That’s an interesting thought, spurred on by the number of conversations I have on this very topic every week. The number of conversations seems to be increasing the last couple of weeks, as people looking at real estate in Milton Ontario, Mississauga, and Campbellville become confused with what is happening out there.

You see, the Main-Stream Media (MSM) has spent so much time and effort fuelling the doom and gloom, and has only just started reversing their story, about 6 months behind what I have been reporting, that the public is only just beginning to catch up with the real reality. As opposed to the reality the MSM has tried to create about the real estate markets in the GTA.

You have to be careful when believing what is being reported by some media giant, and they are all equally bad, because they do no

t have specific data, relevant to your immediate area, updated weekly. Perhaps more importantly, media like The Star, National Post, and The Globe & The Sun, do not have the local expertise to provide real, on-the-ground information with local interpretations of the data.

There’s one part of the key – ‘on-the-ground with local interpretations of the data‘. On my main real estate site, AllMiltonHomes.com, I have an Internet Warning:

REAL ESTATE INTERNET WARNING: Despite advertising claims to the contrary, the Internet is not an experienced Real Estate Professional. It cannot consult, counsel, advise, have knowledge of local laws and market conditions, make judgements, ‘own’ the result, or most importantly, understand your individual goals and needs and care about you as a Client. To obtain an accurate interpretation of any information  you obtain online, please contact us.

To me, this pretty much sums it up – data is worthless in the absence of skilled interpretation.

So, on to the subject of this post – are rising house prices better for buyers or sellers? Would a better question be “are rising house prices good for anyone?”

Let’s look at it from a seller’s point of view – when prices are rising, the value of your present house goes up. That’s great if you are in the segment of the market that is down-sizing, and it’s also great if you are relocating to a less-expensive marketplace. However, it is not so great if you are moving up in the same general marketplace. Let’s suppose your present house is valued at $400,000, and prices go up by 10%; that would make your house worth $440,000, which is pretty cool. However, the other side of that is, if you are like the average move-up buyer, you will be spending 30% to 50% more on a house, which means that the $550,000 house you were thinking of buying is now going to cost you $605,000. So, your current house went up $40,000, your new house went up $55,000, with the net result that you lost $15,000. I’d say that rising prices are not so good in that situation, wouldn’t you?

What about looking at things from a buyer’s point of view? Well, that’s a pretty simple conclusion – the more prices rise, the more a house costs you, so it can’t be a good thing, right?

Hmmmmm. So, if rising prices aren’t good for sellers or buyers, why is it that the real estate buying and selling public historically act against their best interests? To understand that thought better, look at the ‘feeding frenzy’ that was the real estate markets for most of the first 2/3rds of this decade – the faster houses were selling and the faster prices were rising, the more buyers their were competing for them. Now, when prices are, in general, lower and houses are, in general, taking longer to sell, there are less buyers out there and less sellers out there. Hmmmm.

So, where are you in the real estate market? Buyer? Seller? Are you active in the market right now? Why not? Let’s talk about it.

By Glenn Curtis

Many people assume that they can simply 1) buy a house, 2) apply a fresh coat of paint, 3) trim some bushes, and then 4) resell the home at a profit. Unfortunately, this process, called “flipping” is not that easy. After all, if it were, everyone would be doing it. There are several skills and people that every potential investor/flipper should have in place before even considering entering into a real estate transaction of this nature.

(If you’ve ever watched shows on HTGV or TLC on flipping houses, some of them make it look so easy, and it is just an unfair portrait to paint. First of all, you have to remember that the shows are filmed in the USA, where banking laws are much different, thus allowing for lower costs to the flipper. Also, building supplies are often much cheaper, thus allowing the flipper to make more money. Want a laugh? Google some of the ‘stars’ of those shows and see the trouble they are in.)

Here are the top five “must-haves” you’ll need to succeed in this endeavor.

1. A Group of Experts

While a house flipper can certainly go it alone, it will certainly help to retain individuals that are familiar with the legal, accounting and construction ramifications of flipping houses.

Flippers typically work against the clock, so they must renovate a home on budget and then turn it around and sell it before the financing costs eat up their profits. In any case, a bevy of experts including a real estate agent, a lawyer, a contractor or renovator, an accountant, a home inspector and an insurance agent can ensure that the work is completed in a timely and efficient manner.

