Rising housing values and lack of inventory challenge first-time buyers, says RE/MAX

(April 22, 200 - While higher housing values and tight inventory levels have hampered home-buying activity so far this year, longer amortization periods and alternative housing types have offset the impact on most major markets across the country, according to a report released today by RE/MAX.

Despite a higher degree of frustration in the marketplace than in previous years, the RE/MAX Affordability Report found that first-time buyers, in particular, remain steadfast in their determination to purchase a home. In fact, entry-level purchasers are adjusting their expectations by sacrificing size, location, and even long-term financial freedom, to overcome challenges such as rising prices and serious supply issues. Innovative financing has become key to homeownership in today’s environment – with longer amortization periods gaining favour in 62 per cent of the major centres surveyed. Low or no down payments were popular with first-time buyers in 38 per cent of markets.

“Doom and gloom reports coming from south of the border have yet to hinder overall momentum,” says Michael Polzler, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “First-time buyers are still leading the charge, taking advantage of every resource available to achieve homeownership. They’re determined to get into the market sooner rather than later. If suburban locations, smaller condominiums and town homes, or a little sweat equity is what it takes to get into the market, these purchasers are game.”

Almost every time I’ve listed a home or condo, each owner asks me what improvements they can make to increase the value of their home.  Sometimes it’s a simple and obvious answer – maybe the place just needs to be painted in neutral colors – or some much needed landscaping for curb appeal.  The fact is that each property has its own limitations on what should be done.  It’s important to never over improve a home beyond the neighbourhood’s potential.  Some home owners can get carried away and over improve beyond what a willing buyer would pay for the area or condo building.  

You don’t want to be the most expensive home on the street.  To give you an example ~ a homeowner with a $400,000 home decides to fork out $50,000 for an in ground pool ~ on the resale market that home is still worth roughly $400,000.  Some renovations have an impact on value and some don’t.  I’ve listed an index report from RE/MAX and included a link to the 6 Smartest Renovations you can make to a home or condo to increase value.  

The RE/MAX Return on Reno Index is a proprietary tool to help you get the most value out of every renovating dollar you spend. We took an exhaustive look at the various renovations people commonly do on their homes and judged their return on investment based on a variety of criteria. The findings were nothing short of enlightening.

We learned “down to the dollar” what different renos deliver, but we also discovered that the relative return on investment changes based on the value of the house being sold. Have a look at these charts, which compare your return on reno, based on the value of the home being sold.

http://www.remax-oa.com/SmartRenovator/Landscaping.asp

Renting vs. Home Ownership

This is a decision which many people face, and the decision is not as easy to make as it may sound.

As a homeowner, you can reasonably expect the equity in your home to increase over time as your mortgage is paid down. That, combined with regular appreciation in property values, can be a rapid and rewarding way to increase your net worth. In contrast, the person renting over the same amount of time is left with no property investment but may have enjoyed lower living expenses and the opportunity to invest in other opportunities. 

When comparing owning to renting, you have to add up all of the figures, including the cost of your home, the size of your down payment, utilities, immediate repairs, interest rates and insurance, and compare them with how much you are currently spending on rent.

Of course, you also have to place a value on the enjoyment and satisfaction that you will derive from owning your own home.

Finally the spring real estate market has started.  As a realtor I love getting out and looking at different homes and condos that find themselves on the market.  It’s considerably more enjoyable without the snow piles and storms we faced this winter though.  This is very much the case for many buyers and sellers who have been sitting on the side lines waiting while record snow levels, spring break, and Easter Long Weekend came to an end.  As always ~ the weather has broken and it seems our spring market is here ~ we’ve seen a huge spike in interest within the last week 1/2 from interested home buyers and sellers.  There has also been an increase in the number of properties come available.  With that in mind ~ here’s a link to search for homes currently on the market

http://www.jarrodarmstrong.com/index.php?p=2&io_mdist=E  Search For Properties currently on the market.

540 Dorchester 

Price:  $135000 - $150000 

Condo Fees:  $210 - Includes Water, building insurance, parking, and common elements. 

