Real Estate News from Thom Gallagher December 2010   

If you need to discharge your mortgage, you’ll likely face some hefty prepayment penalties.  This month, we share a money saving strategy that the banks don't want you to know about.

We’ve also included some driving tips for the busy holiday season as well as a few natural home remedies that'll help fight the common cold.

Thanks for checking out our newsletter.  Let us know if you have any questions or comments regarding the articles or real estate in general -- we'd love to hear from you!


In this issue...
National Resale Housing Activity Improves in October 
National resale housing activity rose for the third consecutive month in October 2010, according to statistics released by The Canadian Real Estate Association (CREA).
Seasonally adjusted national home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards climbed 4.6% in October 2010.  The monthly rise in activity builds on similar increases in August and September.  As a result, activity now stands 13.3% above July levels, when it reached this year’s low point.  Three-quarters of local markets posted monthly increases in seasonally adjusted activity in October, led by Toronto and Vancouver.
As further evidence that the market is returning to normal, sales activity in October stood halfway between the recessionary low reached in December 2008, and the record level activity posted in December 2009.  Actual (not seasonally adjusted) national sales activity in October 2010 was 21.6% below levels for October 2009, when activity set a new record for the month.
National sales activity rebounded last year without a single monthly decline and hit record levels in the second half of 2009.  As a result, large declines in activity compared to year-ago levels are masking recent monthly gains in national sales activity.  Record level activity late last year is expected to continue stretching year-ago comparisons over the rest of 2010.
The number of new residential listings on Canadian MLS® Systems edged up 1.3% on a seasonally adjusted basis in October.  New listings remain 14% below the recent peak reached in April 2010.
National sales activity and new listings have swung widely but synchronously, which has kept the market in balanced territory since the spring.  Over half of all local markets in Canada are balanced, with an almost equal proportion of the remainder in buyers’ or sellers’ market territory.
The national average price trend remains stable, in keeping with a balanced market.  The national average price trend has remained fairly steady for more than a year, but only recently is this being reflected in year-over-year comparisons.  The national average price for homes sold in October 2010 was $343,747, up less than a percentage point compared to one year ago.  October marks the fourth consecutive month in which the average home price has remained roughly even with year-ago levels.
The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and measures the balance between housing supply and demand.  The seasonally adjusted number of months of inventory stood at 6.2 months at the end of October on a national basis.  This is down from 6.5 months in September.  The number of months of inventory now stands a full month below where it was in July.
“The continuation of low interest rates is supporting sales activity, which has been improving over the past few months in a number of major markets including Vancouver,” said Georges Pahud, CREA’s President.  “National housing market trends are improving, but local market trends can differ significantly, so home buyers and sellers should consult their REALTOR® to understand how their housing market is evolving.”
“National sales activity is now running almost halfway between the highs and lows posted between late 2008 and late 2009,” said Gregory Klump, CREA’s Chief Economist.  “This suggests that the Canadian housing market may be starting to normalize.  After the wild roller coaster ride that many housing markets have been on, normal and stable market conditions are something that many buyers and sellers will likely welcome.”

How to Reduce Mortgage Discharge Penalties 
If you need to pay your mortgage off early, you'll likely get hit with a huge discharge penalty.  Deciphering the fine print behind a mortgage isn't easy but we've got a simple tip that could save you a small fortune.

You can’t always rely on financial institutions to look out for your best interests and explain all the options to you.  Most homeowners don’t realize they’re often able to make a 15% lump sum payment without penalty before discharging their mortgage which can drastically reduce their discharge penalty.

For example, if you want to discharge your $200,000 mortgage, the penalty is going to be much higher than if you'd made a 15% lump sum payment beforehand.  By making this payment, you'd only be paying a penalty on the 170K which would end up saving you around $500!  Think what you could do with the extra cash!

Homeowners usually just rely on the bank’s advice and pay the amount that appears on the discharge statement.  Don't make this mistake!  It’s up to you to be familiar with all the fine print in your mortgage documents so you'll be armed with the knowledge of how to reduce your penalties.

Prepayment policies vary greatly from one institution to the next so get everything in writing, read the terms carefully and ask lots of questions.  We hope you found this article helpful.  For other tips that can save you hundreds or even thousands of dollars, give us a call -- we're here to look out for you!

Safely on the Road Again 
The holiday season involves lots of extra travel whether you're off to the shopping mall or visiting friends and family.  Here are a few tips to help ensure your safety on the road during this busy time of year:

  1. Wipe the Slate Clean - Replace your wipers if they're not working properly.  They're absolutely critical to your safety, especially at night.

  2. Air On the Side of Caution - Check your tire pressure regularly but do it before driving too far as it changes when the tires warm up.  Don't forget the spare!

  3. Fill 'er Up - Check fluid levels including steering, brakes, transmission and oil.  Refill your windshield wiper fluid frequently and keep a bit extra on hand for emergencies.

  4. Be Prepared - Make sure your car contains a cell phone, first aid kit, blanket, energy bars, water, candles, flashlight, safety flares and some basic tools.

Now that the roads are filling up with holiday traffic, one of the best safety tips you can follow is to take your time while being aware of others.  Properly preparing your car for the winter means you’ll not only be safer but you’ll also have peace of mind.

Naturally Fighting the Common Cold 
This is the time of year when viruses spread like wildfire.  Here are a few natural remedies that'll help you feel better:

  • To relieve a sore throat, drink a cup hot water with a ¼ tsp of cayenne pepper mixed in.

  • Cut up and boil an onion to make tea.  Add a bit of lemon to help with the taste.

  • Take 1 tsp of apple cider vinegar in ½ a cup of water every few hours at the first sign of a cold.

Hopefully the nasty viruses will pass you by this season but if you do end up catching a cold, the natural home remedies we've mentioned might just do the trick!

PS Let me help you, or someone you know, achieve your residential or investment real estate goals. You bring the vision and I help you get it done. Call me today at (416)524-6530 to discuss your plans or visit my web site to start your search. I look forward to wowing you with top notch service. 

Not meant to solicit clients already under contract.