2. A Handyman or Knack for Home Improvement

The house flippers that make the most money buying and selling homes tend to be handy people. That is, they have the ability to step in and lend a helping hand when time or money constraints kick in. Most flippers can do things like change a sink, install a countertop, do basic electrical or plumbing work, and/or shingle a roof.

Why is being handy so important?

The obvious answer is that if you can do the work yourself, you won’t have to pay someone to come in and do it. However, there are other advantages to being handy as well. For example, there are times when it will be impossible to get an electrician to install an attic fan on short notice. There are also times when a job must be completed without warning at the last second in order to obtain a certificate of occupancy. In these instances, having the ability to navigate your way around a tool box is very valuable.

3. A Good Lay of the Land

The buyer should know about the area in which they are buying property. A buyer should know, for example, what characteristics (acreage, number of rooms, type of home, etc) are the most desirable in the area in which they are looking to buy. Equally important is knowing what houses in the general vicinity have sold for and if there is likely to be any future development in the community (such as a new school, condominium or shopping center) as this could affect supply and demand.

4. A Good Estimator

By definition, house flippers attempt to buy a property and then resell it at a profit in relatively short order. In order to do this, however, the flipper must typically make some structural and/or cosmetic changes to make the property more appealing to the next buyer.

If the flipper underestimates the costs associated with the refurbishment he or she may be exposed to large monetary losses. Therefore, a flipper should be familiar with construction materials (their use and their cost), as well as local construction codes, the cost of local labor and the time it should take to do a given job.

This is no small feat. In fact, it takes even the most seasoned construction professional many years before he or she is aware of all the nuances that exist. In any case, before becoming involved in “flipping”, be certain of your abilities to estimate a job in terms of both cost and time.

5. A Dose of Patience

One of the biggest obstacles to making money in the real estate market is that buyers tend to overpay for a given property.

Why do buyers overpay?

Typically, buyers become emotionally attached to a property or develop some other bond with it, which in turn forces them to enter into a contract on less than favorable terms.

However, savvy flippers have the ability to avoid emotional purchases, and the desire to find diamonds in the rough and properties on the cheap. They also understand that if they aren’t buying a property at a favorable price and with favorable terms, it makes sense to simply move on to greener pastures.

The bad news is that patience is a difficult virtue to teach and hone. In general, either you have it or you’ll lose a lot of money trying to learn it.

The Bottom Line

While quitting your job and becoming a full-time house flipper may sound like an attractive proposition, be sure that you have these five “musts” before investing in a real estate project.

(There are many better and easier ways to make money through real estate investing – come to one of our FREE Millionaire Real Estate Investor workshops to learn about them. Click the link at the top-right of this blog to get information about when the next workshop is being held.)

I came across this article today, and it made me think abo u

t the real estate market locally – more specifically, how the market is in kind of a shambles because people have been buying into the messages from the mainstream media (msm) for far too long.

You see, the msm has spent the last 12 months talking about how everything is so bad, and how much worse things are going to get, and everybody listened. It reminds me of the politician who reports when gas prices are going to go up – they go up. What if he reported that gas prices are going to go down? Might they go down?

Anyway, my position on the real estate market has been, and still is, that people have to live somewhere, so why not buy a house? Prices have gone down, rates are crazy-low, and rents have gone up. Talk about three things to stop people from renting! Yet they have continued to hold off on buying a home.

The reasons given are varied:

1. Worry about job security. Well, as mentioned, if you have to live somewhere, and it is cheaper to own than to rent, why would you rent?
2. Prices are going to go down even more. Are they? They haven’t, and they’re not going to. Why? Because we are not the United States, our systems work very differently, and Canadian banks don’t want to own real estate.
3. If it is such a great time to buy, more people would be buying. Actually, the fact of the matter is that if there were more well-priced, well-maintained houses on the market, more people would be buying. There’s almost a herd-mentality amongst homebuyers – when everyone’s buying, it must be a good time to buy. Hmmm. The laws of supply and demand say the opposite, don’t they?
4. I’ve got 9 months left on my lease. Yes, and? What I mean by this is that there are all kinds of creative ways to buy now even if you are in a 1-year lease for another 364 days. Call me for details – there are lots of ways to take advantage of the rates and prices before they go up (which they will once everyone else starts buying).
5. I don’t have enough of a downpayment saved. Well, what is ‘enough’? You can still get 100% financing; you can still get cash-back. I’m telling you, times are perfect to buy!

