Home sales down 37% by mid July

According to the Toronto Real Estate Board (TREB) / Greater Toronto Realtors only 2,790 sales were made during the first two weeks of July 2010. For the Toronto real estate market that represents a 37% drop compared to the same time frame in July 2009. New listings also were down 8%.

This is to be a little expected however. Last year saw a bumper crop of home sales.

“Last summer existing home sales spiked well above the expected long-term trend. Sales were also unseasonably high during the first four months of this year,” says TREB President Bill Johnston. “Transactions will be down year over - year in the second half of 2010 as the level of sales balances out.”

“With year-to-date sales up by more than 18 per cent compared to last year, we continue to look forward to one of the best years on record under the current TREB trading area,” says Bill.

The average price for July mid-month transactions was $427,931 – up 8% from the same time period in 2009.

Jason Mercer, TREB’s Senior Manager of Market Analysis, believes that there will plenty of sales to maintain the sustainability of price growth.

But what if he's wrong and prices start to plummet?

Retroactive property tax bills

New homeowners in Etobicoke are being struck by multiple retroactive property tax bills for 2008, 2009 and 2010... and they have to be paid in two installments in September and October.

Depending on the size of a home in Etobicoke homeowners can expect the combined three tax bills to total between $2,100 for a small bungalow and $60,000 for a multi-million-dollar mansion.

Having to find such large amounts in a short time period has angered many homeowners, especially since this isn't the fault of the homeowners in the first place. This is the fault of lazy, slow-moving bureaucracy.

Property taxes in Ontario are assessed by MPAC (Municipal Property Assessment Corporation) and are usually assessed in the current year and going back up to two years. Thus the longest any property tax can be retroactive is three years. When that happens, homeowners get an extra hefty bill to pay in a short amount of time. But it is supposed to be extremely rare!

Normally assessment is supposed to happen within the first 6 months of new construction.

What has happened here is because of a shortage of inspectors and rampant growth of new homes in the Etobicoke region there has become a huge backlog of new homes that don't get assessed for 2 or 3 years after being built. (Or rebuilt in the case of fire or there was something wrong with the foundation forcing the house to be torn down and rebuilt.)

This year however instead of 1 or 2 homes being charged retroactive tax bills going back three years, there are literally hundreds of new homeowners who are getting whacked over the head by the tax truncheon. MPAC is refusing to give exact numbers, but the number of complaints continue to pile up.

Worse, if your house was rebuilt and it was originally valued at say $450,000 in 2007 and the new house is only worth $250,000 you still have to pay retroactive taxes on the house as if it was still worth $450,000.

More than 12,300 supplementary tax bills were mailed in the last cycle of land taxes in Etobicoke, mostly representing back land taxes for 2 years. There are 3 to 4 cycles of land taxes per year.

So yeah. That has just scared me away from buying a home in Etobicoke. If they can't send tax bills out on time, just imagine what else is wrong with the system out there.

Leaside, a dream neighbourhood in Toronto

The Bank of Canada has raised interest rates again, making it more difficult for people to get a mortgage at an affordable rate. The key overnight lending rate has been raised from 0.5% to 0.75%.

With that in mind it makes sense to me that people might want to consider buying a house in a region of Toronto which is often overlooked.

Leaside is a small but quiet neighbourhood right in the middle of Toronto. Most of the homes in Leaside are traditional detached two-storey designs dating from the 1930s and 1940s, all-brick constructed, with distinctive intermixing of cut stone around entryways and front bay windows. Homes in Leaside often have exterior details such as leaded glass windows, arched / peaked entrances and broad wooden door casings. Its a level of artistry that hasn't been seen in decades and for someone like myself who enjoys older architecture, a pleasure. Inside you will typically see traditional wooden mouldings, baseboards, and floors... the type of things you'd see when visiting your grandparents.

Or in my case, my parents' farm... or the 1920s apartment building I currently live in.

I look at the architecture of some of the homes in Leaside and I just drool. They're "perfect", almost idealized, like a Carl Schaefer painting.

Not all the homes in Leaside are what I'd call affordable. Some of the really nice homes are $900,000 or more. Depending on where you look however there are more economical alternatives. South Leaside has a variety of semis and bungalows with price ranges hovering around $500,000.

The reason for this is because Leaside is a good place for anyone in the upper middle-class wage bracket. So that means people like myself probably couldn't afford to live there... but I can still dream right?

Sure, its not the multi-million dollar homes of Rosedale... and its not one of the soon-to-be-a-slum condos by the waterfront either. Its just a nice quiet neighbourhood with the following perks:

#1. Conveniently close to both Yonge Street and the Don Valley Parkway. Commute time to downtown is 15-30 minutes.

#2. Cycling distance from downtown. In fact there's plenty of bicycle lanes and trails in the surrounding region. (As a bicycle mechanic, I appreciate these things.)

