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Tuesday 29 October 2013
Mortgage Rates
Wednesday 9 October 2013
September Stats - Prices up 6.7% and Sales up 32.9%
The REALTORS® Association of Hamilton-Burlington (RAHB) reported 1207 properties sold through the RAHB Multiple Listing Service® (MLS®) system in September. This represents a 32.9 per cent increase in the number of sales over September of last year and is only one sale shy of the September record of 1208 sales set in 2009.
The average sale price of $392,013 was an increase of 6.7 per cent over the previous September. There were 1953 properties listed in September, an increase of 5.8 per cent over September of last year. End-of-month listing inventory is 6.8 per cent lower than last year.
“Sales and listings for the month of September were both well above the 10-year average for the month,” said RAHB CEO Ross Godsoe. “Even though there was an almost-six per cent increase in listings, inventory continues to be lower than last year at this same time.”
Seasonally adjusted* sales of residential properties were 21.4 per cent higher than the same month last year, with the average sale price up eight per cent for the month. Seasonally adjusted numbers of new listings were 1.4 per cent higher than the same month last year.
Seasonally adjusted data for residential properties for the month of September, 2013:
Actual overall residential sales were 31.1 per cent higher than the previous year at the same time. Residential freehold sales were 34.6 per cent higher than last year and the condominium market saw an increase of 16.7 per cent in sales. The average sale price of freehold properties showed an increase of 10.1 per cent over the same month last year; the average sale price in the condominium market decreased seven per cent when compared to the same period last year.
The average sale price is based on the total dollar volume of all residential properties sold. Average sale price information can be useful in establishing long term trends, but should not be used as an indicator that specific properties have increased or decreased in value.
The average days on market remained at 44 days in the freehold market and decreased from 50 days to 42 in the condominium market.
“This is the first time since the first quarter of the year that we saw a more balanced market,” added Godsoe. “Whether it will continue that way is a good question – we’ll have to see what the next few months bring.”
Year to date, listings are up 1.3 per cent compared to the same period last year, while sales are 1.6 per cent higher. The average sale price for the first three quarters of the year is 7.7 per cent higher than the same period last year.
The numbers for the month of September 2013 compared to September 2012:
Every community in RAHB’s market area has their own localized residential market. Please refer to the accompanying chart for residential market activities in select areas of RAHB’s jurisdiction.
*Seasonal adjustment removes normal seasonal variations, enabling analysis of monthly changes and fundamental trends in the data.
City Living vs. The Burbs -- Which is cheaper?
There's a common perception that living in the suburbs is much cheaper than the city. This article originally posted on the Globe and Mail shows the other side to the story.
There’s no refuge in the suburbs from Canada’s housing affordability problem.
You can buy a house for less money in the suburbs than you can in a big city, but the cost of commuting may kill almost all your savings. Some number-crunching by a public-spirited mortgage broker in the Toronto area makes this point quite clearly.
David Hughes, with the Mortgage Group Ontario Inc., divides his clients into a couple of groups with respect to attitudes toward living in suburbia: One group wants to live in the suburbs and is fine with the idea of commuting, and then there are those who want to live downtown, but can’t afford the prices. “They either buy a fixer-upper, or they run screaming to the suburbs and living with the two cars.”
Now, he finds people talking more about the cost of two working parents commuting by car every day. He explains this shift as being a result of the bigger mortgages people are taking on, and the considerable cost of buying and owning a car. “Gas at $1.30 a litre will do that to you,” he said.
No question, you’ll find house prices are cheaper outside big cities. Toronto Real Estate Board numbers suggest a spread of almost $250,000 between city homes and those in the neighbouring suburbs. Suburban living loses its cost advantage if you have two adults commuting by car each day. Add the effect of stress and time spent in gridlock, and suburbia looks even more costly.
Imagine you’re part of a couple that has $50,000 for a down payment and must decide between a $500,000 house in the suburbs and a $720,000 house downtown. The suburban lifestyle comes with two cars in this example; the city dwellers get by with public transportation, taxis and car sharing or rentals. To keep things simple, we’ll assume here that your mortgage rate will be a constant 3.5 per cent and that you’ll take 25 years to pay it down.
Suburban living costs less in this example, but by only $63 per month if you add mortgage and transportation costs. And that’s with some conservative estimates by Mr. Hughes on car costs.
Using the 2013 edition of the Canadian Automobile Association as a guide, he set the annual cost of commuting at $9,500 a vehicle, or $19,000 for a pair. Included in these costs are variable factors such as fuel and maintenance, and fixed expenses such as insurance, licence and registration, depreciation and financing.
Your actual car ownership costs could be lower if you drive a reliable older vehicle that has been paid off. But you may well pay more. Mr. Hughes’s CAA numbers were based on owning two Honda Civics – many families are driving at least one fancier vehicle. The estimated total number of kilometres driven each year was in the low 20,000 range – you could easily drive further in a year if you have a long commute.
The downtown household pays $6,000 annually for a pair of monthly transit passes and occasional use of taxis, car rentals or car sharing. Maybe it’s not realistic to believe a family with kids can live downtown and not own a car. But while owning a car for periodic use makes city living more expensive, it doesn’t do a thing to mitigate the high cost of commuting from the suburbs.
The case for cheaper suburban houses is undermined most when you take a long view that factors in your transportation needs both before and after your mortgage is paid off. Mr. Hughes figured on the suburban household moving to just one car after the mortgage is done, while the downtowners stay car-less.
Let’s add up what happens over 40 years – 25 with a mortgage and 15 afterward. The suburban household pays a total of $1.3-million on mortgage principal and interest and transportation. The downtown household pays just a little bit less – $33,865, to exact.
If you plan to live outside the city where you work, commuting costs must be part of your housing affordability analysis. Mr. Hughes said he delicately makes this point to clients that come in with thoughts of suburban living. “I don’t want to see anyone impoverished by their choice.”
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