Selling Your Home To Leave The City: Is It Right For You?

CBC reports that a new Royal LePage survey found that about half of Baby Boomers surveyed in Canada planned to sell their homes and downsize.

According to Royal LePage, many of these Boomers want to move to smaller, more affordable communities.

At BGS Homes Inc., we have seen the latest phases of communities in locations such as Norwich and Norwood sell out, with Boomers being a significant percentage of buyers.

Here are several tips to determine if selling your City home is right for you:

1.  Have you saved enough money for retirement?  A recent survey by CIBC found that respondents believed that $756,000 was the amount respondents thought was necessary for retirement.  The survey also found that 90 percent of respondents did not have a plan to get there. 

According to TREB (the Toronto Real Estate Board), in the GTA in July, the average sale price of a home was over $1 million. Semi-detached homes averaged $746,000 in the GTA during the same period.

So if you are lucky enough to own a home in Toronto and paid off your mortgage, selling your home in the city and moving outside of the city could help you get close to that $756,000 goal!  Visit www.bgshomes.com to see some of our latest communities and how to learn about pricing.

2.  When should you sell?  That same TREB survey showed that detached homes only increased 0.5% in the GTA between July 2017 and July 2018.  That increase is lower than many savings accounts pay!

Over time the history of the real estate market in the GTA has been up, but downturns do happen, as has been seen during certain periods of the past year. 

What would happen if all Baby Boomers sold at the same time to cash out?  While that hopefully does not happen, if it did, it may cause a downturn.

There are many factors to consider when selling, but if you are near or in retirement and have no retirement savings, selling when prices are still strong may be worth considering and discussing with a real estate professional.

3.  Will I get bored moving out of the City?  We have built many communities within an hour and half or so outside of Toronto.  A trend we notice is that people get to know their neighbours in smaller communities.  You may be surprised of the fun you will have and people you will meet, all while still owning a detached home.

Further if you live within an hour and a half drive outside of Toronto, you may be able to attend your favourite sports and entertainment events in Toronto on weekends, when traffic is lighter, and spend less time driving than many people commute in weekday rush hour!

As Average Rents Go Up, How Can Renters Find Relief?

An Urban Nation study found that the average rent a Greater Toronto Area average-sized (732 square feet) condo rose 11 percent in the second quarter of 2018 compared to the same period in the prior year.

Average monthly rent hit $2,302.

Here are several longer term ways renters may be able to find relief.

1. Save money with a roommate. If you are just starting out, a roommate is a great way to save money, as you can share expenses, and typically a two-bedroom apartment is not double the price of a one bedroom.  For example, in the study cited, an average one bedroom goes for $1,968, while an average two bedroom goes for $2,640.  The cost of two tenants renting two average one bedrooms is $3,936.  By sharing a two bedroom apartment, each tenant will save almost $650 per month, plus benefit from the ability to share other costs like any utilities and cable.

2. Write to your local member of Parliament, member of Provincial Parliament, and City Councillor and demand more affordable housing.  These three levels of government have worked together to find incentives to build new affordable housing (Full disclosure, BGS Homes Inc. has built affordable apartment housing in Toronto and Whitby in conjunction with all levels of government).

3. If you can work from home, consider moving out of the GTA and buying a home. For example, a family earning $70,000 a year can afford a home valued at $350,000 with a $100,000 down payment. While that may not get you a home in the GTA, there are homes within driving distance of the GTA within that price range.  Check out bgshomes.com for the latest communities we are building.

Things Not To Include With Your Home Offer

The Canadian Press reports that some potential resale home buyers in Canada are including notes and family photos with their offers.  The idea is that if there are multiple offers, perhaps a sentimental note attempting to connect with the seller may improve your chances of selling a home.

We will leave it to you and your real estate agent to decide whether this approach is right for you. If you do decide to take this sentimental approach here are some light-hearted:

Items Not To Add To Your Offer To Purchase A New Home

1.  Spilled red wine stains. In addition to looking sloppy, one might question whether you were even sober when you made the offer and should be taken seriously!

2.  A Post-It note with all of your internet and app login passwords.  The sellers could steal your identity. Worse, they could hire Uber drivers to move all of their furniture to their new home in Saskatchwan using your account. Say goodbye to your near perfect 4.8 Uber score!

3.  A photo of the random family that came with a picture frame you just bought. Especially if it is a random family of kittens. Kittens are notorious for walking away from counteroffers.

De-Mystifying Toronto Real Estate Numbers For Consumers

The Toronto Real Estate Board (TREB) reported its June 2018 monthly numbers today.
According to TREB:
"The average selling price edged up by two per cent on a year-over-year basis to $807,871 in June 2018. After preliminary seasonal adjustment, the average selling price was also up by 3.3 per cent month-over-month between May 2018 and June 2018. The MLS® Home Price Index (HPI) was down by 4.8 per cent on a year-over-year basis, but remained basically flat month-over-month."
Confused?  We don't blame you, there was a lot of information packed in there.
Here are three points to help you understand the information:

1. Know the meaning of "month-over-month." Prices rose "month-over-month" between May 2018 and June 2018.  That means the average selling price trend between May and June was an increase of 3.3 percent (subject to seasonal adjustment which we'll get to later).
2. Know the meaning of "year-over-year." This looks at the change of price after a year. So it is comparing the average June 2018 price to the average June 2017 price.  The average price increased 2 percent in a year.
3. Know the relevance of seasonal adjustment.  People like to buy houses in the spring and summer. The weather is nice for visiting open houses and for moving furniture.  Families can relocate to new areas in time for the school year.  So comparing winter sales to spring sales is never apples to oranges.  So a seasonal adjustment is intended to compensate for the actual season, to give you a better idea of the strength of the market.

As for that "MLS Home Price Index" - we'll get to that in a future post.  Have any topics you'd like to see - let us know in the comments section below!

Housing Affordability May Be Declining In Canada… But There Are Solutions Near Toronto

According to a recent RBC Economic Research report cited by BNNBloomberg:

“[A]ggregate affordability measure rose four percentage points on a quarterly basis to 48.4 per cent, signalling that more of homeowners’ household income would need to be devoted to the cost of ownership…”

Here are some potential ways that some aspiring homeowners can deal with this problem:

1. If you are able to work from home, consider moving out of the GTA. Within a two hour drive of Toronto are numerous quaint communities where a new home costs significantly less than in the GTA.
2. Don’t give up the hope of home ownership. It may be easy to think there is no point saving your money when housing prices are as high as they are. However the housing market, like any market is subject to cycles.  If you save money on that daily latte, some day may come when your income may also be higher and homes are more affordable.
3. Resist the temptation to Keep Up With The Joneses. You may have friends who appear to be living the high life with a home much larger than they really need. But they also may be living pay-cheque to pay-cheque to afford some luxuries they don’t really need. If you get in the habit of saving, you may view such items in terms of the time it takes you to save that much money, inspiring more saving.