For so many, arriving home at the end of the day is like the calm after the storm.

That welcoming feeling is warm and comfortable, like a sunbeam focused on your very own driveway.

The last few minutes of your drive, through the familiar streets of your neighbourhood can either be the start of your relaxation or the last hurdle before you are safe. Neighbourhoods can be a very special place because they are an extension of your comfort zone or they can be a wasteland surrounding your oasis.

Seeing the community parks, local shopping areas, places of worship, community centres, areas, playing fields and the friendly faces of your neighbours can be a welcoming sight on your way to your home or do you just see everything as buildings between here and there.

Looking for a new house might also mean looking for a new neighbourhood.

Imagine your community life and make a list of what is important, to you:

Community Centre __________________
Local Shopping _____________________
A Place of Worship __________________
Sports Field. Soccer? Baseball? _________
Library ___________________________
Arenas. Hockey? Skating?_____________
Schools ___________________________
Restaurants, pubs ___________________
Post Office _________________________
Coffee Shops________________________
Public Transit _______________________
Walking trails _______________________

When you look for a neighbourhood, who can help you identify what suits you best? If you were to make a list of the ten most important things in your neighbourhood, what would they be?

One neighbourhood perfect for one family may be completely wrong for another family. An established neighbourhood of two storey homes for a family would not be suitable for a young couple just starting out. What will be important about your new neighbourhood, to your family?

Do you like a mature neighbourhood with slow moving traffic or a vibrant city life with convenient shops and entertainment?

There is much to consider when buying a new home. One consideration is living in a neighbourhood that inspires you.

Dave Airey
Sales Representative with Signature Service GMAC Real Estate

The Toronto Real Estate Board (TREB) released its figures for January recently, and overall they paint a very positive picture.

Sales are up 87% from a year before, with 4,986 homes exchanging hands in January 2010. This is comparison to January 2009, when only 2,670 sales were completed.

Image: David McDermott / Flickr

The president of the board, Tom Lebour, said, “The Greater Toronto Area home market has rebounded well from the lows in sales experienced at the beginning of 2009. Sales climbed back to healthy levels across the GTA because the cost of home ownership remained affordable in the Toronto area.”

And this is the caveat that we need to remember: January 2009 sales were historically low. January 2010 sales were only slightly greater than the average sales in the previous five Januarys.

Jason Mercer, TREB’s Senior Manager of Market Analysis affirms this: “Expect strong annual growth rates for existing home sales and average price through the first quarter as we continue to make comparisons to the weak market conditions at the beginning of 2009.”

Detached homes remain the biggest segment of the market, with 46% of sales. Condominiums are next, with about 25%.

The average home price dropped slightly from December 2009, hitting $409,058. However, an indicator that home prices could start to rise again is in the average days on market. The length of time a house sits on the market unsold has been falling since the beginning of last year, and now sits at 29 days. This is particularly true in the red hot downtown condo market, where the average time an unsold unit sits on the market is 23 days.

What does this mean for you and your home?

Clearly, things are doing much better than they were a year ago. And there are more signs of a growing inventory crunch: many of Toronto’s developers put their plans on hold last January, and some of the delayed projects are only now being restarted. The result is that there will not be enough new developments to meet demand.

If you are looking to sell, you might want to wait a while, as pricing will likely increase in the short term. But if you are looking to buy, now is the time: prices will likely continue to rise from here.

Nelson Goulart
Broker of Record with Signature Service GMAC Real Estate
www.ssgmac.ca

It is not really news that condos in Canada’s downtown urban areas are often bought by young, single professionals. City councils in several cities have struggled to persuade developers to add multi-family units to their buildings. And the developers point out that families don’t want condos.

Image: Woodley Wonderworks / Flickr

The problem with marketing condos almost exclusively to young professionals is that they often don’t have enough money to buy, particularly in the priciest markets. To ensure that there are units that are affordable for these consumers, the trend has been for condos to shrink over the last few years.

“The growth is for small types of dwellings,” says Sandra Perez, of Canada Mortgage and Housing Corp. Although there are no direct stats for small condos, CMHC also reports that family dwellings in urban areas with more than 10,000 people have fallen to 52%. This is a drop from their 61% share in 2002. Condos, particularly the smaller types, are helping drive down the family unit’s share.

How small is small? Prior to the turn of the century, the smallest condos were generally around 600 square feet. They have since fallen to 400 square feet in Toronto and Vancouver.

Vancouver is one of the biggest testing grounds for smaller urban living in Canada. Although 400 square feet sounds unimagineably small from a North American perspective, recent immigrants from Hong Kong and other Asian markets are used to even smaller square footages. And Vancouver’s landscape and height restrictions limit the amount of land available to be developed.

As part of this trend, two Vancouver developers have unveiled “micro-lofts” which will be built in a building in the Downtown’s Eastside: the micro-lofts will be approximately 270 square feet. These units will be rentals, not condos, but they do herald a new comfort with smaller living. Twenty years ago, Vancouver’s city council refused to consider allowing 320 square foot units, calling them “coffins.”

