December Housing Sales Up vs 2012 & 2013

 

Montreal's resale market ended 2014 with a bang, recording its best December for housing sales in three years.

A total of 2,203 homes were sold in the final month of '14, a 9-per-cent increase over the same month in 2013, which, if we're being honest, was a pretty crappy year for the local housing scene. (I am looking at you Pauline Marois and your trio of ill-behaved frat boys, Drainville, Peladeau and Lisée.)

It is no secret that the housing market took a dive during the Parti Québeois' 18-month chair-warming tenure as government. That took care of the final quarter of 2012, all of 2013 and the first bit of 2014. Happily, sales began to regain equilibrium in the second half of last year.

The North Shore and Laval led the charge, registering an eye-popping  26 per cent and 19 per cent respectively. Sales were up on the island by 8 per cent and 4 per cent on the South Shore.

Somewhat surprisingly, sales of both single-family homes and condominiums rose by 9 per cent and plex sales rose by 10 per cent. This despite an abundance of new and resale condos available. The median home prices remained unchanged at $284,000, while condo prices inched up by two per cent.

The number of active listings also rose December over December by 8 per cent. More choice for everyone!

The Gap Between Asked and Sold Prices, Not All Montreal Neighborhoods Are Created Equal.

 Roberto Rocha, a tech-savvy reporter at The Gazette crunched some real-estate sales numbers to see which neighborhoods in Montreal have the smallest gap between asking prices and sale  prices in this softer than usual market. It makes for interesting reading.

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These are are average listing and sale prices for all housing types combined. Nice to see my favorite, Verdun, up near the top of the list. I think it might have done even better had the numbers been parsed more closely to exclude Nuns' Island. The island and mainland are very distinct real estate beasts. 

I do wonder how it can be that Outremont, home to Quebec's francophone business, legal and health care elites and that great bald-headed Cirque du Soleil git Whatshisname, can possibly have an average asking price of $450,000. That will buy you a nicer than average house near the water in Verdun, but certainly not a three-bedroom starter mansion in Outremont. Hmm.

The Plateau, where I do a fair amount of business, remains a hot commodity, with properties selling for just a shade under 95 per cent of asking price.

Westmount trails the pack, with a nearly 10-per-cent gap between asking and sold prices.

Have a look. 

Pauline Marois Sells Her Ile-Bizard Palace

La Closerie, 7 bathrooms, 3 powder rooms, 7 bedrooms, 'Nuff said.

It seems that Parti Québecois leader Pauline Marois has managed to unload her estate in the wilds of Ile Bizard. The 1.7 million-square-foot property known has La Closerie had been on the market since July, 2009.
The property was listed on the MLS for much of that time, though the last listing expired in December a year ago at $8 million. Chateau Marois is currently listed with Sotheby's Quebec, despite the presence of an offending apostrophe in the company name, Perhaps Mme. Marois chose to overlook that little linguistic transgression in the interest of a speedy sale.
The listing is now at $6.98 million. I guess it was priced to move, what with a provincial election looming in the not too distant future and Marois consistently placing a distant third in opinion polls. Hard to position yourself as Quebec's social democratic alternative to the corrupt Liberals and the right-wing arriviste Coaliton pour L'avenir du Québec when the school and property taxes on the house you own are more than what the average Quebec receptionist earns in a year. ($36,009 vs $34,919.)
Do you suppose she's now scoping out a little bungalow in Répentigny?

