintenance fee is just that Proposed. It will change after the first annual budget, once the NEW condominium board has been installed and taken possession of the building. Let us assume that the monthly fee is $450. When compared with the 1,400 square foot unit with $1,100 in maintenance fees it is not so absurd. There are a number of buildings like this that are of similar value to purchase almost double the size unit inside but alas the maintenance fee is also multiplied.

But who is marketing the building; maintaining its online panache, catering to their pool of owners to add value? Who is responsible to inform the public that this build has no crime, stable population, rent-ability, responsibility in management and prudent financial stewardship. Who promotes the community led Euchre Wednesdays, Cloverdale Mall Mondays for shopping excursions or the publication of internal newsletters?

One Condo Board has taken this by storm and has even submitted [itself] for Condominium of the year http://www.palaceplace.org/UploadedFiles/Palace%20Place%20Article.pdf This page > http://www.palaceplace.org/index.cfm?ID=644 includes a link to the article in the CCI about Palace Place winning this quarter's competition for 'Condo of the Year".

The Condominium Community was profiled in one of my previous blogs available here.

Once the building has been registered, New Board of Directors installed, a number of different committees need to be formed within the Board itself; they should be directed to deal with issues like Seniors Living, Quality of Life, Building Presentation and perception. Maybe a committee to plan Winter exterior decorations is timely. Has there been a meet and greet your new neighbours event in your building?

I organized this very event in my condo and was delighted with the response and participation.

Your condo board should be conscious of image and maintaining a web presence post move in and occupancy. It will help maintain and support your buildings value. What would you like to see from your condo board?

Add your comments.

This note was left for me by a resident at Palace Place ended with ... BTW, I don't know of any other real estate [agent] in the GTA that has made such extensive use of technology to market their services. If you have occasion to list a suite in Palace Place, I will be glad to do what I can to help. You would be a good benchmark for other agents marketing Palace Place.

Thank you for the note of approval.

Larry the Landlord; Hides the Grow Op and Sells

Ontario Realtors favour grow-op registry bill

The Ontario Real Estate Association is welcoming a private member’s bill before Queen’s Park that calls for the creation of a grow-op registry – a move Realtors say will protect homebuyers.

“Grow-ops are major problem for homebuyers in the province and we have been urging the Ontario government to establish a registry to protect consumers for almost 10 years,” the association’s President Dorothy Mason said in a news release published Nov. 25.

While Realtors are required by law to disclose if a home has been used as a marijuana-grow operation or drug laboratory, they are hindered by the lack of central registry.

Many times these homes receive cosmetic renovations to “disguise the fact they were marijuana-grow operations and consumers unknowingly purchase these homes,” the release states.

Drug manufacturing can cause physical damage to homes, such as mould and chemical contamination, while structural and electrical wiring alterations made to run a drug operation are potential fire hazards.

Having these problems can lead to a loss of insurance and “exorbitantly high remediation costs,” the associations says.

Progressive Conservative MPP Lisa MacLeod’s private member’s bill, or Bill 139: the Clandestine Drug Operation Prevention Act, 2010, would complement a law passed in 2006 that requires all Ontario Realtors to disclose if a home has been used for drug operations or face an administrative fine and the possible loss of their license.

The law is administered by the Real Estate Council of Ontario.

"..... the only safeguard in place to inform consumers if their soon-to-be new homes were formerly used as grow-ops is nothing more than the well-trained eyes of their Realtor and/or home inspector.

In many cases, however, former grow-op homes are given a series of cosmetic fixes that disguise the fact they were once used as a grow-op. Canadian Real Estate Magazine"

http://www.canadianrealestatemagazine.ca/news/75739/details.aspx

David Pylyp So you are a buyer and you want to score on a fixer upper. You need to know before you buy to estimate the cost of repair or remediation required to render a home suitable to RE habitate. [Toronto real estate] What if the previous owner repainted and masked all the defects? How will you know?

