Thursday, December 7, 2017

Ex-Windsorites: Make 2018 The Year To Move Back Home

Part of the boom we’ve seen in our local Windsor-Essex area in the past few years has been attributed to the large segment of Windsorites moving back home.  Whether they left for jobs, school or other factors, people are migrating back in droves.  For those of you still weighing a potential move back home to Windsor-Essex, today we are going to try and push your decision over the edge and discuss what you are missing out on!

You can drive pretty much anywhere you’d like to go in 20 minutes or less!  Traffic is one of the biggest issues of living in a big city and having a long commute is a big contributor to issues with stress and quality of life.  Give up that two hour commute and spend more time with family or at the gym everyday

I don’t know if you’ve been living under a rock, but Detroit is experiencing a renaissance these last few years.  Lots of exciting developments are underway and tens of thousands of new people are living and working again in the city.  As it grows, our area is becoming a suburb of Detroit and offers us access to many big city amenities including a major airport, all four major sports teams (Major League Soccer is also in the works), shopping, bars and restaurants, and also a large job market as many cross border workers can attest to.

Cheap Real Estate
You probably already knew this one, but Windsor-Essex still offers some of the cheapest real estate in Canada.  As you get priced out of the large Canadian markets, you’ll still more than likely be able to afford the type of home you desire in our area.  At an average price of around $260,000, you wont have to grind it out paying a mortgage your whole life!

The YQG has one of the warmest climates in Canada. Summers are longer and during winters we often "skate" by with little snow (fingers crossed for this year).  If cold winters and snow aren’t your thing, consider a move to the southernmost county in Canada.

Part of the reason lots of people left our area over the last decade was the automotive downturn and the accompanying high unemployment rate.  Well, that has more than reversed course and we now hold one of the lowest unemployment rates in Canada (below 6% this fall).  One of the main issues we face going forward is a shortage of workers in different sectors.  Apply within!

Those are just a few of the dozens of reasons you should consider moving back home to Windsor-Essex.  It really is the “Biggest Small Town” around.  What are you waiting for?  Make 2018 your year.

Wednesday, November 15, 2017

Real Estate Insider: November 2017 News Report

Wow, did we find some articles you won't want to pass up! This edition, we cover tax evasion, living with your parents, "jingle mail", and much more.


Have an RRSP? Thinking about buying a home? Make sure you are up to date on the provisions of the Home Buyers Plan to make sure you are saving as much as possible! >>


Watch this great video if you’re considering becoming a Landlord! Be sure to know all the tips and tricks before you make the big investment! >>


There are many different ways to invest your RRSP; one of the lesser-known ways is to invest it in Real Estate! Learn how you can use your RRSP to your advantage when investing for your future. >>


Buy or Rent? An age-old question associated mostly with cars and houses, but what about water heaters? Learn the pros and cons of buying versus renting a water heater for your home. >>


Want to learn more about the upcoming stress test? Read these 10 ways that it will change the lending market. >>


Tax Evaders beware! BC and Ontario to consider registry of pre-construction condo sales. >>


Whether you are a Landlord or a Tenant, make sure you are up to date with the changes to Ontario’s Residential Tenancies Act so you can stay informed and protected! >>


Still living with your parents? You’re not alone! Multi-generational households are becoming more common due to price growth and it is changing the way developers are planning for the future. >>


American Real Estate Company “Zillow” to start showing Canadian Listings with goals to expose American buyers to affordable housing in Canada, mainly in big cities and vacation areas. >>


“Think Canadians couldn’t abandon their mortgages like Americans did in 2008? Think again.” >>

Tuesday, October 31, 2017

Are you Fit for a Mortgage?

What the heck is a Stress Test? Why Should I care?
Starting next year, it will become tougher to qualify for a mortgage.  Earlier this month, Canada’s banking regulator published final guidelines for its mortgage qualification rules.  For some reason it hasn’t gotten as much coverage as other news items, such interest rate hikes or Amazon HQ2.  But it should have because it has serious potential repercussions for the real estate market and the economy.  Today we are going to discuss what you need to know.

Who is making this change?
Canada’s banking regulator, the OSFI (Office of the Superintendent of Financial Institutions).  The OSFI is responsible for supervising and regulating Canada’s financial institutions.

When do the changes come into effect?
January 1, 2018.

What changes are they making to the regulations?
They are tightening standards on uninsured mortgages (mortgages where the borrower is putting down 20% or more of a down payment on the purchase price).  Lenders will soon be required to “stress test” all uninsured mortgages at the greater of: the Bank of Canada’s five year posted interest rate or 200 basis points (2%) higher than the negotiated contract interest rate.

