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LACKIE: Real estate downturn bringing much-needed reset for industry



There is exactly zero part of me that believes anyone, anywhere could care any less that realtors are having a tough time out there these days.

In fact, I am almost entirely certain that for many, the only silver lining to this market correction is the image of repo trucks fanning out across the GTA, off in hot pursuit of all the flashy cars the once-flashy real estate agents can no longer afford to make their payments on.

Real estate Reddit abounds with delighted tales of Teslas now appearing with DoorDash deliveries.

Schadenfreude indeed.


And the thing is, I get it.

As last week came to a close, I happened upon an article in which a realtor was bemoaning the current state of things. Complaining that in this tough market it’s impossible to make a decent go of it as a part-timer.

Apparently, we are to feel sympathy for those among us now grappling with the reality that it’s no longer possible to float a big lifestyle off of a few big deals a year. With market volume having dropped so precipitously over the last year-and-a-bit, there just aren’t enough deals to go around. People are having to get real day jobs again.

I am trying to understand if anyone sincerely believes it’s a bad thing that real estate must now be undertaken by people who conduct themselves within it as a whole and complete profession, replete with professional standards, ethical obligations, and radical accountability to the consumer.

As far as I am concerned, if that’s what’s on the other side of all of this, we will all be for the better. And I say this as a full-time real estate agent.

The best agents I know are in the office every single day. They work relentlessly at their business and to the benefit of their clients. Their clients derive value.

There is no denying that this market moment we currently find ourselves in is resulting in a challenging time for my industry.

Transaction volume has dropped right off. There is activity, sure, but next to no inventory.

There are very few deals out there relative to the wild ride of the last few years.

And broadly speaking, prices haven’t substantially corrected in any meaningful way. The agents who are getting deals are fine. But it’s a quiet time for many.

However, if you were to survey one hundred consistently-producing agents, I am certain the overwhelming majority would prefer a market correction that resulted in a strong correction to prices that might bring an element of affordability to the market place.

Steady activity in a balanced and healthy marketplace is what we would all jump at. Not the baffling frenzy of recent memory.

I will thank my lucky stars if I am never again on the other end of a deal with an agent who happens to be unreachable between the hours of 9:00 and 5:00.

I will count my blessings if I never again have to beg a listing agent to trouble themself to pick up the phone and return my call instead of texting me because they are too busy enjoying the beach in Miami.

We will all have to grind every day to bring value and deliver results to our clients. The harder it becomes to do well, the better our industry will fare.

We’ve been waiting for the purge and it’s here.



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Mortgage Transfers Pick Up as a Way to Beat Rising Rates – The New York Times



Real estate agents are pushing sub-3 percent mortgages as an amenity, just like marble countertops or a view of the mountains.

The only goal was to not lose money.

When Matthew Kilboy listed the Washington, D.C., condominium that he and his husband had bought in 2017, they accepted that higher interest rates and a soft market for condos meant any dollar over the $529,000 they had paid was a dollar they would thank their lucky stars for.


A similar two-bedroom and two-bath unit in the building had recently gone for just under half a million. The $549,000 price they listed in April was basically a wish.

A month later, the couple closed at $565,000 — thanks to a little-known amenity that has become increasingly popular as mortgage rates have risen. Their unit came with an assumable 30-year mortgage, with a 2.25 percent fixed rate that the couple had locked in after a November 2020 refinancing. By advertising that the buyer could inherit the mortgage, the couple, who have moved to Denver, got several over-asking-price bids that seemed like a relic from the warped real estate market during the Covid lockdown.

“It was the very first sentence of the listing,” said Mr. Kilboy, 39, a former Navy nurse whose loan, backed by the Department of Veterans Affairs, could be passed to the buyer. “No one could find an interest rate that low, so we were really pushing it.”

The Federal Reserve might have slowed interest rate increases, but monthly mortgage costs remain more than double their levels from 18 months ago. This has significantly lowered the supply of for-sale inventory by discouraging the millions of homeowners who locked in bargain rates during the pandemic from selling their home and incurring potentially hundreds of dollars a month in extra borrowing costs on a new one.

