Check out this quick youtube video from the Toronto Real Estate Board.  It explains the benefits of signing a Buyer Representation Agreement.

While these agreements have been around St. John’s for years, they are becoming more and more common practice amongst Realtors and clients….both benefiting.

Demand for housing in St. John’s remains healthy, particularly among first time buyers, despite a decline in year-to-date sales.  Buyer’s market conditions and the best choice of product in years have buoyed the entry-level segment, along with wage gains, economic growth and rising consumer confidence levels. Affordability continues to be  favourable, with increased earnings offsetting the more moderate price growth of late.  Most young home buyers are now active from $200,000 to $250,000.  Those buying new construction will have to ante up more—typically between $230,000 and $280,000 to start—as the  price of new construction has risen at a greater rate.  Those on a tight budget will find that homes listed below $200,000 are few and far between and tend to sell for close to full price, if listed at fair market value.  Some even generate a rare multiple offer.

To illustrate the supply issue, only 34 homes have sold year-to-date under $175,000, accounting for just 10 per cent of all sales, and only 39 listings under that price point are currently available. Given that, buyers at the lowest end of the price spectrum will have to act more quickly.  The housing mix in St. John’s continues to favour the single detached home, particularly in the first-time buyer segment.

Of the 34 homes sold under $175,000, only three were condominiums. Entry-level condominium product remains limited in St. John’s, as builders continue to focus on the mid-range—units priced between $250,000 and $350,000. While condominiums are gaining traction with younger buyers, they remain only a small portion of entry-level sales. Condominiums now start from $165,000 to $175,000 for an  older, 650 to 750 sq. ft. walk-up unit on Thorburn Rd., Dalton Ave., and in Pleasantville.

With the current oversupply of homes listed for sale in St. John’s, buyers remain in the driver’s seat. That, along with historically low interest rates, continues to serve as a significant  impetus.

Detached homes can be found from $169,000 for an older bungalow requiring work, located on the peripherals. Older homes are most popular. Most sought-after are properties priced between $210,000 and $250,000 in established neighbourhoods such as Cowan Heights, Mount Pearl and Paradise. Most buyers are realizing their choice location, with little need to compromise.  Those that must choose are opting to spend a little more, if necessary.

Solid demand among first-time purchasers is expected to carry over in to the spring market, with new financing criteria expected to have little impact. In fact, look to sales in the entry-level segment to prompt greater activity in the move-up range in the months ahead. February year-to-date sales were 11 per cent off year-ago levels, with 359 sales recorded, while average price continued its ascent at $255,512, up just over five per cent.

Full RE/MAX Media Release for the First Time Buyers Report 2011

Driven by the threat of higher interest rates down the road, first-time buyers are contributing to strong upward momentum in residential housing markets across the country, according to a report released by RE/MAX.

The RE/MAX First-Time Buyers Report, highlighting trends and  developments in nineteen major Canadian centres, found that low interest rates and balanced market conditions have provided significant impetus in 2011, particularly at lower price points.  Just over 30 per cent of markets are reporting sales in excess of 2010 levels as a result, while almost 70 per cent have experienced an upswing in average price.  Leading the country in terms of percentage increases in the number of homes sold are Western Canadian markets, including Saskatoon (up close to 15 per cent), Greater Vancouver (up close to 12 per cent), and Winnipeg (up just over 11 per cent).  With an average price hike of close to 20 per cent year-to-date (February), Greater Vancouver continues to show unprecedented strength, followed by Hamilton-Burlington (eight per cent), Quebec City (seven per cent), Winnipeg (close to seven per cent), Greater Toronto (five per cent), and Greater Montreal (five per cent).

Despite homeownership rates approaching 70 per cent, there is clearly room for growth as entry-level buyers make their moves from coast-to-coast, undeterred by higher housing values and changes to lending criteria.  Many purchasers intent on realizing homeownership are scaling back on expectations or are willing to sacrifice location, quality and/or size to make their dream a reality – not unlike generations before them.

