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Rate hikes add a note of hesitation to real estate market

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53 Lynndale Rd. in the Scarborough Bluffs neighbourhood. Listed with an asking price of $4.2-million, the house sold after 16 days on market for $3.9-million.Ciprian Dumitrascu/Ciprian Dumitrascu/Soare Productions

The Toronto-area fall real estate market is entering the final stretch of 2022 with dispirited buyers, a lack of inventory and the table set for an interest rate hike in December.

The cautious mood in November follows a sombre October which saw sales in the Greater Toronto Area tumble 49.1 per cent compared with October, 2021, according to the Toronto Regional Real Estate Board.

The average price in the GTA dipped 5.7 per cent from a year earlier to stand at $1.089-million at the end of October.

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Rochelle DeClute, broker at DeClute Real Estate Union Realty, says rising interest rates have offset the drop in average price. House hunters who line up a preapproved mortgage and fail to buy before it expires find out they are approved for less each time they apply for a renewal.

“They’re preapproved for a certain price and that price keeps dropping,” she says. “That’s been discouraging.”

Meanwhile, the family money that propelled many first-time and move-up buyers during the run-up in prices during the pandemic is not as readily available,” Ms. DeClute says.

Older generations have seen their investment portfolios decline, she says, and higher interest rates make it less attractive for parents to take out a home equity line of credit on their own house in order to help their adult children.

While such a move made sense when rates were low and real estate prices were rocketing higher, parents are more hesitant when prices are declining, she says.

With prices softening, Ms. DeClute says her team is making sure that sellers are serious before they take on a listing.

Prepping houses for sale is costly for agents, who invest in staging with fresh furniture, painting and landscaping in some cases.

“We really have to have a good conversation about their motivation,” she says. “We have to be very sure that they’re ready to sell and they’re not just testing the market.”

Some homeowners see a property in their neighbourhood sell quickly and expect the same result, she says. If their own house lingers, it’s hard for homeowners not to take it personally.

“The reality of living through it is something sellers are not prepared for,” she says.

Still, some houses are selling with multiple offers – particularly if they have an asking price below the $1-million mark.

Ms. DeClute points to one recent sale in Toronto’s east end. Agent Melanie Wright listed the semi-detached house at 36 Ashland Ave. with an asking price of $999,000 and drew 20 offers.

Six of the offers were clustered around the high end, says Ms. DeClute, and the house sold for $1.415-million.

Houses in higher price brackets are also selling, but a little more slowly compared with recent years, Ms. DeClute says.

In the Scarborough Bluffs, agent Rick DeClute listed a large house at 53 Lynndale Rd. with an asking price of $4.2-million. The house sold after 16 days on market for $3.9-million.

The average number of days on market in October was 21, up 61.5 per cent from the 13 in the same month last year.

New listings, meanwhile, dropped 11.6 per cent in October from October of last year.

Traditionally, many homeowners have taken advantage of a declining market to trade up.

But agents say some potential move-up buyers appear to be nervous about taking on more debt after a series of interest rate hikes by the Bank of Canada that lifted its key rate to 3.75 per cent.

Pritesh Parekh, real estate agent with Century 21 Legacy Ltd., says he is encouraging prospective buyers to figure out the repercussions for their budget if mortgage rates climb higher or they face economic hard times.

“They should be asking the questions I don’t think people were asking two years ago,” says Mr. Parekh, who has a background in finance. “As much as the stress test helps, do your own stress test.”

Interior shots of 53 Lynndale Rd. The average number of days on market in October was 21, up 61.5 per cent from the 13 in the same month last year.Ciprian Dumitrascu/Ciprian Dumitrascu/Soare Productions

Mr. Parekh says buyers are also delving into the fine print in mortgage agreements more thoroughly than they did in the past. Breaking a fixed-term mortgage, for example, often comes with hefty penalties.

He expects the market to remain slow for the remainder of 2022.

But some clients are contemplating an upgrade in 2023 as the decline in the average price in the GTA hits single-family homes the hardest.