Because so little is for sale, home prices have remained stable, and even resumed their ascent, despite a huge increase in borrowing costs. The refrain among real estate agents and economists is that anyone who secured a mortgage rate of 3 percent or lower owns a valuable asset that they are loath to give up.

But every asset has a price. And now an emerging cadre of investors and real estate agents are trying to, in effect, sell mortgage rates from several years ago by transferring them to new buyers.

Redfin, the real estate brokerage, has seen a steep rise in listings like Mr. Kilboy’s that have comments like “beautiful home with assumable loan at 3.25 percent.” Facebook groups have popped up to find buyers for them, while new companies are pitching services to speed up the transfer.

“Homeowners with mortgages that are capable of being assumed have something valuable that many home buyers want and would be willing to pay for,” said Daryl Fairweather, chief economist at Redfin. “For people who bought when home prices were near the peak but mortgage rates were still low, it may be an attractive way to get out of a remorseful purchase.”

The assumable mortgage on Matthew Kilboy’s previous home had a 2.25 percent fixed rate, making it very attractive to buyers.Benjamin Rasmussen for The New York Times

Investors are just as eager: The euphemistic “creative finance” has become a huge topic of conversation on sites like BiggerPockets, a forum where landlords trade tips on topics like operating short-term rentals and buying a first investment property. In books, seminars and YouTube videos, influencers peddle advice on how to find struggling homeowners willing to transfer a low-rate mortgage without their bank’s knowledge — a valuable but immensely risky strategy that title companies say they’ve seen more of.

“It’s just too appealing,” said Scott Trench, chief executive of Bigger Pockets, adding the disclaimer that many of these strategies frequently involve extra risks and paperwork that most people are unfamiliar with.

From the pedestrian to the dodgy, it all seems to underscore the manner in which the nation’s real estate market has been frozen by regret. Buyers are resentful that the low-cost mortgages are gone. Sellers are reluctant to lower their prices from the peaks of the pandemic. In lieu of acceptance, a determined few are trying to use imagination and fine print to build a portal to the cheap-money days of 2021.

Most U.S. mortgages are not directly assumable. However, a host of popular government-backed mortgages — such as those insured by the Federal Housing Administration, the Department of Veterans Affairs and the Department of Agriculture — typically are, said Michael Fratantoni, chief economist at the Mortgage Bankers Association. These loans are frequently used by first-time buyers and account for roughly a quarter of outstanding mortgages, according to Black Knight, a mortgage technology and data provider.

In theory, any of the millions of homeowners holding a assumable low-rate mortgage have a valuable perk to sell with their home. Still, real estate agents say it can be hard in practice to transfer them. For instance, homeowners who transfer a V.A.-backed mortgage can lose their ability to get another similar loan unless they can find a V.A.-eligible buyer to take their original mortgage.

Or consider a homeowner who has a low-rate mortgage but has paid a chunk of it down: To assume the loan, a buyer would have to come up with a large down payment to account for the seller’s equity — something that very few people can do.

Craig O’Boyle is hoping to create a business making assumptions faster and easier. Mr. O’Boyle is a real estate agent who has been selling homes in Colorado for three decades, long enough that he remembers having to read through the door-stopper contracts that buyers and sellers now just click through on DocuSign. Reading over the lines about certain loans being assumable, he said, he had long thought that if rates ever spiked those owners would suddenly discover that their debts had value.

“And then here comes this shift in the interest rate market,” Mr. O’Boyle said.

Last year, he and a partner started Assumption Solutions, a consulting firm that, for a $1,100-per-deal processing fee, helps real estate agents navigate transferring mortgages between sellers and buyers. In his pitch to agents, Mr. O’Boyle argues that they push sub-3 percent rates as they do marble countertops or a view of the mountains.

“You market this, and let’s say you’re competing against the house next door, your house should sell either faster or for more money,” he said.

Even for the vast majority of people using a conventional mortgage that can’t be transferred, some sort of rate compensation is becoming the norm. While home prices have fallen from their all-time high last June, they haven’t come down nearly enough to make up for the increase in mortgage rates, and they’re rising again.