First you need to obtain air particulate mass report with clear conclusive evidence that mold does not exist in the house (has already been removed BEFORE ESA) or no other agency will enetr to inspect. Mold remediation based on what is in the house may require suits and masks. (workplace safety issues)

Requiring an ESA inspection by Hydro may get your power turned back on but you have not dealt with outstanding fines, paying all hydro bills up to date.

Purchasing and financing a POST grow op is at 50% of land value regardless of existing structure. Insurance is difficult to obtain.

No matter how well you have fixed the house, you must delare the past events keep the receipts and prove the remediation and reinspections were all completed. This stigma will continue for the next owner. For ever and ever.

By what percentage does that diminish value?

Do houses with Urea formaldehyde still have stigma?

What are your thoughts?

Digital Marketing for Homes west Toronto

If you have been searching the MLS for photos of houses and their interiors, you know that the limit of 9 photos is a disappointment and can not truly reflect the character and charm of your home.

For this reason alone; having a digital photographic slideshow of your property with potentially 40 or 50 photos [displayed seasonally if you wish to show off that pool, landscaping and yard] on google for your address, and fully searchable, will provide the most Buyer Views.

Seriously, isn't that really my job? To present your property in a positive fashion and expose you to multiple streams of advertising that are a photo slideshow display as well as Video Tours and highlights. With effective digital marketing our number of days for sale [on market] will be shorter, yielding you additional shoppers and ultimately better offers. Digital Marketing, Photo Slideshows, Video Tours, Marketing Materials and Brochures, Cost of Closing and monthly payment schedules, so your buyers can select the best property. For Buyers Its a one stop shopping experience where I look after all your details. We are interviewing now for what we expect to be a robust and exciting Spring Market in 2011. We only have a few weeks left to prepare

So... When you are ready, I would love to sell your home. Call me at 647 218 2414

David Pylyp is Professional and Persistent in Getting things done Search On ..Google Quick List for[Buyers] or [Sellers]

Transit City and Rob Ford

Received this today, What do you think?

Good Afternoon,

I would like to reassure you that your concerns are being taken seriously. By being an active part of the democratic process, you are allowing me to gain perspective on public opinion and suggestions.

It is my hope that the Transit City brand will be replaced with a brand that takes a broader transportation perspective. The plan isn't being killed, but much of the work will be refocused underground.

The first transit priority is to build a subway on Sheppard Avenue and replace the Scarborough RT. These routes were first priority in the Transit City plan, I would like them open before the Pan-Am Games in 2015. The second transit priority is the Eglinton line. This route was second priority in Transit City plan. I would like this line open, as currently scheduled, by 2020.

I have asked the TTC to investigate and present options for a new plan to achieve these goals. Once this plan is established, I will be able to answer more specific questions with regards to cost and changes.

The previous Transit City plan was not approved as one plan by Council, individual lines were voted on. As your Mayor, I look forward to bringing the new plans forward to my council colleagues.

Sincerely,

Rob Ford

Mayor of Toronto

I believe that Toronto City council under previous administration did vote for parts of Transit City. I Know that further delay just makes for additional expense and gridlock.

Both are expensive. What do you think?

Growing Toronto Housing Bubble

Yes, coming to a City Near you! The overheated housing market is causing a housing bubble and the impending fall of real estate values because of housing affordability.

No matter how many times this headline is repeated it does not become the truth. No matter the sources that post on this topic the inherent facts within the Toronto real estate market continue to defy the media pundits calling for it's demise.

I have three simple answers; inflation, immigration and consumer confidence.

Here are my sources of rebuttal;

Canada’s residential housing sector is landing safely after a wild ride over the past three years, Toronto-Dominion Bank said in a report on Thursday.