But a continuing trend that partly accounts for the tight inventory and the low number of transactions at the moment is that people often want to hold onto the original property.

He points to one client who was living in a condo unit with his family. He purchased a townhouse for the family and kept the condo as a rental property.

Mr. Parekh says owners who sell now will have to accept a lower price for their current property, but in most cases they will save more on the new property. He points to the October numbers from TRREB, which show the average price of a detached house in the GTA dropped 11 per cent year-over-year to stand at $1,372,438. For a semi-detached, the average price fell 6.2 per cent to $1,079,393.

The average townhouse price in the GTA slipped 3.9 per cent year-over-year to $919,903.

The average condo price, meanwhile, edged up 1.8 per cent to stand at $716,515.

Mr. Parekh predicts the market will soon head into its typical seasonal slowdown in December, and the Bank of Canada has another policy meeting set for Dec. 7.

“As we get closer to the end of the year, there’s the looming story of another rate hike.”

Stephen Brown, senior Canada economist at Capital Economics, notes the central bank has been sounding more dovish recently but he believes that tilt looks premature following a surge in employment and acceleration in wage growth in October.

Mr. Brown points out that Bank of Canada governor Tiff Macklem left the door open to another 50 basis point hike in December, but many on Bay Street are now forecasting 25 basis point hike.

Mr. Brown expects the bank to hike in December and again in January.

Looking ahead, Ms. DeClute expects transactions to slow down even more in the final weeks of the year.

More homeowners are planning to list in the early months of 2023 but some are hoping prices will rebound in the spring. Ms. DeClute sees that as unlikely.

The impact of higher interest rates tends to hit borrowers about 12 to 18 months after rates begin to rise, Ms. DeClute says, so she is just now receiving the first calls from concerned homeowners.

One buyer who purchased during the pandemic planned to hold onto the house for about five years and then use the profits from a sale to fund his retirement. But the increase in rates has made that plan unviable.

“He felt strongly the market is going to continue to decline and he wants out.”

She is also hearing from families who have tighter cash flow than they had when they bought their house. Some have kids in expensive activities such as hockey and dance and they will have trouble stretching to make mortgage payments at higher rates.

Ms. DeClute says some are running the numbers and deciding to simplify their lives.

“They’re saying, ‘I don’t need to be in this pocket’, or ‘I don’t need this huge house.’”

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Climate-Proofing Your Edmonton Garage Door: A DIY Guide

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Edmonton has a one-of-a-kind climate, which can be very harsh on residential garage doors. Homeowners need to ensure that their garage doors are able to withstand severe weather conditions lest they compromise the safety of their homes.

This piece aims at providing tips for DIY insulation, weather stripping and maintenance to enable you maintain your garage door in good working condition throughout the year.

 

 

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Significance of Climate-Proofing Your Garage Door

Adapting to any weather is possible when you ensure your Edmonton garage door is ready. It keeps your home warm, saves on power bills, and lessens the concern of what lies beyond coming in.

 

Tailoring Garage Doors for Edmonton’s Climate

Edmonton experiences lengthy freezing periods during winter. Such extreme cold requires tough garage doors; hence, people living around Edmonton should consider the Thermacore insulated steel door series, which are among the best. They are made to fight the winter cold by keeping the garage warm.

 

These doors block out all things chilly while retaining heat inside. As John Carter, who conceptualized garage door repair Edmonton, states, Choosing a garage door that can withstand the winter in Edmonton is not just wise but necessary.

 

Enhancing Insulation for Energy Efficiency

Start with the garage door when you want to make your home more energy efficient. It is a simple move, but one that pays off. If filled with materials such as polystyrene or polyurethane, this will keep heat in and cold out, especially during winters, when temperatures can drop significantly in places like Edmonton. This is not only for comfort’s sake; it also saves money on power bills.

 

Such improvements translate into great savings, generally speaking too. If you insulate your garage door along with windows and skylights, which are energy efficient, you will cut down on heating and cooling costs immensely. These alterations are relatively cheaper than other methods but will eventually have paid for themselves through reduced energy expenses.

