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Media Roundup October 30th 2009

Media Roundup

Real Estate News

Canadian Home Prices Rise for Fourth Straight Month in August (Bloomberg)

Rebound hammers affordability of GTA homes (Toronto Star)

Don’t Get Excited By Rising Yields, Suggests Carney (Canadian Mortgage Trends)

An infill builder tells tales from the inside (Globe and Mail)

As condo sales dip, the new homes market is turned on its head (Globe and Mail)

Toronto settles for half a Libeskind (Globe and Mail)

How to invest in real estate (Globe and Mail)

In condo marketing, a gut feeling is no longer enough (Globe and Mail)

Low inventory leaves Toronto buyers scrambling (Globe and Mail)

The great B.C. real estate bust (Globe and Mail)

Housing bubble possible, not likely (Montreal Gazette)

Fewer McMansions on the Horizon (Wall Street Journal)

Economic News

Economy finally back in gear (CNN)

Mortgage Payments Declined in Third Quarter (Wall Street Journal)

A Look at Case-Shiller, by Metro Area - October Update (Wall Street Journal)

Economists React: ‘Blockbuster’ Month for Home Sales, but What’s Next? (Wall Street Journal)

Neighbourhood and Urban Planning

The Junction’s secret history checked out (Globe and Mail)

CONDO CRITIC: Jane/Finch rehab faces uncertain future (Toronto Star)

Hume: A brilliant beauty built to last (Toronto Star)

Honesty won't resolve disclosure form issues

Bob Aaron in Legal, Home Selling Tips

The Great SPIS Myth

It's time to reveal The Great SPIS Myth – the prevailing fiction about the Seller Property Information Statement (SPIS), a disclosure form published by the Ontario Real Estate Association (OREA).

Although its use is endorsed and encouraged by many OREA member boards, real estate agents remain sharply divided on whether the form is too dangerous to use, and whether it protects the public or the agents who try to get sellers to sign it.

I have been very critical of the form because it results in a great deal of litigation among sellers, unhappy buyers and the agents who are caught in the middle.

The official position of OREA and industry commentators who support it is that the problem with the SPIS is not the form itself, but that some sellers do not tell the truth.

The key to the successful use of the SPIS, OREA says, is honesty. In every one of the court cases I have written about in this column, OREA's view (set out in a letter to me last month) is that "it was not the SPIS form itself that caused legal difficulty for the sellers: rather it was the failure of the sellers to be forthright in their disclosures about the property."

This, in my view, is the fatal flaw in the OREA logic. I call it The Great SPIS Myth – the fiction that if sellers are honest they won't wind up in litigation over the SPIS form.

A careful analysis of the reported court decisions shows that this position is simply not accurate, and that is probably why OREA's president declined my request for an interview.

Consider some of the questions on the form:

Media Roundup October 23rd 2009

Media Roundup

Real Estate News

Bank of Canada monitors real estate surge (Globe and Mail)

New condominiums will have Don River on the doorstep (Globe and Mail)

Fixed or variable mortgage? That is the question (Globe and Mail)

More home owners using cash for renos (Globe and Mail)

Developers willing to dive into distress (Globe and Mail)

Has a backlash begun? (Globe and Mail)

Sales of existing homes in full recovery after downturn (Toronto Star)

Analysts forecast near-record home sales in 2009 (Toronto Star)

CMHC bubble is 100% made in Canada (National Post)

Toronto now bedroom community for 905, report finds (National Post)

Sony Centre gets facelift, L-Tower gets started (National Post)

Commercial real estate bounces back (Globe and Mail)

Housing, industry fuel U.S. rebound (Globe and Mail)

Waiting for the Next McMansion to Drop (Wall Street Journal)

Neighbourhoods and Urban Planning

The new zoning bylaw: a confusion of bases (Spacing)

WATERTABLE: art commission under the Gardiner unveiled (Spacing)

Hume: A watershed for Toronto artworks (Toronto Star)

What Colour is Your Toronto? (Creative Class Blog)

Why are there fewer for sale signs in Toronto?

John Pasalis in Toronto Real Estate News

There are a lot of factors at play when it comes to the current shortage in housing supply that we are seeing in Toronto. 

From 2004-2006, annual resale home sales hovered around the 86,000 mark, and in 2007, sales jumped up to 97,000.  The sudden increase in sales was attributed to the jump from 25-year mortgages to 40-year mortgages which made homes more affordable for a greater number of buyers. We did some analysis at Realosophy and found that the majority of this increase in sales was driven by repeat buyers, not first time buyers. 

This means that thousands of repeat buyers who were planning to sell their existing house and buy a new house between 2008-2010, may have rushed into the market ahead of schedule in 2007 because of the introduction of the 40-year mortgage.  This shock to our market not only impacted sales in 2007, it is having a lagging effect on supply in the years following because fewer existing home owners are moving.

It’s also worth noting that the number of new listings peaked in 2008 which may also be having an effect on the supply of homes in 2009. The peak in new listings was likely a result of home owners trying to time what they thought was the peak of the market.

October mid-month real estate statistics

John Pasalis in Toronto Real Estate News

From the Toronto Real Estate Board:

In the first two weeks of October, Greater Toronto REALTORS® reported 3,631 sales – up 34 per cent compared to the first two weeks of October 2008. The average price for these transactions was up 17 per cent year-overyear to $414,479.

"While demand for existing homes has remained strong, it is important to recognize the context of current statistics. We are now making comparisons to the fall of 2008 when we experienced a marked decline in sales and average price," said TREB President Tom Lebour.

Year-to-date sales, at 69,964 are up six per cent compared to 2008. Average price, at $389,687, is up by two per cent.