Looking ahead, the economics unit of Canada's No. 2 bank said it expects improved home sales and a higher average price next year, largely because housing affordability will likely be extended as uncertainty lingers about the global economy. http://www.bnn.ca/News/2010/12/9/Housing-prices-to-rise-TD.aspx

The media and some analysts remain glued to the idea that the Canadian housing market is a bubble ready to implode à la the U.S., Ireland, Britain, and Spain, where prices have dropped 22% on average. The latest concerns were fanned by an article in The Economist that suggests the Canadian market is 24% overvalued based on a comparison of prices and rent. Rent captures the stream of income derived from housing, and thus, in theory, is an appropriate valuation metric. However, in practice, it is important to note that statistical agencies often have difficulty measuring effective rents. Moreover, the downward trend in interest rates in the past three decades would normally favour ownership over renting and, hence, encourage a higher price-to-rent ratio today than in the past (Chart 1). Perhaps for these reasons, of the 20 countries reviewed by The Economist, the median overvaluation was 20%, and only four countries were overvalued by less than 10%, casting some doubt on the appropriateness of this metric. http://www.bmonesbittburns.com/economics/focus/recent/101105doc.pdf

So let us turn our attention to Toronto Real Estate;

Although this is a bit slower than last year, these are very strong numbers. The number of homes for sale has dropped dramatically and we’re down to only 15,K units right now. In the GTA as a whole, we currently have less than 2 ½ month’s supply of homes for sale. This is still considered a “Seller’s Market”.

http://eleganthomesinwesttoronto.blogspot.com/2010/12/toronto-is-place-to-be.html

Prices are rising 2-3 % ahead of inflation, net migration within Canada and new immigration to Canada will bring us approximately 60,000 new households and there is confidence in the continued growth and security of living in Toronto. [Canada]

I believe that 2011 will be a year modest growth and continued stability with Toronto real estate prices. I am more concerned about hydro rates, insurance and gas prices increasing my costs of ownership and conducting business.

What are your thoughts?

RE/MAX outlook for 2011 Positive and Promising

Residential values expected to climb further in 2011 as housing sales stabilize in most major centres, says RE/MAX

Mississauga, ON (December 7, 2010) - Although improved economic fundamentals will have a positive impact on Canadian housing markets moving forward, the forecast for residential real estate sales remains static in most major centres in 2011, according to the RE/MAX Housing Market Outlook Report released today by RE/MAX.

"In terms of resale housing activity, what many are talking about as the new normal is actually a return to the traditional real estate cycle ," says Michael Polzler, Executive Vice President, Regional Director, RE/MAX Ontario-Atlantic Canada. "The past decade was truly unprecedented-never before have we experienced a run up that was as strong or lasted as long. As we have digressed from the typical pattern, people have forgotten what the usual healthy cycle looks like, but all the hallmarks are there. Ample inventory levels, steady demand, and moderate growth, both in terms of sales and prices, will characterize the market in 2011. While the pace may appear lackluster in comparison to what we've grown accustomed to, it underscores the principles of real estate 101: The market is cyclical. All boats rise and fall with the tide."

» DOWNLOAD COMPLETE PRESS RELEASE

» DOWNLOAD COMPLETE REPORT

Toronto is the Place to Be

In November 2010 there were 6,510 sales for the month.

Although this is a bit slower than last year, these are very strong numbers. The number of homes for sale has dropped dramatically and we’re down to only 15,K units right now. In the GTA as a whole, we currently have less than 2 ½ month’s supply of homes for sale. This is still considered a “Seller’s Market”.

The West end as a whole? 5,883 listings with 2,342 selling. In the millionaires Row of housing in Etobicoke there were 196 available with 94 selling. Bare in mind that the higher the price, the fewer the customers. In W06 Humber Bay Shore That’s Marina Del Ray though Palace Pier along the Lake Shore Marine Parade Dr., There were only 120 new listings with 84 sales.. Imagine.. Only 84 sold.

The question I get asked most often, “What do you think will happen next year?” In Canada and in Toronto specifically, yes, we still have a very sound economy. We are not experiencing the melt down they are in the U.S. If someone were to be looking for a safe place to invest in real estate, Toronto would come right at the top of the list. I believe our real estate market will remain very stable in 2011.

It will be a great year for anyone to get into home ownership or make that move “up” or “down” as their lifestyles may require. There are many shoppers out there. Rates continue to be low. Our employment rate is at 7.6% effective today... Whats holding you back? My job is to fill your families housing needs. What do you Need? You have questions I have answers Lets talk. 647 218 2414

When will we admit we are a world class city?