#3. Abundant local parkland. Serena Gundy Park, David A. Balfour Park, Moore Park Ravine, Flemingdon Park, Sunnybrook Park, Blythwood Ravine, Sherwood Park.

#4. Lots of local schools for children and teens. Maurice Cody School, Blythwood School, Bessborough Drive School, Rolph Road School, Leaside High School, Northern Secondary School, Marshall McLuhan Secondary, North Toronto CI, Don Mills CI.

#5. Oh and its only a short bicycle ride to the Ontario Science Centre, a huge chunk of parkland, fishing in the Don River and the archery range just south of the OSC (as someone who enjoys the sport of archery I can appreciate that).

The area is named after the Lea family from Lancashire, England who arrived in Canada in 1819. John and Mary Lea later built the first brick house in York township in 1829. In 1841 their son William later bought additional land and built an octagonal home which he dubbed "Leaside". The house is no longer there, but its location was where the Leaside Memorial Gardens is now.

I did manage to find a painting of the octagonal home however, shown here.

A lot has changed since Leaside was once prime farmland. Now there's three subway stations nearby, Eglinton, Davisville and Bayview, a plethora of restaurants, boutiques and a combination of small "family businesses" and larger retail stores.

The history of the area includes:

The Leaside Junction Station, one of the busiest train stations and train yards in Toronto from 1894 to 1969.

The Leaside Viaduct, a bridge built in 1927 across the Don Valley.

Residential construction in Leaside didn't begin until the 1930s. In 1967 Leaside became part of East York and eventualled was amalgamated with Toronto in 1997. The area is popular with families, since it has such quiet streets, very little crime and a large number of schools / parkland. Many parents consider it to be one of the ideal locations in Toronto to raise kids.

In the 1990s a number of "exclusive" condos and townhouses were built in the region, attracting more families to the area. Many of Leaside's local shops are geared towards children and mothers, although the area also boasts antique shops, specialty stores and pubs. There's also libraries, community centres, indoor ice arena and an indoor swimming pool, curling rink and an auditorium. The local Sunnybrook Park even has horseback riding stables.

Seriously, freaking horse stables! Who wouldn't want to live in Leaside???

Well, maybe if you were allergic to horses or you have Hippophobia (the fear of horses)... but otherwise, com'on! Leaside is like a dream neighbourhood most people can only fantasize about living in. Of course, if you have a good job and can afford to live there that is another matter entirely.

Learn more about Leaside here:
Leaside : Prime Toronto Neighbourhoods
Search Leaside Homes
A Brief History of Leaside

Which Toronto neighbourhood is the best?

When it comes to buying a home the question of which neighbourhood is the best (or at least the best for you) is a question that is bound to come up.

For example, I happen to like the quaintness of Tiny Town (Craven Road, near Gerrard and Coxwell). There's also Marlborough Place Avenue, a thin street between Avenue Road and Yonge Street, just north-west of Rosedale Subway Station. So despite the small size of the homes in Tiny Town or on Marlborough, these little houses are arguably pretty good if you want to find a house on a budget and you're not fussy about lots of space.

If you live way out in the middle of nowhere (ie. Mississauga's Lorne Park) you might think being surrounded by lots of trees (and the occassional vacant lot) is a good thing. Lorne Park is like the new Oakville... really far away from downtown Toronto, but the houses and land there is cheaper... just so far as you don't mind commuting.

And frankly there's nothing I find MORE BORING than sitting in traffic for 2 hours per day, because that is what you get when you live in Oakville, Richmond Hill, Vaughan, Markham, Purpleville or even those crazy people who commute all the way from Aurora, Newmarket, Pickering, Barrie or Hamilton. Its not even NEAR Toronto any more when you live way out there. Its just insane people who are too cheap to buy a house which is closer to downtown Toronto...

Or worse, they're so obsessed with having a backyard and a front yard that they completely ignore the condo option. Don't even get me started on the anti-condo movement... (Although I will note that overseas in Asia, condos are considered to be better than a house. The anti-condo sentiments in North America are outdated and unrealistic.)

Anywho... my point is that there is still plenty of unused land close to downtown where people can buy a house (or even build a new one). People can get "more bang for their buck" simply by shopping around more and exploring different options... ie. Midtown, uptown, Little Italy, Cabbagetown, Lawrence Park, Leaside, Summerhill... you know... the sleepy neighbourhoods where the prices aren't sky high, and are still pretty reasonable when you consider their location.

Price appreciation in the suburbs and satellite cities of the GTA have been going up so fast that a house in Richmond Hill is now comparable to the price of a house in Leaside. The houses in Richmond Hill may be bigger, have extra rooms you will never use (seriously, I swear the people designing these houses are building extra living rooms in them just so they can jack up the price more)... and frankly who needs all the extra space?

