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July 2010 – Market Notes

Here are the latest numbers reflecting the Toronto residential market’s activity:

Sales: We’re into the summer market, represented by 8,442 properties changing hands last month, versus 10,955 the year previous. Not a huge amount of activity, but still a reasonable market volume. I expect the market prices will likely stay level through summer with buyer confidence diminishing (perhaps unjustly) in the face of regulatory changes, such as the ‘new’ mortgages rules and HST implementation, and seller motivation staying stable. The effect will be a lingering, more balanced, buyer-friendly environment, and longer marketing periods (days on the market), which we are certainly already seeing.

New Listings: June also saw 15,086 new listings hit the market, up 13% (!) from the number listed in 2009. The continued high volume of new listings from May into June has assured that we are definitely heading further into a buyers’ market. The sudden incursion of huge seller volume has certainly stabilized the market. Look for prices to languish at this level through the summer, with savvy buyers finally finding really hot deals again… though I wouldn’t expect them to drop too much more in the near future. Buy now or in the coming months for good deals and great inventory.

Active Listings: Active listings (total single family homes currently on the market) are up 28% year-over-year, with 23,923 properties on the market last month, meaning that the new wave of sellers has more than completely balanced the market. The sellers have come to the table in droves, but buyer confidence is (perhaps unjustly) low. It’s a great time to begin surfing the listings and snatching up deals, which is what I’m personally doing with my portfolio and that of my investor clients. Decisive action when the market is uncertain pays big dividends for those who have access to the best/most information.

Days on the Market: The trend is still continuing toward fast sales as well, generally benefiting sellers, with properties taking on average far less time on the market to sell, down from 33 days to only 27 days this year. You are encouraged to remember that this number represents the time until deals are firm and reported, and often includes a conditional sold period of up to 2 weeks. Consequently, these properties are effectively off the market much sooner.

Price: Finally, the median price of homes in the GTA in June was $367,750, up from $345,000 in the same month of 2009, with detached homes trading at a premium, priced at $460,000 last month median value. Versus last month, this represents a median drop in market price of about 2.1%.

Often times, the best advice is: When nobody’s buying… buy! It’s a great way to get higher value and more blue-chip product than you could in a hyper-competitive market., and you’ll be happy when you’re holding those properties in 5 years, believe me. This fall will be a great time to expand your portfolio with good opportunities become more accessible.

Tell your friends! They’ll thank you. Call me if you’re interested in learning more about buying or selling real estate.

Until next time,

Shaun Nilsson
1-888-712-7888

Posted in Investing, Leasing.

No comments

By Shaun Nilsson – July 26, 2010

July 1: How The HST Will Apply

This week, I thought I’d keep it brief, and focus on a topic which is about to be near and dear to all of our hearts (and pocketbooks) – the HST. The HST will be rolled-out this week on July 1, and some important changes will be taking effect with respect to real estate transactions and taxation.

Here is the new tax landscape, in summary:

Resale Homes

Before July 1, 2010: No GST, and no PST.

After July 1, 2010: No HST.
Photobucket
New Homes Up To $400,000

Before July 1, 2010: GST taxable at 5%, no PST.

After July 1, 2010: HST taxable, but with certain special provisions to apply.

From the Ontario Government’s website: “The new housing rebate will be 75 per cent of the Ontario component of the HST, up to a maximum of $24,000. The rebate will ensure that buyers of homes priced up to $400,000 will, on average, pay no more tax than under the PST system. However, applicable PST on building supplies is embedded in the price of the home.”

New Homes Over $400,000

Before July 1, 2010: GST taxable at 5%, no PST.

After July 1, 2010: HST taxable, but with certain special provisions to apply.

Again, new homes purchased as primary residences, valued at $400,000 or more will be eligible for the maximum new housing rebate of $24,000.

Realtor Commissions, Legal Fees, Home Services, etc.

Before July 1, 2010: GST taxable at 5%, no PST.

After July 1, 2010: HST taxable at 13%.

You are encouraged to remember that all of these changes will take a bit of getting used to, but are designed to help stimulate business in Ontario by providing more tax ‘pass-throughs’. Only time will tell if it works, but in the meantime, staying up on where the HST does and does not apply will help you make educated choices regarding your investments.

Are you looking to buy or sell Toronto real estate this spring? Call my office today and we’ll get you started out right.