The proliferation of condo's and especially upscale multilevel penthouse apartments cater to a select crowd of successful but discreet clientelle. We are Canadians.

We know we have made it but we don't want to show it. Hazelton Lanes and Yorkville, continue to be the place to been seen, from business Shakers and Movers to tres Celeb's just in for the Tiff.

But would you like the best condo in the city of Toronto? 11,000 square feet of opulance; designed and appointed exactly as you see fit, Your designer providing the final touches or I can recommend a few designers with impeccable portfolio's. 12 foot ceiling combined with floor to ceiling panoramic views. Penthouse and Lower Penthouse selections.

Some will talk about Price Ceilings and topping $1,000 per square foot, in a penthouse market where the ultimate is only one in Toronto. What should the value be?

There are several Central Park Condo buildings along the park, they are: 1 Central Park West, 15 Central Park West, 25 Central Park West, 25 Columbus Circle (TimeWarner Center), 60 Columbus Circle (Mandarin Oriental Residences), 160 Central Park South (Essex House), 1 Central Park South, 923 Fifth Avenue and 995 Fifth Avenue (condop).

In order to have a Central Park view condo, the condo building does not neccessary to be right next to Central Park. The condo building can be few blocks away from the Park, as long as the unit is on the high floor and there are lower buildings around it, the condo unit can have an unobstructed view of Central Park. (here is a picture of myself in a condo "Millenium Tower" building that is few blocks away from Central Park.)

In todays market, Central Park Condos with direct Central park views is priced range $3,200 to $4,500 per square foot upwards. This is just an approximation of the price range, each Central Park condos is also priced based on its building, condition, exposure and other factors.

http://activerain.com/blogsview/1999896/central-park-condos-upper-west-side-manhattan-new-york

Take a video tour of the views of this 11,000 square foot condominium unit, the tallest in Toronto. http://www.collegeparkcondos.com/phvrtour/75thFloor.html

So lets ask a question; what value should the largest penthouse in Toronto, that is located in the heart of downtown Toronto, on Bay Street, with unobstructed views from the 75th floor of Aura condo's be valued at? Can we conclude the same NYC, Manhattan and Central Park prices apply? SO.. 11,370 square feet, Private elevator, 24 hour concierge, lavish finishes and the prestige of having the only unit, the singular penthouse, tallest, most opulent location would be?

Computer Technology permits me to send you a CD with an interactive Virtual Tour that permits a walk through of the unit; Great for a personal flow and walk test through of your penthouse.

11,000 square feet at $3500 per square foot would be ? So this is a value added purchase at $17,500,000 reflecting a value pst of approximately $1,500.

The View would be of every sunset and sunrise overlooking Lake Ontario and the Toronto Islands and almost the Niagara Peninsula. Sorry.. You cannot see Central Park from here, no matter how you turn your head.

Send an email or a text 647 218 2414 and the shopping team can accommodate your inquiries.

david@davidpylyp.com

I look forward to hearing from you.

Simply Not Knowing; Is not an excuse

A very wise person recently said "Sometimes we don't know what we don't know"

My Duties include; the correct pricing of your home based on local conditions, competition and trends in the market, making you aware of sales histories and trending that effect your property values, assisting you in the presentation of the property, [we may need a stager or a decorator or a dumpster], the video and slideshow for your property, preparation of a full hard stock colour brochure, preparation of all online marketing materials to draw potential buyers to your home, the promotion and logical defense of your property values. Of course there is the negotiation and then transaction management.

We will need to deal with the timely fulfillment of all conditions that you made in your Agreement of Purchase and Sale. We attend at all inspections, verify your financing and insurance requirements, double check all payout commitments, attend with your solicitor.

Unlike Miss Bening; I do not do floors, dishes, counters, make beds, vacuum or general housekeeping.

Although some may think that I have been granted with Super Powers and memory of past sales events, I am very focused save for conducting real estate or internet social marketing to get your property featured. With humour, stories and integrity we will answer all your concerns until you are ready to proceed.

When you are ready I would love to sell your home.