Is the Bubble About to Burst?

This Is Where Awesomeness Happens!

Everyone is talking about a housing bubble bursting, but I think the first thing you need to decide is whether there actually is a bubble.

I watch the media headlines each day, and have picked a few below that perhaps are a good indication of why consumers are confused about the answer to the question I posed. (I know I am)

“Everything you need to know about Canada’s housing ‘bubble’”

“Is Canada immune from a housing bubble?”

“New hints of ‘soft landing’ for housing market as construction hums along”

“Toronto’s tallest condo towers designed for bull market that no longer exists”

“Average sale price for Hamilton property jumps $45,000 from last September”

“Home sales edge lower”

“Home sales drop 15% in September as prices edge higher”

“New rules may be slowing home sales”

“Canadian’s debt soars into danger zone”

“Are we worrying ourselves into a housing crash?”

These headlines have…

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Is the Bubble About to Burst?

Everyone is talking about a housing bubble bursting, but I think the first thing you need to decide is whether there actually is a bubble.

I watch the media headlines each day, and have picked a few below that perhaps are a good indication of why consumers are confused about the answer to the question I posed. (I know I am)

“Everything you need to know about Canada’s housing ‘bubble’”

“Is Canada immune from a housing bubble?”

“New hints of ‘soft landing’ for housing market as construction hums along”

“Toronto’s tallest condo towers designed for bull market that no longer exists”

“Average sale price for Hamilton property jumps $45,000 from last September”

“Home sales edge lower”

“Home sales drop 15% in September as prices edge higher”

“New rules may be slowing home sales”

“Canadian’s debt soars into danger zone”

“Are we worrying ourselves into a housing crash?”

These headlines have all appeared within the last 2 weeks, and show just how all over the map our supposed experts are in suggesting what the market is doing.

The full story for the first headline can be found at http://tinyurl.com/9u63885. The article clearly outlines the case for a bubble, but stops short of predicting a market crash similar to the US.

The full story for the last headline can be found at http://tinyurl.com/99mdl56.  This article has an interesting take on the market too, with the opposing position that we are not heading for a repeat of the U.S. situation.

The important thing to remember when looking at what the market is doing, is that real estate is a local business. Headlines are designed to catch your eye and make you read the article. They are generally very broad in the information provided, stating facts based on national information. It is important to realize that the national numbers are affected to a huge extent by the Toronto and Vancouver markets. Hamilton and area in contrast to these markets has not seen the fast run up in prices over the past few years, and accordingly is very unlikely to see the correction that is being predicted in the form of the bubble bursting. So my best guess is NO, there is not a local housing bubble. (hey, but don’t hold me to it!)

INTEREST RATES – WHERE ARE THEY GOING?

A day doesn’t go by when someone doesn’t ask me if interest rates are going up or down. Is there a correct answer to that question? Who really knows? Depending on which ‘expert’ you talk to, there’s a good chance you will get a different answer every time.

Reports in the news lately say Canadian household debt is higher than ever. Although the Bank of Canada is keen on doing something about it by raising interest rates, some experts say now is not the time as the global economy is too weak.

Any increase in interest rates will definitely affect those with variable rate mortgages and lines of credit. If you are planning on renewing your mortgage or you are buying a home make sure you do your homework when you decide on which mortgage product you choose. For example, some lenders offer a split mortgage where it is split between a fixed rate and variable rate mortgage.

Some economists are predicting rates won’t increase until sometime in the second half of 2013. Mark Carney, head of the Bank of Canada said he would give the public ample warning of any interest rate hikes. Historically when rate hikes occur many consumers who were thinking of refinancing jump in and do it before the increase or home buyers take less time to make their home purchase decision. Lenders are very aggressive with their lending practices just before any increase in interest rates.

What I find interesting is the central bank increases rates to slow the borrowing by consumers over the long haul but it has the opposite affect short term as it pushes consumers to borrow more before the rates go up.

Not an easy task, controlling the interest rates, to make sure it helps the economy, and not hurt it.

What’s the old saying, ‘Damned if you do, damned if you don’t’.

Your Real Estate Service Choices

There has been a lot of talk about ‘mere postings’, a la carte, do it yourself, full service, and more, but what are these choices really?

The publicity surrounding the Competition Bureau challenge to the real estate industry has brought to the forefront of our real estate profession, the variety of choices available to the consumer. These choices have always been there, but not everyone was aware of it. I would like to outline how each works.

