Monday, April 18, 2011

This is a good time to buy but not a time to rush as we expect the buyers’ market to continue all through 2011.

Spring was, was not, was, then went away but is almost here and the real estate market does show signs of a spring awakening.

On February 7 and 8th most major Canadian banks raised their 5 year interest rate for mortgages by .25%. More recently some banks have slightly raised the long term rates due to a low supply of mortgage money but rate increases do not appear to be likely until at least the Fall due to the upcoming Canadian election.

With low rates, this year is a good time to buy. We suggest that it is a good idea to list properties for sale now in the early spring market, before there is more competition in your neighbourhood.

Continuing instability in the Arab world, have created uncertainty, a higher Canadian dollar and higher fuel prices but otherwise the world’s economy appeared to be in less danger of slipping back into recession until the earthquake/tsunami/radiation crisis hit Japan.

I believe there will be even higher oil prices once lost nuclear energy is replaced by oil and Japan moves into rebuilding. Ontario’s economy has done better than many others.

We will have a federal election in May but it should not affect the Canadian economy’s performance or affect the real estate market in Ontario. Stock markets rose and gold speculation reduced in the early new year showing support for improved economic indicators in the USA and the approval of major tax cuts as a further stimulus to the economy. We have been living this year in a more optimistic world but not necessarily safe from recession yet as seen by stock markets falling in Canada and worldwide after the Japan crisis evolved. The recent move to well above parity for the Canadian dollar is actually a danger sign especially for Ontario where the high dollar is bad for exports.

Last year’s real estate slowdown started once the HST was effective. Last year the major Canadian banks began to raise longer term mortgage rates during the last week of March and again in mid April 2010 as the long term bond rate went up due to speculation of higher rates coming. Most people thinking that tough times were over, were expecting that the official Bank of Canada interest rate would begin a serious increase in rates from their recession low of .25% and the present 1% official rate, but that was not in the cards.

There is good reason to continue to hold rates low when serious unemployment as part of a weak recovery in the USA, problems in Europe and concern over restraint in China have kept the Canadian dollar from jumping and hurt commodity prices for minerals and oil which are so important to Canada’s economic performance. This continuing world downturn is the real force that will slow pressure for rate increases in Canada.

High interest rates would help raise the Canadian dollar (now at $1.03) far above the US dollar and hurt the Canadian manufacturing sector which is the main part of Ontario’s economy. With the Libya crisis and oil prices over $100 per barrel, rising with concerns about peak oil (Saudi Arabia running out?) and the environmental danger of offshore drilling, we can expect the Canadian dollar to continue to rise to dangerous levels due to higher valuation of Canadian tar sands oil reserves even without an interest rate increase over the next several months.


Much real estate activity has been driven by fear of big increases in interest rates. People want to lock into a long term mortgage while rates are still fairly low. This probably makes sense if you can get a 5 year rate of 4% or less. The reality is the economic crisis is far from over and long term mortgage rates may fall a little again giving even better terms for a locked in mortgage rate in the future. This is a good time to buy but not a time to rush as we expect the buyers’ market to continue all through 2011. Make offers conditional so you can have someone qualified inspect the property first and be satisfied you wish to proceed once you know the condition of the property and likely future costs related to the property deficiencies.


The real estate market was hot early in 2010 in our local areas of Pickering, Ajax and Whitby and other popular places in the City of Toronto. The mild weather and absence of snow in Southern Ontario certainly helped keep the market alive last winter. The busy winter market of 2010 was unprecedented and the big question now is what will happen beyond this Spring in 2011.

This winter has not been like last winter in any way especially the weather. Recent developments continue to show that the economic crisis is not over and unemployment is a very serious concern. While technically the recession was over by the end of 2009 the recovery remains questionable. There is a huge and growing Government deficit both Federal and Provincial which will take many years or major Government spending cutbacks to repay once the effort is made. Right now interest rates remain at historic lows and incentives for first time buyers have brought new buyers to the real estate market. There was a rush to be ahead of the Ontario HST which adds 8% provincial sales tax to the GST of new home purchases (over $400,000), all real estate commissions and all legal fees which started in July 2010. Utility and fuel costs have risen because of the HST. Higher taxes associated with home ownership, purchase and sale have already slowed the market. The 905, 519 and 705 areas are significantly benefiting from the City of Toronto’s Land Transfer Tax which adds considerable cost to a home purchase in Toronto (except for first time buyers).

Toronto is reviewing the Land Transfer Tax and taxes in general with a penny pinching mayor. This May, if Rob Ford succeeds, draw some people back to the city or at least slow down the exit from 416 to 905 many have been making. At the same time this may cause fearful minorities and those requiring social services to exit Toronto which could become less friendly with the new group in charge at city hall.