To stimulate new loans, mortgage companies have started marketing products in which borrowers can “buy down” rates by paying several thousand dollars for a year or two of significantly lower interest. One of the more popular products is a “2/1 buydown,” in which a borrower pays for an interest rate reduction of two percentage points during the first year and one percentage point in the second.

Put simply: “Most homes are unaffordable at today’s rates,” said Luis Solis, a real estate agent in Phoenix and Portland, Ore.

A majority of Mr. Solis’s recent deals have had some form of interest rate compensation that is a price cut in all but name, he said. Usually it’s a lump sum at closing that buyers use to buy temporarily lower rates. Sellers with a lot of equity can cut out the middleman and finance the buyer’s purchase below prevailing rates by acting as a lender — seller financing, it’s called.

Assuming mortgages, paying down rates: These are creative but straightforward solutions to rising borrowing costs. But on the margins, a rising number of investors looking to buy homes with minimal cash are trying a gray technique of finance — known as “Subject to” or “Subto” — in which they try to find people who have fallen behind on their debts and make a side agreement to take over their (low-interest) payments. (The deal is said to be “subject to” an existing loan.)

The strategy has obvious appeal when interest rates are high, but it comes with a huge asterisk: Once a home has changed hands, banks typically have the right to call the loan — that is, demand that the seller’s mortgage balance be paid in full immediately. Also, if the buyer falls behind on the payments, the property can be still foreclosed on — ruining the seller’s credit, for a home that he or she no longer owns.

Despite this, Bill McAfee, president of Empire Title, said he has seen an increase in customers looking to change their title under these terms, and has stock disclosures warning both sides what can go wrong.

“I’m not saying I agree with doing this, but it’s a way to get into property with very little money,” he said. “They have to figure out if it’s worth the risk.”

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Interest rate hikes and how they'll affect Canadians: This week's top real estate stories – The Globe and Mail



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This week in real estate, the Bank of Canada’s latest interest rate hikes and how they’ll affect fixed- and variable-rate mortgagesEdwin Ham Photography/Edwin Ham Photography

Here are The Globe and Mail’s top housing and real estate stories this week, with the lowest mortgage rates available in Canada today, commentary from our mortgage expert and one home worth a look.

Bank of Canada raises interest rate by a quarter percentage point

The Bank of Canada raised its benchmark interest rate by a quarter percentage point on Wednesday, restarting its campaign to tighten monetary policy after it paused in January. The move is in response to stubborn inflation and surprising resilience in the Canadian economy, reports Mark Rendell. Canada’s policy rate is now at its highest level since 2001.

Higher interest rates are coming for more than just mortgage borrowers

The central bank’s decision to increase its trend-setting rate to 4.75 per cent will immediately affect Canadians, writes Erica Alini. It will likely drive an uptick in consumer delinquencies and weigh on a recent rebound in home prices, experts say. It could also have ripple effects in the rental market, forcing some landlords to off-load investment properties. The first people to feel the sting will be those with debts that have variable interest rates: adjustable-rate mortgages and those who have lines of credit.


Floating your way into Vancouver’s housing market

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The Lilypad, home of Jen Abrams.The Agency Vancouver

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The 978 sq. ft. floating house is moored at Richmond Marina.The Agency Vancouver

Vancouver real estate is famously expensive, but there are some non-traditional ways into the market, writes Kerry Gold. Jen Abrams has lived for seven years in a 978-square-foot float house called the Lilypad, moored at Richmond Marina and walking distance to the SkyTrain station, which brings her downtown in 15 minutes. The Lilypad, one of three dozen float homes in the marina, is two floors, with kitchen, laundry room, dining and living rooms, one bedroom and den, patios, garden, storage and light filled rooms.

Home of the week: A converted church near Toronto’s High Park

  • Home of trhe Week, 202 – 384 Sunnyside, TorontoEdwin Ham Photography/Edwin Ham Photography

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384 Sunnyside Ave., unit 202, Toronto

In 2009, a century-old church building in Toronto’s leafy High Park neighbourhood was transformed into 24 residential lofts. This unit provides approximately 1,836 square feet of living space on two levels. The primary bedroom retains some of the character of the old church with wood rafters and a large arched window. There’s also a guest bedroom and a powder room on the main level.