 

Integrating Heat Pumps and Renewable Systems

Incorporating heat pumps in your home comes with a myriad advantages. These small devices pack quite the punch when it comes to saving power and, therefore, are ideal for those who wish to introduce green solutions into their living spaces. By slashing energy bills and cutting reliance on non-renewable power sources, these systems are easy on the bank account and good for our planet.

 

Homeowners who leap witness a rise in their indoor air quality levels while at the same time ensuring more comfortable living spaces; this contributes towards making the world eco-friendly. living sustainably should start from your home – this is among the many steps we need to take toward coming up with climate-resilient solutions for tomorrow.

 

Practical Approaches to Garage Door Climate-Proofing

 

Leveraging Canada Greener Homes Grants

Even Canadians can apply for the Canada Greener Homes Grant, which aims to make their houses energy efficient, including garage doors. It provides up to $5,600 to cover part of the expenses for eligible renovation works geared towards enhancing energy performance in a home.

 

Out of this total amount, not less than $5,000 goes into financing different types of retrofits, such as improved insulation or heat pump installation to create more comfortable living environments and save on utility costs. This support encourages eco-friendly renovations across Canada by helping cover the costs of retrofit improvements necessary for sustainable living enhancements.

 

These financial incentives are crucial for pushing forward energy-efficient upgrades and retrofit improvements without putting too much strain on personal budgets.

 

Implementing Garage Door Resiliency Features

Weatherproofing adds an extra layer of protection against storms and extreme temperatures. People typically seal gaps around their garage doors to prevent drafts and leaks, which also helps control the indoor climate. Adding storm protection features can shield homes against severe weather.

This may involve strengthened panels or materials capable of withstanding winds, rain, and snow. It ensures that despite whatever is happening outside, a steady temperature is maintained inside.

So, giving your garage door a climate makeover keeps out the cold and cranks up the cozy in your house. Taking advantage of programs like Canada’s Greener Homes makes it less of a hit on the wallet. Protecting against every kind of bad weather while still managing to be friendly towards both our planet and our finances Sounds like a win-win to me. Therefore, feel free to get all DIY with that garage door.

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Calgary’s ultra-luxury real estate heats up

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New report from Sotheby’s International Realty Canada highlights that the city leads the nation for demand growth.

Ultra-luxury homes in Calgary may not be selling like hotcakes, but homes priced $4 million or more are seeing higher demand than ever before, says a local realtor, specializing in the niche resale real estate segment.

“This spring, Calgary has seen multiple ultra luxury sales over the $4-million mark, compared with last spring,” says Corinne Poffenroth, senior vice-president of sales with Sotheby’s International Realty in Calgary.

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She points to one sale in late April in Upper Mount Royal for more than $5 million among a handful of ultra-luxury home transactions that are becoming more common, though still far from the norm in Calgary. The recently published Top-Tier Real Estate: Spring 2024 State of Luxury Report, by Sotheby’s International Realty Canada, reveals that Canada’s luxury market is recovering after the recent slump in activity in many major centres, resulting from higher borrowing costs.

It also highlights Calgary as a luxury market outlier with higher demand than other large cities, further adding the city should continue to lead Canada for percentage sales growth of high-priced homes.

“One big reason is Calgary is attracting a lot of new businesses right now,” says Don Kottick, president and chief executive officer of Sotheby’s International Realty Canada.

What’s more, Calgary is a value market for luxury, unlike Vancouver and Toronto where luxury starts at $4 million. In Calgary, by comparison, luxury starts at $1 million.

Yet luxury is a moving target in Calgary these days — upward in price, that is — given that the average price for a single-family detached home in the city exceeded $800,000 at the end of March, Calgary Real Estate Board statistics show.

Still, buyers are arguable purchasing a luxury home in Calgary for about $1 million, with Kottick noting a comparable home in Vancouver costs $4 million — which is considered luxury there.

Most luxury demand in Calgary is for single-family homes “accounting for 83 per cent of sales for homes priced at $1 million-plus,” Poffenroth says.