Until next time,

Shaun Nilsson
1-888-712-7888

Posted in Buying, Investing, Leasing, Mortgage, Negotiating, Selling.

2 comments

By Shaun Nilsson – June 28, 2010

Design Week II – June 2010

Feast your eyes on the latest design trends and luxury objects of desire heating up the design pages this month!

OBJECT: ‘Welcome To The Jungle’ Furniture
http://shaunnilsson.com/blog/
Designed by Rui Alves, of My Own Super Studio, these pieces are multi-functional and designed to be used as chairs, benches, tables, or whatever you choose. Cool.

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OBJECT: The “SK” Fish Bone Wood Armchair
http://shaunnilsson.com/blog/
Nicolas Marzouanlian’s vision for a wooden chair without screws, glue or other fasteners comes to life. The chair is made entirely out of wood, and comes signed, numbered and dated, for that exclusive feel.

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OBJECT: The Vuzzle Chair
Photobuckethttp://shaunnilsson.com/blog/

Consisting of 59 individual pads and inspired by the Voronoi diagram, this new chair by Christopher Daniel is constructed with neodymium magnets allowing the user to easily form the object (in a fashion reminiscent of a Lego puzzle).

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OBJECT: The ‘Breathing’ Chair
http://shaunnilsson.com/blog/
Breathing is Wu Yu-Ying’s foray into the fully-recyclable furniture world, and is made of body-conforming neoprene. When the sitter applies their weight to the chair, it automatically adjusts to their shape to provide a fully supportive lounging experience. Awesome!

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OBJECT: “Curve” by Darko Nikolic
http://shaunnilsson.com/blog/
This time, I’ll let you figure it out.

Amazing stuff! Are you looking to buy or sell Toronto real estate this spring? Call my office today and we’ll get you started out right.

Until next time,

Shaun Nilsson
1-888-712-7888

Posted in Buying, Lifestyle.

No comments

By Shaun Nilsson – June 21, 2010

Understanding Cap Rates and Multipliers

So… you’re ready to invest, huh? You’ve been reading the Monday Morning Memo and you think you’ve got it all figured out. Then you read a real estate listing touting a great investment opportunity with a “Cap Rate of 6%”, or a “13 GIM” … and suddenly you’re not so sure.

What are Cap Rates? And what are Income Multipliers? In this brief article I’ll outline two of the most common rules of thumb used by Realtors and investors alike in describing investment property.

(1) Capitalization Rates. Or cap rates, for short, are imaginary numbers that are used to define return on investment in apples-to-apples terms, allowing for easy comparison of various investment opportunities.

A cap rate is arrived at by completing the following equation with respect to a given property:

Cap Rate = Net Operating Income / Purchase Price

So if you know that a property makes $80,000/year in net income (after expenses, but before debt service), and costs $1,000,000, then you can quickly arrive at a cap rate of 0.08 or 8% for this property. You can see that this makes sense, since investing your one million in cash would net you proceeds of 8% or $80,000 annually.

Cap rates are great because once you know what rates can be expected for a given type of property or market, then you can begin to understand value. If the above million-dollar property were typical of our market, and then we came upon a $500,000 property that netted $60,000/year, we would instantly know that this was a great deal (all other things being equal), since its 12% cap rate was well above the market norm. We could surmise that this property was actually worth $750,000 as an investment, based on these income numbers and the prevailing 8% rate. What a bargain at half a million!

(2) Gross Income Multipliers. These are used to asses the value of income assets as well, and are sort of like an inverse relative of cap rates (the Net Income Multiplier is the true inverse of a cap rate). They are arrived at through the following equation:

GIM = Purchase Price / Gross Income

So let’s say our $500,000 property above grossed $75,000/year before expenses. That would indicate a GIM of around 6.67 for this property. In general, a lower GIM is better because it means that it will take a shorter period of time (in this case 6.67 years) to recoup the entire investment in gross revenues. Amazing!

With GIMs and cap rates mastered, you’ll be well on your way to quickly analyzing investment opportunities and moving on to further stages of due diligence on only those that meet your rate or multiple requirements first. It’s a great way to sort through the market and find good potential, fast.

Tell your friends! They’ll thank you. Call me if you’re interested in learning more about buying or selling real estate.

Until next time,

Shaun Nilsson
1-888-712-7888

Posted in Buying, Investing, Leasing, Mortgage, Selling.