What do you think is the asking price for this house?

a. $1,999,990

b. $2,299,990

c. $2,999,990

d. $3,199,990

a. The asking price is $1,999,990.

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Surreal Estate: $28 million for a humongous North York mansion off Bayview with a 40-seat home theatre



Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: kitchen

Neighbourhood: Silver Hills
Price: $28,800,000
Size: 21,000 square feet
Bedrooms: 5
Bathrooms: 11
Parking spots: 12
Barry Cohen

The place

A massive Silver Hills estate on Old Colony Road (a short walk from Bayview), with its own cellular antenna and underground filtration system. Nestled on a one-acre lot surrounded by greenery, this fortress—designed for a wealthy buyer who loves both entertaining and privacy—has so far piqued the interest of business moguls, celebrities and members of the Toronto Raptors. The mansion is loaded with over-the-top amenities: a family room the size of a dance hall, a Cineplex-grade home theatre, a 360-degree camera system, built-in face-recognition technology and voice-activated locks. In total, the place has over 15 kilometres of wiring within its walls.

The history

Architect and designer Lisa McCann considers this state-of-the-art marvel her magnum opus. She spent the past six and a half years on the project, collaborating with her husband, Michael McCann, as well as more than 100 tradespeople. “I didn’t want this to be a subdivision on steroids,” she says. “I wanted to bring as much functionality as possible so that residents would never want to leave.”


The tour

Mature trees help camouflage the brick fortress in the summer, making it barely visible from the street.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: facade

A four-inch-thick front door intersects an elegant stone wall.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: foyer

The foyer gives way to this Gatsby-like living room. The floor is limestone, and the outlets are painted custom off-white to hide even the smallest imperfections.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: living room

Moving through the space reveals the voice-activated fireplace, which can be turned on from any room. Modernist floor-to-ceiling windows lead to the side-yard tennis court.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: fireplace

The tennis court has an adjacent patio.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: tennis court

The family room’s south wing is really a 20-foot atrium, equipped with a wall-to-wall walk-out to the sprawling backyard.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: atrium

Here’s a view of the atrium from the landing above. The McCanns say it’s ideal for a library or meditation space.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: landing

Next to the atrium on the main floor is the kitchen, which features rows of Lutron pot lights, laminate white cabinets and funky fluorescent counters. The glowing island anchors the room.

The main-floor bathroom comes with a ceiling grid light and dual powder stations with Boffi faucets sourced from Italy.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: bathroom

The glass-and-oak staircase serves as the home’s spine, contrasting with the rustic stone wall.

Toronto, Real Estate, Surreal Estate, Silver Hills Mansion: staircase

Upstairs, there are multiple walk-outs to the 72-foot wrap-around balcony.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: balcony

Lisa’s favourite room on the second floor is what she calls the Frank Lloyd Wright office, inspired by the architect’s love of looking out at nature while working from his desk.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: office

Down the hall are the two main bathrooms. First, the man cave: a grout-less porcelain wonder with a glass shower and a nine-foot vanity featuring Versace detailing.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: main bathroom

And here’s its feminine counterpart, with a soaker tub, tons of storage and veined marble everywhere.

Here’s one of the house’s five bedrooms, each large enough to fit a king-sized bed, an entertainment unit and an office.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: bedroom

The main bedroom features a huge oak cloakroom with bespoke cabinets.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: cloakroom

The wine room is something you’d expect to find in a Yorkville restaurant, built with help from Halpern Enterprises. Naturally, it fits 1,000 bottles.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: wine room

Behold: the basement bathroom, with heated porcelain floors, a quartz vanity and black-and-grey mosaic tiles.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: basement bathroom

Finally, the showstopper—an 8K Cineplex-grade theatre with a 177-inch screen, surround sound, a space-themed ceiling and capacity for 40 people.

Toronto, Surreal Estate, Real Estate, Silver Hills Mansion: theatre

Have a home that’s about to hit the market? Send your property to [email protected].  



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