So, are you going to just sit back and wait? Wait for changes that won’t come? Wait until the home of your dreams is priced out of what you can afford because prices and/or rates have gone up?

Search on Twitter for GTA real estate agents – they are all saying the same thing: multiple offers. The sellers won’t sit back and wait for you – get into the market while it is to your BEST advantage.

Here’s the article that spurred my thinking:

The Bank of Canada is declaring the recession essentially over in Canada and projecting the economy will bounce back at least twice as strongly as in the United States.

The bank said today it estimates the Canadian economy will advance by 1.3% during the current July-September period, and 3% in the fourth quarter, both at annualized rates.

The bank’s quarterly monetary policy report contains many cautions about how the world and Canada is coming out of the deepest and most painful downturn since the Second World War.

The bank remains concerned that the fragile financial systems in the United States and Europe may contain more unpleasant surprises that will sideswipe the global economy once more, and it believes the strengthening loonie is not helpful given the Canada’s dependence on exports.

As well, it warns the recovery is at best nascent and dependent on massive government stimulus and historic low interest rates to support domestic activity and consumer spending.

But overall, the new outlook represents a clearly more optimistic view of the Canadian economy than governor Mark Carney presented in April, when he saw the contraction that began last October lasting at least until the fourth quarter of 2009, and the dip in the first month of this year breaking all records.

The Bank of Canada first indicated it was about to brighten its outlook on the economy on Tuesday in a statement accompanying the decision to keep short-term interest rates unchanged.

At that time, it said the economy would shrink by 2.3% this year—implying growth had already begun—and expand by 3% in 2010.

On Thursday it said that economic growth “is now projected to turn positive in the third quarter.”

Carney told reporters the recovery it will be a “gradual” process.

“Global economic activity appears to be nearing its trough, and there are increasing signs that activity has begun to expand in many countries in response to monetary and fiscal policy stimulus and measures to stabilize the global financial system,” he said.

“However, this recovery is nascent, and to sustain global growth effective and resolute policy implementation remains critical.”

That effectively means that the downturn that cost Canadians close to 400,000 jobs since October has ended, although the recovery will be modest by historic standards.

The bigger bounce the bank is projecting starting this quarter does not change its overall view that it will take until mid-2011 for Canada’s economy to return to full capacity.

I got this article from a mortgage agent, and thought it worthy of passing on to you . . .

Too many buyers … especially first time home buyers… find themselves standing on the sidelines watching the housing parade go by due to a unfounded concern that home prices might dramatically drop again due to a sagging economy.

If this sounds like you, there is something you need to be aware of:

By not taking action today on a affordable home you may be missing out on some of the best moments life has to offer for you and your family!

Personal Story:

Many years ago, the wife and I decided that we should abandon apartment life and put down some permanent roots closer to our daughter’s new school.

Had it not been for the fact that we had to buy before the start of school, we may have been inclined to put off buying today in hopes for a better price tomorrow…and that would have been a big mistake. Here’s why:

What I Know Now I Didn’t Know Then:

I will never forget our first night in our new house. As we sat in our new dinning room having

our first dinner in our new home something seemed out of place. It was quiet…too quiet.

Gone were the sounds of the footsteps from the woman who lived a floor above us as she darted from room to room. (that woman never sat still) …

Gone were the sounds of two yapping dogs across the hall who barked uncontrollably every time someone in the building opened and closed their door.

Gone were the sounds of car horns and screeching brakes during rush hour traffic from the busy street adjacent to our building…

Gone were the sounds of our neighbors daily life. From their music, to their television shows….

All of that noise and chaos was gone. In its place was a quiet, tranquil feeling that let us silently know that all of that was behind us now because we were home. It was so quiet we felt like we were on a vacation in a cabin somewhere in the mountains.

