How to Calculate All Your Real Estate Expenses

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In today’s world, who doesn’t seek the easiest, fastest and simplest way to access information? And with the Internet that is entirely possible. But with the host of real estate websites out there, I wanted to create one for you that would encompass everything you need all in one place and serviced by your very own real estate expert advisor.

There is information about buying a home, selling a home and much, much more. You can easily contact me with the touch of a button and if you prefer to leave an email there is a contact form for your convenience so I will receive it almost instantly.

Among the many resources on this fantastic website, there is a section to the left hand that has a host of mortgage calculators and other financial tools that I am sure you will find beneficial in your real estate endeavors. To calculate your mortgage payment, how much you can afford, CMHC insurance fee, Land transfer tax, mortgage refinancing, mortgage penality, debt consolidation, also determine how much equity you can access through mortgage financing. It is all in my website under 'all your real estate expenses'.

As always, I welcome the opportunity to assist you with your real estate needs and look forward to meeting with you! In the interim, please visit my website!

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Eden Mesganaw

416 918 5979

eden4realestate@gmail.com

Market Watch November 2012

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Here we are with just one more month left in 2012 and much is on the horizon of our real estate market. With a sizable decline in sales of 7.1% as compared to the same time last year plus almost 17% more homes on the market, things are changing. The number of days on market is fairly level at just 28 days versus 26 days last year but all in all our marketplace is reasonably stable. Here are some observations that will help you in making sound real estate decisions, considering what is happening in our marketplace today:

Canadian Lending Standards Provide Strong Foundation

Canada has avoided repeating many of the mistakes made in the US housing market largely because of our banking regulations. With our regulations and lending standards much higher than in the US, we have been able to consistently prevent prices from plummeting and spiraling completely out of control.

Despite this positive spin in our country, some top economists though are aware of some alarms going off in the Canadian market. Home prices in Toronto have been higher than the long-term average and Canada is seeing a sharp decline in home sales across the board, as evident in the year over year numbers for November.

Exceptionally low interest rates have been the key reason for keeping affordability from reaching dangerous levels in Canada but now it seems that may not be enough to keep our housing market from skyrocketing.

Household Debt-to-Disposable Income Ratio Reaching High Levels

Canada’s subprime mortgage industry is growing with $500 billion in high-risk mortgages in the Canadian housing market. That translates to nearly 15% of the entire market where household debt is becoming a problem for families. In fact the debt to disposable income ratio for Canadian households is nearly 155 to 160 percent. A good way to understand this figure is to consider that just before the US recession hit, most American households had a debt to disposable income ratio of 160 percent.

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Despite all of this, the government and lending institutions are being proactive, regulators have been changing policies and Canadian housing authorities are doing everything they can to keep things under control. In fact, earlier this year the Canadian Finance Ministry made important changes to the mortgage industry that have positively impacted our marketplace. The changes include a reduction in the maximum amortization schedule, a higher minimum equity requirement, a higher required Gross Debt Service ratio and more.

What this means to you today is that regardless of whether you decide to sell your home, sell and buy or purchase your first home – it is critical that you work with a competent, experienced professional real estate agent that understands today’s market and can help you leverage the concerns of today.

Call me today at 416-918-5979 or email eden4realestate@gmail.com.

GTA Realtors Announce the New Home Price Index

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Until now, homeowners had to request home valuation information solely from their real estate agents or brokers. However the Greater Toronto Area Realtors Association has announced a new MLS® Home Price Index that will provide clarity on home prices as well as home price growth. By measuring price trends in five major Canadian markets, consumers will be armed with the knowledge necessary to make informed decisions about buying and selling a home. Toronto, Montreal, Calgary, Vancouver and Fraser Valley are the major areas that will be included in the index that measures home price inflation and deflation as well as pricing trends in general.

With this new system, agents and consumers alike will be able to measure average and/or medium home prices using an “apples to apples” comparison approach since the system compares similar features and amenities when factoring in price data. The Home Price Index (also called HPI) will be published twice monthly with one report being much like the Consumers Price Index and with the other presenting a series of benchmark home prices.

The Toronto Real Estate Board is pleased to provide this tool for homeowners across Canada to be able to independently determine a home’s worth, with the ability to calculate it on their own without the assistance of a professional Realtor.