No comments

By Shaun Nilsson – June 15, 2010

June 2010 – Market Notes

Here are the latest numbers reflecting the Toronto residential market’s activity:

Sales: Sales are down, as usual when heading into the summer months, with 9,470 properties changing hands last month, versus a similar 9,589 the year previous. This number is not likely correlated to the slump we felt in early 2009, and so represents a reasonable market volume. I expect the market prices will likely stay level into summer with buyer confidence diminishing (perhaps unjustly) in the face of regulatory changes, such as the ‘new’ mortgages rules and HST implementation, and seller motivation staying stable. The effect will be a more balanced, buyer-friendly environment, and longer marketing periods (days on the market), which we are certainly already seeing.

New Listings: May also saw 18,940 new listings hit the market, up 38% (!) from the number listed in 2009. The continued high volume of new listings from April into May has assured that we are definitely heading further into a buyers’ market. The sudden incursion of huge seller volume has certainly stabilized the market. Look for prices to languish through the summer and possibly fall, with savvy buyers finally finding really hot deals again… though I wouldn’t expect them to drop too much more in the near future. Buy now or in the coming months for good deals and great inventory.

Active Listings: Active listings (total single family homes currently on the market) are only up 18% year-over-year, with 25,414 properties on the market last month, meaning that the new wave of sellers has more than completely balanced the market.  The sellers have come to the table in droves, but buyer confidence is (perhaps unjustly) low.  It’s a great time to begin surfing the listings and snatching up deals, which is what I’m personally doing with my portfolio and that of my investor clients.  Decisive action when the market is uncertain pays big dividends for those who have access to the best/most information.

Days on the Market: The trend is still continuing toward fast sales as well, generally benefiting sellers, with properties taking on average far less time on the market to sell, down from 35 days to only 22 days (!) this year.  You are encouraged to remember that this number represents the time until deals are firm and reported, and often includes a conditional sold period of up to 2 weeks.  Consequently, these properties are effectively off the market much sooner.  This is an unbelievably short time for properties to sell, on average.  Buyers will still need to be very quick to snatch great properties in the sub-$400K market, which is evidenced on the street by many disappointed shoppers arriving to the table too late.  Above $400K, property trade times have noticeably cooled, however vigilance will be needed to get ‘the good ones’.

Price: Finally, the median price of homes in the GTA in May was $376,750, up from $337,000 in the same month of 2009, with detached homes trading at a premium, priced at $464,000 last month median value.  As predicted, the price versus last month has virtually leveled off.

Often times, the best advice is: When nobody’s buying… buy!  It’s a great way to get higher value and more blue-chip product than you could in a hyper-competitive market., and you’ll be happy when you’re holding those properties in 5 years, believe me.  This summer and fall will be a great time to expand your portfolio with good opportunities become more accessible.

Tell your friends! They’ll thank you. Call me if you’re interested in learning more about buying or selling real estate.

Until next time,

Shaun Nilsson
1-888-712-7888

Posted in Investing, Leasing, Mortgage.

No comments

By Shaun Nilsson – June 7, 2010

Design Week – June 2010

Feast your eyes on the latest design trends and luxury objects of desire heating up the design pages this month!

TREND: Mosaic Sinks
http://shaunnilsson.com/blog/
Wow – stunning. The mosaic sink is the perfect compliment to many a bathroom design. This one by Betonware is a definite winner.

OBJECT: Chistera Lawn Furniture
http://shaunnilsson.com/blog/
This new lawn furniture concept from designer Jerome Gauthier hits just t the right time, when most of us are thinking about entertaining outdoors. Get yours; look loungey.

OBJECT: Luminist Lavatory
http://shaunnilsson.com/blog/
This new concept by Toto is another winner for the fixture powerhouse. This is a counter and basin all-in-one combo that certainly wows.

OBJECT: Muscle – The Urban Bench
http://shaunnilsson.com/blog/
This new public space solution by Alexandre Moronnoz is gorgeous. You can probably see where it gets its name.

TREND: Cool Walls
http://shaunnilsson.com/blog/
Forget the table… look at that wall and floor! With designer-y furniture to set it off, even the most wacky unfinished basement, if well lit, may be a design inspiration waiting to happen!

Amazing stuff! Are you looking to buy or sell Toronto real estate this spring? Call my office today and we’ll get you started out right.

Until next time,

Shaun Nilsson
1-888-712-7888

Posted in Buying, Investing, Lifestyle.