Mere Postings

This is a term that has been used to describe a situation where a home owner has decided to sell their home themselves, but wish to use the http://www.realtor.ca website to advertise their property. To do this, they must list their home with a REALTOR®, but decline any service offering the REALTOR® might normally provide. REALTORS® are not required to provide this service, and many do not. REALTORS® who do provide this service do so at various prices. One thing to be aware of is that the property listing will show on the real estate board where the REALTOR® is a member, not necessarily where the property is located. For example, if you use the services of a Toronto REALTOR® to list the property and the property is in Hamilton, it will appear on the Toronto Real Estate Board, not Hamilton. The fees charged are generally paid up front and are non-refundable.

A La Carte

This model describes a system whereby a homeowner can select from a menu the services they wish to use a REALTOR® for. A fee is generally assigned to each service. For example, a homeowner could select placing their property on the MLS®, having a market evaluation done, negotiation of offers or any other combination of services outlined. Depending on the number of services requested, the price can vary greatly. The fees are generally paid up front, and no refund is provided if a sale is not completed. Also the homeowner is responsible for any marketing or advertising costs they might incur.

Do it Yourself

Much as the name indicates, the homeowner takes 100% responsibility for the sale of their property. This method does not involve the help of a REALTOR® and does not provide for advertising through the http://www.realtor.ca website. The cost of sale is paid 100% by the homeowner.

Full Service

This describes the situation where the homeowner enters into a contract with a REALTOR® to sell their home. The fee for this service is set by the particular REALTOR® who is hired. The services provided should be outlined for the homeowner at the outset, and the homeowner should be fully aware of what to expect from their REALTOR®. Studies in the United States have shown that using the services of a REALTOR® to sell a home will result in a higher dollar received by the homeowner. By this I mean that after all the fees are paid, the homeowner has more money in hand to buy another property or whatever else they intend to use the proceeds for.
The fees charged for this model are paid only upon negotiating an acceptable sale, and are paid once the homeowner has received their money from the buyer.

I hope these brief descriptions have shown the difference in these service models. If you are considering selling your home, perhaps they will have helped you better decide which is the right way for you. If you wish more information about what services a Coldwell Banker Pinnacle REALTOR® provides, please give one of our representatives a call. They will be glad to meet with you to discuss this fully, and you are under to obligation to use their services, unless it is the right choice for you.

MOBILE APPS – WHAT BENEFIT ARE THEY?

I don’t know how I ended up with this topic because I am by no means an expert on Mobile Applications, but I’ll give it a go.

A mobile application (or mobile app) is a software application designed to run on smartphones, tablets and other mobile devices. They are available through application distribution platforms, which are typically operated by the owner of the mobile operating system. Some apps are free, while others have a price. Usually, they are downloaded from the platform to a target device, such as an iPhone, Blackberry, or Android phones.

With today’s craving for instant information by the mobile consumer mobile apps have been developed for almost anything you can think of. And if you can’t find an app for your specific need, there is probably someone somewhere working on its’ development.

There are literally thousands of mobile apps available, but the experts recommend you do your homework before you acquire any new apps, especially if there is a cost. You want to make sure it will do what you want it to do. I came across this blog with the top 50 apps broken down into 5 different categories – check it out !  http://www.telegraph.co.uk/technology/mobile-app-reviews/8319652/The-50-best-mobile-apps.html

If you are looking for real estate information I recommend you check out the Coldwell Banker mobile app. It will show you homes available for sale in the area surrounding where you are at any given moment. You can also do specific searches for homes that meet your needs. It provides you with all the information regarding a property including photos and REALTOR® contact information.

Another great app for real estate information is the REALTOR.ca app. Again it will provide you with all the information regarding listed properties all across Canada. These apps are free so use them to your advantage when searching for your next home.

Technology has changed the way we live, the way we do business, the way we do everything. All indications show that the mobile technology world will be growing at an astounding rate. If you are doing business in today’s world you need to make sure all your technology such as your website or your intranet site for employees is mobile friendly. If businesses don’t adapt to mobile technology they may be overlooked by today’s consumer.

I don’t know about you, but I hate change. A friend once told me, “technology is your friend, embrace it, and use it to your advantage”.

I’m learning something new everyday!