Located at Stevenson and Laval between Gibb and the 401 are the townhouses of 540 Dorchester.   Walk to schools, shopping, Loblaws, bus routes and the Oshawa Mall. Originally built with electric baseboard heating ~ many have been upgraded with Gas Forced Air systems.   Typically you will find a 3 bedroom model, although there are a couple 4 bedroom units that find themselves on the market.   All units have an average size basement, backyard area, and garage. 

Contact me today for a complete list of condos currently available at 540 Dorchester. 

220 & 221 Ormond Drive 

Price:  $130000 - $150000 

Condo Fees:  $200 - $220 - Includes Water, building insurance, parking, and common elements. 

Located on the North West corner of Ritson and Taunton are the 2 condo townhouse complexes of Ormond Drive.   You can enjoy the convenience of being located close to schools, shopping, bus routes and the University. Originally built with electric baseboard heating ~ many have been upgraded with Gas Forced Air systems.   There are 2 general layouts available.  You can pick from a main floor basement or a layout with a basement below grade.   Most buyers are surprised at the space available in these Townhouses compared to similar priced properties throughout Oshawa.  

In general the fees are low and the price is great.  I’ve never encountered any problems with the management of this complex.  On the other hand ~ the brown siding above the brick is becoming an eye sore although some have started to be replaced (covered in Condo fees)    

Contact me today for a complete list of condos currently available on Ormond Drive.

1133 Ritson Road: 

Price: $135000 - $160000 

Condo Fees:  $175 includes water, building insurance, parking, and common elements.

Located at the intersection of Ritson and Beatrice are the townhouses of 1133 Ritson Road (entrance off Ritson or Beatrice).  Available in a 2 storey or 3 storey layout ~ 2 or 3 bedrooms ~ some have finished basements or walkout basements depending on the Layout.   

The last time I went to sell a condo here the Status Certificate indicated some issues with the reserve fund.  It seems the management company has been operating over budget and dipping into the reserves to cover the day to day expenses.   This was last fall in 2007 ~ It’s always important to have good lawyer who takes their time reviewing this document.  In our case ~ my client was able to walk away from the property and save themselves considerable aggravation and loss of money.  The government sets a standard for how much money should be in the reserve fund ~ if the level of money is below the standard ~ then every owner will be charged a fee to top up this fund.  Always be careful and investigate as much as possible before proceeding with a purchase.  These problems may have been resolved this year ~ but take extra care if considering making 1133 Ritson Road your next home.

Contact me today for a complete list of condos currently available at 1133 Ritson Road or an up date on current news.

1330 Trowbridge: 

Price: $145000 - $160000 

Condo Fees:  $250 includes water, building insurance, parking, and common elements.

Located at the intersection of Ritson and Beatrice are the townhouses of 1330 Trowbridge.  There not new – but still popular.  For a great price you’re able to purchase a nice roomy townhouse with garage, separate parking area, outdoor pool, private yard, and finished basement.  Conveniently located close to shopping, schools, parks, and public transit make these ideal for seniors, younger families, students, and single owners. 

Contact me today for a complete list of condos currently available at 1330 Trowbridge.

611 Galahad:

Prices: $125000 to $145000

Condo Fees:  $200 - 250 includes the water, building insurance, parking, and common elements.

These are always popular and sell rather quickly.  This average sized Townhouse complex is located in an excellent area of north east Oshawa between Wilson and Harmony just south of Rossland Road.  Although they are getting up there in age ~ they have all been generally well maintained.   The lower priced townhouses typically need new flooring, fresh painting, and updates in the kitchen and basic fixtures.   The top end of the price spectrum should leave you with nothing to do ~ just turn a key and move in.  Often popular among first time home buyers and small growing families.  Typically a well priced unit will sell within 60 days for 98% of list price.

401 Wentworth:

Prices:  $85000 to $110000

Condo Fees:  $400ish includes the water, heat, hydro, building insurance, parking, and common elements.

This is one of the smallest Townhouse condominiums complexes located in the south end of Oshawa.  Its just west of the Oxford and Wentworth intersection.  You can pick from 2 or 3 bedroom models. You will find these are only heated with electric baseboards and have a small laundry area in the basement with a potential space for a recreation room. 

I find this complex to be one of the nicest in the South end of Oshawa for the price.  What separates these from similar priced townhouses in the area is the number of units.  401 Wentworth only has a small number of units ~ this allows for a tighter community and less distractions.   The surrounding area is slightly better as well.