Yet ultra-luxury — $4-million-plus — in Calgary, often a slow market, has picked up, as noted in Sotheby’s report.

It points to two luxury properties worth more than $4 million selling in the first three months of the year versus none in the same period in 2023.

The market for luxury homes under that price, however, was much more active. All told, 441 sales over $1 million occurred in the first quarter of this year, an increase of 63 per cent year over year, the report states.

The vast majority of sales are in the $1-million to $2-million range, accounting for 92 per cent of luxury activity in Calgary.

While many of these transactions involve single-family detached homes, other luxury housing types — townhomes and condominium apartments — are seeing stronger demand than seen in the previous 10 years, Poffenroth says, pointing to recent sales for $1.5 million and $3 million for apartment condominiums downtown.

“We are seeing both downsizers wanting larger luxury condos and a lock-and-leave lifestyle to replace their large estates, combined with out-of-province buyers who see the investment value in Calgary luxury condos.”

CREB statistics from the first quarter of 2024 reveal 15 apartment sales of $1 million or more versus 10 in 2023, also a strong market historically. Row sales did fall from four to three sales year over year, ending March 31, but semi-detached transactions in that price range were up sharply from three last year to nine this year.

Kottick says the report forecasts improving demand for Canada’s luxury market, especially if interest rates fall, with Calgary expected to again be a luxury activity leader.

“The city is still booming economically, and that will certainly drive luxury sales.”

 

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This abandoned Toronto home is $6 million

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It’s unclear how long this Toronto house has been abandoned.

The last time it sold was in 2009 for $1.8 million, and even then, it was being sold “as is.”

“The house had been vacant and derelict for years before I purchased it,” said current owner Marina Stefanovic.

“And at the time the sellers, the estate of the couple that passed away, was not allowing showings inside the house for safety reasons. The children of prior owners had chainsawed the house throughout (floors, fireplaces, walls,  etc.) looking for a valuable coin collection that the parents had.”

For the record, the kids never found the coin collection.

When Stefanovic bought it she had grand plans but she told blogTO that it took a long time to get through the Committee of Adjustments for approvals of new plans.

By the time plans were approved Stefanovic, her family had moved out of the area and things stalled.

In 2017, 132 Blythwood Rd. went on and off the market for the entire year. It started at $6,188,000 and dropped to $5,295,000 by December, but never sold as a deal fell through.

132 Blythwood Road Toronto

The front of the house.

In the intervening seven years, the house has remained abandoned and has only become more derelict.

And yet, despite the abysmal state of this house, the home has just been re-listed for $6,385,000.

Why? You might ask. Because land. It’s always land.

132 Blythwood Road Toronto

An aerial shot of the neighbourhood and property.

132 Blythwood Rd. is sitting on a massive 77 by 403-foot ravine estate lot with a substantial amount of table land (aka flat ground).

With over 30,000 square feet of land, the possibilities of building a dream home are pretty much endless, if you have the cash.

You could have a sprawling estate with a pool, detached four-car garage, and enough room for the greenhouse of all greenhouses.

In fact, according to the listing, plans for a dream home are already in the works.

There’s a survey, previously approved renovation/extension plans by Richard Wangle, and draft plans for a 13,000-square-foot new build.

Or, if you’re more entrepreneurial, you could divide the property in two and build a whole townhouse development, a condo, or whatever you want.

132 Blythwood Road Toronto

The backyard and detached garage.

This property has the space and potential to pretty much do anything you can get a building permit for.

Location wise, it is in the prestigious Lawrence Park neighbourhood where homes, on average, go for over $4 million.

So that obviously plays a part in the listing price, but even considering all that $6 million is likely high.

When we ran the address through HouseSigma and looked at the comparables, the value of the 132 Blythwood Rd. was in the $4 million range.

132 Blythwood Road Toronto

Looks like there once was a pool.

Then again, Stefanovic shared that in the years she’s owned the property she’s received a number of unsolicited offers – the highest offer being $6 million plus commission.

So who knows, maybe it will sell for close to the asking price.

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