June 28, 2008
Getting The Best Return On Home Improvements
The truth is most home improvements don’t increase the value of your house as much as they cost.
If you are getting ready to move and want to make some improvements that will actually increase the value of your house, check out the Home Sale Calculator at HomeGain. The calculator will help you determine which areas you should concentrate on and list the top 10 home improvements that will give you the most bang for the buck.
Here is an example of their recommendations:
1. Clean / de-clutter – 973% Average Return on Investment: Remove clutter by storing items in basement, attic or friend’s home. Rent a storage space or sell excess items, if needed. Keep every room very clean during open homes. Do pre-open house cleanliness inspections.
2. Lighten and brighten – 865% Average Return on Investment: Replace any burnt-out bulbs and use higher wattage bulbs, if possible. Have defective electrical components repaired or replaced. Make sure skylights are clear and keep drapes open during the day.
3. Yard and Landscaping- 426% Average Return on Investment: Store away personal effects from front yard. Hire gardener or landscaper to trim back the overgrowth and maintain yard. Make sure that your lawn has a healthy green appearance.
4. Plumbing and electrical – 260% Average Return on Investment: Consider repairing or replacing any defective plumbing or electrical items in your home. Make sure you have the right person for the job by getting several estimates.
5. Staging – 251% Average Return on Investment: Buy some fresh flowers, live plants and other decorations to liven up the home. Dispose of old furniture or other large items. Consider renting furniture or hiring a staging consultant.
6. Update kitchen and bath – 168% Average Return on Investment: Update kitchen and baths by resurfacing cabinets or painting with neutral color. Replace toilet seats, dated fixtures and drawer/cabinet handles. Freshly caulk and redo grout in countertops, sinks, tubs and showers.
7. Paint interior – 148% Average Return on Investment: Repair any damaged interior walls by patching all chips, holes and cracks; then touch up or repaint interior walls with neutral color.
8. Carpeting = 104% Average Return on Investment: If carpets are only lightly soiled, shampooing and/or spot removal should suffice. If there are rips, fading, heavy wear, smells or deep stains, replace with neutral colour.
9. Flooring – 101% Average Return on Investment: Repair and refinish damaged floors, or cover with neutral-colored wall to wall carpet and note damage in your disclosure.
10. Paint exterior – 76% Average Return on Investment: Repaint or resurface the outside walls of house, as needed. Patch and repair any damaged areas.
June 28, 2008
Canadian Real Estate Market Summary
The Canadian housing market has ceased to be a sellers’ market in both the residential and the recreational sectors, meaning the boom experienced over the past few years is over, analysts say.
The long awaited end of the boom is reflected “in more moderate demand and increased supply of properties for sale,” said TD economist Craig Alexander in an interview Thursday following the release of a housing report by the bank.
“I don’t think it’s surprising that we’ve seen that the housing market in Canada is really cooling down,” he said.
Average annual price gains on a national basis were running on average at about 10 per cent between 2002 and 2007.
“If you look back historically, the historical average should be about 4.5 per cent. So the rate of price growth has been double what’s probably sustainable,” he said.
Alexander said the housing market boom was eventually going to come down to earth. “And really it’s been in the last four to five months that the economic numbers have very clearly shown us that the housing boom has come to an end,” he said.
The year-over-year price growth for existing homes in Canada’s major markets fell to only 1.1 per cent in May, down from 8.6 per cent just four months earlier, the TD report said.
At the same time, new residential listings rose 1.8 per cent on a seasonally adjusted month-over-month basis to 78,878 units in May, the Multiple Listing Service reported Thursday.
Royal LePage also said the recreational property market is returning to a more normal state, with price increases moderating.
“Mirroring the trend we are seeing in urban real estate markets, recreational property prices continue to rise, but at approximately half the rate of the increase in 2007,” Phil Soper, president and CEO of Royal LePage Real Estate Services, said in an interview Thursday.
“Improving supply has helped temper price increases this year, which will have a disproportionately favourable impact on cottage seekers when compared to their city counterparts,” he said.
The average price for a recreational property in Canada now ranges between $326,567 and $1,066,389, according to the 2008 Royal LePage Recreational Property Report.
“We’re looking at an average five per cent increase in prices by the end of the year,” Soper said.
Alexander said the trend across the country is “broadly based.”