Can you give an example of how this would work?
Let’s say you are looking to purchase a house and are shopping to line up mortgage financing.  Your realtor tells you to go get pre-approved so you understand what price range you can afford.  Your lender offers you a 5 year fixed interest rate of 3.19% (which would be competitive as of the writing of this blog).  Before this change, you were able to qualify at this fixed rate with your lender and based on your ratios you were able to qualify up to a maximum price range.  After the change, you will now have to qualify at the higher of: 4.99% (the bank of Canada’s posted rate as of writing) or 200 basis points higher than the contract rate (3.19% +2.00%) or 5.19%.  In this case you would use 5.19% to qualify.  Naturally with the higher interest rate your ratios would change and your affordability will drop – you won't be able to qualify for as much house!

How will this affect the market?
This will knock some buyers completely out of the market in some higher priced areas and will drop other buyers into lower prices ranges when shopping for a home.  This should increase competition for starter type homes and decrease the pool of buyers in larger and pricier homes.  Other people will be forced to put up a higher down payment (thanks Mom and Dad).  This will also increase rental demand in most markets.

Why are they making this change?
The main reason is to slow down the runaway housing market many cities in Canada have experienced in the last 7-8 years.  The regulator is also concerned about the indebtedness of the population and their ability to handle potential rising interest rates.  This should reign in the mortgage segment at least.

What else should I know?
This applies to you if you are renewing your mortgage as well.  The only time it doesn’t is if you are renewing and staying at the same lender.  But if you decide to switch, you’ll also have to qualify with this new stress test.  It is a bit concerning that some people will be forced to stay with their existing lenders because of this and knowing the borrowers predicament, the lender will not be very generous in their renewal terms.

Of all the changing regulations the government has thrown at the housing market in the last few years, this one has the most potential to really shake things up.  It remains to be seen how the market will respond but it will be interesting to see!  What do you think of these stress tests?  Will they affect your plans in 2018?  We’d love to hear from you.

Thursday, October 19, 2017

Real Estate Insider: October 2017 News Report

Did your equity in your home spike in the past few months due to the increase in property values? Use it to make your wealth grow! Read this to learn the basics such as how, when, and why. >>


If you have multiple rental properties, this article is for you! Learn the pros and cons of opening up a holding company. >>


Planning your estate or have you recently gotten a large inheritance? Here’s what you should know about estate and inheritance tax in Canada. >>


Are you self-employed or a new Canadian? CMHC proposal will make it easier for you to buy a home by getting rid of a lot of the ‘red tape’. Read more here >>


Read the top 9 things this experienced couple looks for when buying a rental property, and what they wish they knew when they first started. >>


These few little known facts could save you tons of money on capital gains tax when selling your rental property. >>


Inheritance can be tricky, especially when it isn’t divided equally or fairly. Read this man's conundrum when his Mother left him everything and his brothers were left empty handed. >>

Friday, October 6, 2017

Has The Local Real Estate Market Cooled Off?

It's hard to tell from the unseasonably warm weather, but we are a couple weeks into the fall season. The autumn real estate market is well under way and even if the weather hasn’t cooled off yet, our local real estate market (Windsor, Ontario) is certainly feeling a drop in temperature. Today we are going to discuss a few of the factors that have led to this cooling.

Sellers Have Adjusted Their Prices Upwards
This makes a lot of sense. We had a pretty crazy first 8 months of the year. Multiple offers were everywhere, properties were selling considerably over list price and it was a great time to be a seller.  As this continued, the market adjusted and realtors and sellers began to adjust their prices to these new comps. As prices increased, demand levelled out to a more balanced market place.

Interest Rates Were Raised A Couple Times
The Bank of Canada (BOC) has now increased the benchmark interest rate two times this year, for a total of 50 bps (0.5%). Although this is a minor increase, it has affected affordability and how much house a buyer can qualify for.  The BOC seems to be indicating that they are also planning further hikes into 2018. This has led to a modest softening in demand.

Trickle Down From The Toronto Market
After a series of measures introduced earlier this year to slow the housing market, the government seems to be finally succeeding. Sales are way down, prices are stalling and deals signed in the spring are running into snags at closing. A large segment of the demand in our market was coming from Toronto buyers who were relocating and/or investing in our market. Suddenly, properties that used to sell in a few days are sitting on the market for a couple months. Because of these developments, this pool of buyers has seemed to slow and put a dent in demand.

General Uncertainty
There seems to be lots of bad headlines out there right now: the Liberals are planning to change the taxation of professional corporations; anything Trump related; the US, Canada & Mexico are renegotiating NAFTA; North Korea’s nuclear program; hurricanes causing havoc; flooding (which we experienced locally); and terrorist attacks. Uncertainty is never good for markets. Markets operate on confidence, which is sometimes a fragile thing. It's difficult to quantify how much confidence is shaken by these types of events, but combined with the above factors, it probably has some impact on demand.

Sometimes it's hard to figure out cause and effect in markets but those are some of the factors we see cooling our local market. What are your thoughts on this subject? We’d love to hear from you.