Inventory levels, while tight in several larger centres, are more balanced overall, giving first-time buyers a good selection of housing product from which to choose.  Not surprisingly, condominium apartments and town homes have become the first step for many entry-level purchasers, especially in Greater Vancouver, Victoria, Kelowna, Edmonton, Calgary, London-St. Thomas, Hamilton-Burlington, Greater Toronto, the Island of Montreal, and Halifax-Dartmouth where average prices have risen unabated in recent years.

With the Canadian economy on firmer footing overall, residential real estate is well-positioned moving into the traditionally busy spring market.  Consumer confidence is climbing in conjunction with economic performance, and concerns over a secondary recession fade with each passing day.  The mood is cautiously optimistic, as first-time buyers enter the market.

Changes to recent financing criteria have not created the anticipated run up in activity in most markets.  From a financial standpoint, most rookie home buyers remain quite prudent.  Those making the leap are not doing it lightly, buying within their means.  While this most recent round of policy tightening will likely have a negligible effect on demand, the message is getting across.

Affordability remains a growing concern in most markets, and—aside from first-time purchasers—no one is more in tune with that than housing planners and developers.  In fact, the growing demand for reasonably-priced product is creating a shift in the country’s housing mix.  That trend is expected to gain traction in coming years, as builders look to create greater options for those seeking to realize homeownership.    In recent years, builders have helped ease the move to homeownership by concentrating on intensification—condominium buildings with smaller suites and small-lot subdivisions offering detached, compact homes at a fraction of the cost of a traditional single-family home.   On the flip side, the affordability factor is also breathing new life into tired older neighbourhoods, and that, in turn, is contributing to rising values.

As prices escalate, first-time buyers are indeed spending more—some out of necessity, but others are simply in a position to do so.  Unlike in years past—a greater percentage of today’s first-time buyer pool is comprised of dual-income, college or university-educated couples with solid earnings.  They’re spending close to average price or slightly more to secure—in most cases—a better location or a home that will grow with them.   Yet, the fact remains that those on a tighter budget can get in for considerably less, with reasonable choices in every major market across the country.   While some may feel discouraged by eroding affordability levels, the underlying confidence in the concept of homeownership is rising.

While market conditions are one thing that influences first-time buyers, few things trump the fundamental belief in homeownership.  Today’s entry-level buyers are steadfast in their mindset.  They know they have to live somewhere, but they simply don’t want to pay someone else’s mortgage.  Savvy or practical, they remain a driving force.  The bottom line is that the demand for entry-level product will remain steady.  The role of starter homes in the marketplace is becoming ever more vital.

Full RE/MAX Media Release can be viewed here.

This is a guest post from Jeff Burton with Royal Bank. Jeff is a Mortgage Specialist and can be reached anytime at 709-685-4816

With spring just around the corner, many people contemplate selling their home.  There are many variables to consider. A commonly asked question is; “if my mortgage is not up for renewal, can I sell my home?” or “if I sell my home before it is up for renewal, will there be a pre-payment charge or most commonly referred to as a penalty?”

The good news is, you have options.

Your mortgage may be portable and/or assumable.  If your mortgage is not up for renewal and you sell your home, then most likely there will be a pre-payment charge if you do not avail of one of the previously mentioned options.  The amount of this pre-payment charge will vary depending on a number of factors and best answered one on one by a mortgage professional.

Porting your mortgage refers to transferring your mortgage from one property to another.  By taking advantage of this option, you will avoid the pre-payment charge since the financial institution does not loose your business. Most often a blended rate will occur.  This is when the financial institution looks at your current rate (and the time remaining in that term) and blends it with the closest term (to time remaining) and its rate to calculate a blended rate.  Normally you have a 90 day period to port your mortgage.  So from the sale date of your existing home to the purchase of your new home, it should be within 90 days.  It is possible to port your mortgage anywhere in Canada.  Again this is best discussed one on one with a mortgage professional.

If you are selling your existing home but not buying a new property within the 90 day period or you are moving outside of the Canada, you may avail of having someone assume your mortgage.  In short, an assumable mortgage means someone can take over your mortgage.  Since the financial institution still maintains the mortgage, this will allow you to move forward in your plans and avoid the pre-payment charge.  There maybe be underlying conditions if your mortgage is assumed, again this is best discussed with a mortgage professional.