Zoocasa: When an Appraisal Isn't Worth the Paper It Isn't Written On,

Big splash in the Globe and Mail this morning about a new function on Zoocasa.com's do it yourself real-estate search site. Now with a few keystrokes consumers can get an appraisal of their property.
Zoocasa, which is owned by media giant Rogers Communications, has partnered with Centract Settlement Services, an appraisal firm owned by Brookfield Residential PropertyServices. Brookfield, by the way, also owns Royal LePage and Via Capital.
As usual, the news story is full of quotes about how this service will deal yet another blow to rotten real estate agents who hoard information and then charge people money to access it instead of giving it away for free.
First off, pretty much any agent on the planet will give a homeowner a free valuation of their property as part of their sales pitch. We don't get paid until we sell the house.
Second, the Zoopraisal function is only an estimate, based on the sale of similar properties in the neighborhood. That might work in a subdivion where all the houses or condos are cookie-cutter, but it won't do you any good in a neighborhood where the houses are different. It also doesn't account for improvements or differences in location within a neighborhood. For instance, next to the crackhouse is almost always worth less than two blocks away from the crackhouse, right?
I took the service out for a spin, using it to appraise my own home. Punching in my address, the software next prompted me to choose a housing type but wouldn't let me choose "bungalow", only two storey, side-split or condo. Hmmmm.
I chose side-split, because the fun I was having was, you know, side-splitting.
Within a nanosecond the computer churned out a value, that was conservatively $100,000 more than my house is actually worth. That was the mid-range value. The low range was about $25,000 below, while the highest value was about $175,000 too high.
My house is worth X, give or take $175,000. Thanks so much Zoocasa for clearing that up.
If I were to put my house up for sale tomorrow, which of the appraisal website's proposed values would I use to price my house?
Never mind algorithms, the best way to price a house is to have someone who knows the market walk through and study the comparable sales in the neighborhood within the last 6-12 months.
The dinkus who runs the service says that "hoarding of information" is a "crutch" that has hurt agents. This from a guy who works for a media conglomerate that sells specialty television packages, cable TV service, cellular telephone and Internet services and a host of magazines, among other things. How come when Rogers charges for information it's business and when I give mine away for free it is "hoarding"?
Things that make me go hmnnnn.
As the old saying goes, Beware Greeks bearing gifts. By which I don't mean Greeks and I certainly don't mean gifts.

******
Later. . .

And another thing. Don't you think that if they wanted to they could have put a really good appraisal tool online? I mean, Brookfield has an in-house appraisal firm so it must be able to collate the data. Could it be that Brookfield prefers to "hoard" the information?  @%#&ers!

How Much is a Real Estate Commission?

A Gazette reader sent in a question to the paper's popular Open House web page.  I was the poor sap tapped to answer.

Read all about it here.

Smart Guy Sticks a Pin in Talk of Housing Bubble

Gazette business columnist Jay Bryan ushered out 2010 with an excellent column that explains in clear, simple terms why all the hysterical talk about the bursting of the Canadian housing bubble is so much nonsense.
He's right, of course. The Globe and Mail regularly ran stories in the Report of Business about the imminent collapse of the housing market here. Any day now. Any... day... now. . .   I guess it made a nice change from those stories about whether there was going to be a snap federal election zzzzzzzz. Sorry, the thought of an election is so boring, I must have dozed off.
I ran into several buyers in 2010 who were poised to invest in real estate because they were certain that the market was about to collapse and they would be able to swoop in and buy up distressed properties at deep discounts. With clients like that, I listen politely and then gently disagree. Prices are rising, not by leaps and bounds but they are rising. Anybody who thinks they are going to get a great deal and pay less than they did a year ago, or even two years ago, is mistaken.
Here's the column, which I can't help but notice is being widely reposted in the blogosphere. Skeptical bloggers are taking aim at Jay Bryan and accusing him of drinking Canadian Real Estate Association Kool-Aid.
I think we should let those bloggers get back to stocking up their bomb shelters.

Divided Versus Undivided Co-Ownership, What's the Difference?