The auto sector is doing very well now and jobs have been preserved at GM and Chrysler who were in bankruptcy situations. Ford has grown stronger to become the number one auto manufacturer. In Oshawa people at GM are working overtime and extra shifts to build new Camaros. Impala production in Oshawa has been renewed along with new Cadillac models and the made in Oshawa Camaro continues to be produced below demand levels. GM and Ford are benefiting greatly from increased sales in the fast growing market of China. Toyota’s vehicle problems have helped GM as well and GM is now actually making a profit.Its recent sale of shares went very well and they are holding their price. We project further growth and stable housing prices in the Durham Region buoyed by GM’s recent success. This should spill over to Peterborough and the Kawartha Lakes areas which are designated for growth by Province of Ontario plans. Signs are now up and an announcement made for the full extension of the 407 Highway to Highway 115 which will make the commute to and from the Kawarthas easier which will attract home and cottage buyers. We expect a housing boom to spread into Peterborough and the Kawarthas in the coming two years with greater volume of real estate sales and higher prices.



Announcement by Canada’s Finance Minister Jim Flaherty of tighter rules for qualification for an insured high ratio mortgage has made a greater than originally expected impact on the market and not just by keeping borderline qualified buyers out of the market. With the tie of qualification to long term interest rates the new rules force home buyers to qualify for a mortgage at the high 5 year posted fixed rate even if they are selecting a discount, variable or lower short term rate. Many who can easily afford to buy a home are not qualifying because of the requirement for bigger down payments and that they qualify for the highest rate mortgage now offered. This will put a damper on house buying by people who can barely afford it and in the long run it should stabilize the market. There was some panic going on in late 2010 which was unwarranted and there is now less talk of “bubble bursting”.



Condominium sales in Toronto have weakened because there are so many new projects opening in excess of demand. We believe the fear of there being too many new ones being built is unfounded in the long run as condominiums reflect a lifestyle change which is beginning to extend to the baby boomers. This is an excellent time to get a good deal in the condo market. There is likely to be a decrease in new condo projects which will once again tighten supply before too long. There has been little activity in the cottage market for a few seasons but it picked up a little last year with no boom. Lower priced cottages have been selling as have those with price drops. Reasonable pricing is the key as the market has many cottage options in Ontario with a wide range of prices. The best cottage investments would be properties close to the GTA where the drive is not too far noting the rising price of gasoline. Cottage areas east of Toronto should benefit from easier access. More cottage owners are looking to get rental income and it appears renting is more affordable for many people than buying. Cottage buyers will be attracted by the opportunity to rent out their cottage some of the time to offset costs. Buyers for all types of properties need to be cautious of overpaying and need to think of the future when they may have to renew large mortgages at a higher interest rate.



I predict that the Ontario, Canada real estate market will be positive through 2012 despite negative factors including the HST. Canadians always seem to adjust quickly to new taxes. I do expect a continuing slow but steady market with no “crash”. Royal Lepage on January 6, 2011 issued a report predicting a 3% rise in housing prices nationally for 2011. Most home buyers now are locking into longer term mortgage rates that are sometimes much higher than short term rates. I believe you will save if you get a lower variable rate now as I predict any rise in rates will not be as large as the current spread between long term and variable rates. What you do depends on your willingness to take risk and how important certainty is to your budgeting. As well if your bank will give you a low five year rate as some banks are now offering it may be to your advantage.

If you have any questions about the real estate market, just give me call (416) 953-9714 or (905) 568-2121.

Tuesday, April 5, 2011

Don't toss out that towel! How to Get Rid of Mold in Towels and Clothing : )

 How to Get Rid of Mold in Towels and Clothing

Tossing damp towels and clothing into a laundry hamper or beach bag might seem convenient at the moment, but it can lead to mold. Mold stains and scents can be difficult to remove from laundry unless you use the proper techniques. You don't have to scrap your moldy towels and clothes in favor of buying new ones. There are simple ways to remove mold and mildew.

Difficulty:ModerateInstructions

things you'll need:

Water

Washer

Dryer

Bleach

Laundry detergent

Clothesline (or other means of hanging clothes outside)



1 Fill your washer with hot water, the appropriate amount of laundry detergent and one cup of bleach. Use chlorine bleach for whites and color-safe bleach for non-white towels and articles of clothing.

2 Add the clothes or towels as the washer is filling with water (after you have added the detergent and bleach).

3 Let the clothes or towels soak for 30 minutes before continuing the washing cycle.

4 Remove the towels or clothes from the washer once they finish washing and place them in the dryer. Dry for 30 minutes on the hottest setting. The heat from the washing and the drying, combined with the bleach and detergent, should kill mold spores.

5 Hang the clothes or towels outside in bright sunlight, preferably in an area where they can receive a breeze. Try to leave them hanging outside all day. This should help to remove any remaining moldy scent.


Tips & Warnings

Prevent mold and mildew in clothing and towels by washing wet or damp items immediately or hanging them in a well-ventilated place to dry out until you can wash them.