Sunday, September 10, 2017

Real Estate Insider: September 2017 News Report

Welcome back to the Lalovich Real Estate Insider! We've been busy reading a tonne of topics and wanted to share the best finds with you. How much do you need to make to buy a house in Toronto? How did a multi-million dollar home street sell for less than $100k in California? What does the end of the Canadian housing bubble market mean for you? Find out the answers and much more in this edition. Enjoy!

Don’t be tricked by ‘buzz words’; make sure you know your options when applying for insurance. >>


Looking at the house price-to-rent index, to balance out from the recent spike in housing prices, value either needs to go down or rent needs to come up. Based on this, the OECD predicts a 28% decline in home prices by 2020. Read more here >>


The Ontario Real Estate Association is stepping up to become the self proclaimed “watch dog” for the industry’s regulatory body. This transformation is catalyzed by the fact that as of 2020, they will no longer be providing real estate education. Read more about the transformation here >>


Thinking of becoming a landlord? Here are 10 tips to follow to make your rental property a successful one. >>


A change of heart ended up costing this buyer $360,000! Learn why walking away from a deal could cost you more than just your deposit. >>


While the housing boom drew thousands into the Real Estate career, the inevitable slowdown is expected to decimate the ranks of the inexperienced realtors. >>


A private street in San Francisco with 35 Mega-Million Dollar mansions was sold to a couple for $90,100… all because of a $994 unpaid tax bill. Read why here >>


Are you getting the best rates on your mortgage? Experts say people need to start comparing mortgage rates the same way they do when booking flights or hotels. Read the startling facts here >>


Thinking of moving to Toronto? A recent study has found that to afford the average detached home, residents need an average income close to $200,000. >>


Deciding what to do with your rental properties? Considering entering the rental property market? Be sure to read this list of every indicator to consider when selling an investment property. >> 


Going with traditional: a new mixed commercial/residential building is planned for an empty Walkerville area lot, becoming one of the first buildings of its type built there in a long time. >>


Learning from past mistakes: it seems as though Canada’s housing market bubble is officially over, without the notoriously feared “pop”. >>


Buyer's remorse: people are scrambling to close after the recent cool down of the housing market. >>


The real estate association believes it's time to increase the penalty for unethical behaviour in the real estate profession and is lobbying for stricter regulations due to the fact that the current regulations are close to 15 years old. >>


Feel like you're paying too much for your mortgage? It's likely you've made one of the top five costly homeowner financial mistakes. Find out here >>

Thursday, August 31, 2017

Basement Flooding 101

In our area of Windsor, Ontario, we had some very heavy rains this week. Although nothing comparable to some of the devastation in the Houston, Texas area, many people suffered substantial damage from basement flooding. The condo building I live in had 2.5 feet of water in the parking garage ☹. We thought this friendly reminder on basement flooding tips would be timely.

Follow any directives to turn off utilities. If you’re advised to switch off the main power source to your home, flip each breaker and then turn off the main breaker. You may also need to shut off the main valve for your home’s gas and water.

  1. Be aware that submerged outlets or electrical cords may energize standing water. Keep the power off and do not enter a flooded area until it has been determined to be safe to do so by a professional.
  2. Have an electrician inspect electrical appliances that have been wet. Do not turn on or plug in appliances unless and electrician tells you it's safe.
  3. If the flooding is due to a sewage backup (or you are not sure), do not flush the toilet, run a washing machine, dishwasher or any other feature with a drain since this will likely increase the flooding.
  4. Report the issue to the municipality. Documentation of flood locations helps municipal staff determine if any work is required on municipal infrastructure.
  5. During clean up, provide as much ventilation as you can. Open windows if weather permits and use fans to dry things out.
  6. Call your insurance company immediately. They will advise you on standard clean up procedures, contractors to call and claim information.
  7. Make sure you take lots of pictures and document items that have been damaged or need to be replaced. Before you head out and start buying new stuff, make sure you are familiar with the coverage you have with your insurer. Keep any and all receipts for emergency work done, purchases, and/or repairs.
  8. Insurance companies look favourably on homeowners wanting to undertake work on their own to reduce the likelihood of future flooding. Repeat claims with no efforts to reduce future risk may be sufficient for an insurance company to drop that form of coverage in the future.
  9. Take preventative measures in the future to make sure the water stays away from your basement as much as possible. These include: making sure downspouts are extended and flow away from the foundation, gutters are clean and flowing, grading isn’t low in any areas and if it is having it filled it to flow away from the house, and having the sewer lines checked annually to make sure they are flowing and not backed up and possibly having them eeled out if need be.
  10. If the preventative measures don’t work at keeping the water away, you may need to look at additional upgrades including: adding in a sump or multiple sumps with battery back ups, a back flow (check flow valve) to stop the sewer back up, doing the weeping tile along the perimeter of the basement, and digging up the exterior of the house to add a waterproof membrane.
Sometimes when we get a huge rain storm in a short period of time, there isn’t much you as a homeowner can do. Knowing some of these tips can help keep you safe next time and hopefully minimize the damage. Stay dry out there!