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.