My daughter now had her own backyard to play in. My wife went from one room to the next excitedly discussing her decorating plans. I finally had my home office. As a family we began planning things we only dreamed of before…like having our own dog. (his name was Logan and he gave us 14 great years)

I could never put a price on the feeling of pride and enjoyment our family had those first few days…weeks…and months in our new house.

Bottom Line: I understand that afford ability is an important factor.  However,  if you find a home that is affordable and meets your needs, don’t talk yourself out of buying today with the notion that by waiting you may get a better deal somewhere down the road (especially if you are looking at homes in the lower end of the market).

Rate are down…inventory is up…prices are affordable and there are a number of incentives for buyers to buy.

If you are looking to buy a home, there are a lot of factors in your favor right now.  Don’t let an unfounded concern or fear regarding something that may never happen (another major drop in housing prices) stand in the way of  presenting your family with one of the greatest gifts you can possible give them…the enjoyment of owning their own home!

In my business, I have been noticing a growing trend that more and more homebuyers are either newly-arrived immigrants, or they are people living overseas and making plans to move to Canada. Curiosity led me to do some research as to whether this is a GTA-phenomenon, or something more widespread.

Here’s an article recently run by the CBC:

Canadian immigrants are narrowing the homeownership gap with their Canadian-born counterparts, according to a new report Thursday by Scotia Economics.

The report compared census data from Statistics Canada from 2001 and 2006, when the housing boom was near its peak and unemployment was low.

The report indicates that in 2006, 72 per cent of immigrants lived in an owned home.

That’s compared with 68 per cent in 2001, an increase of four percentage points.

At the same time, the percentage of Canadian-born people choosing home ownership over renting rose by only two percentage points to 75 per cent, up from 73 per cent.

“Homeownership tends to increase the longer one has lived in Canada, with the majority of new arrivals first settling in rental accommodation,” Adrienne Warren, a senior economist with Scotia Economics, said in a release.

“Over time, immigrant families eventually make the move to homeownership, at rates similar to the Canadian-born population. However, between 2001 and 2006, the homeownership rate rose for all immigrant groups, regardless of how long they had resided in Canada. The biggest increase was among those living in Canada for less than 10 years.”

Warren said the faster transition to home ownership was likely due to two factors.

“I think it’s that we’ve had a very strong job market, and that has allowed people to make the step from being a renter to homeowner perhaps faster than in the past,” she said.

“I think it also has to relate to mortgage [and] market conditions, [and] the fact that we’ve had historically low mortgage rates that has made buying a home cheaper.”

Because the analysis was based on data from 2001 and 2006, it was unclear what effect the current recession might be having on the number of immigrants and others entering the housing market.

It was clear from the report, however, that Scotiabank expects that trend in real estate to continue.

“Given Canada’s aging population and relatively low fertility rates, longer-term household formation and housing needs will be largely determined by immigration,” Warren said.

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Given the plethora of mortgage programs available to new immigrants, my experience is that an ever-increasing number of them are looking to buy a property, rather than renting. Sure, some new immigrants want to rent for 6 months to a year, to make sure they are choosing an area they will like, but the vast majority are coming over because of family, work, etc., so they want to buy as soon as possible.

Genworth has a program that will enable new immigrants to buy a house, with as little as 3% downpayment. Here’s just a few of the details of this program:

The New To CanadaTM Mortgage Insurance Program makes it possible for individuals relocating to Canada to purchase a home sooner with as little as 3% down. Through this program, Genworth helps new Canadians purchase their first home, build equity, and become economically established in Canada.

Highlights
• Up to 97% LTV for qualified borrowers
• No minimum income requirements
• Increased qualification options
• Available up to 36 months after arrival
• Standard Premiums apply
• Extended amortizations available up to 40 years

New To CanadaTM Mortgage Insurance
Program features:
• Opportunity: helping new Canadians own their home sooner and become economically established in Canada
• Low down payment: as little as 3% down
• Flexible: fixed, variable, or adjustable rate mortgages permitted
• Common-sense evaluation: review all files by individual circumstance
• Portable: insurance can be applied to a new loan

If you’d like more information on mortgages for new Canadians, give me a call or fire me an email.