Do these sizes sound too small? Some perspective is probably needed. Before 1950, the average size of North American homes was 900 square feet. And in the 1940s, the government’s Wartime Housing Ltd built thousands of bungalows for veterans and labourers measuring only 500 square feet. The North American obsession with bigger being better is only a very recent phenomenon, and it is one that has gone counter to demographic trends. U.S. National Association of Home Builders (no equivalent Canadian data is available) say the average home size is over 2,400 square feet – nearly three times as big as a 1950s home – despite our ever-smaller family sizes.

Smaller condos may sound unappealing, but they are actually closer to the norm of how most people in Canada have historically lived, and how people in other parts of the world do live. A small condo is not for everyone, but for the rest, it can be an affordable and enjoyable option for home ownership.

Nelson Goulart
Broker of Record with Signature Service GMAC Real Estate
www.ssgmac.ca

With new mortgage rules taking effect on April 19th, 2010, homebuyers are now faced with the problem of coming up with more money for their down payment, among other changes being made.

What is to come after these rules take effect should be the rise of interest rates, and if inflation continues to rise in the next coming months we might be seeing interest rates rise earlier than expected.

Now the outcome of having the new mortgage rules in place and interest rates rising is the market cooling down.

Any chances of their being a housing bubble should dissipate however there may not be such record breaking months as seen last year.

What we have to consider is that with the labour market improving, people might be in a more financially stable position which would lead them to purchase a home despite the new rules and higher interest rates.

When looking at homes, do not stretch your budget to the max, try to leave a bit of room just in case you end up in a bidding war or for any additions you may want to make to the house in the future.

What you can expect to find in the coming week are tips you can do to help you throughout the time when interest rates rise and the new mortgage rules come into play.

Jeff Markewich
Broker of Record with InfoMarket Group GMAC Real Estate
www.imgrealestate.ca

With the change coming to the housing market, home buyers might begin to find themselves looking at less expensive houses in order to purchase a home according to the new rules.

What might happen as we are nearing the period when interest rates rise, we will see Canadians stretching their budget; however what happens is that it might leave little room to deal with any unexpected financial challenges you may face.

To help you deal with future financial challenges, you can take different measures.

One of which is to make a larger down payment, by doing so you will be able to pay less interest over the life of your mortgage. You can take a shorter life of the mortgage, allowing you to pay less interest.

By cutting your amortization period you will be able to be mortgage free much faster than you might have anticipated.

For the time when interest rates do rise, you should consider making a savings account for the purpose you need extra funds to make any repairs or payments for your home.

Keep in mind, do not get dragged into today’s heated market, and by that I mean do not get locked into a bidding war because it can push your finances outside of your budget which can make it harder to afford the home.

Glen Chapman
Broker of Record with Club “100″ GMAC Real Estate
www.club100realestate.com

Although the general consensus is that Canada is not experiencing a housing bubble – at least, not yet – there are still some concerns that the market will get overheated in the next few months.

Image: Kevin Spencer / Flickr

There are the standard concerns, such as the various legislative changes that affect the real estate market in Canada. For instance, this includes the introduction of the HST in BC and Ontario and the changes to the mortgage lending rules across the country in April. Both of these will likely encourage some people to push up their home purchases before these changes come into effect.

There is also the ever-looming possibility that the Bank of Canada will begin raising interest rates in the third and fourth quarters.

But David Rosenberg, in the Globe, presents an even more worrying analysis of the current housing market in Canada. First of all, he points out that affordability of mortgages is declining: residential mortgages balances are worth 92% of consumers’ disposable income. This was the ratio just before the bubble started in the U.S. in 2005. As well, housing is becoming more and more unaffordable.

But his most penetrating insight, and one that possibly needs to be addressed in Canada too, is the demographics behind the buying and selling. As has been noted before, the biggest residential bubbles in the U.S. were largely in Sun Belt cities like Phoenix, Tampa and Las Vegas, all of which have large Baby Boom populations. Baby Boomers were looking at their homes as investments, so they were overbuying. They bought houses that were larger and more luxurious than they required because they thought the price of the houses were going to keep rising.

But the prices collapsed. Saddled with houses that are too large for their needs and unaffordable mortgages, these buyers now want to down grade and sell at any price. This has produced very strong selling pressure in the affected markets.

Canadian houses are almost as large as American ones, and the Baby Boom is just as important demographically. Will we experience a similar sell-off of over-sized homes?

Although David Rosenberg feels very confident that we will, it should be noted that outside of Victoria and possibly Vancouver, there are very few housing markets in Canada that are largely being driven by investments by retirees.

More importantly, the housing bubble picture in the U.S. is more complex than Rosenberg presents it. The markets that saw the biggest gains in prices were in the Sun Belt, but the cities that have seen the biggest foreclosures are in states that have been most distressed economically, particularly Michigan and Ohio. Paradoxically, these states didn’t even see much of a housing bubble before they collapsed.

In other words, over-buying by Baby Boomers may eventually depress some markets, but what is more important from a bubble point of view is whether people have jobs and can pay for their houses. Buyers of investment property in Phoenix can ride out the storm or sell at a lower price without hurting their net worth much. Without a job, like some people in Michigan, you have no choice but to give up.

No one can predict the future. But, for now, we likely shouldn’t worry about a Baby Boom-fuelled housing bubble.

Heleen Jacobsen
Broker of Record with InfoMarket Group GMAC Real Estate
www.infomarketgroup.com