Andre Smit's Real Estate Round-up
Thursday Oct 14th, 2021Share
We are now starting to see some homes being offered for sale at more realistic prices without resorting to the silent auction method of only accepting offers on a certain day. But without new listings increasing substantially, we will remain in the current sellers' market.
The inflation rate is still well above the Bank of Canada's target of 2%. Economists are now predicting interest rate increases as early as the end of the first quarter in 2022, but almost definitely by the end of the second quarter. This action should reign in the inflation rate, but will also have a dampening effect on housing prices. Together with an expected increase in listings next Spring, this may well be the end of our current sellers' market!
The actual sales to new listings ratio has moved down from 81% in August, to 67% in September. Remember that if the ratio is above 60% then it indicates a sellers' market. This is a positive move towards a more balanced market. October's ratio will show whether this is a sustainable trend.
Total physical sales dropped by 18% from the same month a year ago. However, total new listings, which drive the sales, dropped by a whopping 34% over the same period. This resulted in the total average price increasing by 18% for the same period, and the average days that homes stayed on the market before selling, decreased by 13% to 14 days.
For detached homes, physical sales were 29% lower for September, 2021 compared to September, 2020, with new listings being down by 35% over the same period. This resulted in an average price increase for detached homes of 28% for the same period and the average days on market before selling, dropped by 19% to 13 days.
For condo apartments, physical sales were actually up by 13% while new listings were down by 32%. The average price in this category increased by 12%, while the average days on market before selling, dropped by 10% to 19 days.
This month, I am going to discuss an often misunderstood modern insurance, called title insurance.
This is now viewed as the only sure means of guaranteeing a statement of the title, (right of ownership), to real property. It is considered a necessary part of the conveyancing business, and allows lawyers to close property deals at greater speed, with greater ease and more protection for the buyer, at a lower total cost, as certain off title searches, are no longer required, if this insurance is purchased.
It covers the following:
An undischarged mortgage
Gaps in title
Slight spelling differences in owners' names on title
Fraud & forgery regarding the title, in the future as well
Access to the property
The need for an up to date survey
Coverage offered is twofold:
Payment of legal fees and costs incurred in defense of the insured title. Coverage is for an unlimited $ amount
Indemnity for actual loss, due to defects in title
The cost for this coverage depends on the property value, but varies between $300 and $500 for an average home in the GTA. It is a once off payment at closing, and lasts as long as the insured or beneficiary owns the property. There is no deductible, and actual losses or costs, are compensated for. This insurance can only be acquired through a conveyancing lawyer.
An added benefit for clients using this insurance, is the possibility of deferring closing costs, with the payment of a small administration fee.
To summarize, title insurance has now become the norm in the Canadian conveyancing industry. I hope that you are now more informed about this valuable type of insurance.
SMIT'S TIP OF THE MONTH:
Get your lawnmower ready for winter storage, by adding a fuel stabilizer to the fuel tank and lubricating all the moving parts. Also lubricate all your garden tools to prevent rust forming in the winter. Cover your air conditioning unit to protect against any damage from snow and ice buildup. Clean leaves and debris from eaves and gutters to ensure proper water flow, in order to prevent ice from forming and backing up under the shingles. Clean your bathroom fans by washing the covers and vacuuming in and around the motors.
If you, your family or friends, have an questions regarding any real estate matter, or indeed, require the services of a good realtor, please do not hesitate to contact me at 416-898-2852, at anytime. Please remember that I run a cash incentive referral scheme, for any referrals, that result in a sell or buy transaction, with me.