I'm working with a new client ready to buy his first property.  He said he was looking for a condo, but I've come to realize that buyers throw that term around without knowing what it means.
In Quebec, there are two kinds of shared ownership properties: undivided co-ownerships and divided co-ownerships. People tend to use the word condo to mean both but they are distinct and there are things a buyer should understand about each before purchasing.
When buying into an undivided co-ownership property, you are, in fact, buying a share in a property as a whole. In a triplex, that typically means that you are buying about 33 per cent of the roof, foundation, walls and yard. You are given exclusive use of a portion of the property but you are essentially a shareholder in the whole.  The property has one tax account, divided among the owners according to their share of the property. One of the big advantages to this kind of ownership is that property and school taxes are substantially lower.
Undivided co-ownerships have their own particularities. 
As a rule of thumb, asking prices for undivided properties are lower than those for divided properties of similar size and with similar features. That's because buyers are obliged to provide a larger down payment when buying into an undivided property, 20 per cent down, versus the usual minimum 5 per cent.
Only two lenders will mortgage them: The National Bank and the Caisse Populaire. You can't choose, the lender will already be in place when you make an offer to purchase.
The third thing about undivided properties is that you have no automatic right to occupy the premises. Whaaaa?  It's true. If you lease your "apartment" in an undivided co-ownership building, Quebec law says that you cannot then reclaim it unless the tenant agrees to go.  It is equally true that if a rental building is turned into a undivided co-ownership property, the tenants cannot be turfed out, regardless of how many months notice they are given, or how much money you offer them as an inducement to leave.
For this reason, many undivided properties have clauses in their co-ownership agreements that forbid owners from leasing their properties.
Life is much more straightforward with a divided co-ownership property. Properly, this is what people mean when they talk about condos.  You own your unit, its walls, floors and ceilings. Your tax bill will be higher, because it will more closely reflect the market value of your individual unit. This kind of ownership is relatively new in Quebec. It only became possible to divide a property after the Quebec Civil Code was revised by the National Assembly in 1969.
Unlike an undivided, the down payment can be as low as 5 per cent and you can seek a mortgage with any lender you like.
Which is the better option? There is no easy answer. For some people, substantially lower tax bills trump all other considerations.  For others, there is a clean, simple logic to owning a unit, versus a share in a property.
The main thing is to consider what you're buying into. Read the co-ownership agreement. It will be so very booooooooooooring, but you'd be a fool not. A good agent will read it too, and advise you on potential problems. Are dogs allowed or not? Are carpets mandatory, or can you have hardwood floors? Are window boxes okay? Who has use of the yard or the basement? How much is each owner required to contribute to the reserve fund. All will be spelled out in a well-written co-ownership agreement.
Also read the minutes to the last two or three annual meetings of the co-owners. These will give you an idea of the issues and possible conflicts in the building. Examine the financial statements so that you know what big bills may be coming due and how much money is in the reserve fund.

Montreal Real Estate, A Return to Form in October

Housing resales in greater Montreal were up by 23 per cent last month compared to October, 2008.
A total of 3,543 homes traded hands - a notable improvement over the year earlier period, also known technically as "the beginning of the giant freakout."
In fact, real estate sales in the metropolitan area plummeted by 17 per cent a year ago, as buyers and sellers digested the carnage being visited on the U.S economy and wondered what the heck it meant for Montreal.
Not so much, as it turned out.
Still, let's not belittle last month's terrific sales numbers. It is more useful to measure them against October, 2007, the best October of record, according the Greater Montreal Real Estate Board. How did last month stack up? Three per cent more sales than the best previous October.
Condo sales were up 28 per cent compared to a year earlier and up 12 per cent compared to 2007.
Single-family home and plex sales were up 23 per cent and 16 per cent respectively compared to last year but were stable compared to 2007.
Prices across all property types were up six per cent compared to this time last year.
The median price of a single-family home reached $240,000, while that of a condo reached $195,000 and a plex (two to five dwellings) reached $350,000.

Local Housing : Lots of Choice Yet Prices Firm

La Presse had a good resumé of the current housing market in the Saturday Mon Toit section.
The headline read "À défaut d'aubaines, l'embarras du choix", or "In the Absence of Bargains, an Embarrassment of Choice".
The underlying theme was that while turmoil has struck other markets across North America, Montreal continues to chug along.
Buyers hoping to scoop up real estate at distressed prices have been disappointed. Prices are stable and even rising. What has changed is that properties are taking a little longer to sell. It took the typical home 65 days to sell during the first three months of last year. During the first quarter of 2009, that listing period was 80 days. There are more properties to choose from and buyers have more time to consider their purchase, but prices continue to increase.
You can read the article here.

L'Actualité Grapples with a "Big Picture Story". Story Gets Away.

L'Actualité magazine's cover story this week is all about Quebec real estate. The headline writer must have pulled a muscle stretching to come up with the headline; "How to profit from the crisis."
Sounds juicy, right? Except after reading the whole dang thing, I don't know what crisis they're talking about. Inside, the headline reads "Where are the deals? Condo or bungalow? In town or the suburbs? How to profit from an end of boom market."
It's partly a matter of scope, as the reporter veers from the big picture in Canada, to the meltdown in Detroit to the price of real estate on the Plateau. Nice work, but could you tell me what these have to do with each other? Real estate is local, even hyper local. Even if you draw the conclusion that prices on the Plateau are overheated and due for a correction, all you have to do is drive, bike or hop on the métro and travel 5 kilometres to find a neighborhood where prices are more affordable.
The one useful thing the mag provides is an online chart that shows the variation in average Montreal prices for condos, single-family homes and plexes (two to five units) between 2000 and 2008. The rest of the report, a bit of a dog's breakfast.