As a devoted cyclist I like being able to cycle around downtown on a moment's notice. Driving for an hour to get something annoys the hell out of me. I want to be close to the things I want. I am willing to pay extra for the convenience... and when you consider that the prices of homes in these suburban boonies are going up quickly it makes you realize that its probably unsustainable.

Lets take Lorne Park for example (its an upscale neighbourhood near the beach in Mississauga), where the average price has gone up 30.2% in the first half of 2010 compared to 2009 prices (figures from ReMax). The average home there is now $880,373 compared to $676,289 in 2009.

So you're not saving any money by living in such an upscale suburban neighbourhood. All you're doing is giving yourself extra headaches from traveling farther, making your gasoline budget sky rocket and destroying any convenience you could have had by living in a neighbourhood closer to the downtown core.

The “near suburbs” have been driving up prices during the first six months of 2010 because buyers want homes within a half-hour drive of downtown. Except Lorne Park isn't even near the downtown... the commute time is still 40 to 50 minutes via the Gardiner Expressway.

But buyers in 2009 actually got a deal in 2009... because prices in Lorne Park dropped 18% in the wake of the financial crisis in the USA. Thus anyone who bought a home in Lorne Park managed to get it on sale and is probably now tempted to flip it for a good sale value.

According to ReMax 80% of GTA neighbourhoods had a decline in value in 2009. With the record low interest rates people actually looking to buy probably got a good deal.

But this year the prices are back up. The average sale price in June was up 8% compared to June 2009, but overall the number of sales of Toronto homes were down 23%... despite the fact that home listings is up 28%, suggesting the Toronto real estate market is becoming a bit flooded.

Usually when the market is flooded prices should come down, but this phenomenon is not limited to just Toronto. Canadian home sales across the country in June were down a seasonally adjusted 8.2% compared to May. The Canadian Real Estate Association reported 36,467 sales in June, down from 39,778 reported in May.

Actual (not seasonally adjusted) sales was also down by 19.7% in June compared with June 2010.

And yet despite the lower number of sales, the average price in Canada in June was $342,662, up 4.9% from June 2009.

Part of this is probably due to the rise in interest rates and Canada's shakey recovery from the American Recession. Job numbers in the service sectors are up, but manufacturing is still shedding jobs.

So which Toronto neighbourhood is best? I think it really depends on what you can afford, but vote is for any neighbourhood where you can walk to the movie theatre, the grocery store or go shopping... all within 20 minutes.

Because then its no longer the size of your house. The whole city is your oyster.

5 Ways to look like a Rich Douchebag

The following is a list of 5 ways to make your house or condo look more expensive than it really is, but only if you don't mind looking like a snobbish douchebag.

1) WORK WITH WHITE

Use a limited palette and lots of white. It will make your condo seem bigger than it really is. No clashing colours, no questionable accents, just completely spartan like you don't have anything resembling a personality that is HUMAN. Instead you mix textures... suede sofa, satin pillows, faux polar bear skin rug. The idea is to convince people you paid a fortune because you WANT people to think you're a rich snobbish douchebag.

2) GO SHINY

Anything stainless steel or high gloss ceramic white or black adds a sense of luxury to your condo. Do this enough and you will begin to feel like you live in an industrial warehouse instead of a home.

3) DON'T BUY A SHOWROOM SET

Avoid having all your furniture designs match. If all your decor looks like you bought it at Ikea on the same day your visitors will think you lack the skills to decorate. You're trying to show off like the rich douchebag you are so you have to the time to at least make it look like you put thought (or hired an interior decorator) into your layout.

4) SPEND A LOT ON ONE BIG ITEM

Spend all your wad on something really big and impressive. Max out your credit card by buying the most expensive 3D HDTV you can, with extra glasses for guests. Or if 3D HDTV isn't your thing, buy something equally expensive so you can show off to people.

5) BUY A PAINTING REPRODUCTION

You want to at least pretend you're sophisticated and know something about the artworld so go out and buy a really big reproduction of a famous painting, not something that is too distracting but is still pleasing to the eye. A really nice landscape, abstract painting or still-life... because you have no life and no time to go out and buy real painting from a real artist.

So obviously I am making fun of this. Interior designers these days are all loving the spartan white look and this look is being perpetuated by other interior designers on television and in magazines, etc. They have almost no imagination. Its a bit like the Nazis decorating... EVERYTHING MUST BE WHITE OR SPARTAN OR SHINY! *Best imitation of a German gestapo officer*

I say live a little. Want to impress people? Put real thought and personality into your decor. Use wood, mix palettes, experiment. Sure you can still buy big ticket items, but only if you really want them and not just because you're trying to impress people. BE YOURSELF. Don't try to present yourself as some bourgeosie spartan douchebag who must have everything looking perfect.