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Kat’s Blog
Toronto Real Estate market in COVID-19 Pandemic

The challenging times we are experiencing make us wonder if things will ever return to normal. While no one knows for sure, there will likely emerge a new normal in most of aspects of our lives and businesses, including the real estate market. 

In April, the Toronto Real Estate Board reported a 67 per cent drop in home sales year-over-year with average home prices remaining at April 2019 levels.

CHMC suggests that prices mostly likely won’t return to pre-pandemic highs until 2022. 

It’s important to note that the housing supply slowed along with the demand this spring with listings plunging 65 per cent from last year’s levels.

“When thinking about home prices, it is important to remember that the pace of price growth is dictated by the relationship between sales and listings,” Jason Mercer, TRREB’s chief market analyst, said. “So while the onset of Covid-19 has understandably shifted market conditions and resulted in average selling prices coming off their March peak, there has continued to be enough active buyers relative to available listings to keep prices in line with last year’s levels.”

The good news is, the Toronto market is still active. Buyers looking to buy are shopping and sellers who need to sell are listing. However, some things have changed.  For instance, under-pricing properties and holding back offers is not a popular strategy any longer. 

Sellers also need to adjust their expectations regarding timing on the market and should expect to receive offers with more conditions entailed, such as financing, home inspections and lawyer review. Buyers will have to be more diligent about their financing and shopping options. Checking out homes virtually and touring homes online may become a new norm. 

While it’s hard to predict when the pandemic will be over, it’s good to have a realistic approach without false expectations, evaluate your market position accordingly and create a solid financial plan for these uncertain times.

Toronto Real Estate COVID-19 updates

Hope you are staying safe. During these unprecedented times, we encounter a lot of uncertainty navigating the housing market from buyers, sellers, landlords and tenants. 

Here are some highlights of changes introduced to the real estate landscape. 

Currently, we are facing a liability for all “in-person” showings being conducted with no documentation attesting to the health of each party in regard to COVID-19, or the agreed upon procedures for attending the home. A number of new forms have been developed to protect our clients and to promote a greater consumer confidence for essential “in-person” showings.

Ontario REALTORS® are encouraged to use virtual showings in place of in-person ones. This is a great tool to vet properties, however, before committing to a purchase most buyers would request an in-person viewing. Such showings will be considered an essential appointment complying with a strict and prescribed method of viewing the home.

OREA is calling on all landlords and Ontario REALTORS® to stop in-person showings of tenant-occupied properties and seeking new tenants during Ontario’s State of Emergency. In particular, tenants with underlying medical issues or who are otherwise at risk should NEVER be forced to allow strangers into their home during this State of Emergency.

The Lanlord and Tenant Board introduced some temporary changes in response to the COVID-19 outbreak:

– EVICTIONS: no new eviction orders will be issued until further notice and sheriff’s offices will postpone any scheduled enforcement of current eviction orders. Tenants must pay rent while an eviction order is not being enforced.

– ENTERING A RENTAL UNIT: Landlords are encouraged to request entry only in urgent situations and to follow physical distancing guidelines.

Landlord and tenants are strongly encouraged to work together to find a solution that protects the health and financial well-being of everyone. 

For more information about the temporary changes to residential rental rules and processes, please visit the following website: https://www.ontario.ca/page/renting-changes-during-covid-19

Personally, I embrace the innovative and creative ways to complete real estate transactions while keeping the top priority to reduce the spread of COVID-19. While understanding that the COVID-19 pandemic is an evolving concern, I welcome any of your new questions. Together, we can get through this challenging period: we will survive this.

Kitec Plumbing

Kitec plumbing was installed in homes and condominiums from 1995 to 2007 as a corrosion-resistant piping alternative to copper pipes and plumbing fittings. It was popular in construction because it was faster and less expensive to install than copper piping.

Kitec got recalled in 2005 in the US and Canada due to a high risk of deterioration and failure resulting in pipe bursting and flooding. One alleged reason is that fittings may contain high levels of zinc, leading to corrosion and weakness over time.