“We’re shifting across the country from a sellers’ market conditions, particularly in the West. Now we’re really into more balanced markets,” he said.
Home prices in Calgary and Edmonton in April and May, for instance, fell to below year-earlier levels.
While the bank had expected the slowdown to occur much earlier, housing remained stronger for longer than anticipated, “largely due to increased affordability through new financing options, such as no money down or extended amortizations,” said Alexander.
“But even those additional buyers have now been absorbed,” he said.
However Alexander said Canada is not going to see the same boom-bust cycle seen in the United States.
What Canadians will see, he said, is that the boom will end with the growth in prices coming down to very low single digits.
“Our forecast is that price growth in 2008 will average two per cent and then it will be about 3.5 per cent next year. So we’re going to be below the (4.5 per cent) trend for a few years,” he said.
June 27, 2008
House not selling?
New design shows can help distract you
The real-estate market has turned medium-cool lately. The mortgage crisis south of the border, a slowdown in new-home sales and general North American economic malaise have expectedly reduced the volume of buyers and sellers in the housing market. With daily reports of a semi-recession and gasoline prices reaching new highs, fewer people are looking to change their address.
The market value of home and design TV shows, meanwhile, booms away. The renovation and design genre does not require permits to make additions; most often the new shows simply appear on television and immediately connect with some segment of the viewing audience, whether on a mainstream scale (Trading Spaces, various Martha Stewart incarnations) or to a more select viewership (World’s Greenest Homes or the curiously popular Colin and Justin’s Home Heist).
The niche category expands slightly for the launch of four new shows on HGTV, the cable mother ship of home and design television. And in a very rare occurrence, each new arrival is of Canadian origin.
The hottest new listing: The Stagers (Tuesday, HGTV at 10 p.m.) focuses on a handful of experts who transform average-looking homes into posh showroom spaces, with the express intent of driving up the price, of course. Even in the fussy TV design field, home staging is an extremely specialized craft.
See story in the Globe and Mail »
June 26, 2008
The Canadian real estate boom is over
Canada’s housing boom has ended Canada’s housing boom has come to an end and that is no more evident than in Alberta – with prices continuing to fall this year by eight to 10 per cent from their peak, says a national real-estate report.
TD Economics says “the long-awaited end of the Canadian housing boom has occurred, reflecting more moderate demand and increased supply of properties for sale” and it is a trend that is broadly based “but it has been particularly sharp in some of the markets that had experienced the most dramatic price growth.”
Highlights of the report are:
The long awaited end of the Canadian housing boom has occurred, reflecting more moderate demand and increased supply of properties for sale.
Most of Canada’s major housing markets have moved out of seller’s territory to more balanced markets
TD Economics forecasts modest national average price growth of 2.0% this year and 3.5% next year, down substantially from the 10% annual pace of the last six years.
Sales are significantly lower than in the banner year that was 2007, but they are returning to 2004-06 levels, held up by solid economic and financial fundamentals
Past erosions in affordability are the main factor behind weaker sales, but affordability is now set to improve
Additional supply of homes for sale is booming out west and new listings must be absorbed at more conservative prices before demand can lift prices again. After a pullback over the next 12 months, Alberta’s major markets will stabilize and post mild prices gains thereafter
Home prices in the formerly red-hot markets in Calgary and Edmonton performed worse than the slowing national average, falling below levels reached one year ago in April and May.
“Resale activity in Vancouver is tracking significantly below last year’s levels and we expect sales for 2008 as a whole to end up almost 20 per cent lower than 2007. Toronto is expected to experience 10-per-cent lower sales.”
Ontario and Quebec homes, which have appreciated at a steady six to seven per cent rate over the last three years, will now only appreciate at half that pace through 2008 and 2009.
Even Saskatchewan won’t remain unscathed, the report predicts. While price gains have mirrored those in Alberta as the province’s potash, uranium and agriculture industries have thrived, the report forecasts only two to three per cent price growth in 2009, with the risk of a mild price correction.
See the full TD housing report »
June 26, 2008
Time to take advantage of stabilizing cottage market?
Echoing the trend observed in Canadian cities this year, the country’s recreational property market is returning to a more normal state, with price increases moderating when compared to the frenetic pace experienced in 2007.
