September 2010 Market Update

Selling prices were seasonally lower from July to August, but generally continued to trend well above the average from August 2009. Sales volumes, however, continued to trend well below last year’s levels.

This was a reflection of a number of factors – comparing against a strong recovery period last year, many buyers moving their purchase earlier in the year and a very limited choice due to low inventory levels.

The outlook for this fall looks quite promising with a lot more buyers seeming to be active and a lot of new listings already hitting the market in anticipation of a good fall market. We are also seeing some positive news reports on the state of the economy and the real estate market which is helping to boost buyers confidence levels.

You can check out some of these articles on my blog at www.torontocentralhomes.blogspot.com

Greater Toronto REALTORS® reported 6,232 sales through the Multiple Listing Service® (MLS®) in August 2010. This represented a 22 per cent decrease compared to the 8,035 sales recorded duringthe same period in 2009. New listings decreased by one per cent year-over-year to10,488.

“The prospect of interest rate hikes and new mortgage lending rules prompted some households to purchase a home sooner than they otherwise would have this year. The result has been a larger than normal dip in sales over the summer months.

With this said, it is important to recognize that sales on the year were eight per cent higher than in 2009,” said Toronto Real Estate Board President Bill Johnston.

The average price for August transactions was $411,012 – up six per cent compared tothe average of $387,921 reported in August 2009.

“Market conditions have remained tight enough to support higher home prices in comparison to last year. Under current mortgage lending standards, a household earning the average income in the GTA can comfortably afford the mortgage payments on an average priced home. Market conditions and the affordability picture would have to change dramatically before a sustained drop in the average selling price would take place,” said Jason Mercer, TREB’s Senior Manager of Market Analysis..


How to Plan a Successful Open House
Having an open house is a lot of work so if you decide to do it, you’ll want to ensure it's a success. Here are some tips that'll have your home looking its best on the big day:

De-Clutter - Clearing out clutter makes your home appear much larger so remove personal items like photos and souvenirs. Also, put away small appliances to increase your counter space.


Deep Clean - Thoroughly clean your home from top to bottom. Serious buyers will look everywhere including under the kitchen sink so make sure everything's neat and tidy.


Lighten Up - Wash your windows and open up the drapes and blinds to let in as much natural light as possible. Turn on all the lights and put out some fresh flowers to brighten things up.


Blooming Beautiful - Buyers are looking for a tranquil outdoor setting to relax in so cut the grass and pick up the kid's toys. While you're at it, pull out some weeds and plant a few flowers.


The Nose Knows - Baking just before an open house will leave a pleasant aroma that'll remind people they’re in a home rather than a house. You can even leave some out for your visitors!


Seasonal Pics - If your open house occurs during the winter, showcase your garden by displaying some photos of what your yard looks like during the summer when it’s at its best.


Don't Delay - There’s always a buzz when a new property hits the market so the sooner you schedule your open house, the more traffic you'll generate.
The day of your open house should find your home sparkling! Potential buyers need to envision themselves living in your home so in order to make them feel more comfortable, you and your pets should leave ahead of time so your real estate agent can focus on selling your home.


Do You Know How Your Credit Score Works?
By Ellen Roseman - Toronto Star

Your credit score is a three-digit number that can determine whether or not you get a loan and at what rate.
Many insurance companies also use credit scores to decide what you pay to protect your home and belongings from damage.

So, what does your credit score say about you? How can you get it? And how can you improve it?

Credit scoring was developed by Fair Isaac & Co. in the United States to help credit bureaus assess the risk to lenders.
Equifax, one of Canada’s two major credit bureaus, is licensed to use the FICO score, known as the Beacon score here. Its rival, TransUnion, uses a slightly different score (called Empirica).

Your credit score is not the same as your credit report, which shows your payment history. The credit report is free for you to check, but you can’t get your credit score without paying $15 to $25 or so to check it online.

Ignore any offers of free credit scores. They’re only teasers to sell you something else, such as a monthly credit monitoring service.

Eric Putnam spent 26 years in consumer lending before starting a company, Debt Coach Canada. He charges a monthly fee to people who want help organizing their finances and improving their credit scores.

I asked him what goes into a credit score – a secret guarded carefully by the credit bureaus.
The biggest part of the score (35 per cent) is your payment history, he says. This shows if you pay bills on time, have any unpaid debts or have been through bankruptcies, consumer proposals or debt management plans.

Another big part (30 per cent) is based on how much you owe.
If you carry an $8,000 balance on a credit card with a $10,000 limit – even if you pay the minimum on time each month – your credit score will drop. So, it pays to keep your balances down and not get close to your credit limits.

Another 15 per cent of your credit score is based on how long your accounts have been open and used. You may be a newcomer to Canada with no record of loans or someone whose spouse takes care of all credit transactions.

To be seen as a good credit risk, it’s not enough to be approved for credit. You have to use the credit you’re given.
Another 10 per cent of your credit score depends on the balance between revolving credit (such as credit cards) and instalment loans (such as mortgages or car loans).

Lenders like to see both types of credit. Revolving credit can be maxed out since the rates are high enough to absorb losses, while instalment loans with fixed payments must be approved and supervised closely.

The remaining 10 per cent of your score is based on how much new credit you’ve obtained or applied for. This shouldn’t be too high a percentage of all the credit shown on your file.

If you’re shopping for credit, do it within a 15-day period, Putnam says, since that will show as one credit inquiry.
Otherwise, do your shopping with a copy of your credit score, which you can show to lenders to find out what they will offer you.

Banks may give the three-digit number if you ask, but they’re not supposed to give the context that goes with it.

For information, go to www.equifax.ca and www.transunion.ca. You can also read the Financial Consumer Agency of Canada’s publication, Understanding your Credit Report and Credit Score, at www.fcac.gc.ca.

Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca, 416-945-8687 or ellenroseman.com


Don’t Cry Over Split Blood
Have you ever had to throw away a piece of clothing because of a small blood stain? If you don't have immediate access to a washing machine before the stain sets, there's another option to consider.

A simple and effective way to remove blood from fabric is to immediately dab some of your own saliva directly onto the stain. Saliva contains certain digestive enzymes that help break down the proteins in blood. This method isn't practical for large stains but if it's just a few drops, it should do the trick.