Founded by the Canadian Real Estate Association as well as the real estate boards of Calgary, Fraser Valley, Greater Montreal, Greater Vancouver and Toronto – the MLS ® Home Price Index is designed to help consumers make accurate comparisons in harmony with their Realtors’ knowledge and expertise. There is more information such as news, tools and resources available on this website. You can also get your of the HPI or the percentage difference by contacting me at 416.918.5979 or email eden4realestate@gmail.com today.

Your Local Market Update

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Hello! And welcome to the latest edition of the GTA Market Watch with the most recent information on our local real estate market. Today, I will be reporting on the number of homes sold in our market through July of this year as compared to the same time last year. Also, we will be taking a look at our present inventory levels plus the average price of homes sold. Finally, we will review how many days that properties remain on the market prior to being sold. In addition, a look at the condominium market in the Greater Toronto Area.

Number of Homes Sold

Through July of this year, we have sold a total of 7,570 homes. With a decline of 1.5% from the same time last year, in 2011 the total number of sold homes was reported at 7,683.

Inventory of Available Homes

In terms of the number of homes available on the market, we saw an increase of 16% year over year. By the end of July 2012, we had 20,318 homes available for sale whereas in the same time frame in the previous year there were 17,515 available homes.

Media Home Price

Priced have increased modestly but they are heading in the right direction. As of July 2012, the average selling price is reported at $476,947 as opposed to $458,646 in July of the previous year. This translates to a 4% increase year over year.

Days On Market

The total number of days on average that our homes have remained on the market before selling has remained unchanged this year as compared to last, at 26 Days On Market. 

Condominium Market Set to Expand

As the second largest city in terms of the number of high rises, with New York City ranking at number one, Toronto currently has 132 new high-rise buildings under construction as well as 1,875 existing such buildings. We expect to see as many as 53,000 new condo units available in the next 18 months.

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If you are ready to buy, sell or invest in property in the Greater Toronto area, I welcome a call from you so we can discuss your needs and get to work at realizing those goals. Call me today at 416.918.5979.

Four Key Changes Recently Made to Government Insured Mortgages in Canada

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In its fourth change to the rules for government-backed mortgages since 2008, the Canadian Finance Ministry has made four new adaptations to the existing list of guidelines in order for consumers to qualify for government-backed mortgages. The most significant impact lies on first time homebuyers, with the changes making it much more difficult for them to obtain a mortgage given the tighter rules.

Effective July 9, 2012 the following changes were made to the mortgage guidelines overseen by the Ministry:

Maximum Amortization Reduced to 25 Years

The maximum amortization period has been reduced from 30 years down to 25 years, meaning that mortgagors will now be held down to the mortgage for five years less than what they have doing until recently. This will change the monthly payment of course given the maximum mortgage term length has been reduced. According to an RBC report, a typical mortgage of $288,000 with a rate of 5.24% will amount to an increase of $136 each monthly payment assuming 25 years versus the original 30-year amortization schedule.

Minimum of 20% Equity Required To Borrow Against the Property

Prior to these newest changes, Canadians were able to borrow against their property in the amount of 85% of the value of their homes. However now, the maximum amount has been lowered to 80%.

Gross Debt Service Now Required To Be at 44%

Mortgagors will now face lower debt service ratios with the limit for gross debt service ratio (GDS ratio) at 39% and the limit for the total debt service ratio (TDS ratio) reduced to 44% from 45% as it was prior to July 9, 2012.

Properties Over $1M Will Not Qualify for Government Insured Loans

Government-insured mortgages will no longer be available to homes that have a purchase price of $1M or higher. The general consensus being that these homes represent a minority in the real estate industry in Canada and the burden of insuring these loans should not fall on taxpayers.

New Guidelines for Residential Mortgage Underwriting Also Announced Recently

The Office of the Superintendent of Financial Institutions announced on June 21, 2012 that there would be some additional rules in the underwriting guidelines for financial organizations. Highlights include reducing the maximum loan-to-value on a home equity line of credit from 85% to 60%, more stringent qualifying rates for conventional mortgages and the right of lenders to recalculate loan-to-values anytime subsequent refinancing is sought or if deemed necessary.

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If you have any questions at all about how these changes will impact you or if you would like assistance with any of your real estate needs, please do not hesitate to call me at 416 918 5979. I would be happy to help!