2 comments

By Shaun Nilsson – May 31, 2010

Assembling Your Team

A great man once said “real estate is a team sport”. I couldn’t agree more. When you’re ready to step into the real estate investment market as a serious player, you’re going to need to gather around you the staff that will help you make fast, reliable decisions, save you time, and improve your investments. Once you assemble a great team, you’ll have the building blocks of a successful real estate business.

Here are the folks you’ll need, and what I look for in these members of my team:

(1) The Lawyer. A great real estate lawyer is like the quarterback of your investment team. He is probably the most important player other than yourself, and should be selected carefully. Choose an experienced lawyer who is creative, but also has been around the block. You don’t want your lawyer ‘learning as he goes’ with your money at stake. A top-tier real estate lawyer should also provide ‘deal-flow’, meaning that he or she will be bringing investment opportunities your way from time-to-time.

(2) The Realtor. You’re going to want a person who is bringing in the deal opportunities and advising you on the market. You should also know the market inside and out, but it helps to have a second voice who is ‘on the street’. Additionally, a great Realtor will be able to seamlessly transact property deals for you when it is time to buy/sell an asset. Most people consider this the main duty of the Realtor, but to an investor, deal-flow and timely, accurate advice trump all.

(3)  The Accountant. Real estate investment is a business.  For some odd reason, most people in this business are not aware of that, however.  Businesses need accurate and helpful number-crunchers, and that’s where your accountant comes in.  An accountant is not just for tax time (a good one isn’t, anyway).  The best accountant for your business will be keeping track of all of your cash flows, critical ratios and the like, allowing you to make month-to-month decisions about which properties to buy, or to divest of (sell).

(4)  The Partner. One person can’t do it alone.  I don’t care if you’re making a million dollars every year.  You’re going to run out of borrowing power.  What?  I’ll say it again – You’re going to run out of borrowing power. You will almost certainly need partners in order to succeed, because they help mitigate risk and allow you to borrow into more properties and more leverage.  Choose partners very carefully.  Your business partner choices are almost as important as choosing your spouse.  At the bare minimum, ensure your goals and time horizons are aligned from the outset.

Once you’ve assembled a great team that you believe in and trust, you’ll be well on your way to a successful real estate investment business.  Learning to delegate appropriate tasks to these people, and especially to listen to them will be the path to financial victory.

Also remember, one of the most valuable traits of all of these folks is that they are not you.  They have their own opinion on your investment decisions, and if you truly trust them, you should heed what they have to say – particularly when they don’t like an investment opportunity.  Be prepared to listen, but have the courage to make your own decision.  Good luck!

As always, call me if you’re interested in learning more about buying or selling real estate.  I look forward to chatting.

Until next time,

Shaun Nilsson
1-888-712-7888

Posted in Negotiating.

1 comment

By Shaun Nilsson – May 24, 2010

The World’s 5 Most Expensive Homes

Just for fun, here they are in all of their glory! Check out the world’s five most expensive homes!

5. Three Ponds : $75,000,000
http://shaunnilsson.com/blog/
Located in Bridgehampton, New York, this mansion has as namesake three ponds stocked fully with fish, and also includes a golf course and 14 differently-themed gardens.

4. Donald Trump Palace : $125,000,00
http://shaunnilsson.com/blog/
This 18-bedroom waterfront palace in Palm Beach, Florida belongs to none other than ‘The Donald’ himself. Rough life!

3. Updown Court: $140,000,000
http://shaunnilsson.com/blog/
Living next to Elton John and the Queen of England? Sure, why not?! This 24-bedroom mansion in Surrey, UK costs over half a million dollars per month to maintain and staff. Yikes!

2. Ira Rennert Mansion : $180,000,000.
http://shaunnilsson.com/blog/
At 63 acres of land, this Sagaponack, New York home is considered to be the largest residential compound in the US. It features 29 bedrooms and 39 bathrooms.

1. The Villa La Leopolda in Nice, France: $ 398,350,000
http://shaunnilsson.com/blog/
Requiring a staff of over 50 gardeners alone, this property, formerly owned by Bill Gates, is nestled in a secluded neighbourhood of Nice, France. I hear it may be for sale, so please do contact me if you’re in the market for a summer home.

As always, call me if you’re interested in learning more about buying or selling real estate. I look forward to chatting.