"Tight market conditions throughout the GTA will continue to exert upward pressure on home prices in the fourth quarter," explained Jason Mercer, TREB's Senior Manager of Market Analysis. “Expect more listings in 2010 as home owners react to the price gains experienced in the second half of 2009.”

John Pasalis is the Broker owner of Realosophy Realty Inc in Toronto. Email John

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Ontario a step closer to mandatory energy audits

Bob Aaron in Legal

With the proclamation of the Green Energy Act, 2009, Ontario has moved one step closer to requiring mandatory energy audits on the sale of residential properties.

Section 3 of the new legislation is the only part of the law that has not yet received royal assent, but when it does it will give anyone who is making an offer to purchase a residential property the right to receive an energy audit from the seller. Regulations, which have yet to be released, will describe the type of information and reports the purchaser is entitled to receive.

The new law allows the government to establish rules setting out how energy audits will disclose the energy consumption and efficiency ratings for the house.

The Green Energy Act also states that, before accepting the offer, the seller must provide the prescribed information, reports or ratings to the buyer.

Real estate agents, or any others acting on behalf of the seller, are required to inform the owner promptly of any request for the information, reports or ratings from a person submitting an offer to purchase. This requirement, however, does not apply to agents or others who are performing their services as a favour and not getting paid in connection with the offer to sell.

Media Roundup October 16th 2009

Media Roundup

Real Estate News

Real estate: Why new house prices lag old house prices (Globe and Mail) 

Mortgage rate hike could cool housing rebound (Globe and Mail)

Fewer listings boost home prices (Globe and Mail)

Home prices rise less than expected (Globe and Mail)

Sales hot for condo at heart of Regent Park redevelopment (National Post)

Toronto helps lead surge in existing home sales (Toronto Star)

Despite objections, Yonge-Bloor area condo gets green light (Toronto Star)

Economic News

‘Runaway' Canadian dollar puts Bank of Canada in spot (Globe and Mail)

BoC chief in a quandary over interest rates (National Post)

A Bounce? Indeed. A Boom? Not Yet. (New York Times)

Work of 2009 Economics Nobel Laureates Sheds Light on Regulation (Wall Street Journal)

FT video: Martin Wolf discusses the winners of the Nobel Prize for economics (Financial Times)

Neighbourhoods and Urban Planning

City councillors approve condo tower for historic downtown street (National Post)

Councillor suggests implementing red light districts in Toronto neighbourhoods (680 News)

Beach residents battle condo plans (Toronto Star)

Architectural jewel goes straight to L (Toronto Star)

Fort York to bridge the city's past and present (Toronto Star)

Privacy at home focus of much court debate

Bob Aaron in Legal

Just how much privacy can a person expect in the comfort of his or her own home, free from any government intrusion? That was the question considered in August by a three-judge panel of the Alberta Court of Appeal. The case involved the home of Daniel James Gomboc in southwest Calgary.

Back in January 2004, police officers noticed that the windows in Gomboc's house were covered with condensation, the curtains were stained with moisture and the roof was free of snow – unlike the neighbouring houses.

After making these observations, the police officers asked Enmax Power Corp., the local utility supplier, to install a digital recording ammeter (DRA) to create a record of when electrical power was used in the premises.

Enmax complied, even though the police had not obtained a search warrant. Five days later, Enmax provided the police with a printout of the data obtained from the DRA. The record suggested that the electricity use was consistent with a marijuana grow operation.

Using that evidence and their earlier observations, the police obtained a search warrant and upon entering the house discovered a sizeable grow-op. They seized 165.3 kilograms of bulk marijuana, and 206.8 grams of processed and bagged marijuana, as well as numerous items related to the grow operation.

Media Roundup October 9th 2009

Media Roundup

Real Estate News

Home sales sharply higher in September (Toronto Star)

Red-hot real estate shatters price record (Toronto Star)

 Scarborough top spot for investors? (Toronto Star)

Global housing sector in 'tentative' rebound, Scotiabank report says (Toronto Star)

Buyers more irritable (Globe and Mail)

How to negotiate your first mortgage (Globe and Mail)

Becoming a landlord: More trouble than it's worth? (Globe and Mail)

Open vs. Closed Variables (Canadian Mortgage Trends)

Real estate: New life for high-end condos (Canadian Business)

Car-free condo approved by council (Inside Toronto)

Council narrowly rejects Don Mills development, community centre plan (Inside Toronto)

Canadian home resales seen leveling off by November (Reuters)

Hot real estate could prompt Canada rate hikes-TD (Reuters)

Rebound in house prices doesn't point to boom: Royal LePage (Canada.com)

Home sales jump not sustainable, Canadian Real Estate Association says (Daily Commercial News)

Economic News

Jobs market bounces back (Globe and Mail)

Canada Adds 30,600 Jobs, Jobless Rate Falls to 8.4% (Bloomberg)

Real Estate Trends Could Impact Future Path of Canadian Monetary Policy (TD Bank)

Housing Markets Rebound Sharply, Sidestepping the Worst (TD Bank)

Housing Starts Follow the Script in September (TD Bank)

Nobels and Great Classes In Economics (WSJ)

Neighbourhoods and Urban Planning

Are we becoming a city of haves and have-nots?  (Toronto Star)

Diverse city blind to the plight of its immigrants (Toronto Star)

Tough love for Toronto architects (Globe and Mail)

Toronto Real Estate Inventory Down 42%

John Pasalis in Toronto Real Estate News

The Toronto Real Estate Board released their monthly Market Watch report yesterday and the numbers aren't very encouraging.  We are continuing to see a significant imbalance between the supply and demand for homes in Toronto.

The inventory of homes available for sale in September dropped 42% over the same month in the previous year.

 

Resale home sales increased by 28% over last year breaking a sales record for the month of September.