Kitec plumbing is made of plastic (cross-linked polyethylene (PEX)) on the outside with inside aluminum lining. It be identified visually by its bright orange for hot and bright blue for cold water. It was also sold in red, blue, gray and black. It’s stamped with with names such as Kitec, Plumbetter, IPEX AQUA, WarmRite, Kitec XPA, AmbioComfort, XPA, KERR Controls or Plomberie Améliorée. Fittings are also branded as KITEC to KT.

In a home, the best way to look for Kitec is around the hot water tank or under the sinks where pipes are connected.

In the recent years Kitec became a stigma affecting homes and condos with Kitec plumbing. Although Carson Dunlop Inspections reports that “as of January 2018, we have seen very few failure problems with this piping in our inspection area”, Kitec is still perceived as a potential costly issue.

The only complete solution is replacing Kitec with copper pipes. This is a major expense especially for the condo corporations as well as inconvenience for its owners. Some insurance companies are refusing to provide water protection coverage for homes with Kitec based on the liability risk assessments. Also, many financial insitutions require confirmation of Kitec removal.

If you decide to sell your home without replacing Kitec, you should prepare a full disclosure for potential buyers. Also, it would help to get a reliable quote for the replacement job, so buyers understand the cost and process they will be facing.

A class action lawsuit was issued in 2011 against IPEX Inc. Visit http://www.kitecsettlement.com/ to check if you are eligible to take part in that settlement and contact a lawyer for more information. The deadline for submitting a Kitec claim is January 9, 2020.

Curb Appeal Tips

Whether you are an avid gardener or just a homeowner who wants to spruce up their property, summer is the time to get outdoors and get active. This is a great opportunity to plan, plant and clean. Beautiful gardens create curb appeals and sell homes. And if you are selling your home, it helps to step across the street and check if your home makes a statement. First impressions are lasting and the exterior appearance of your home is just as importance as the interior. Here are a few tips on how to freshen up your home’s exterior:

1. Power-wash the front door, windows, porch, siding, driveway and walkway

2. Clean up garden beds and planters by pulling out dead plants and weeding

3. Introduce hardy plants such as hostas, begonias, pansies and sedums

4. Place fresh mulch on all garden beds

5. Regularly Weed and mow the lawn

6. Fix and clean interlocking stones

7. Add a fresh coat of paint to the porch and stair railings

8. Repair cracks in the driveway, reseal and make sure no weeds come out at the edges

First Time Buyer Incentive Ontario

If you are a first-time homebuyer, you are probably wondering how the First-Time Home Buyers’ (FTHB) incentive announced in last month’s Federal budget can benefit you. At first blush, it sounds pretty good. But, like any new government program, the devil is always in the details.

First, the good news. If you have less than a 20% down payment, you can get a 10% interest-free CMHC loan to top-up your down payment. For example, let’s say you have a 5% down payment for a $400,000 property — add on the 10% top-up loan and like magic you have a 15% down payment. Your mortgage is now 85% of $400,000, or $340,000, with just 5% down it would have been 95% of $400,000, or $380,000. That brings down your mortgage debt load by $40,000, not bad at all. Now, given a mortgage rate of 3.5 %, that roughly translates into a monthly mortgage payment that is more than $200 lower, which is more than $2,400 a year in savings.

Now there is a catch, you will have to pay the 10% interest-free loan back, most likely after the home is sold. However, it is not clear yet if you have to pay the original value or the appreciated value of that loan, those details are still to be worked out.

Now, the bad news. While this program will work great for first-time homebuyers in most places in Ontario. It is basically a dud in high-priced markets like Toronto. Why? Well, an applicant must have a household income of less than $120,000 per year to qualify. Also, the program caps out at four times the applicant’s annual income. So, that means that $120,000 income qualifies you for a property that is around $500,000. As we all know, that pretty much excludes most downtown Toronto detached and semi-detached homes.

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HomeLife/Realty One Ltd.
Real Estate Brokerage*

501 Parliament St. Toronto, ON M4X 1P3

Mobile: 647.225.2426
Business: 416.922.5533
Fax: 416.922.5808
E-mail: kat@katanderson.ca

*Independently owned and operated, REALTOR®

DISCLAIMER: Not intended to solicit currently listed properties or buyers under contract.