Until next time,

Shaun Nilsson
1-888-712-7888

Posted in Buying, Investing, Lifestyle.

No comments

By Shaun Nilsson – May 17, 2010

May 2010 – Market Notes

Here are the latest numbers reflecting the Toronto residential market’s activity:

Sales: Sales are up again, with 10,898 properties changing hands last month, versus only 8,107 the year previous. This is the first month where that number is not likely correlated to the slump we felt in early 2009. That 34% positive change is actually indicative of the beginning of a buyers’ market, and may begin to have temporary cooling effects on value appreciation. I expect the market will likely level into summer with buyer confidence diminishing (perhaps unjustly) in the face of regulatory changes, such as the ‘new’ mortgages rules and HST implementation, and seller motivation staying stable. The effect will be a more balanced, buyer-friendly environment, and longer marketing periods (days on the market).

New Listings: April also saw 20,683 new listings hit the market, up 59% (!) from the number listed in 2009. The continued high volume of new listings from March into April has assured that we are definitely heading into a buyers’ market. The sudden incursion of huge seller volume has stabilized the market like water stabilizes a fire. Look for prices to languish through the summer and possibly fall, with savvy buyers finally finding really hot deals again.

Active Listings: Active listings (total single family homes currently on the market) are only down -2% year-over-year, with 22,951 properties on the market last month, meaning that the new wave of sellers has likely completely balanced the market. The sellers have come to the table in droves, but buyer confidence is (perhaps unjustly) low. It’s a great time to begin surfing the listings and snatching up deals, which is what I’m personally doing with my portfolio and that of my investor clients. Decisive action when the market is uncertain pay big dividends for those who have access to the best/most information.

Days on the Market: The trend is continuing toward faster sales as well, generally benefiting sellers, with properties taking on average half of the time on the market to sell, down from 37 days to only 21 days (!) this year. You are encouraged to remember that this number represents the time until deals are firm and reported, and often includes a conditional sold period of up to 2 weeks. Consequently, these properties are effectively off the market much sooner. This is an unbelievably short time for properties to sell, on average. Buyers will still need to be very quick to snatch great properties in the sub-$400K market, which is evidenced on street level by many disappointed shoppers arriving to the table too late. Above $400K, property trade times have noticeably cooled.

Price: Finally, the median price of homes in the GTA in April was $373,000, up from $330,000 in the same month of 2009, with detached homes trading at a premium, priced at $462,000 last month median value. Let’s see if the trend stays up month-over-month by June’s Market Notes…

Real estate, contrary to HGTV’s programming line-up, is not generally a short-term investment. In times like these, you’ll want to average in to the real estate market and take advantage of slumping prices. When nobody’s buying… buy! It’s a great way to get higher value and more blue-chip product than you could in a hyper-competitive market. you’ll be happy when you’re holding those properties in 5 years, believe me.

Tell your friends! They’ll thank you. Call me if you’re interested in learning more about buying or selling real estate.

Until next time,

Shaun Nilsson
1-888-712-7888

Posted in Buying, Investing, Selling.

No comments

By Shaun Nilsson – May 10, 2010

Design Week – May 2010

Feast your eyes on the latest design trends and luxury objects of desire heating up the design pages this month!

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OBJECT: Rest Sofa, by Vondom


Not only is this an amazing-looking seating arrangement just based on its incredible design alone, it also comes with an added surprise… This is outdoor furniture.

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OBJECT: Rotoluxe Illuminated Planters


These illuminated planters from Rotoluxe are environmentally friendly and made entirely from recycled – and recyclable – materials. They also come in many other variations and styles.

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TREND: Natural Fixtures


The new standard in chic elegance emerges with this trend toward natural-looking washroom and kitchen fixtures in their raw form, like this gorgeous travertine sink from Italian design house Vaselli.

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TREND: Glass Mosaic Tile


How about the new trend towards more interesting wall coverings? Loving it. And this example from Trend USA, of 100% recycled glass mosaic tile certainly is helping further the cause.

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OBJECT: Towel Warmers


Oh baby… Towel warmers? Now that’s a bath worth having.

Amazing stuff! Are you looking to buy or sell Toronto real estate this spring? Call my office today and we’ll get you started out right.

Until next time,

Shaun Nilsson
1-888-712-7888

Posted in Buying, Investing, Lifestyle.

No comments

By admin – May 3, 2010