In almost all of the nation’s summer hotspots, prices have continued to rise in 2008, but at a considerably slower rate than in the previous year. This moderating trend bodes well for cottage seekers – particularly the young professionals who make up the single largest group of those planning or considering a cottage purchase (19%), according to the 2008 Royal LePage Recreational Property Report released today.
The 2008 Royal LePage Recreational Property Report comprises a nationwide research poll of Canadian cottage owner and buyer attitudes and actions, and an extensive 53-market analysis of recreational property prices, trends and activity in selected leisure markets across the country.
The survey showed that Canadians overwhelmingly see the benefit of owning real estate – be it a primary residence or a cottage; the survey found that nearly two-thirds (61%) of cottage owners and those who plan on buying a recreational property feel that buying a cottage is a better long-term investment than buying stocks, bonds or mutual funds. In fact, the survey revealed that 15 per cent of recreational property owners own more than one recreational property.
“Mirroring the trend we are seeing in urban real estate markets, recreational property prices continue to rise, albeit at a slower rate than in recent years,” said Phil Soper, president and CEO, Royal LePage Real Estate Services. “Improving supply has helped temper price increases this year, which will have a disproportionately favourable impact on cottage seekers when compared to their city counterparts. The Canadian recreational property market has been notoriously short of supply for several years.”
Added Soper: “The fact that an increasing number of young people are joining more mature adults in the quest for a recreational retreat comes as no surprise; today’s young adults are increasingly savvy when it comes to investments. The average age of first-time homeowners continues to drop. It’s only natural for this trend to spill over into the cottage market.”
Despite moderating prices, huge disparities continue to book end the country’s most expensive and most affordable properties. Recreational playgrounds that are frequented by Hollywood celebrities and Canada’s elite, such as Kelowna’s Okanagan Valley, The Muskokas, and Nova Scotia’s South Shore, boast properties that command price tags upwards of $1.5 million. For the more modest shopper, affordable abodes in areas including Parry Sound and Sudbury can be acquired for approximately $300,000. Hidden gems for under $100,000 can be found in Kingston and Haliburtan Highlands in Ontario, and throughout much of Atlantic Canada – however, at this price point; it will be rare for these properties to have water access.
A little more than half (54%) of cottage-craving Canucks, who are likely to buy or are planning to buy a recreational property, have budgeted to spend between $50,000 and $300,000. Some very modest will-be buyers will have to do a lot of searching to find their wilderness retreat, as 33 per cent of these respondents said they were looking to spend less than $50,000.
Putting the brakes on heading to cottage country?
The lure of the great outdoors and promise of rest and relaxation continue to trump rising gas prices, increased traffic congestion, and a changing real estate climate, as the number of Canadian cottage owners has remained steady over the past three years, at nine per cent.
However, reason (and a need to mind the bank account) is likely to outweigh passion this summer, as 19 per cent of cottage owners stated they would consider selling their properties if gas prices continue to rise; an increase of seven per cent since last summer. The poll also revealed that 33 per cent of recreational property owners said that the rising gas prices would impact the number of trips they take to the cottage this summer. On the flip side, local cottage rentals could see a spike in activity this summer, as rising fuel prices keep some families from flying to their summer vacation destinations.
Summer lovin’ replaced with summer siestas
It seems that the blazing weekend warrior has finally simmered down. Once known for their boundless levels of energy come Friday at 5 PM, a startling truth has now come to light: once at the cottage, their fire seems to flicker out. When it comes to activities at the cottage, a dramatic 45 per cent of cottage owners would rather catch up on sleep, than have a ‘romantic liaison’ with their partner.
Given most people’s hectic social schedules in the city and busy work demands, it’s little surprise that catching up on sleep at the cottage is placed at a premium; for some cottage-goers, R&R will be hard to come by, as 16 per cent of respondents won’t be able to escape the rat race, claiming they will continue to work from the cottage.
Additional Findings:
When asked, “How do you plan to unplug yourself from the wired work world while enjoying your recreational property,” the top two responses included: there won’t be Internet access at the cottage (24%) and I won’t take my Blackberry or cell to the cottage (17%).
Among cottage owners, and those who plan to buy a cottage, 11 per cent spent or will spend more on their vacation property, than on their primary residence; 35 per cent plan to spend between $50,000 and $150,000.
While there are an infinite number of elements that make a recreational property special, Canadians list the top three most important features to be a pristine waterfront, four-season capability, and low maintenance properties.