Don’t worry if you didn’t understand every point made above. The important thing is being aware of the options available.  This allows you to make an informed decision that is right for you. Ask questions. Re-ask if you are unsure of the answer.  This is your future and you deserve to know what is available to help you accomplish your goal.

**SOLD** Great Location near downtown St. John’s.  37 Golf Ave – $159,900 Spacious 5 bedroom home with two bathrooms located within walking distance to Mun and close to St. Clare’s Hospital. Large deep lot. Main floor laundry. Hot Water Radiation heat. Mostly new vinyl windows. 125 Amp Breaker Panel. Off street parking. Great Investment property.  MLS:157071 Call Fraser or Stephen Winters for more information.

**SOLD** Fraser and Stephen Winters have just listed 24 Barachois Street.  Located in the west end of St. John’s, this 2 + 1 bedroom end unit has MANY upgrades. It is freshly painted from top to bottom. Has new flooring throughout entire home.  New lighting fixtures installed throughout.  Even has a new hot water boiler.  There is nothing to do but move right in.  Excellent home for a first time buyer or used as an investment property.  Close to the Village mall. Vinyl windows and vinyl siding. $35 a month condo fee. MLS: 155060 Asking price is $174,900

For a virtual tour of 24 Barachois Street click here

**SALE PENDING** Fraser and Stephen Winters have just listed 26 Laurier Street.  Located in a great neighborhood in the East End of St. John’s.  Extremely well cared for 3 bedroom bungalow with numerous upgrades. Hardwood and ceramic floors throughout main floor. Large eat-in country style kitchen with plenty of cupboard space. Formal living room with a propane fireplace and custom mantel with granite. Main floor bathroom completely upgraded. Vinyl windows and premium vinyl siding complete with rigid insulation underneath & band saw pine trims. In the basement you will find a recently completed recroom with plenty of space for entertaining or for the children to play in. There is a convenient spare room that can be used as a 4th bedroom or office and a new 3 piece bathroom. Recently installed Venmar HRV. The grounds are nicely landscaped with a fully fenced backyard, 12×16 patio and mature trees. 12×12 wired shed. Asking price is $274,900  MLS:154760

For a virtual tour and interior photos of 26 Laurier Street click here

Canada Mortgage and Housing have released the First Quarter 2010 MLS Trends – Newfoundland and Labrador issue.  Below are the key points in the release.

Record MLS® Residential Sales during First Quarter

• „„MLS® sales increased 25.8% to a record 784 compared to 2009’s first quarter sales of 623 „„January, February and March MLS® sales were 240, 234 and 310, respectively.
• „„First quarter average MLS® residential house price climbed nearly 18% to $230,376 compared to $195,517 during the first quarter of 2009.

Market Conditions Fluctuated

• „„There were approximately 1,850 new residential listings during the first quarter compared to 1,500 during the same period in 2009 „„Active listings or inventory averaged 1,500 from January to March and around the same during Q1 of 2009.
• The sales-to-active listings ratio dipped into buyers territory, but hit 18.9% in March and averaged 17.3% during the quarter versus 13.8% in the first quarter of 2009

Active Listings Remain Low

• „„Despite the surge in new listings, record first quarter sales caused active residential listings to remain relatively low
• „„Active listings for January, February and March were 1,369, 1,503 and 1,644, respectively
• „„Although inventory was similar to 2009’s first quarter level, the 25.8% increase in sales resulted in balanced market conditions during most of the quarter

The St. John’s Property assessment is the estimated value of a property (land and building) utilized for municipal taxation purposes.  The “Assessment Act 2006” is the Legislative authority governing assessment and taxation in the City. The assessment value can at times be similar to fair market value, however with the fast changing St. John’s Real Estate market the two values can be greatly different in figures.

From the City of St. John’s website  “the City’s assessments are calculated on the basis of a property’s market value as of a specific point in time, referred to as the “base date”. The presently applicable “base date” on which your assessment is calculated is January 1st, 2008. In other words, the market value of your property on that date is presently utilized to calculate your municipal taxes for 2010.”

To find out the assessment value of a home in St. John’s visit the Property Assessment Search

Annual residential property taxes for St. John’s are calculated at a rate of 10.1 mils, or 1.01 % of a property’s total assessment (for the year 2010).  A property with a total assessed value of $100,000. would be charged an annual property tax of $1010.00, calculated as follows:

Assessed Value of St. John’s Home = $100,000.
Multiplied by the Mil Rate = .0101 (10.1 Mils)
Annual Property Tax for 2010 = $1010.00

Don’t forget to include your water taxes. Water taxes for St. John’s are a flat rate of $520. (multiplied by 2 if you have a 2-apt home)

So a $100,000 property would have a total property tax of $1530 for the year or $127.50 per month.

There are a number of people who transfer jobs and relocate to and from Newfoundland and never realize  that there are tax benefits involved with moving expenses.

If you are preparing to move, it’s best to be informed, so below I have included a quick summary of tax deductible moving expenses provided from the Canada Revenue Agencies website.

Eligible moving expenses include:

• transportation and storage costs (such as packing, hauling, in-transit storage, and insurance) for household effects, including items such as boats and trailers; traveling expenses, including vehicle expenses, meals, and accommodation, to move you and members of your household to your new residence
• costs for up to 15 days for meals and temporary accommodation near either residence for you and the members of your household
• the cost of canceling a lease for your old residence, except any rental payment for the period during which you occupied the residence.

When your old residence is sold as a result of your move, eligible moving expenses also include:

• legal or notarial fees for the purchase of the new residence, as well as any taxes paid (other than GST/HST or property taxes) for the transfer or registration of title to the new residence, if you or your spouse or common-law partner sold the old residence
• the cost of selling your old residence, including advertising, notarial or legal fees, real estate  commission, and mortgage penalty when the mortgage is paid off before maturity.

Moving expenses that you cannot deduct include:

• expenses for work done to make your home more sale-able
• any loss from the sale of your home
• the value of items movers refused to take, such as plants
• frozen food, ammunition, paint, and cleaning products
• expenses for job hunting in another city (such as traveling expenses)
• expenses to clean or repair a rented residence to meet the landlord’s standards;
• expenses to replace personal-use items such as tool sheds, firewood, drapes, and carpets
• mail-forwarding costs (such as with Canada Post);
• costs of transformers or adaptors for household appliances;
• costs incurred in the sale of your old home if you delayed selling for investment purposes or until the real estate market improved
• costs for vehicle inspections and/or emissions tests

Be sure to check out Canada Revenues website for updated information, and speak with your accountant.

What is the home buyers’ tax credit (HBTC)?

The HBTC is a non-refundable tax credit, based on an amount of $5,000, for certain home buyers that acquire a qualifying home after January 27, 2009.  This means the actual closing must be after this date.

The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009, the credit will be $750.

Beginning with the 2009 personal income tax return, line 369 is incorporated into the Schedule 1, Federal Tax to allow you to claim the credit in the year in which you acquired the qualifying home.

Who is eligible for the HBTC?

Taken directly from the Canada Revenue website

You will qualify for the HBTC if:

• you or your spouse or common-law partner acquired a qualifying home; and
• you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years.

If you are a person with a disability or are buying a house for a related person with a disability, you do not have to be a first-time home buyer.  However, the home must be acquired to enable the person with the disability to live in a more accessible dwelling or in an environment better suited to the personal needs and care of that person.

What is a qualifying home?

A qualifying home is a housing unit located in Canada acquired after January 27, 2009. This includes existing homes and those being constructed. Single-family homes, semi‑detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings all qualify.  A share in a co‑operative housing corporation that entitles you to possess, and gives you an equity interest in, a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.

Also, you must intend to occupy the home or you must intend that the related person with a disability occupy the home as a principal place of residence no later than one year after it is acquired.

If I buy a house, can my spouse or common-law partner claim the HBTC?

Either one of you can claim the credit or you can share the credit. However, the total of your combined claims cannot exceed $750.

My friend and I intend to jointly purchase a home, and we both meet the conditions for the HBTC. Can we both claim the credit?

Either one of you can claim the credit or you can share the credit. However, the total of your combined claims cannot exceed $750.